Master Findings
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NAFTA has produced a disappointingly pocket-size internet gain in jobs in United mexican states. Information limitations preclude an exact tally, but it is clear that jobs created in export manufacturing have barely kept pace with jobs lost in agriculture due to imports. There has likewise been a decline in domestic manufacturing employment, related in part to import competition and perhaps too to the substitution of foreign inputs in assembly operations. About 30 percent of the jobs that were created in the maquiladora assembly plants in the 1990s take since disappeared. Many of these operations were relocated to lower- wage countries, peculiarly Red china.
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Mexican agriculture has been a net loser in trade with the United States, and employment in the sector has declined sharply. U.South. exports of subsidized crops such equally corn have depressed agricultural prices in United mexican states. The rural poor take borne the brunt of adjustment to NAFTA and have been forced to accommodate without adequate regime support.
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Productivity has increased in Mexico over the last decade. NAFTA probable played a significant role, considering Mexico cut tariffs deeply and was exposed to competition from its giant neighbors. The desirable growth in productivity may have had the unwanted side upshot of reducing the rate of task growth, since fewer new jobs were created every bit workers already on payrolls produced more.
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Real wages for nearly Mexicans today are lower than when NAFTA took effect. The stunning setback in wages is mainly attributable to the peso crisis of 1994-1995. Yet, during the NAFTA period, productivity growth has not translated into wage growth, as it did in earlier periods in Mexico. Mexican wages are as well diverging from, rather than converging with, U.South. and Canadian wages.
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Income inequality has been on the rise in United mexican states since NAFTA took result, reversing a cursory declining trend in the early 1990s. Compared to the period earlier NAFTA, the top 10 percent of households have increased their share of national income, while the other ninety percent have lost income share or seen no change. Regional inequality within Mexico has likewise increased, reversing a long-term trend toward convergence in regional incomes.
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The experience of United mexican states confirms the prediction of trade theory, that in that location will be winners and losers from trade. The losers may be as numerous equally, or fifty-fifty more numerous than, the winners, peculiarly in the curt-to-medium term. In Mexico , farmers are still struggling to accommodate to NAFTA-induced changes.
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The short-to-medium?term adjustment costs faced past the losers from trade can exist severe, and in Mexico the losers are often those segments of society to the lowest degree able to cope with adjustment, due to bereft skills, meager savings, and limited mobility. It must also be recognized that there may be permanent losers from trade, due to these limitations.
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Employment
Mexico has an abundance of labor. Very high population growth rates through the mid-1970s translated into a demographic burl in the workforce through the belatedly 1990s, every bit people born during the earlier high-growth years matured and began looking for work. In improver, during the 1980s and 1990s women joined the workforce at increasing rates, in part considering of the decline in the reproductive charge per unit, simply also out of the demand to support household incomes during recurrent economic crises. Overall, the Mexican labor forcefulness grew from 32.iii meg immediately before NAFTA to 40.2 meg in 2002, meaning that Mexico needed almost a million jobs a year simply to absorb the growth in labor supply. [1]
Economical theory suggests that opening to trade volition increase the demand for labor in a labor- abundant country and therefore will increase the number of jobs, the wages paid, or both. Clearly, that would be a desirable result for a land with a large and growing workforce such as Mexico. However, in practice, the effect of a merchandise pact similar NAFTA depends on many factors, including which tariffs were reduced or eliminated past each country, at what pace, and in what sequence. The following word focuses on tariff changes between Mexico and the U.s.a., considering trade between United mexican states and Canada is a very minor part of Mexico?s total merchandise. [ii]
Under NAFTA, the United States cut tariffs on most Mexican manufactured goods, with the largest cuts on textiles and wearing apparel, followed by more modest but still significant reductions on footwear, chemicals, miscellaneous manufactures, and transportation equipment. The U.s. also cut agricultural tariffs and increased quotas, although one of United mexican states?due south main agronomical products, sugar, continues to be restricted through tariffs and quotas. Other Mexican crops face up seasonal restrictions that are scheduled to end past 2008. Meanwhile, Mexico cut tariffs dramatically on both agronomical and livestock products and well-nigh all manufactured appurtenances from the United States. Some tariffs will exist maintained on sensitive agricultural products such equally maize and beans until 2008, simply in practise the Mexican government has already allowed substantial above-quota tariff-free imports of corn.
