June 05, 2008

NAFTA Lowers Mexican Wages

The huge arguement that NAFTA would bring Mexican wages upto American wages seems to have taken a wrong turn.

As more automakers turn to Mexico, a big argument for the North American Free Trade Agreement in 1993 -- that Mexico's low wage rates would slowly rise to close the gap with U.S. wages -- seems to have been thrown in reverse.

Mexican auto unions are taking a cue from U.S. labor leaders by offering two-tier hiring systems and salary cuts that bring already low wages down to near-Chinese levels.



Union leaders at the plant told the Associated Press they had agreed to cut wages for new hires to about half of the current wage of $4.50 per hour.

"We need to be more competitive," said Ford union leader Juan Jose Sosa Arreola. "That's the truth. That's a reality."

With these labor costs Mexico is competitive with China, where an average worker at a foreign-owned factory or joint venture can make $2 to $6 per hour.

And people here in the U.S. bitch that a person cannot live on minimum wages, in Mexico and China they are making no where near U.S. minimum wages. Mexico is taking cues from the U.S. companies though saying they must lower wages to compete with China.

Mark my words, within 5 years manufacturing jobs in the U.S. will be making minimum wages and all for "competing with the competition".

The U.S. is being drawn down to the communist country levels, they are not being drawn upto our levels as supporters of "Fair-trade" treaties claim.

Posted by Quality Weenie at June 5, 2008 08:23 AM | TrackBack