NAFTA: Estimates of Job Effects and Industry Trade Trends After 5-1/2 Years
CRS Report for Congress
NAFTA: Estimates of Job Effects and Industry
Trade Trends After 5½ Years
Updated December 14, 1999
Mary Jane Bolle
Specialist in International Trade
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress
ABSTRACT
During the North American Free Trade Agreement (NAFTA)’s first five and one-half years,
it has served primarily to accelerate trade, plant relocation, and sectoral job “gain” and job
“loss” trends that were already ongoing. This report documents five and one-half years worth
of trends, and includes six tables. They track overall U.S. commodities exports, imports and
trade balance; imports and exports by industry; estimates of jobs supporting those exports,
by state; and industry import and plant relocation effects translated into potential job losses,
both by industry and by state. A separate graph shows re-employment experience of
displaced workers one to three years later. This report is updated periodically.
NAFTA: Estimates of Job Effects and Industry Trade Trends
After 5½ Years
Summary
Five and one-half years after the North American Free Trade Agreement
(NAFTA) between the United States, Mexico, and Canada went into effect in January
1994, there is a continuing debate over whether it has resulted in job “gains” or job
“losses.” Before NAFTA, estimates were that the trade agreement could result in a
maximum of one million job shifts among sectors over NAFTA’s entire 10-15-year
implementation period.1
In its first five and one-half years, NAFTA has primarily served to accelerate
trade, plant relocation, and sectoral job gain and job loss trends that were already
ongoing. Before NAFTA, no Federal agency documented specific job losses from
imports or plant relocations to Mexico or Canada. Only anecdotal estimates were
available. These statistical gaps make NAFTA’s effects difficult to isolate. Because
it is virtually impossible to discern job effects from NAFTA, this report is really about
job effects since NAFTA. Moreover, job-effect estimates included in this report were
developed by different agencies using divergent methods, are arguably incomplete,
and may not capture all of the sectoral job gains or job losses; but they attempt to
present arguments and data so far.
During a little more than NAFTA’s first five and one-half years (from January
1, 1994 - September 28, 1999), nearly 260,000 primary jobs were certified by the
Department of Labor (DOL) in 2,346 plants as potentially threatened by increased
imports from or plant relocations to Mexico or Canada. Two industries, apparel and
electronics, accounted for about 40% of the NAFTA certifications. According to
recent reports by the Department of Labor, perhaps 20 - 30% of those workers
certified may actually have collected benefits. Others certified may never actually
have lost their jobs, or may have found new jobs before beginning to collect benefits.
Additional job losses may have occurred outside of these figures.
These potential job losses are balanced by an estimated nearly 710,000 net job
gains in the economy from increased exports to Mexico and Canada since NAFTA
took effect. This represents nearly 5% of the 15 million jobs created in the U.S.
economy over the same period of time. It may also account for about 98% of the
697,000 jobs gained in manufacturing over the same period of time, since slightly
more than half of all jobs supporting exports to Mexico and Canada are in the
manufacturing sector.
1For a summary of pre-NAFTA job studies, see U.S. Library of Congress, Congressional
Research Service. NAFTA: U.S. Employment and Wage Effects, by Mary Jane Bolle.
[Washington] April 27, 1995, p. 4. (CRS Report 93-447.)
Contents
Overall Job Effects Under NAFTA..................................1
Estimates of Job “Gains” Since NAFTA..............................3
Difficulty of Making Estimates of Job “Losses” Since NAFTA.............5
How Great Have Certified Job Losses Been Under NAFTA?...............6
Industries of Potential Job “Losses” and Estimated Job “Gains” Under
NAFTA ................................................... 7
Certified NAFTA Cases and Workers by State..........................9
Effects of NAFTA on Jobs in Perspective............................11
List of Figures
Figure 1. Re-employment Experience of
Displaced Workers 1 to 3 Years Later...........................11
List of Tables
Table 1.U.S. Commodities Exports, Imports, and Trade Balance with Mexico
and Canada: 1993 - 1998..................................2
Table 2.Estimates of “Gross” and “Net” Jobs Created from Increased Exports
to Mexico and Canada Since NAFTA.........................4
Table 3.Major Industries of Increased Exports to Mexico
and Canada, 1993-1998...................................4
Table 4.Industry Effects Since NAFTA: Jan. 1, 1994-Sept. 28, 1999.......8
Table 5.Potential Job “Loss” by State: Number of Cases and Workers
Certified by the NAFTA-TAA Program, Jan. 1, 1994-
Sept. 28, 1999
Table 6.Appendix. Data on Trade with Mexico and Canada, 1993-1998...13
Special thanks to Cathi Jones for assistance in obtaining data for this report.
NAFTA: Estimates of Job Effects and Industry
Trade Trends After 5½ Years
Five and one-half years after the North American Free Trade Agreement
(NAFTA) between the United States, Mexico, and Canada went into effect January
1, 1994, there is a continuing debate over whether the trade agreement has resulted
in net job “gains” or job “losses.” Before NAFTA, estimates were that it could result
in a maximum of one million job shifts among sectors over NAFTA’s entire 10-15-
year implementation period.
