Just Foreign Policy wrote:
Just Foreign Policy News, February 17, 2009
From: Just Foreign Policy [info@justforeignpolicy.org]
Sent: Tuesday, February 17, 2009 6:09 PM
To: Tom Chambless
Subject: Just Foreign Policy News, February 17, 2009
A coalition of major Canadian organizations yesterday urged Prime Minister Stephen Harper to signal Canada’s willingness to renegotiate NAFTA in talks next week with President Barack Obama. In a letter sent in the run-up to next Thursday’s first visit to Ottawa by the new president, the coalition stresses revisiting NAFTA doesn’t mean scrapping it, but rather committing to a “transparent and comprehensive renegotiation.”
Never mind Canada. What needs to be discussed here is Mexico. It is absolutely essential that Mexico raises their minimum wage to at least half of the United States, as a beginning. This is from Bandaras News, December, 2008:
The minimum wage in Zone A, which includes Mexico City, Acapulco and several cities on the U.S. border including Ciudad Juarez and Tijuana, will increase to 54.80 pesos ($4.18) a day from 52.59 pesos this year. In Zone B, wages will rise to 53.26 pesos daily from 50.96 pesos. The zone includes some of Mexico’s largest cities such as Monterrey and Guadalajara. Wages in Zone C, which applies to the majority of cities, will increase to 51.95 pesos a day from 49.50 this year.
Four dollars and eighteen cents per day. The real heartbreak of all this is the fact that under NAFTA U.S. manufacturing companies were allowed to close their factories and move to Mexico without assigning import tariffs to offset the difference in labor costs and thusly have little impact on U.S. labor. Tariffs would have balanced the deal and protected the price of labor in the U.S. But the radical right had to have it their way and NAFTA was passed anyway.
Another sad part is that these manufacturers were allowed to legally screw both American and Mexican workers in order to increase their profit margin. Americans, even if they were just getting minimum wage lost their jobs. American workers had to apply for unemployment and suffer through a period of time with no medical coverage and many still have no coverage even if they could find similar work.
Mexican workers were hired at their minimum wage thereby reducing the manufacturer’s labor costs by roughly 500%. Because the manufacturers caused that giant sucking sound and moved to Mexico thereby saving themselves tons of money in wages, did any of them pass any of those savings off to the American consumer? Of course not. They weren’t compelled to reduce their prices so they didn’t. They have made a fortune on cheap Mexican labor.
The long lasting effects and been a reduction of the cost of labor in the United States. We can’t compete with a wage of four dollars and eighteen cents per day. Renegotiate NAFTA? Hell yes.
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