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Economy & Business

Job Loss or Job Gains: NAFTA's Lasting Impact on Milwaukee

If there are political issues that get both Democrats and Republicans riled up these days, near the top of the list would be trade deals.

Some people call trade agreements essential, while others insist they put the U.S. at a disadvantage. What the country seems most focused on now, during the races for president and U.S. Senate, is the proposed Trans Pacific Partnership – it would link 12 Pacific-rim nations. But decades ago, NAFTA - the North American Free Trade Agreement was all the rage. WUWM reports on how some Milwaukeeans describe NAFTA’s impact here.

Both Democrats and Republicans approved NAFTA; it took effect in 1994. Its primary goal was to allow the easy sale of goods between the U.S., Mexico and Canada, by eliminating tariffs and other trade barriers.

Michael Rosen says you don’t have to travel far to understand NAFTA’s impact on southeastern Wisconsin. Rosen teaches economics at Milwaukee Area Technical College.

“I see AO Smith abandoned and I see America Motors now a Walmart and I see Allis Chalmers now a shopping center and I see countless factories on the 30th Street corridor that are abandoned, weeds are growing. What I see is the fact that this state has lost much of its industrial base and the working people in this community, have lost the jobs that both made Milwaukee a vibrant, powerful city and that gave them a good standard of living,” Rosen says.

And Rosen says that reality has impacted African Americans here the most.

“African American workers were disproportionately employed in manufacturing in the Milwaukee area,” Rosen says.

Still, Rosen says it’s too simple an explanation to say that NAFTA alone has caused Milwaukeeans to lose jobs and wages. What has also happened - technology has improved, global trade has grown and other countries have become more competitive.

Robert Gardner is president of M.E.Dey Company Incorporated. It works with local firms that trade goods across North America.

“The whole idea behind NAFTA is being able to maintain the profitability of the manufacturer here,” Gardner says.

Gardner says it makes no sense for some plants to do production work here because costs are too high.

“They have to find competitive means to stay afloat,”Chakrabarti says

That’s Avik Chakrabarti, a professor of economics at UW-Milwaukee. He says many consumers choose low-priced products from other countries.

“If consumers were to buy goods made in Milwaukee, made in the United States, then this problem would be less severe. But with a large section of our consumption coming from foreign goods, our companies don’t have a choice,” Chakrabarti says.

Chakrabarti says just as with most things, there have been local winners and losers under NAFTA. Wisconsin exports have increased, including agricultural products and construction machinery.

According to the Business Roundtable, a Washington D.C.-based group that advocates for business-friendly policies, Wisconsin’s exports to Canada and Mexico have jumped by $8.2 billion since the start of NAFTA.

Robert Kraig says many workers here have taken the hit. He’s is executive director of the group Citizen Action Wisconsin. 

“If you’re looking at manufacturing, there has, in fact, been a net loss. For the whole state, it’s around 130,000,” Kraig says.

One statement many candidates have made to Wisconsin voters this campaign – if the country does engage in trade deals, they must benefit workers here.

The Business Roundtable estimates that in 2014, in Wisconsin, nearly 900,000 jobs were directly or indirectly tied to trade.