Economists believe that overall and in the long run, trade in general and NAFTA
in particular results in neither net job gains nor net job losses — only in reallocations
from less efficient to more efficient industries. Job-effect estimates included in this
report were developed by different methods, are arguably incomplete, and may not
capture all of the sectoral job gains or job losses. Nevertheless, the purpose of this
report is to present, sort out, and explain the arguments and data so far.
Overall Job Effects Under NAFTA
When discussing job effects under NAFTA, most economists emphasize that
both production shifts caused by lowering of trade barriers and resulting job
dislocations are an intermediate step to greater productivity, greater real income, and
a higher standard of living. The effects of NAFTA will take many years to become
fully manifest.
Under NAFTA, trade barriers are being reduced gradually over 10-15 years, and
resulting dynamic gains from trade and accompanying job effects will continue for all
three countries, particularly as the Mexican economy evolves. In this report estimates
of job gains cover NAFTA’s first five years; estimates of potential job losses cover
a bit more than NAFTA’s first five and one-half years.
In its first five and one-half years, NAFTA has primarily served to accelerate
trade, plant relocation, and sectoral job gain and job loss trends that were already
ongoing. Before NAFTA was approved, however, no Federal agency systematically
documented specific job losses from imports or plant relocations to Mexico or
Canada. Only anecdotal estimates were available: Between 1986 and 1993, for
example, an estimated 25,000 jobs in electronics, 20,000 jobs in transportation,
and 17,000 jobs in apparel production moved to Mexico.2 Meanwhile, expanding
exports to Mexico supported increasing numbers of U.S. jobs — an estimated
2U.S. Library of Congress, Congressional Research Service. NAFTA: U.S. Employment and
Wage Effects, by Mary Jane Bolle, op. cit., p. 10.
538,000 jobs in 1990.3 Now, while estimates are available, hard data still are difficult
to come by. In addition, because it is virtually impossible to discern job effects from
NAFTA, this report is really about job effects since NAFTA.
One more point about overall job effects under NAFTA: Economists argue that
since total U.S. employment (as well as U.S. manufacturing employment) increased
by about 15 million jobs in the 1994-1998 period, any job losses under NAFTA have,
in the aggregate, been more than made up for by job gains in other industries.
Job effects since NAFTA depend on trade effects. Table 1 shows changes in
trade with Mexico and Canada during NAFTA’s first five years. (Trade data at the
industry level are included in the Appendix Table 6.) Since NAFTA went into effect,
exports to and imports from Canada have each increased by roughly 55%. This
suggests little net job effects from trade with Canada. Imports from Mexico,
however, have increased about one and one-half times as much as exports to Mexico.
This suggests some sectoral job “losses” from production shifts to Mexico. However,
since about two-thirds of the increase in imports from Mexico is covered by an
increase in exports to that country, net job effects over NAFTA’s first five and one-
half years are estimated to be relatively small.
Table 1. U.S. Commodities Exports, Imports, and Trade Balance with
Mexico and Canada: 1993 - 1998
(in millions)
19931994 1995 199619971998
MEXICO
U.S. Exports$41,635$50,840$46,311$56,761$71,37879,010
U.S. Imports 40,74550,35662,75674,11187,16796,078
Trade
Balance 891 484 (16,445) (17,350) (15,789) (17,068)
CANADA
U.S. Exports$100,190$114,255$126,024$132,584$150,124154,152
U.S. Imports113,617131,956148,304159,746171,440178,048
Trade
Balance (13,427) (17,701) (22,280) (27,162) (21,315) (23,896)
Source: U.S. International Trade Commission Dataweb. http://dataweb.usitc.gov. Numbers in
parentheses represent negative balances.
3U.S. Department of Commerce, Economics and Statistics Administration. U.S. Jobs
Supported by Goods and Services Exports to Mexico, May, 1992. OIMA Research Series
2-92, p. 10, and U.S. Jobs Supported by Goods and Services Exports, 1983-94, OIMA
Research Series 1-96, p. 20.
Estimates of Job “Gains” Since NAFTA
How great have the sectoral job gains been during NAFTA’s first five years?
The Department of Commerce (DOC), under contract with the University of
Maryland, used an input-output model (incorporating output-per-worker ratios for
each sub-industry) to estimate jobs added to the economy when output for any given
sector increases. This model has been used to calculate the average number of jobs
supported by each billion dollars worth of exports to Mexico and Canada for each
year since NAFTA went into effect. The resulting figures can be used to produce two
separate estimates on job gains in the U.S. economy from increased trade with
Mexico and Canada since NAFTA. The two estimates are “gross” job gains and “net”
job gains (which are mitigated by productivity increases). Both sets of figures are
presented in Table 2, columns 6 and 7, on the following page.
Table 2, in addition to showing estimates of job gains from new trade with
Mexico and Canada since NAFTA went into effect, also includes other data from
which these job gains were derived.
In table 2, columns 2 and 3 list the value of total exports to Mexico and Canada
combined, and new exports for each year since NAFTA went into effect. Column 4
includes figures from the DOC model — the number of jobs supporting each billion
dollars worth of exports to NAFTA partners for the various years. This is a number
which declines each year because of productivity changes.
Column 5 lists total jobs supported by merchandise exports to NAFTA partners
for the respective years.
Columns 6, as mentioned above, reflects “gross” jobs — that is, the value of
new exports, in billions (column 3), times the number of jobs supporting each billion
dollars worth of exports (column 4).
