American Workers Bid Adios as Jobs Go South
Impact of freer trade is softened by US federal aid and retraining program
STANLEY Lewis's job assembling video- game machines was putting food on the table and his wife through Seattle University. Then, Nintendo of America Inc. dropped a New Year's bombshell: The factory was moving to Mexico. Mr. Lewis and 135 other American workers were pink-slipped.
But the blow was softened by the North American Free Trade Agreement safety net. Legislation approving NAFTA, with its cuts in trade tariffs, also provides generous benefits designed to help those who lose jobs as a result. The assistance is turning the layoff a year ago into what Lewis, a 25-year-old high-school graduate, calls ``an answer to prayer.''
Under NAFTA, his unemployment insurance is extended for up to a year beyond the standard 26-week limit. The program, called NAFTA -
Transitional Adjustment Assistance (TAA), also pays for up to two years of retraining for a new career. For Lewis, who had planned on more education anyway, the NAFTA-TAA means getting a two-year accounting degree without having to hold down a job at the same time.
Lewis is not unusual. After a year of doing business under NAFTA, many of the expected job casualties have already picked themselves up and moved on, often using Uncle Sam's help to prepare for higher-wage careers. A booming job market in many regions - for 1994 at least - has helped. Moreover, analysts say, only about half of the 15,837 people who have been certified as eligible for NAFTA benefits owe their job losses to production moving to Mexico or Canada.
So should Americans forget Texas billionaire Ross Perot's warnings about the ``giant sucking sound'' of jobs going south?
Mike Yeubanks of Springfield, Mo. doesn't think so. He and 430 workers at a Zenith Electronics plant are slated to lose their jobs by next April. Again, production is moving to Mexico.
``You gave the best years of your life away and they turn around and move,'' comments Mr. Yeubanks, who has worked at the Zenith plant for 25 years.
Though unemployment in Yeubank's mid-sized Missouri town stands at just 2.7 percent, he says the newer jobs often pay near minimum wage. Zenith pays workers $8.50 an hour, plus benefits.
Career switches can be tougher for older US workers such as Yeubanks. But his situation suggests another continuing challenge: creating good-paying, skilled jobs to replace the many blue-collar jobs that shift to lower-wage nations.
Remember ``Roger and Me''? The Michael Moore 1989 documentary film told how General Motors Corporation was closing US plants and opening them in Mexico during the 1980s. Flint, the Michigan city highlighted in the film, has seen its labor force shrink by 20 percent and still has a jobless rate nearly twice the national average.
``General Motors became the largest private employer in Mexico. It used to be the largest private employer in the United States, but it's been replaced by McDonalds. That tells you something, doesn't it?'' says Tom Laney, a member of United Auto Workers union who studies trade issues.
Mexican auto workers not only work for much lower pay but also in poorer conditions and with little union clout, says Mr. Laney, an employee of the Ford Motor Company in Minneapolis. Ford has also moved thousands of jobs to Mexico.
Such job-shifting began long before NAFTA, which can be seen as simply the codification of a trend.
``We used to produce a finished good here,'' Yeubanks says. In 1991, Zenith laid off about 1,500 people as the company shifted television assembly to Mexico, leaving the present force to mold plastic TV cabinets.
The recent devaluation of the Mexican peso promises to make exports from Mexico to the US even cheaper. That could accelerate the trend to shift jobs south.
Lewis and his wife Teresa shake their heads at the growing prosperity rift in America between ``knowledge workers,'' who thrive on global trade, and low-skilled workers whose wages are dragged down in part by developing-country competition.
Their own planning, plus the NAFTA-TAA assistance, puts them on a path to enter the higher-wage sector. The couple hopes eventually to be self-employed and raise children.
Other former Nintendo workers are also using federal aid, including career counseling, to target more promising occupations.
Rich Terry now has retrained and gotten a job as a computer technician. Karin Wilson will soon be a licensed massage therapist.
``A lot of people ... had aspirations to get the heck out of there,'' Mr. Lewis says of the work at Nintendo, which was repetitive and offered little opportunity for advancement.
But for some immigrant Americans, Nintendo provided a decent wage in a job that did not require English-language skills. Randy Lee, who came from China in 1979, was very disappointed when his job at Nintendo came to an end. The non-union shop offered good benefits, including health care and vacations. Like all Nintendo workers, Lee received some assistance but on his own has found an assembly job in the area.
The NAFTA aid is certified by the Labor Department on a company-by-company basis. A direct tie to NAFTA need not be proved, but some relation to competition from Mexico or Canada must be shown. Reasons could range from increased imports from rival firms to relocation of production. A decision is made within 40 days of application, which can come from the company, laid-off workers, or a union.
How many jobs NAFTA has cost or created is a point of debate. ``It will take at least five to 10 years for the full effects of the agreement to manifest themselves,'' states a report by the US Congress Joint Economic Committee.
What is clear is that many jobs, especially in apparel and labor-intensive manufacturing, are moving abroad.
A study by Harvard University's Jeffrey Sachs and Howard Shatz concludes foreign competition has been costing the US about 100,000 manufacturing jobs a year. That's nearly 40 percent of all job losses in manufacturing from 1978-90. The remaining 60 percent are lost mostly by greater efficiency. The economists say service industries could be next. Already some data-entry work has gone abroad.
Lewis does not approve of long-term welfare. But he approves of the NAFTA assistance: ``I don't think that's so much socialistic.... It's smart.
TODAY: NAFTA's US winners and losers
JAN. 5: Mexican companies stoically accept US competition
JAN. 6: Canadian furniture company back from bankruptcy
JAN. 9: Mexican border bullring: Some firms stumble, some thrive