Faded Denim NAFTA Blues: El Paso Confronts Deindustrialization and Betrayed NAFTA Promises

By Medaille, Bill; Wheat, Andrew | Multinational Monitor, December 1997 | Go to article overview

Faded Denim NAFTA Blues: El Paso Confronts Deindustrialization and Betrayed NAFTA Promises


Medaille, Bill, Wheat, Andrew, Multinational Monitor


By the end of year four of the NAFTA calendar, some 6,472 laid off workers in El Paso, Texas had been officially certified as North American Free Trade Agreement victims.

Bienvenidos to ground zero of NAFTA.

151,256 PINK SLIPS SERVED

By December 1997, the U.S. Labor Department's Transitional Adjustment Assistance (TAA) program - which systematically undercounts job losses - certified that 151,256 U.S. jobs had been lost to NAFTA-related imports and plant shutdowns. The hardest hit sectors were garments, electronics and car parts. Texas topped the job-loss list, with 12,800 stiffed workers, about half of them in El Paso.

At 6,472 certified NAFTA job losses and counting, El Paso is NAFTA's undisputed job-loss capital, leaving No. 2 ranked Syracuse, New York (with 2,619 casualties) in a cloud of Southwestern dust.

El Paso Mayor Carlos Ramirez and local activist Cindy Arnold of the labor advocacy group Mujer Obrera (or "Working Woman") predict that the local NAFTA toll will reach 10,000 jobs once all 1997 layoff claims are processed. Kathleen Bombach, who directs a worker retraining center at El Paso Community College, estimates that another "20,000 jobs are vulnerable to permanently leaving El Paso over the next five years." Noting that the value of traded goods passing through El Paso more than doubled in NAFTA's first four years, Mayor Ramirez recently said, "We on the border who facilitate this trade are not receiving the benefits."

El Paso's unenviable status makes the largest U.S. city on the Mexican border an unwilling testing ground for labor promises that the Clinton administration made in selling NAFTA. President Clinton promised that new funds and institutions would nurse the wounds of workers who would be left behind as trade and jobs reshuffled across international borders. Of particular concern were the families that rely on the kind of low-skilled manufacturing jobs that have been El Paso's mainstay.

TWIN CITIES

Though its 670,000 inhabitants make it the nineteenth largest U.S. city, El Paso lives in the shadow of the 1 million residents of Ciudad Juarez, located just across the border. Juarez is where the first maquiladora twin plant was built in 1968. Under the maquiladora system, Mexican workers assemble U.S. components into finished products that are shipped back to the U.S. market. At the border, U.S. Customs agents only impose import duties on the value of the work that the Mexicans performed.

A low-skilled, low-wage Latino workforce fuels El Paso's economy, too. One-fourth of the adult workforce never completed ninth grade and 66 percent do not speak English. Nonetheless, El Paso manufacturing jobs grew 50 percent in the 15 years prior to NAFTA, fed by abundant cheap labor. Of the 100 largest U.S. metropolitan areas, El Paso ranks dead last in per capita income.

MADE IN THE USA

The garment industry developed an early appreciation for El Paso's low-cost workers. In a labor-intensive industry

with well-established technology, apparel companies were among the first to shift jobs overseas. Between 1962 and 1989, U.S. apparel employment fell 14 percent. This job flight was accelerated by a pre-NAFTA tax break that allowed garment sweat shops to function like maquiladoras. So long as foreign workers assembled garments from U.S.cut fabric, customs agents just taxed the imports on the value added abroad.

During this period of garment job flight, El Paso's garment employment more than doubled, as this border city developed a reputation as the cheapest place to sew clothes with a bona fide "Made-in-USA" label. Blue jeans in particular were internationally equated with the "USA" label, and El Paso became the largest U.S. jeans producer and the third largest U.S. garment worker employer (eclipsed by New York and Los Angeles). As recently as 1991, Levi Strauss, Lee, Wrangler and Sun Apparel emerged from a U.S. recession and invested in major plant expansions in El Paso. …

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