Column 7 reflects “net” jobs, which represents added jobs from increased
exports for a given year, minus jobs lost over the year from increases in productivity.
For any year, this is calculated as the column 5 figure minus the column 5 figure for
the previous year. Estimates of the total net number for jobs “created” from “new”
exports to Mexico and Canada since NAFTA went into effect (709,988) represent
about 5% of the 15 million jobs created in the U.S. economy over the same time.
The overall job gain figures are not sorted by specific industries, because the
Department of Commerce does not publish annual figures showing, by industry, the
number of jobs supported by each billion dollars worth of exports. However, Table
3 shows the major industries of increased exports to Mexico and Canada since
NAFTA went into effect. Table 3 shows that most of the export gain, and therefore
most of the presumed job “gains,” since NAFTA went into effect would be expected
in three manufacturing industries: transportation equipment (e.g., auto and some
parts manufacturing), electronics, and nonelectric machinery (including computers).
However, productivity gains in these industries may eliminate any actual net job gains
in these industries.
Table 2. Estimates of “Gross” and “Net” Jobs Created Each Year from
Increased Exports to Mexico and Canada Since NAFTA
(4)
Value of MerchandiseNumber ofTotal Number of Jobs
Exports to NAFTAJobsSupporting New
partners (Can. + Mex.)Supporting(5)Exports to NAFTA
(in $billions)a BillionTotal JobsPartners
DollarsSupported by
Worth ofMerchandise
Exports toExports to(2)(3)(6)(7)
(1) NAFTA NAFTATotal New “Gross” “Net”
YearPartnersPartnersExportsExports JobsJobs
1994 165 23 14,361 2,370,929 330,303 226,109
1995 172 7 13,774 2,373,750 96,418 2,821
1996 189 17 13,258 2,510,332 225,386 136,582
1997 221 32 12,755 2,825,258 410,175 314,934
1998 233 12 12,245 2,855,072 142,771 29,805
1999 245 12 11,755 2,877060 136,240 21,992
TOTAL 1,341,293 732,230
Source of data: Department of Commerce, Economics and Statistics Administration.
Table 3. Major Industries of Increased Exports to Mexico
and Canada, 1993-1998
Growth in Industry% of Total
Export Value 1993-98NAFTA
Commodity
SICIndustryExport Gainin $billions% change
37*Transportation Equip175619
36 *Electronics 17 81 1819
35*Nonelectric machinery16741818
28 Chemicals 87299
33 Primary metals47654
30 Rubber49144
38*Scientific instruments34833
26*Paper products36923
23 *Apparel 2 132 22
20 Food24522
SUBTOTAL765784
Other Manufacturing114612
TOTAL MANUFACTURING876596
Nonmanufacturing 4 44 4
TOTAL9164100
Source: DOC Office of Trade and Economic Analysis.
* indicates industries that are also prominent in Table 4, which lists major industries of NAFTA-
TAA certification in anticipation of possible job loss.
Difficulty of Making Estimates of Job “Losses”
Since NAFTA
Some analysts have tried to count sectoral job losses under NAFTA by applying
the DOC “average” (Table 2, column 4) numbers of jobs supporting each $1 billion
of exports, to imports or to net imports (i.e., trade deficits) for the respective years.
However, this methodology is not correct.
Trade deficits cannot be used to measure net job losses because there are no net
job losses as long as output and employment continue to rise. New imports are just
added to domestic output, and not substituted for it. Trade deficits therefore, do not
reflect aggregate jobs lost, but rather, at most, some job gains foregone (which, have
no identifiable victims) in sectors affected by trade.4 Nor can trade deficits be used
to measure specific job losses in various industries. This is because at even the most
detailed industry levels, job losses in one operation may be balanced by job gains from
increased exports or domestic demand in another.
Thus, many specific job losses are hidden in sub-industries. This is not to say the
job losses do not exist. They are very real, and perhaps more accurately counted
directly and tallied up by industry. However, attempting to do this unveils other
problems. Although the Department of Labor regularly publishes the number of job
certifications (potential job losses from trade with Mexico and Canada since NAFTA),
it does not publish the actual number of job losses in various industries, which may
vary as a proportion of certifications, from industry to industry.
4An example helps illustrate: If there is a trade balance, then exports equal imports. A
subsequent trade deficit means either that net imports have increased or net exports have
decreased. If net imports have increased, then extra imported goods consumed in the United
States are being made abroad in jobs held by workers in other countries. Some would argue
that these specific jobs held by foreigners are actually U.S. jobs foregone (gone to other
countries before they were able to become U.S. jobs) — and thus have no identifiable U.S.
victims.
However, not all these imported goods represent jobs that could be held in the United States
for two reasons: First, because countries tend to import goods that are relatively costly to
produce domestically (and to export goods which they can produce most efficiently) imported
goods, in all likelihood, could not be produced as cheaply at home. Therefore, if the imports
were not available, U.S. consumers would presumably buy a lower additional quantity of
domestically produced goods, which would employ a smaller number of additional workers
in the United States than are employed abroad in manufacturing the actual level of extra goods
produced for import into the United States. Second, if the United States is at “full
employment” when there is a trade deficit (as is currently the case) then there would be a
limited supply of available workers to shift into domestic production of these goods.
