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News from EPI Trade deficit with Mexico has resulted in 682,900 U.S. jobs lost or displaced

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For Immediate release: Tuesday, May 3, 2011
Contact: Phoebe Silag or Karen Conner, news@epi.org, 202-775-8810

Trade deficit with Mexico has resulted in 682,900 U.S. jobs lost or displaced

A total of 682,900 U.S. jobs have been lost or displaced since 1994 as a result of the U.S. trade deficit with Mexico, a new Economic Policy Institute (EPI) study finds.  All 50 states, the District of Columbia and Puerto Rico have seen jobs lost or displaced to Mexico.

Heading South: U.S.-Mexico trade and job displacement after NAFTA, by EPI economist Robert Scott, finds that the ten states that have experienced the largest share of jobs displaced by trade with Mexico are, in order, Michigan, Indiana, Kentucky, Ohio, Tennessee, New Hampshire, Illinois, Alabama, Massachusetts and Texas.  The ten states that have the largest number of jobs displaced due to Mexico trade deficits are, in order, California, Texas, Michigan, Ohio, Illinois, New York, Florida, Pennsylvania, Indiana and North Carolina.

Most of the jobs displaced by trade with Mexico—415,000 jobs, or 60.8% of the total—have been in manufacturing industries.  The manufacturing industries that have been most affected have been computer and electronic parts (150,300 jobs lost or displaced, or 22% of the total number of jobs) and motor vehicles and parts (108,000 jobs, 15.8%).  Other affected manufacturing industries include fabricated metal products (39,200 jobs, 5.7%), apparel and accessories (22,100 jobs, 3.2%) and miscellaneous manufacturing (22,300 jobs, 3.3%).  Service industries that are supported by manufacturing have also seen job displacement, including professional, scientific and technical services (53,300 jobs, 7.8%) and administrative and support services (50,500 jobs, 7.4%).

The trade deficit with Mexico, which currently totals $97.2 billion, developed after the North American Free Trade Agreement (NAFTA) took effect.  In 1993, the year before NAFTA was implemented, the U.S. had a $1.6 billion trade surplus with Mexico, which supported 29,400 U.S. jobs.  Prior to its enactment, proponents of NAFTA argued that it would create jobs in the United States.  Supporters of the proposed U.S.-Korea Free Trade Agreement (KORUS FTA) make similar claims.  Although the Mexican and South Korean economies differ, the evidence suggests that KORUS would result in a growing U.S.-Korea trade deficit that would lead to substantial net job displacement.

Today’s Snapshot shows job displacement by state.


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