I am so used to the New York Times refusing to acknowledge the reality of bad trade deals, this article clam as a shock.
“A new phenomenon has grown up under Nafta — high-productivity poverty,” said Harley Shaiken, chairman of the Center for Latin American Studies at the University of California, Berkeley.
Low wages means low purchasing power. “It is not a successful strategy for globalization,” Mr. Shaiken said.
Even Nafta’s greatest success — exports — has become a liability, as Mexico feels the full brunt of declining consumption in the United States. The auto industry, for example, which has flourished under Nafta, has ground to a virtual standstill. Over all, Mexican auto exports fell more than 50 percent in the first two months of this year compared with 2008, and production dropped almost 45 percent.
The central bank forecasts that as many as 340,000 people could lose their jobs this year, and some investment banks predict the economy could contract as much as 5 percent.
That weakness has driven down the peso, which has lost about a quarter of its value in the last six months. Foreign direct investment fell last year to $18.6 billion from $27.2 billion in 2007.
Sound familiar? Work harder, work longer and have less money?
Ya know all of those folks name called, sidelined warned about all of this race to the bottom.
I guess name calling ain't economic indicators after all.