However, some unknown number of workers would likely be willing and able to shift into jobs
producing these import substitutes if wages were greater than in their current employment, and
if their education and training qualified them for the jobs. Their shifting would leave other
less desirable jobs unfilled.
How Great Have Certified Job Losses Been Under
NAFTA?
The Department of Labor (DOL) certifies potential job losses from trade with
Mexico and Canada under the NAFTA-Transitional Adjustment Assistance (TAA)
Program. The certification identifies those eligible for training or income replacement
benefits because imports are expected to “contribute importantly” to the potential
for job loss, or the plant is relocating to Mexico or Canada. Hence, NAFTA
certifications cover an unknown number of actual job losses which are a subset of
total job losses from NAFTA. The NAFTA certifications include only those job
losses for which the worker or an employer applied for certification and a direct
linkage to trade with or a shift in production to Mexico of Canada can be verified.
However, NAFTA-TAA certification figures may overestimate job losses among
certified workers. Not all workers certified actually lose their jobs. Rather,
certification numbers represent the total number of workers at the plant which has
applied for certification. Data from the Department of Labor suggest that as few as
the others certified may either actually not have lost their jobs, may have found
another job in lieu of needing benefits, or for other reasons may not have collected
benefits.)
The DOL has certified roughly 259,618 job losers from 2,179 plants under the
NAFTA-TAA Program in a little more than five and one-half years (January 1, 1994 -
September 28, 1999.) These potential job losers are distributed by industry in Table
A common question relates to the identity of NAFTA-related job losers outside
the NAFTA-TAA subset. Other workers whose job losses may be related to NAFTA
include the following major groups: (1) primary job losers who for some reason
either: (a) did not apply for NAFTA-TAA benefits; or (b) applied and were rejected
because they did not meet the criteria for certification (e.g., imports from Mexico or
Canada contributed “somewhat” rather than “importantly” to their job loss); (2)
secondary job losers (who typically equal about twice the number of primary job
losers) in supplier or distributor industries who did not apply or were not approved
for NAFTA-TAA benefits;5 and (3) other job losers whose job loss is less directly
related to NAFTA and who did not apply or were not eligible for NAFTA benefits.
5U.S. Department of Commerce, Economics and Statistics Administration. U.S. Jobs
Supported by Goods and Services Exports, 1983-92, p. 13 suggests that approximately two
additional jobs support each manufacturing job by producing intermediate inputs, capital
goods, and transportation and other services to the goods to market.
Industries of Potential Job “Losses” and Estimated Job
“Gains” Under NAFTA
Table 4 shows NAFTA-certified “cases”6 and job losses by industry (columns 1,
2, and 3) in a broader context. For each industry, Table 4 also shows overall industry
employment changes (columns 6 and 7), and trade levels and growth rates (columns
8 and 9) over NAFTA’s first two years, as well as longer-term output (column 4) and
employment (column 5) projections.
During NAFTA’s first five and one-half years, NAFTA-certified job losses
(Table 4, column 3) have occurred in 19 out of a total of 20 manufacturing industries
(column 1) with approximately 41% of the total job loss occurring in two
industries: apparel and electronics. Many of these transitional losses have fallen7
more harshly on workers in declining industries and declining sectors of growing
industries. Declining industries are indicated by a “D” in column 4 — e.g., leather
manufacturing. In these industries, current and projected output (column 4) and
employment during NAFTA’s first five and one-half years are declining absolutely
(indicated by a negative number in column 6). Declining portions of expanding
industries are not identified. However, the fact that many of the same industries
appear in both Table 3, which identifies major industries of increased exports, and
high up on Table 4, which lists industries of potential job “loss” from new trade with
Mexico and Canada, in descending order, suggests that certain portions of the same
industries are declining, and relocating to Mexico or Canada, while other parts are
increasing their exports. Industries included in both Tables 3 and 4 are listed in bold
typeface and marked with an asterisk (*).
Longer-term output and employment projections have been included in Table 4
(columns 4 and 5) because some observers argue that if NAFTA were repealed, both
output and jobs could be preserved in the United States. Since merchandise exports
to Mexico and Canada combined represent only about 2.7% of U.S. GDP, repeal of
NAFTA would likely have very little effect on these longer-term trends in most
industries.8 These trends show clearly that even though output is expected to increase
in most industries, employment is not expected to increase appreciably.
6“Case” refers to a group of workers applying for NAFTA certification. It may represent a
plant or a production operation.
7Declining industries are typically those at the end of their product life cycle, a concept
authored by economist Raymond Vernon. He hypothesized that, as each product moves
through its natural life cycle from a fledgling product requiring constant research,
development, and refining to a mature product with standardized technology, it likely
experiences changes in the geographical location of its production. After production
technologies are perfected, the product can be manufactured wherever production and
distribution costs are lowest. This frees scarce labor resources for work on other, newly
emerging products.