The pattern of merchandise between the two countries changed in a number of ways as a result of these cuts. From Mexico?s standpoint, the cumulative changes resulted in a shift from a cyberspace merchandise deficit with the Usa earlier NAFTA to a substantial net merchandise surplus in 2002. The overall net surplus masks a growing deficit in agricultural trade with the United States that is more beginning past a surplus in manufactured exports from United mexican states. Merchandise in services shows a small arrears for Mexico.
Manufacturing Employment
Translating these changes in merchandise patterns into employment impacts is not like shooting fish in a barrel, but gauge numbers of jobs tin can be adamant with reasonable certainty. With respect to manufacturing, the task is complicated by data availability. The Mexican government tracks manufacturing employment through two separate information series. One survey covers medium-size and large manufacturing establishments that account for about fourscore percent of industrial production, simply excludes the maquiladora sector. [3] A separate survey covers maquiladoras, which are consign assembly plants.
Overall employment in not-maquiladora manufacturing in United mexican states was lower in 2003 than in 1994, except in microenterprises, which are mainly in the breezy sector. [4] Employment in the non-maquiladora manufacturing sector stood at about 1.4 million in January 1994, declined sharply during the peso crunch, then began a recovery that produced an boosted 91,000 jobs at its summit in May 2000 before declining again over the past iii years. The contempo refuse has been caused in pregnant part by the U.S. recession. As NAFTA has linked Mexico more than and more than closely to the U.S. economy, the U.S. business cycle has come up to play a dominant office in Mexico?s economic fortunes. In May 2003 there were 1.3 million jobs in non-maquiladora manufacturing, almost 100,000 fewer than when NAFTA took effect (see Effigy 1).
Figure i: Non-Maquiladora Manufacturing in Mexico
Full Employment, Jan one of each year
The maquiladora program was created by Mexico and the Usa in 1965 to allow tariff-free and tax-free imports of materials and components into Mexico for associates and re-export to the United states of america. It is concentrated in the auto parts, electronics, and apparel sectors. The growth in maquiladora jobs is not primarily owing to NAFTA, since the program predates that pact, but NAFTA did provide pregnant tariff cuts on wearing apparel and as a result stimulated that subsector of the maquiladoras. Maquiladora assembly plants added near 800,000 jobs between NAFTA?southward enactment in January 1994 and the sector?s peak employment in 2000. They then shed about 250,000 jobs through May 2003. Currently, maquiladoras employ about 550,000 more than workers than they did before NAFTA (run across Figure 2).
Figure ii: Maquiladora Employment in Mexico
Total Employment, January 1 of each year
Maquiladora plants produce well-nigh entirely for export, so employment in that sector can exist attributed largely to merchandise (although not exclusively to merchandise resulting from NAFTA). Past contrast, the data on non-maquiladora manufacturing employment alloy production for export with product for domestic markets; therefore, it is hard to determine the proportion of employment attributable to exports. 1 study suggests that the share of non-maquiladora manufacturing employment associated with exports increased past roughly 500,000 jobs between 1994 and 1999, and and then declined. [5] Of those jobs, some 450,000 were based on exports to the United States.
Only part of the growth in both maquiladora and non-maquiladora export employment can be attributed to NAFTA. The peso devaluation of 1994-1995 gave a very significant boost to all Mexican exports, as the dollar bought more than twice the value of Mexican appurtenances subsequently the devaluation. A study past the U.South. International Trade Commission (USITC) establish that the peso devaluation of 1994-1995 had a larger impact on the growth of Mexican exports of manufactured goods to the The states than all NAFTA-related tariff changes combined. [six] If one uses the USITC?southward findings on the relative impact of various factors on changes in Mexican exports to the United States, NAFTA tariff cuts likely explicate nearly ane-quarter of the total growth in consign manufacturing jobs (maquiladora and non-maquiladora), or the improver of about 250,000 jobs, while the peso devaluation, lower transport costs, and other factors account for the rest. [seven]
Some other gene that probable explains office of the phenomenon is that export manufacturing in Mexico is increasingly based on a production model in which component parts are imported, then candy or assembled, then re-exported. In this model, the spillover effect of such operations on the broader economy is very limited, because but a narrow range of processing or associates operations benefit the labor market. Forward and astern linkages, such equally the stimulation of businesses that supply parts and materials, are not created, limiting the multiplier effect of whatsoever growth in exports. This pattern is quite articulate in the maquiladora sector, in which 97 percent of components are imported and only 3 percentage are produced locally in Mexico. But the non-maquiladora export sector shows similar patterns. The intra-firm production carried out by multinational firms operating in Mexico in sectors such equally the auto and electronics industries depends heavily on imported inputs. It seems probable that Mexican manufacturers that previously supplied inputs to large manufacturing firms have lost a significant share of input product to foreign suppliers, and thus account for part of the weakness in manufacturing employment. [ix]
Some other important factor in the decline of domestic manufacturing employment is that some Mexican articles take been displaced directly by imports. The express employment growth that has occurred in manufacturing for the domestic market has been mainly in very small firms and in the breezy sector, with low pay and usually without benefits.
