U.S. Free Trade and Manufacturing Job Loss - 4/19/16
This presidential election cycle has brought enormous attention to the issues of free trade and manufacturing job loss in America. Some of the focus has been on the North American Free Trade Agreement with Mexico and Canada, which went into effect in 1994.
Many might be surprised to learn that the number of manufacturing jobs in the U.S. actually increased during the initial years after NAFTA was signed. But as reported by CNNMoney, that story changed dramatically in the year 2000. Since then, the U.S. has lost a net five million manufacturing positions. In 1960, approximately 1 in 4 American workers had a job in manufacturing.
Today, fewer than 1 in 10 are employed in the industry. There are many reasons, including stiff competition from Asia. Still, manufacturing remains important to the U.S. economy, with more than 12 million Americans employed by the industry. That’s why it’s so important that policymakers make good decisions regarding manufacturing.
At least one presidential candidate has proposed large taxes on Chinese and Mexican goods coming into the country. The U.S. attempted a similar tactic during the 1930s with an act known as the Smoot-Hawley Tariff Act, which helped pull the U.S. deeper into the Great Depression.