8U.S. Library of Congress. Congressional Research Service. NAFTA: Economic Effects on
the United States, by Arlene Wilson. [Washington] April 12, 1996. CRS Report No. 96-
Table 4. Industry Effects Since NAFTA:
January 1, 1994-September 28, 1999
Cases and Workers Certified and Trade Changes against a Backdrop of
Overall Domestic Output and Employment Trends
Domestic TrendsTrade Trendsd
ProjectedbActualTrade with Mexico
1994-20051993-6/1999and Canada
Industry CasesWorkersaOutputEmployment% Employ-mentof totaljob loss
(SIC)CertifiedCertifiedChange ChangeChangein (6)ExportsImports
(1)(2)(3)(4) (5)(6)c(7)(8)(9)
MANUFACTURING 1,698 244,266 S D 43 220 (66%) 274 (78%)
*Apparel (SIC 23)64573,568SR/D-23334(132)%9(206%)
*Electronics (36)28033,684R/ED1237(81%)35(117%)
*Trans. equip.(37)9217,092SD7 46(56%)74(70%)
Fab. metals (34)11415,372SD1211(56%)7(126%)
Textiles (22)10514,150ND-11184(100%)2(217%)
*Nonelec. mach. (35)9911,747R/ED1437(74%)21(132%)
Lumber (24)1469,826SD152(21%)11(55%)
*Scientif. inst. (38)859,433R/ED-3349(48%)6(106%)
*Paper products (26)598,982R/EN-2536(69%)12(37%)
Rubber/Plastics (30)647,722R/ES119(91%)5(103%)
Leather (31)687,521DR/D-29221(62%)1(65%)
Misc. (39)486,909SN43(55%)2(114%)
Primary metals (33)436,321NR/D410(76%)15(59%)
Food (20)406,043SN4 8(45%)8(84%)
Stone/clay/glass (32)435,995ND93(43%)3(91%)
Furniture (25)264,130SN73(41%)6(149%)
Chemicals (28)403,493SN-3 919(72%)10(67%)
Prnt./publishing (27)211,995R/ES33(25%)1(108%)
Petroleum prods. (29)3285R/EN-733(65%)3(0%)
Tobacco (21)00DR/D-7*(21%)*(-92%)
NON-MANUFACTURING S
Commodities 100 7,549 — — — — 13 (44%) 43 (48%)
Services496,234——— —————
Unallocated 142 1,569
TOTAL 1,989 259,618 — S 16 220 (66%) 274 (78%)
SIC: Office of Management and Budget Standard Industrial Classification codes. Manufacturing industries are represented by
SIC Codes 20-39.a
”Cases certified” includes a group of workers who may represent a plant or a production operation. Source for plant closings
and job losses: U.S. Department of Labor, Office of Trade Adjustment Assistance.b
Source: Franklin, James. Industry Output and Employment Projections to 2005. Monthly Labor Review, November 1995,
p. 45-59. For output change for the period 1994-2005: D= declining (4-19% decline); N= no change (-2%-+2%); S=
slow-growing (3-25% growth); R/E= rapidly expanding (26-50% growth). For employment change: R/D= rapidly
declining (21-38% decline); D= declining (2-20% decline); N= neutral growth (-3%-+3%) S= slow-growing (4-8%
growth).c
Source: U.S. Department of Labor, Employment and Earnings, all workersd
Detailed trade data are included in appendix Table 6.
*less than 0.5 billion.
Therefore, for most industries these projections include only a very marginal job effect
from trade with Mexico and Canada, and an even smaller effect specifically from
NAFTA.
To what extent is NAFTA exacerbating absolute employment declines in certain
industries? During NAFTA’s first five and one-half years industry employment
declined absolutely (column 6) in seven out of 19 manufacturing industries that show
potential NAFTA job loss. Within these seven industries, potential NAFTA job loss
accounted for 3% to 53% of total job loss (column 7). In other industries where
employment did not occur overall, much of the job loss was presumably attributable
to productivity gains or non-NAFTA-related declines in output. Overall, between
1994 and June of 1999, an increase in manufacturing jobs in the U.S. economy has
more than made up for NAFTA job losses. Between January 1994 and June, 1999
manufacturing employment grew by 478,000 jobs or about 2.6%.
To what extent will NAFTA-related job gains occur in the manufacturing
sector in the coming decade? As mentioned briefly earlier in this report, productivity
gains in manufacturing are expected to greatly mitigate job opportunities in this
sector. Little future job growth is expected in any of the four industries that currently
account for 63% of manufacturing exports to Mexico and Canada (Table 4, column
even though two of these industries (electronics and non-electrical machinery)
anticipate rapidly expanding output, and all four industries anticipate expanded trade
with NAFTA partners. Only two industries (rubber/plastics and printing/publishing
— see column 5) anticipate employment growth above 3% for the 11-year period
All this means that NAFTA-related job gains in the manufacturing sector could be
very small, and most job gains related to NAFTA will likely occur in other industries.
Certified NAFTA Cases and Workers by State
Table 5 shows the number of cases and workers certified, by state. Three groups
of states have chalked up more than 80% of the NAFTA-related job loss: (1) some
of the more traditional industrial states (i.e., New York, Pennsylvania, Michigan,
Wisconsin, New Jersey, Illinois, Ohio, and Indiana); (2) some of the southern states
which represent some labor-intensive industries as well as some border retail
establishments (i.e. North Carolina, Texas, Georgia, Arkansas, Florida, and
Tennessee), and (3) some of the high-tech states (i.e., Washington and California).
