# NAFTA: Estimates of Job Effects and Industry Trade Trends After 5½ Years

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URL: https://www.frixlaw.com/law-library/documents/crs%3A98-783

## Record

- **Collection:** Congressional research report
- **Document type:** CRS Report
- **Published:** December 14, 1999
- **Citation:** 98-783

## Text

98-783 E

CRS Report for Congress
Received through the CRS Web

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.

1

For 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, 1994Sept. 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 10-15year 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
2

U.S. Library of Congress, Congressional Research Service. NAFTA: U.S. Employment and
Wage Effects, by Mary Jane Bolle, op. cit., p. 10.

CRS-2
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 onehalf 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)

MEXICO
U.S. Exports
U.S. Imports
Trade
Balance
CANADA
U.S. Exports
U.S. Imports
Trade
Balance

1993

1994

1995

1996

1997

1998

$41,635
40,745

$50,840
50,356

$46,311
62,756

$56,761
74,111

$71,378
87,167

79,010
96,078

891

484

(16,445)

(17,350)

(15,789)

(17,068)

$100,190
113,617

$114,255
131,956

$126,024
148,304

$132,584
159,746

$150,124
171,440

154,152
178,048

(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.

3

U.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.

CRS-3

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.

CRS-4

Table 2. Estimates of “Gross” and “Net” Jobs Created Each Year from
Increased Exports to Mexico and Canada Since NAFTA

(1)
Year

(2)
Total
Exports

(3)
New
Exports

(4)
Number of
Jobs
Supporting
a Billion
Dollars
Worth of
Exports to
NAFTA
Partners

1993
1994
1995
1996
1997
1998
1999

142
165
172
189
221
233
245

—
23
7
17
32
12
12

15,123
14,361
13,774
13,258
12,755
12,245
11,755

Value of Merchandise
Exports to NAFTA
partners (Can. + Mex.)
(in $billions)

(5)
Total Jobs
Supported by
Merchandise
Exports to
NAFTA
Partners

2,144,834
2,370,929
2,373,750
2,510,332
2,825,258
2,855,072
2,877060
TOTAL

Total Number of Jobs
Supporting New
Exports to NAFTA
Partners
(6)
“Gross”
Jobs

(7)
“Net”
Jobs

—
330,303
96,418
225,386
410,175
142,771
136,240

—
226,109
2,821
136,582
314,934
29,805
21,992

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
Export Value 1993-98

% of Total
NAFTA
Commodity
Export Gain

in $billions

% change

*Transportation Equip
*Electronics
*Nonelectric machinery
Chemicals
Primary metals
Rubber
*Scientific instruments
*Paper products
*Apparel
Food

17
17
16
8
4
4
3
3
2
2

56
81
74
72
76
91
48
69
132
45

19
1819
1818
99
54
44
33
23
22
22

SUBTOTAL
Other Manufacturing

76
11
87
4
91

57
46
65
44
64

84
12
96
4
100

SIC

Industry

37
36
35
28
33
30
38
26
23
20

TOTAL MANUFACTURING

Nonmanufacturing
TOTAL

Source: DOC Office of Trade and Economic Analysis.
* indicates industries that are also prominent in Table 4, which lists major industries of NAFTATAA certification in anticipation of possible job loss.

CRS-5

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.

4

An 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.

CRS-6

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
20-30% of the certified workers actually collect NAFTA-TAA benefits. (Therefore,
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
4 and by state in Table 5.
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.

5

U.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.

CRS-7

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 fallen
more harshly on workers in declining7 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.
7

Declining 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.
8

U.S. Library of Congress. Congressional Research Service. NAFTA: Economic Effects on
the United States, by Arlene Wilson. [Washington] April 12, 1996. CRS Report No. 96336E.

CRS-8

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
Trade Trendsd

Domestic Trends
Projected
1994-2005b

Cases
Certified
(2)

1/1/949/28/99
Workers
Certifieda
(3)

Output
Change
(4)

MANUFACTURING 1,698
*Apparel (SIC 23)
645
*Electronics (36)
280
*Trans. equip.(37)
92
Fab. metals (34)
114
Textiles (22)
105
*Nonelec. mach. (35)
99
Lumber (24)
146
*Scientif. inst. (38)
85
*Paper products (26)
59
Rubber/Plastics (30)
64
Leather (31)
68
Misc. (39)
48
Primary metals (33)
43
Food (20)
40
Stone/clay/glass (32)
43
Furniture (25)
26
Chemicals (28)
40
Prnt./publishing (27)
21
Petroleum prods. (29)
3
Tobacco (21)
0

