This week marks the 20th anniversary of the ceremonial signing of the North American Free Trade Agreement, or NAFTA. The agreement was controversial from the start when negotiations began in the mid 1980′s. Many argued NAFTA would bleed American jobs to Mexico. Others said it would be a boon for the American economy and make American manufacturing more competitive.
It many cases, it depends on which side of the fence you sit. And even then, answers aren’t so clear cut. Consider two auto towns, one in Michigan and another in Mexico. First, take the case of Michigan and one retired autoworker there.
Bob Bowen worked for the Ford Motor Company in Ypsilanti, Michigan for 35 years assembling cars. He retired in 1994. Today, he lives in a modest house in the Township of Ypsilanti. He collects a pension from Ford of $1,300 a month. He takes home another $1,200 in social security. He’s spending part of his retirement restoring a 1957, baby blue Ford Thunderbird.
“First car I bought,” said Bowen, who bought the car at age 18.
I asked Bowen if a young blue collar worker starting at Ford today could afford to buy a new car like that.
“Not too many, no,” he said.
“So he’s worked at Ford now for about eight years. And he’s worked up to pretty good pay grade, I think he’s around $17 or $18 an hour.”
That’s the same hourly wage Bowen got 20 years ago. And his grandson has no pension, less generous healthcare benefits and weaker job security. Bowen doesn’t see how his grandson can achieve the same middle class lifestyle he enjoyed in Ypsilanti.
“You’re supposed to save up enough money to buy a home,” said Bowen “You have to have a way to get to work, so that means you have to have a new car, so that’s pretty expensive. You have to have insurance, that’s expensive. You have to eat every day, contrary to what some conservatives think. And you have to save enough money so you can educate your children, if you have any children. Where’s that money coming from?”
Bowen added, forget about having enough money at the end of the month for your 401k. At least Bowen’s grandson, Bobby, has a job here. Another grandson had to move to Kentucky to find work and another one joined the military.
In the late 1970’s, some 20,000 people worked for Ford and General Motors in Ypsilanti. Today, only a few hundred work in the auto industry here. It’s the same story in cities throughout Michigan, Ohio, and Indiana.
To say the least, Ypsilanti has seen better days. Tax revenues have plummeted in the past 20 years. The city mayor says he’s considering combining fire and police into one. The parks and recreation department has a budget of $0. It’s just a web page that rarely gets updated. Downtown, auto row is no longer.
“So you take east of the river on Michigan Avenue, there used to a row of automotive dealerships there,” said Bowen “Along the north side, was a Pontiac dealership, which is now a Honda dealership. And then you go across to the other side, there was Lincoln Mercury, then there was a Chevy dealer, there was the Dodge dealer, and then there was an Oldsmobile dealer. Well all that’s left is the Honda dealer, which tells you something, right?”
Like many current and former auto workers I met, Bowen blames Washington for the changes around here. Another retired autoworker I met in Ypsilanti, Shirley Poling, said NAFTA was the “death knell of her town and permanent trade relations with China was the final nail in the coffin.”
At the same time, Bowen, and the others, understand that NAFTA was only one factor in their town’s problems. Jobs were moving away from here well before NAFTA was signed, and not just to Mexico. Technology has also made it possible for car makers to hire far fewer workers and be more productive.
Through it all, Bowen doesn’t blame the Mexican workers. He says wages are too low there and the workers are being exploited. Nor does he blame the men who run the Detroit car companies for what happened here.
“They’ve made some mistake in product choices, but it’s understandable how they made that, that’s past history. They’re a product of the environment that they have to exist in,” he says. “I’ve known these… These are decent people. GM executives I’ve know have been just as decent as the union brothers I knew. But they lived in a world where they had to compete with China. If General Motors, or Ford or Chrysler makes a car that no one can afford, they’ll go out of business.”
Detroit’s Big Three are far stronger than just a few years ago. The bailout from American taxpayers helped get GM and Chrysler back on their feet. And, most auto analysts agree: Detroit is putting out a better product.
That’s welcome news for American autoworkers who can earn bigger bonuses through profit sharing. Proponents of NAFTA also point out that American consumers can now purchase more affordable cars and have more variety to choose from. But people like Bob Bowen said laid off autoworkers in places like Ypsilanti can’t afford them.
“It’s almost like reading what happened after WWI where you’ve got a lost generation – you had so many people killed. Well in this case, it’s killed opportunities.”
Others I spoke with in Ypsilanti did express some reason for hope. When I visited four years ago, the main drag was almost entirely boarded up. Today, there are hip coffee shops, stores and restaurants. Apartment lofts have opened above them. Some artists and have moved to the area. And people from nearby Ann Arbor have come for cheaper real estate.
Bob Bowen said the changes are superficial. He said what would help people here more than anything else are new jobs.