Table 5. Potential Job “Loss” by State: Number of Cases and Workers
Certified by the NAFTA-TAA Program,
January 1, 1994-September 28, 1999
Total Total
Jan. 1994-Sept. 28,Jan. 1994-Sept. 28,
1999 NAFTA-TAA1999 NAFTA-TAA
Certified Certified
STATE Cases Workers STATE Cases Workers
North Carolina17127,725Arizona301,354
Texas 252 23,386 Minnesota 20 1,343
Pennsylvania19318,663New Mexico121,260
New York12617,487Maine181,234
California 124 14,825 Kansas 13 1,184
Georgia11012,457West Virginia18842
Tennessee 109 12,191 Connecticut 11 780
Indiana 59 9,406 Mississippi 4 753
Arkansas488,993Puerto Rico2631
Michigan 74 8,334 Utah 13 483
Wisconsin 52 7,776 Montana 24 399
Washington 85 7,351 Alaska 5 390
New Jersey697,064Wyoming19371
Alabama406,627South Dakota5319
South Carolina466,551Iowa9300
Virginia 64 6,513 Vermont 4 280
Ohio536,074North Dakota4220
Missouri 67 5,984 Maryland 3 211
Florida 72 5,756 Oklahoma 4 157
Illinois 50 5,718 Nebraska 5 83
Oregon 90 4,907 Nevada 1 1
Louisiana184,688New Hampshire00
Idaho 383,073Delaware00
Kentucky302,904Rhode Island00
Massachusetts 31 2,562 Hawaii 0 0
Colorado282,359Dist. of Col.00
TOTAL 2,346 259,618
Source: U.S. Department of Labor, Office of Trade Adjustment Assistance. Database sorted by
CRS.
Note: Totals in Table 5 do not agree with totals in Table 4 because certain entries which lack SIC
code identifications were not picked up in the Table 4 sort.
Effects of NAFTA on Jobs in Perspective
While NAFTA has resulted in job loss in certain import-sensitive industries, it
may have also resulted in job gains in some export-oriented industries. While parts
of many industries are growing as a result of NAFTA, some have lost jobs primarily
because of trade with Mexico and Canada. All the estimated 259,618 workers
certified under NAFTA-TAA are eligible for retraining benefits through local state
employment agencies for up to 18 months, if they actually lose their jobs. Data are
not available to show specific subsequent job history of job losers under NAFTA.
However, a DOL study showing how 3.6 million full-time wage and salary workers
displaced from their jobs between January 1995 and December 1997 had fared one
to three years later in February 1998 offers a possible scenario (see Figure 1).9
Figure 1. Re-employment Experience ofOf all workers displaced
Displaced Workers 1 to 3 Years Laterfrom wage and salary jobs, after
29%one to three years, 29% wereconfirmed to have found new
Re-employed
full-time atfull-time wage and salary jobs
same or earning the same or higher
37% higher earnings:salary. Another 37% were re-
Re-employed:
full-time atemployed at lower earnings,
lowerpart-time, or were self-
earnings;
part-time; oremployed. Another 24% were
self-employedunemployed or dropped out of
10%the labor force. The remaining
24%Re-employed full-time; no 10% were re-employed full-
Unemployed orwage data:
dropped out of labor force:time but no wage data were
Data source: see foonote at bottom of page.available for their previous
employment, so it can not be
determined whether they gained
or lost wage ground.
What is happening to U.S. jobs as a result of NAFTA is part of a larger picture
of job changes in the American landscape: Although manufacturing’s real (inflation-
adjusted) output as a percent of real GDP has remained relatively stable,
manufacturing’s employment level and employment share has been shrinking:
Between 1972 and 1998 manufacturing lost 2% of its jobs, while its share of total
U.S. jobs declined from 26% to 15%. Productivity growth and downsizing have
helped some manufacturing industries become more competitive in the international
marketplace. Between 1992 and 1997, manufacturing employment has actually
grown by 3%. In the future, however, as manufacturing employment continues to
shrink from additional productivity gains, most employment gains elsewhere in the
economy that balance out small NAFTA-related job losses will tend to occur in non-
manufacturing sectors.
9Source of data: BLS Finds Risk of Displacement Higher Even as Job Losses Ease in 1995-97
Period. Bureau of National Affairs’ Daily Labor Report, August 20, 1998, p. D-5 — D-13.
In conclusion, the estimates reported here provide a medium-term perspective
on possible trade-related effects since NAFTA. An analysis of the complete
employment effects from NAFTA must include many more years of data and more
comprehensive analysis. An accurate assessment of employment effects under
NAFTA would have to separate out from raw data, such non-NAFTA influences as
business cycles, productivity growth, pre-NAFTA-trends, and post-NAFTA
fluctuations in currencies.