244,266
73,568
33,684
17,092
15,372
14,150
11,747
9,826
9,433
8,982
7,722
7,521
6,909
6,321
6,043
5,995
4,130
3,493
1,995
285
0

S
S
R/E
S
S
N
R/E
S
R/E
R/E
R/E
D
S
N
S
N
S
S
R/E
R/E
D

100
49
142

7,549
6,234
1,569

1,989

259,618

Industry
(SIC)
(1)

TOTAL

Certified
workers
as a %
% Employ- of total
Employment
ment job loss
Change
Change
in (6)
(5)
(6)c
(7)

—
—

D
R/D
D
D
D
D
D
D
D
N
S
R/D
N
R/D
N
D
N
N
S
N
R/D
S
—
—

—
—

—

S

16

NON-MANUFACTURING

Commodities
Services
Unallocated

Actual
1993-6/1999

43
-23
12
7
12
-11
14
15
-3
-2
11
-29
4
4
4
9
7
-3
3
-7
-7

33

18

34
53
22

9
3

—
—

Trade with Mexico
and Canada
combined: 1998 level
in $billions; and (%)
change 1993-98
Exports
(8)

Imports
(9)

220 (66%)
4 (132)%
37 (81%)
46 (56%)
11 (56%)
4 (100%)
37 (74%)
2
(21%)
9 (48%)
6 (69%)
9
(91%)
1
(62%)
3
(55%)
10 (76%)
8
(45%)
3
(43%)
3
(41%)
19 (72%)
3
(25%)
3
(65%)
*
(21%)

274 (78%)
9 (206%)
35 (117%)
74 (70%)
7 (126%)
2 (217%)
21 (132%)
11 (55%)
6 (106%)
12 (37%)
5 (103%)
1 (65%)
2 (114%)
15 (59%)
8 (84%)
3 (91%)
6 (149%)
10 (67%)
1 (108%)
3
(0%)
* (-92%)

13 (44%)
—
—

43 (48%)
—
—

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 workers
d
Detailed trade data are included in appendix Table 6.
*less than 0.5 billion.

CRS-9
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
8: transportation equipment, electronics, nonelectrical machinery, and chemicals),
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
1994-2005, even though 15 out of 20 industries (column 4) anticipate output growth.
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).

CRS-10

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
Jan. 1994-Sept. 28,
1999 NAFTA-TAA
Certified
STATE

North Carolina
Texas
Pennsylvania
New York
California
Georgia
Tennessee
Indiana
Arkansas
Michigan
Wisconsin
Washington
New Jersey
Alabama
South Carolina
Virginia
Ohio
Missouri
Florida
Illinois
Oregon
Louisiana
Idaho
Kentucky
Massachusetts
Colorado

Cases

Workers

171
252
193
126
124
110
109
59
48
74
52
85
69
40
46
64
53
67
72
50
90
18
38
30
31
28

27,725
23,386
18,663
17,487
14,825
12,457
12,191
9,406
8,993
8,334
7,776
7,351
7,064
6,627
6,551
6,513
6,074
5,984
5,756
5,718
4,907
4,688
3,073
2,904
2,562
2,359

Total
Jan. 1994-Sept. 28,
1999 NAFTA-TAA
Certified
STATE

Arizona
Minnesota
New Mexico
Maine
Kansas
West Virginia
Connecticut
Mississippi
Puerto Rico
Utah
Montana
Alaska
Wyoming
South Dakota
Iowa
Vermont
North Dakota
Maryland
Oklahoma
Nebraska
Nevada
New Hampshire
Delaware
Rhode Island
Hawaii
Dist. of Col.
TOTAL

Cases

Workers

30
20
12
18
13
18
11
4
2
13
24
5
19
5
9
4
4
3
4
5
1
0
0
0
0
0

1,354
1,343
1,260
1,234
1,184
842
780
753
631
483
399
390
371
319
300
280
220
211
157
83
1
0
0
0
0
0

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.

CRS-11

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
Of all workers displaced
from wage and salary jobs, after
one to three years, 29% were
confirmed to have found new
full-time wage and salary jobs
earning the same or higher
salary. Another 37% were reemployed at lower earnings,
part-time, or were selfemployed. Another 24% were
unemployed or dropped out of
the labor force. The remaining
10% were re-employed fulltime but no wage data were
available for their previous
employment, so it can not be
determined whether they gained
or lost wage ground.

Figure 1. Re-employment Experience of
Displaced Workers 1 to 3 Years Later

37%
Re-employed:
full-time at
lower
earnings;
part-time; or
self-employed
24%
Unemployed or
dropped out of labor force:

29%
Re-employed
full-time at
same or
higher
earnings:

10%
Re-employed
full-time; no
wage data:

Data source: see foonote at bottom of page.