The export manufacturing model in Mexico has also failed to generate much growth in jobs at the high-skills end of the spectrum, in areas such as research, engineering, blueprint, and bookkeeping. One study of the skills component of manufacturing jobs in Mexico found that in 2000, the proportion of skilled labor in the manufacturing sector was but 9.9 percent. [ten] The skilled labor component in manufacturing was actually less than the average share of skilled labor in the overall economy, xiii.9 pct.
The limited job creation nether the manufacturing model currently prevalent in Mexico is of particular business when put in the context of other changes that are likely to affect future employment growth in the sector. Mexico enjoyed the reward of being the first low-wage land to strike a free-trade agreement with the United States and Canada. All the same, as more than complimentary-trade agreements are negotiated, unilateral preference programs are expanded, and World Trade Organization (WTO) membership grows, the first-mover advantage is progressively diluted. The accession of Cathay to the WTO, in particular, has meant mounting competition for Mexico?s manufactured exports, particularly in labor-intensive sectors such as apparel and electronics. In 2003, China displaced United mexican states every bit the second-largest exporter to the United States (subsequently Japan). It is no accident that Mexico was the final WTO member to concur to the terms for Prc?s accession to the trading organization. The proliferation of costless-trade agreements by the United states and Canada also means that the value of Mexico?southward market access advantages will erode every bit other low-wage countries gain similar access. For instance, proposed free-trade pacts with Central America would add a sizable pool of lower-wage labor to the available regional labor supply, undermining Mexico?south current advantage.
Agricultural Employment
Equally noted higher up, Mexico has had a net trade deficit in agronomical goods with the United States every year since NAFTA took event, except the peso crunch year of 1995, when the huge devaluation of the peso made most dollar-denominated products likewise expensive for Mexicans. The agronomical trade arrears existed earlier NAFTA, but information technology grew afterward enactment of the merchandise pact and was larger in 2002 than in whatsoever previous year. Tariffs on the nigh sensitive crops in both the U.s.a. and Mexico have yet to be eliminated, and so the nature of bilateral agricultural trade will go on to evolve. However, the pattern to engagement challenges the conventional wisdom that agricultural liberalization is expert for the developing state in a merchandise relationship with a developed economy. The one bright spot for United mexican states, an increase in exports of fruits and vegetables, has not kept pace with imports of U.S. grains and oilseeds. This may be due in part to greater efficiency amidst U.S. producers, simply it is also partly due to U.S. subsidies. By one guess, U.S. corn was sold in Mexico from 1999 through 2001 at prices 30 percent or more below the cost of product. [11]
The increasing trade deficit has translated into job losses in agriculture. Agronomical employment in United mexican states actually increased somewhat in the tardily 1980s and early 1990s, employing 8.ane million Mexicans at the end of 1993, just before NAFTA came into force. Employment in the sector so began a downward trend, with 6.eight million employed at the end of 2002, a loss of 1.3 million jobs. [12] While not all of that reduction can be attributed to NAFTA, other forces that afflicted trade, such every bit the sharp devaluation of the peso during 1994-1995, pushed in the reverse direction, toward greater growth of Mexican exports over imports. In fact, 1995 was the one mail service-NAFTA twelvemonth in which United mexican states had a surplus in its agronomical trade with the United States, and agricultural employment did better modestly for a short menses thereafter. Still, one time the peso stabilized, the agricultural merchandise remainder again turned against Mexico and agricultural employment resumed its decline. During this menstruation, Mexico was also liberalizing merchandise with other partners, so the entire impact cannot be ascribed to NAFTA. But the WTO has determined that Mexico reduced its agricultural tariffs much more than for the United States than for other trading partners. [13] Thus, agricultural trade liberalization linked to NAFTA is the single most significant gene in the loss of agricultural jobs in United mexican states (see Figure 3).
