NAFTA's small-town impact
By being flexible, Morrilton, Ark., shows how to survive when jobs move
Just a few months ago, the future of this small town seemed as dark and foreboding as a storm rolling in over the Ozarks.
Two of Morrilton's biggest employers - Levi Strauss and Arrow Automotive - had up and left, moving overseas for the lure of cheaper wages and lower costs. Almost instantly, one-sixth of Morrilton prepared for the unemployment line.
The town would collapse, some said, like so many NAFTA ghost towns that lost needle-trade and manufacturing jobs to places such as Sri Lanka or Honduras.
But today, Morrilton is far from empty. The town has forged a new identity and taken the first steps toward recovery. It's experience is a parable of rural America in a free-trade age - to survive, small towns must turn away from old manual-labor models and toward high-tech solutions.
"Morrilton has become a model transition community," Barbara Pardue, executive director of the Arkansas Department of Economic Development. "It wasn't going to be a blinking 'hold' button waiting for something to come to it."
Across America, the impact of free trade has been significant. While towns up and down the US-Mexico border are bustling, old Southern textile towns are feeling pinched. In 1968, more than 1.4 million Americans made clothing. Now only 770,000 cut and sew. Last year, the US imported some $51 billion in apparel - about six times more than it exported - mostly from the developing world.
According to one union comparison, a US manufacturing job that pays $10.12 an hour, including benefits, costs companies just $1.51 an hour in Mexico and 91 cents in Honduras. Indonesians work for as little as 16 cents an hour.
Other businesses, such as aerospace giant Lockheed Martin, have also complained about losing American jobs, but overall, US officials say, free trade's benefits have outweighed its drawbacks. According to Department of Labor statistics, 210,000 American workers have lost their jobs in the past five years because of the North American Free Trade Agreement (NAFTA). Yet the humming economy - which NAFTA can take some credit for, these officials say - created 267,000 new jobs last November alone.
Here in Morrilton, things began a turn for the better on - perhaps appropriately - a stormy night. Some 200 of the town's 6,500 residents met in the local high school gym to discuss their future.