CRS-13
Table 6. Appendix. Data on Trade with Mexico and Canada, 1993-1997
(in $millions)
TRADE BALANCE with MEXICO(exports minus imports)
TRADEEXPORTS to MEXICO (f.a.s. value)IMPORTS from MEXICO (c.i.f. value)
WITH%chng %chng% chng
MEXICO199319961997199893-98 199319961997199893-98199319961997199893-98
41,635 56,761 71,378 79,010 90 40,745 74,111 87,167 96,078 136 891 (17,350) (15,789) (17,068) (2,018)
39,096 52,312 67,306 74,524 91 31,848 61,035 71,573 82,754 160 7,247 (8,723) (4,267) (8,230) (214)
1,996 2,000 2,385 2,830 42 941 1,499 1,733 2,016 114 1,055 500 652 814 (23)
22 38 23 11 (50) 4 11 25 11 175 18 27 (3) 0 (100)
783643 1,035 1,293 1,697 164 123 495 710 735 498 520 540 583 962 85
1,167 1,986 2,510 2,966 154 2,468 4,708 6,325 7,746 214 (1,300) (2,722) (3,814) (4,780) 267
iki/CRS-98-484 256 300 378 (22) 326 411 457 422 29 158 (155) (157) (46) (129)696 527 650 789 13 915 1,552 1,919 2,290 150 (219) (1,025) (1,269) (1,501) 585
g/w
s.or1,376 1,821 2,063 2,298 67 112 247 283 323 188 1,264 1,574 1,780 1,975 56
leak263 341 329 380 44 75 190 223 258 244 187 151 106 122 (35)
://wiki3,036 4,574 5,631 6,069 100 810 1,454 1,628 1,598 97 2,225 3,120 4,003 4,471 101
http813 1,162 1,624 1,504 85 627 431 345 327 (48) 186 731 1,278 1,177 533
1,5382,1082,6753,241111——— —— 1,5382,1082,6753,241111
1,6322,6253,3143,865137 3687118991,0671901,2641,9142,4142,798121
19724331936083351529 61759670(153)(286)(298)23653
364 478 561 635 74 618 1,016 1,141 1,329 115 (254) (537) (580) 694 173
1,892 2,796 3,239 3,809 101 1,289 2,789 3,140 3,503 172 602 7 99 306 (49)
1,977 2,874 2,879 3,166 60 951 1,699 2,199 2,560 169 1,025 1,175 680 606 (41)
5,210 6,859 9,547 10,270 97 2,031 5,389 7,185 8,598 323 3,179 1,471 2,362 1,672 (47)
8,19112,52216,29217,45811311,22218,542 21,55025,434127(3,031)(6,019)(5,259)(7,976)163
5,1125,693 8,3599,298826,44615,61316,97218,816192(1,334)(9,920)(8,613)(9,518)613
1,941 1,797 2,462 2,679 38 1,507 2,584 2,926 3,694 145 434 (787) (464) (1,015) (334)
547 577 854 833 52 663 1,167 1,295 1,431 116 (117) (589) (441) (598) 416
1,716 3,457 2,857 3,412 99 2,376 3,134 3,304 3,611 52 (660) 322 (447) (199) (70)
290 458 475 424 46 4,635 6,862 8,705 5,496 19 (4,345) (6,404) (8,231) (5,072) 17
534534741650221,8863,0803,585 4,217124(1,351)(2,545)(2,844)(3,567)164
CRS-14
TRADE BALANCE WITH CANADA(exports minus imports)
TRADEEXPORTS TO MEXICO (f.a.s. value)IMPORTS FROM CANADA (c.i.f. value)
WITH%chng%chmg% chng
CANADA 1993 1996 1997 1998 93-98 1993 1996 1997 1998 93-98 1993 1996 1997 1998 93-98
100,190 132,584 150,124 154,152 54 113,617 159,746 171,440 178,048 57 (13,427) (27,162) (21,315) (23,896) 78)
93,460 124,110 140,672 145,271 55 93,437 131,266 141,030 148,079 58 23 (7,156) (358) (2,808) (12,309)
3,462 4,298 4,819 5,058 46 3,295 4,767 5,293 5,770 75 167 (469) (475) (712) (526)
11 21 24 29 164 518 27 28 33 (94) (507) (6) (4) (4) (99)
1,254 1,725 1,999 2,089 67 497 931 1,105 1,229 147 757 794 893 860 14
676 1,027 1,221 1,304 93 622 1,199 1,448 1,719 176 54 (172) (227) (415) (869)
7831,165 1,330 1,653 1,619 39 6,638 9,204 10,118 10,369 56 (5,473) (7,874) (8,465) (8,750) (60)1,266 1,519 1,794 1,980 56 1,513 2,748 3,255 3,758 148 (247) (1,229) (1,461) (1,778) (620)
1,936 2,894 3,140 3,301 71 8,307 11,165 10,957 11,243 35 (6,371) (8,270) (7,817) (7,942) 25
iki/CRS-98-1,789 2,048 2,207 2,186 22 530 774 881 998 88 1,259 1,273 1,326 1,188 (6)
g/w7,977 11,052 12,397 12,847 61 5,443 8,239 9,080 8,825 62 2,534 2,813 3,317 4,022 59
s.or734 995 1,111 1,052 43 1,905 2,940 2,916 2,216 16 (1,170) (1,945) (1,805) (1,164) (1)
leak
1,9612,5042,0621,736(11)————— 1,9612,5042,0621,736(11)
://wiki2,873 3,805 4,344 4,762 66 2,325 3,490 3,968 4,408 90 548 314 376 354 (35)