Effigy 3: Mexican Employment in Agriculture
Employees
The release of labor from the agricultural sector largely starting time the employment gains in the export-manufacturing sector that occurred afterwards NAFTA took result. As noted earlier, information technology is impossible to establish precisely what proportion of the gain in export manufacturing jobs and the loss in agronomical jobs between 1994 and 2002 was straight owing to NAFTA. However, it is clear that the sum of the effects of the trade pact to engagement has not been a stiff internet gain in overall employment and may have been a small cyberspace loss of jobs for United mexican states. Further, the long-term furnishings are still uncertain, every bit almost manufacturing tariffs have at present been eliminated, while the nearly sensitive agronomical tariffs have nonetheless to come down.
While the evolution of merchandise-related employment since enactment of NAFTA is disappointing, the commutation of manufacturing jobs for agricultural jobs is generally positive for development, representing a move upwards the production ladder. However, as noted above, in that location are some reasons for concern about the Mexican manufacturing sector. These include the express development of forward and backward manufacturing linkages that would multiply job creation, the erosion of Mexico?south first-mover reward, and the decline in jobs in manufacturing for domestic consumption.
Service Sector Employment
NAFTA has had piddling straight effect on employment in the service sector, because almost services are not traded and those that are, such as financial and telecommunication services, are not very labor intensive. Mexico has had a modest merchandise deficit in services with the Usa , so whatever bear on on employment is likely to exist negative, although not large. All the same, the service sector is central to an overall understanding of the Mexican employment state of affairs, because it is here that most Mexicans find employment. It is also the epicenter of the growth in the so-called informal sector. The share of total employment found in the service sector increased from 51 percent immediately before NAFTA took upshot to 57 percent in 1997. Nearly of this growth was due to assimilation of labor from the agronomical sector, which decreased from 25.7 percent of employment in 1993 to 17.3 percent in 2002 (come across Figure 4). [14]
Effigy 4: Mexican Average Annual Employment Growth by Sector, Before and Afterward NAFTA
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Displacement of subsistence farmers, in function because of increased agricultural imports from the United States as a event of NAFTA tariff cuts, led rural households to struggle to maintain adequate income levels. Mexico has no unemployment insurance program, and then displaced workers must find alternative employment. Due to sluggish employment growth in manufacturing, every bit well equally the limited skills of many agricultural workers, employment was found (or created) mainly in low-pay, depression-productivity jobs in the service sector such as domestic work, street vending, and personal services and repairs. Much of this was in the breezy sector, which comprises self-employment, employment in microenterprises, and other forms of employment that do not provide benefits such equally wellness care and pensions. [15] Overall, the informal sector grew during most of the 1990s, with employment in breezy jobs approaching 50 pct of all employment in United mexican states in 1995 and 1996, following the peso crunch and the subsequent economic contraction. After economical growth resumed in the belatedly 1990s, the informal sector shrank somewhat, but still accounts for about 46 percent of Mexican jobs. [xvi] This reservoir of low-wage, depression-productivity workers shows no sign of being absorbed by Mexico?due south export sector in the foreseeable time to come.