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 (inflationadjusted) 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 nonmanufacturing sectors.

9

Source 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.

CRS-12
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
WITH
MEXICO

EXPORTS to MEXICO (f.a.s. value)

1993

1996

1997

1998

ALL COMMODITIES

41,635

56,761

71,378

79,010

MANUFACTURING

39,096

52,312

67,306

74,524

20—Food products

TRADE BALANCE with MEXICO
(exports minus imports)

IMPORTS from MEXICO (c.i.f. value)
%
chng
93-98

%
chng
93-98

1996

1997

1998

% chng
93-98

891

(17,350)

(15,789)

(17,068)

(2,018)

160

7,247

(8,723)

(4,267)

(8,230)

(214)

1993

1996

1997

1998

90

40,745

74,111

87,167

96,078

136

91

31,848

61,035

71,573

82,754

1993

1,996

2,000

2,385

2,830

42

941

1,499

1,733

2,016

114

1,055

500

652

814

(23)

21—Tobacco

22

38

23

11

(50)

4

11

25

11

175

18

27

(3)

0

(100)

22—Textiles

643

1,035

1,293

1,697

164

123

495

710

735

498

520

540

583

962

85

23—Apparel

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

24—Lumber

484

256

300

378

(22)

326

411

457

422

29

158

(155)

(157)

(46)

(129)

25—Furniture

696

527

650

789

13

915

1,552

1,919

2,290

150

(219)

(1,025)

(1,269)

(1,501)

585

26—Paper

1,376

1,821

2,063

2,298

67

112

247

283

323

188

1,264

1,574

1,780

1,975

56

27—Printing

263

341

329

380

44

75

190

223

258

244

187

151

106

122

(35)

28—Chemicals

3,036

4,574

5,631

6,069

100

810

1,454

1,628

1,598

97

2,225

3,120

4,003

4,471

101

29—Petroleum

813

1,162

1,624

1,504

85

627

431

345

327

(48)

186

731

1,278

1,177

533

3X—Exprts, unident.

1,538

2,108

2,675

3,241

111

—

—

—

—

—

1,538

2,108

2,675

3,241

111

30—Rubbr & plast.

1,632

2,625

3,314

3,865

137

368

711

899

1,067

190

1,264

1,914

2,414

2,798

121

31—Leather

197

243

319

360

83

351

529

617

596

70

(153)

(286)

(298)

236

53

32—Stone, clay,glass

364

478

561

635

74

618

1,016

1,141

1,329

115

(254)

(537)

(580)

694

173

33—Primary metals

1,892

2,796

3,239

3,809

101

1,289

2,789

3,140

3,503

172

602

7

99

306

(49)

34—Fabricatd metls

1,977

2,874

2,879

3,166

60

951

1,699

2,199

2,560

169

1,025

1,175

680

606

(41)

35—Nonelec. mach.

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)

36—Elec machinery

8,191

12,522

16,292

17,458

113

11,222

18,542

21,550

25,434

127

(3,031)

(6,019)

(5,259)

(7,976)

163

37—Transprt. equip.

5,112

5,693

8,359

9,298

82

6,446

15,613

16,972

18,816

192

(1,334)

(9,920)

(8,613)

(9,518)

613

38—Scientific instr

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)

MINING

290

458

475

424

46

4,635

6,862

8,705

5,496

19

(4,345)

(6,404)

(8,231)

(5,072)

17

OTHER

534

534

741

650

22

1,886

3,080

3,585

4,217

124

(1,351)

(2,545)

(2,844)

(3,567)

164

39—Misc.
AGRICULTURE

CRS-14
TRADE
WITH
CANADA

EXPORTS TO MEXICO (f.a.s. value)

1993

1996

1997

1998

TRADE BALANCE WITH CANADA
(exports minus imports)

IMPORTS FROM CANADA (c.i.f. value)
%
chng
93-98

1993

1996

1997

1998

%
chmg
93-98

1993

1996

1997

1998

% chng
93-98

ALL COMMODITIES

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)

MANUFACTURING

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)

20—Food products

3,462

4,298

4,819

5,058

46

3,295

4,767

5,293

5,770

75

167

(469)

(475)

(712)

(526)

21—Tobacco

11

21

24

29

164

518

27

28

33

(94)

(507)

(6)

(4)

(4)

(99)

22—Textiles

1,254

1,725

1,999

2,089

67

497

931

1,105

1,229

147

757

794

893

860

14

23—Apparel

676

1,027

1,221

1,304

93

622

1,199

1,448

1,719

176

54

(172)

(227)

(415)

(869)

24—Lumber

1,165

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)

25—Furniture

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)

26—Paper

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

27—Printing

1,789

2,048

2,207

2,186

22

530

774

881

998

88

1,259

1,273

1,326

1,188

(6)

28—Chemicals

7,977

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

29—Petroleum

734

995

1,111

1,052

43

1,905

2,940

2,916

2,216

16

(1,170)

(1,945)

(1,805)

(1,164)

(1)

3X—Exprts, unident.

