Thursday, October 27, 2011

Inglorious Wage Basterds (Musical Tribute)

I suggest you listen to the music while reading this post. It can't hurt, much.

Click to enlarge.

It looks a lot like the cumulative trade deficit chart. Big shocker.

June 25, 2011
Missing Jobs vs. Trade Deficit

Click to enlarge.

The difference seems to be that the boost to the stock market is/was temporary but the cumulative trade deficit lives on. Behold the staying power of endless debts and deficits.

January 14, 2004
NAFTA's Legacy -- Profits and Poverty by David Bacon

Predictions of U.S. job losses were, if anything, underestimated. By November 2002, the U.S. Department of Labor had certified 507,000 workers for extensions of unemployment benefits under the treaty because their employers had moved their jobs south of the border. Most observers believe that is actually a significant undercount, partly because many workers losing jobs don't know they qualify for trade-related benefits. According to the Economic Policy Institute in Washington, NAFTA eliminated 879,000 U.S. jobs because of the rapid growth in the net U.S. export deficit with Mexico and Canada.

While the job picture for U.S. workers was grim, NAFTA's impact on Mexican jobs was devastating. Before leaving office (and Mexico itself, pursued by charges of corruption), President Carlos Salinas de Gortari promised Mexicans they would gain the jobs Americans lost. In the United States, he promised that this job gain would halt the northward flow of Mexican job-seekers.

NAFTA's first year saw instead the loss of more than a million jobs across Mexico. To attract investment, NAFTA-related reforms required the privatization of factories, railroads, airlines and other large enterprises. This led to huge waves of layoffs. Mexican enterprises and farmers, who couldn't compete with U.S. imports, also shed workers, and the subsequent peso devaluation cost even more jobs. Because unemployment and economic desperation in Mexico increased, immigration to the United States has been the only hope for survival for millions of Mexicans.

This was written when the unemployment rate was 5.7%. It now stands at a whopping 9.1%. It's the gift that keeps on giving. Sigh.

Source Data:
DOL: History of Federal Minimum Wage Rates
St. Louis Fed: Dow Jones Industrial Average


fried said...

You haven't posted for a bit...are you ok? Hoping all is well.

Stagflationary Mark said...


Thanks for asking! I'm fine. I just got caught up in Disgaea 4 combined with trying to get the house ready for Halloween.

I'll be posting twice today if all goes well. :)