Wages and Productivity
Existent wages for most Mexicans are lower today than when NAFTA took effect. This stunning setback in wages cannot be attributed primarily to NAFTA, however. Indeed, wages today are below their 1980 levels. Most of the subtract in real wages observed over the last twenty years can be traced to two periods of precipitous wage declines. The offset was during the debt crisis of the early 1980s, when a devaluation of the peso and contractionary policies designed to accomplish macroeconomic stability and meet the terms demanded by international holders of Mexico?due south debt led to a sharp driblet in wages. The second turn down occurred as a event of the peso crunch of 1994-1995. When the peso was sharply devalued in each crisis, the cost of imported goods and the charge per unit of inflation both shot up, while wages were constrained past the government?s monetary and wage-setting policies. Wages gradually recovered afterward each of those macroeconomic shocks. Nevertheless, they did not grow enough in either recovery period to render to previous levels. This design is truthful of both traded and nontraded sectors of the economy, as well equally for employees of small, medium, and large firms. [17]
While NAFTA is not the cause of the two major setbacks in Mexican wages, it is hitting that a free-trade agreement that dramatically increased exports and strange direct investment has non done more to increase wages and living standards for average Mexican workers--or even for workers in almost export firms--relative to pre-NAFTA levels. Merchandise theory suggests that a country with an abundance of low-skill labor (such every bit United mexican states) that opens to trade volition experience increasing returns (wages) to its low-skilled workers. Yet, wages for production workers in both maquiladora and non-maquiladora manufacturing are withal below pre-NAFTA levels. Some analysts have suggested that, for a variety of reasons, trade increased the need for highly skilled labor in Mexico relative to the demand for less skilled workers. [18] Only even for highly educated workers in the manufacturing sector (such as professional, technical, and administrative staff), real wages in the belatedly 1990s were beneath those in 1993, with the only exceptions occurring in a few regions along the U.Due south. border. [19] This aforementioned pattern holds for other sectors of the economy. Workers with university degrees and even postgraduate report received lower real wages in 2000 than in 1993. [xx] The disappointing wage performance has occurred despite the fact that Mexican workers? productivity has increased since NAFTA took effect (see Figure 5).
Figure 5: Manufacturing Productivity and Real Wages in Mexico
Index: 1993=100
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Increasing productivity is a necessary condition for sustainable increases in wages, since over time an economy tin only beget to consume what it produces. Merely increased productivity is not sufficient to guarantee wage increases. Wage outcomes will depend in part on supply and demand in labor markets, and in part on the quality (and any bias) of institutions that accept been established to determine how the gains from productivity are distributed. At present, labor market supply continues to exceed demand in nigh categories of labor in Mexico, contributing at least a fractional explanation for poor wage results. In addition, the increasing integration of global product as a result of liberalized merchandise and improved protections for foreign investors has meant that, for many categories of unskilled and semi-skilled labor, competition is found non only in national labor markets but also internationally, every bit firms brand production and sourcing decisions based in part on labor costs in various countries. The accession of China and other low-wage countries to the WTO has increased the supply of labor that firms can tap while all the same being guaranteed admission for their output to the world?due south rich markets, including the Usa and Canada. Differences in tariffs and transportation costs may non beginning larger differences in unit labor costs. (Unit labor costs reflect the combination of wages and productivity).
While labor market place supply and demand and fancy-free global production undoubtedly contribute to the decoupling of wages from productivity seen in United mexican states, it is as well the instance that Mexican institutions have been biased against wage increases. For example, it has been government policy to hold downwardly the minimum wage over most of the last two decades. This has been done both to increment global competitiveness of Mexican labor and exports and to meet structural adjustment goals. The minimum wage determines many other wages in Mexico, which are ready as multiples of the minimum, and and then the impact is felt beyond the lowest-paid jobs. Farther, unionization and collective bargaining, among the main institutional mechanisms for determining how gains from productivity increases will be distributed between employers and workers, have been repressed in Mexico through weak labor laws. In the maquiladoras, for example, it is a widespread practice for employers to conclude ?protection contracts? with corrupt or not-real trade unions. Since Mexican labor law allows only ane union to concur a contract in a workplace, these contracts forestall efforts by workers or more legitimate unions to bargain for wage increases. At that place have been numerous substantiated allegations of Mexican labor authorities allowing employers to collude with non-representative unions to avoid vigorous collective bargaining. [21]
Learning from the NAFTA Experience
At ten years, the long-term effects of NAFTA on employment, wages, and incomes in the countries of North America cannot yet be judged. However, some lessons are emerging on the basis of ten years? data that can usefully inform hereafter merchandise negotiations between adult and developing countries, as well every bit United mexican states ?s own policies going forward.
In developing economies with surplus labor, such equally United mexican states, the NAFTA experience demonstrates that trade pacts cannot be counted on to produce much, if any, net employment growth in the absence of other targeted policies. Policies to maximize employment gains from trade would include measures to promote supplier and support industries in the developing land and terms in the trade agreement that reward rather than discourage the utilise of domestic inputs in the production of exported goods.
The experience of United mexican states also suggests that a developing country with a high proportion of its labor force in low-productivity agriculture should negotiate very long transition periods for the phaseout of tariffs on basic crops and should carefully consider the sequencing of liberalization, to allow the absorption of rural workers into other sectors that expand due to liberalized access to foreign markets, before bones crops are liberalized.