1,961

2,504

2,062

1,736

(11)

—

—

—

—

—

1,961

2,504

2,062

1,736

(11)

30—Rubbr & plast.

2,873

3,805

4,344

4,762

66

2,325

3,490

3,968

4,408

90

548

314

376

354

(35)

217

270

311

309

42

101

155

169

149

48

115

115

141

160

38

32—Stone, clay,glass

1,426

1,702

1,837

1,928

35

949

1,482

1,603

1,662

75

477

219

235

266

(44)

33—Primary metals

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

34—Fabricatd metls

4,911

4,965

5,538

7,585

54

2,044

3,443

3,731

4,216

106

2,867

1,522

1,807

3,369

18

35—Nonelec. mach.

16,038

22,360

26,263

26,619

66

6,881

10,357

11,085

12,041

75

9,157

12,003

15,178

14,578

59

36—Elec. machinery

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

37—Transprt. equip.

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)

38—Scientific instr.

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

39—Misc.

1,321

1,653

1,844

2,070

57

491

884

949

1,038

111

830

769

895

1,032

24

AGRICULTURE

2,910

3,204

3,409

3,428

18

2,998

3,906

4,266

4,257

42

(87)

(701)

(857)

(829)

842

MINING

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

OTHER

2,755

3,738

4,087

3,503

27

6,790

10,014

10,579

12,903

90

(4,035)

(6,276)

(6,493)

(9,400)

133

31—Leather

CRS-15
TRADE
WITH
MEXICO &
CANADA
COMBINED

EXPORTS TO MEXICO & CANADA COMBINED
(f.a.s. value)

1993

1996

1997

1998

ALL COMMODITIES

141,826

189,345

221,503

233,162

MANUFACTURING

132,556

176,422

207,978

20—Food products

IMPORTS FROM MEXICO & CANADA COMBINED
(c.i.f. value)

%
chng
93-98

1993

1996

1997

1998

64

154,362

233,857

258,607

274,126

219,795

66

125,286

192,301

212,603

230,833

%
chng
93-98

TRADE BALANCE WITH MEXICO & CANADA
COMBINED
(exports minus imports)

% chng
93-98

1993

1996

1997

1998

78

(12,536)

(44,513)

(37,104)

(40,964)

(227)

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)

21—Tobacco

33

59

47

40

21

522

38

53

44

(92)

(489)

21

(6)

(4)

(99)

22—Textiles

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

23—Apparel

1,843

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

24—Lumber

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

25—Furniture

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

26—Paper

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

27—Printing

2,052

2,389

2,536

2,566

25

605

964

1,104

1,256

108

1,466

1,424

1,432

1,310

(9)

28—Chemicals

11,013

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

29—Petroleum

1,547

2,156

2,735

2,556

65

2,531

3,371

3,262

2,543

0

(984)

(1,215)

(527)

13

(101)

3X—Exprts, unident.

3,500

4,612

4,737

4,977

42

—

—

—

—

—

3,500

4,612

4,737

4,977

42

30—Rubbr & plast.

4,505

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

31—Leather

414

512

630

669

62

452

684

787

745

65

(38)

(171)

(157)

(76)

100

32—Stone, clay,glass

1,790

2,180

2,398

2,563

43

1,567

2,498

2,743

2,991

91

223

(318)

(345)

(428)

(292)

33—Primary metals

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

34—Fabricatd metls

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

35—Nonelec. mach.

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

36—Elec. machinery

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)

37—Transprt. equip.

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)

38—Scientific instr

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)

39—Misc.

1,868

2,230

2,698

2,903

55

1,154

2,050

2,245

2,469

114

713

180

454

434

(39)

AGRICULTURE

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

MINING

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

OTHER

3,289

4,273

4,827

4,153

26

8,675

13,094

14,164

17,102

97

(5,386)

(8,821)

(9,337)

(12,967)

141

Source of data: U.S. International Trade Commission. Website: http://Dataweb.usitc.gov.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/crs%3A98-783. Public record. Not legal advice.