http217 270 311 309 42 101 155 169 149 48 115 115 141 160 38
1,426 1,702 1,837 1,928 35 949 1,482 1,603 1,662 75 477 219 235 266 (44)
3,833 5,132 6,471 6,294 64 8,053 11,057 11,675 11,394 41 (4,220) (5,925) (5,204) (5,100) 21
4,9114,9655,5387,585542,0443,443 3,7314,2161062,8671,5221,8073,36918
16,038 22,36026,26326,619666,88110,35711,08512,041759,15712,00315,17814,57859
12,369 17,446 18,993 19,738 60 4,988 8,167 8,872 9,729 95 7,381 9,279 10,121 10,009 36
24,358 32,416 36,978 36,802 51 37,111 48,492 51,995 55,352 1,392 (12,752) (16,076) (15,017) (18,550) (190)
3,883 4,951 5,664 5,962 54 1,227 1,746 1,900 1,930 57 2,656 3,205 3,765 4,032 52
1,321 1,653 1,844 2,070 57 491 884 949 1,038 111 830 769 895 1,032 24
2,910 3,204 3,409 3,428 18 2,998 3,906 4,266 4,257 42 (87) (701) (857) (829) 842
1,065 1,531 1,957 1,950 83 10,393 14,561 15,565 12,809 23 (9,328) (13,029) (13,608) (10,859) 16
2,755 3,7384,0873,503 27 6,790 10,01410,57912,903 90 (4,035) (6,276)(6,493)(9,400)133
CRS-15
TRADETRADE BALANCE WITH MEXICO & CANADA
WITHEXPORTS TO MEXICO & CANADA COMBINED (f.a.s. value)IMPORTS FROM MEXICO & CANADA COMBINED (c.i.f. value)COMBINED(exports minus imports)
MEXICO &
CANADA%chng%chng% chng
1993 1996 1997 1998 93-98 1993 1996 1997 1998 93-98 1993 1996 1997 1998 93-98
141,826 189,345 221,503 233,162 64 154,362 233,857 258,607 274,126 78 (12,536) (44,513) (37,104) (40,964) (227)
132,556 176,422 207,978 219,795 66 125,286 192,301 212,603 230,833 84 7,270 (15,879) (4,625) (11,038) (252)
5,458 6,298 7,203 7,888 45 4,236 6,266 7,026 7,786 84 1,222 32 177 102 (92)
33 59 47 40 21 522 38 53 44 (92) (489) 21 (6) (4) (99)
1,896 2,759 3,291 3,786 100 620 1,426 1,815 1,964 217 1,277 1,334 1,476 1,822 43
7831,843 3,013 3,732 4,270 132 3,089 5,907 7,773 9,465 206 (1,246) (2,894) (4,041) (5,195) 317
1,648 1,586 1,953 1,995 21 6,964 9,615 10,575 10,791 55 (5,315) (8,029) (8,622) (8,796) 65
1,962 2,046 2,444 2,769 41 2,429 4,300 5,175 6,048 149 (466) (2,254) (2,731) (3,279) 604
iki/CRS-98-3,312 4,715 5,203 5,599 69 8,419 11,411 11,240 11,566 37 (5,107) (6,696) (6,037) (5,967) 17
g/w2,052 2,389 2,536 2,566 25 605 964 1,104 1,256 108 1,466 1,424 1,432 1,310 (9)
s.or
leak11,013 15,625 18,029 18,916 72 6,254 9,692 10,708 10,423 67 4,759 5,933 7,320 8,493 78
1,547 2,156 2,735 2,556 65 2,531 3,371 3,262 2,543 0 (984) (1,215) (527) 13 (101)
://wiki3,500 4,612 4,737 4,977 42 — — — — — 3,500 4,612 4,737 4,977 42
http4,505 6,430 7,658 8,627 91 2,692 4,201 4,867 5,475 103 1,813 2,228 2,790 3,152 74
414 512 630 669 62 452 684 787 745 65 (38) (171) (157) (76) 100
1,790 2,180 2,398 2,563 43 1,567 2,498 2,743 2,991 91 223 (318) (345) (428) (292)
5,724 7,928 9,709 10,103 76 9,342 13,846 14,815 14,897 59 (3,618) (5,919) (5,106) (4,794) 33
6,887 7,839 8,417 10,751 56 2,996 5,141 5,930 6,776 126 3,892 2,697 2,486 3,975 2
21,248 29,219 35,811 36,889 74 8,912 15,746 18,270 20,639 132 12,336 13,473 17,540 16,250 32
20,560 29,968 35,285 37,196 81 16,210 26,709 30,423 35,163 117 4,350 3,260 4,862 2,033 (53)
29,471 38,110 45,337 46,100 56 43,557 64,106 68,967 74,168 630 (14,086) (25,996) (23,630) (28,068) (245)
5,825 6,748 8,126 8,641 48 2,735 4,330 4,825 5,624 106 3,090 2,418 3,301 3,017 (2)
1,8682,230 2,6982,903551,1542,0502,2452,469114713180454434(39)
4,626 6,661 6,266 6,840 48 5,374 7,040 7,569 7,868 46 (747) (379) (1,304) (1,028) 37
1,354 1,989 2,432 2,374 75 15,028 21,423 24,270 18,305 22 (13,673) (19,434) (21,838) (15,931) 17
3,289 4,2734,8274,153 26 8,675 13,09414,16417,102 97(5,386) (8,821)(9,337)(12,967) 141
: U.S. International Trade Commission. Website: http://Dataweb.usitc.gov.
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