The negative state of affairs currently faced by Mexico too demonstrates that a developing land must use that transition fourth dimension aggressively to prepare the rural population for the wrenching adjustment it volition face. Policies should be adopted to shift farmers to competitive crops, to develop culling sources of employment in rural areas, and to invest heavily in instruction to prepare the population for more modern occupations.
Another of import factor for Mexico was that some of its virtually important bones crops, such as maize, were exposed to competition from subsidized U.S. crops that are sold at artificially low prices, sometimes beneath the toll of product. Further, U.S. policy on agricultural subsidies inverse significantly in ways that were not foreseen during the NAFTA negotiations, most notably in the passage of a farm bill in 2002 that increased subsidies. Successful competition volition be incommunicable for the developing country nether those circumstances. In negotiations over agricultural trade, developing countries should likewise insist on terms, including special safeguards, that will prevent a wealthier trading partner from dumping or otherwise distorting merchandise through domestic or consign subsidies.
Increased productivity appears to exist a likely gain from trade, based on the Mexican feel. However, if such productivity gains are to be shared with workers equally rising wages, the institutions and public policies that affect wage outcomes should be strengthened. Countries with weak laws and institutions related to liberty of association and collective bargaining should address these problems before or in conjunction with trade liberalization. Minimum wage policies may need to be reconsidered; dispute resolution mechanisms, such as arbitration, could as well exist strengthened.
If the gains from merchandise are to be shared widely throughout a country, the institutional mechanisms that govern how costs and benefits of economical alter are distributed may need to be strengthened. Regime measures that touch income distribution, such as tax and transfer mechanisms, should exist reviewed and fortified to deal with the impact of merchandise opening.
Considering the impacts of trade are uneven, governments should establish mechanisms that assistance kickoff the losses suffered by those in declining sectors. Countries opening to trade should starting time strengthen social rubber nets to assist those who lose equally a result of trade-induced economic restructuring. Merchandise adjustment assistance should provide income support to workers and small farmers during transitional periods, as well as funds for training for new occupations. Such policies are highly desirable complements to trade pacts. In Mexico , budget constraints and policy choices take precluded the establishment of fifty-fifty the virtually basic unemployment insurance. The harsh bear upon of agricultural trade liberalization on subsistence farmers has not been offset by advisable regime policies. Poor countries should seek aid for funding of transition programs from their richer negotiating partners, as part of the trade parcel.
[1] Maria Elena Vicario, Sandra Polaski, and Dalil Maschino, Due north American Labor Markets: A Comparative Profile, Secretariat of the North American Commission for Labor Cooperation, Washington, DC, December 2003). Available at www.naalc.org. The authors? calculations are based on information from the Mexican National Establish of Statistics, Geography, and Computer science (INEGI) and the Ministry of Employment and Social Insurance (STPS).
[two] In 2002, 89 pct of total Mexican exports went to the United States, while i.7 pct went to Canada; 63 percent of total Mexican imports were from the United States and 4.two percent were from Canada. (The data for Canada are from Statistics Canada, National Income and Expenditure Accounts; for Mexico, from INEGI, Organization of National Accounts; and for the United States, from the Bureau of Economic Analysis, National Income and Production Accounts.)
[3] INEGI, Monthly Industrial Survey (EIM). This survey also excludes microenterprises, small businesses with fewer than five employees that operate in the informal sector.
[5] Enrique Dussel Peters, ?Industrial Policy, Regional Trends and Structural Change in Mexico?due south Manufacturing Sector,? in Kevin J. Middlebrook and Eduardo Zepeda, eds., Confronting Evolution: Assessing United mexican states?s Economical and Social Policy Challenges ( Palo Alto, Calif.: Stanford University Press, 2003).
