This is where NAFTA hurts American workers the most

Most Americans never notice how free-trade deals affect them. Such deals usually push prices down and save consumers a few bucks over time. But the changes are incremental and slow.

Some people, however, feel an abrupt impact from free-trade deals, especially when companies move work out of the United States to a country where costs are lower. People who feel they’ve been economically harmed by trade have an unusually loud voice in this year’s presidential election, with Republican nominee Donald Trump vowing to undo trade deals that have been in place for years. In particular, he has targeted the North American Free Trade Agreement, which was negotiated by Republican President George H. W. Bush in the early 1990s. It went into effect on January 1, 1994, while Democrat Bill Clinton was president.

While opposed by labor groups, NAFTA generally enjoyed bipartisan support—until Trump started going after it, joined by former Democratic presidential candidate Bernie Sanders. NAFTA has allowed many manufacturers, including automakers, to build products in Mexico at lower costs and compete more effectively with rivals from Asia and elsewhere. But it has also shifted some work out of the United States, with workers left to find new jobs in different industries or locations. The turbulent and stagnant economy of the last 15 years has made finding decent-paying new jobs difficult or impossible for an important subset of the American workforce that feels it is falling behind.

New research published in the “Review of Economics and Statistics” provides a picture of the workers and regions harmed and helped most by NAFTA. Economists John McLaren of the University of Virginia and Shushanik Hakobyan of Fordham University used Census data to estimate the effect of NAFTA on wages in every region of the United States. They also analyzed incomes for four different educational groups—high school dropouts, high-school grads, those with some college, and college grads—to determine which types of workers were hurt and harmed most.

High school dropouts suffered the most, not surprisingly, with the pain concentrated in southeastern states such as Georgia, the Carolinas and Alabama. In the worst instances, pay for such workers grew 7% less than that for an average worker from 1990 to 2000. Some workers benefited from the trade deal, including less-educated workers in farm and energy states such as Kansas, Oklahoma and Missouri. Their pay grew as much as 9% more than that for an average worker.

This interactive map, constructed by Graphiq for Yahoo Finance from the researchers’ data, shows in detail how workers in each educational group fared on account of NAFTA between the years 1990 and 2000. Dark-shaded areas are where workers were harmed the most, with light-shaded areas being those where workers benefited or were harmed the least. The numbers on the scale represent the percentage by which wage growth for workers in each area trailed or exceeded the average.