[six] The Bear upon of Trade Agreements: Effect of the Tokyo Round, U.Southward.-Israel FTA, U.S.-Canada FTA, NAFTA, and the Uruguay Round on the U.S. Economic system, publication no. 3621 (Washington, D.C.: U.S. International Trade Commission), August 2003. Available at www.usitc.gov
[eight] Rogelio Ramirez De La O, ?What Has Changed in the Performance of Employment and Wages in Mexico later NAFTA?? paper prepared for the 3rd Seminar on Income and Productivity of the N American Committee on Labor Cooperation (February 2000). Available at www.naalc.org/english/publications
[nine] This effect could be amplified by a tendency in Mexican monetary policy to overvalue the peso every bit ways of controlling aggrandizement. This disadvantages Mexican producers when they attempt to export, while imposing less of a burden on U.S. multinationals using Mexico every bit an assembly platform, since the movement of components into Mexico and of finished products out will largely cancel out or at least smooth out the substitution charge per unit effects.
[10] These figures are for overall manufacturing. The definition of unskilled hither is possession of upwards to twelve years of formal education, while skilled is divers every bit possession of xiii years or more. Jose Romero and Alicia Puyana, The Mexican Economic system later on Two Decades of Trade Liberalization,? 2002. Paper on file with the author.
[11] U.s.a. Dumping on World Agricultural Markets, Cancun Series Paper no. 1 Minneapolis: Constitute for Agriculture and Merchandise Policy), 2003. Available at www.iatp.org
[12] N American Labor Markets (see note 1), based on INEGI National Income and Expenditure Survey (ENIGH) and STPS/INEGI National Employment Survey (ENE).
[13] World Merchandise Report 2003 (Geneva: World Trade Organization), August 2003. Bachelor at world wide web.wto.org
[14] N American Labor Markets (see note i).
[15] In that location are a variety of definitions of the breezy sector. The definition used here was developed for STPS by Clara Jusidman in 1993. It takes into business relationship establishment size, the position held, and the industry involved.
[16] Northward American Labor Markets (see annotation ane).
[17] Carlos Salas and Eduardo Zepeda, ?Employment and Wages: Enduring the Costs of Liberalization and Economic Reform,? in Kevin J. Middlebrook and Eduardo Zepeda, eds., Confronting Development: Assessing Mexico?s Economical and Social Policy Challenges ( Palo Alto, Calif.: Stanford Academy Printing, 2003).
[18] See, for example, Raymond Robertson, ?Merchandise Liberalisation and Wage Inequality: Lessons from the Mexican Experience,? Globe Economy, vol. 23, no. 6 (June 2000), pp. 827-49.
[19] Carlos Salas and Eduardo Zepeda, Wages and Productivity in Mexico: Theoretical and Empirical Issues, July 2003, newspaper commissioned for this report, on file with the author.
[xx] The Mexican Economic system ( see note 10), based on data from the Ministry of Labor and Social Welfare National Employment Survey.
[21] The labor side-agreement to NAFTA includes provisions for public petitions to any of the member governments if labor rights violations occur in any of the other NAFTA countries. Several petitions have been filed alleging interference with freedom of association and commonage bargaining rights in Mexico. The petitions were filed with the U.S. National Administrative Office, the trunk that administers the agreement for the U.s.a.. While expressing its findings in diplomatic terms, the National Administrative Part did observe pregnant shortcomings in this surface area in many cases (see www.dol.gov/ilab/programs/nao).
[22] See, for case, Martin Ravallion, ?Can High-Inequality Developing Countries Escape Absolute Poverty?? World Bank Policy Research Working Paper no. 1775 ( Washington , D.C. : World Bank), 1997. The Earth Bank Web site provides a useful summary of inquiry on this topic at www.worldbank.org/poverty/inequal/abstracts/index.htm
[23] Dani Rodrik, Where Did All the Growth Go? External Shocks, Social Disharmonize and Growth Collapses, ( Cambridge , Mass. : Kennedy School of Government, Harvard University ), 1997, provides a political-economical model. Other models are catalogued at the Earth Bank Web site (world wide web.worldbank.org/poverty/inequal/abstracts/index.htm).
[24] North American Labor Markets (come across annotation ane). Data based on INEGI, ENIGH; and The Mexican Economy ( run across note 15).
[25] Gerardo Esquivel, Sources of Regional (Non)Convergence in United mexican states (Washington, D.C.: World Bank), 2002. Bachelor at www.worldbank.org
[26] Diana Alarcon and Eduardo Zepeda, ?Economic Reform or Social Development? The Challenges of a Catamenia of Reform in Latin America ,? Periodical of Evolution Studies, forthcoming.
Carnegie does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and practice not necessarily reflect the views of Carnegie, its staff, or its trustees.
