NAFTA Dispute Divides Ranks Of Middle Class
For many in Michigan, the free-trade pact is a litmus test for confidence in the future
GRAND RAPIDS, MICH.
MUCH of Michigan distrusts free trade. Two oil embargoes, a Japanese auto invasion, and the steady loss of high-paid manufacturing jobs have rattled its confidence in such open-border policies.
Small wonder, then, that former presidential candidate Ross Perot chose Michigan to deliver his message against the North American Free Trade Agreement (NAFTA). ``It will destroy our economy. It will destroy our country,'' he told some 2,500 people gathered at the state Capitol in Lansing Saturday.
His image of a ``giant sucking sound'' from Mexico resonates well here. Michigan's two United States senators and almost its entire congressional delegation oppose NAFTA.
But even in this battered state, many quietly support the treaty, which would eliminate trade barriers between the United States, Canada, and Mexico over 15 years. Their voices, juxtaposed with NAFTA detractors, speak volumes about the hopes and future of a once-optimistic American middle class.
Grand Rapids lies an hour's drive west of Lansing. It is conservative, tidy, well-to-do. Unemployment is low; Republican registration is high. Former President Ford hails from here.
``There's a lot of support here for the North American Free Trade Agreement,'' says Birgit Klohs, president of the area's economic-development effort, the Right Place Program. She recruits companies from the US and abroad to locate in Grand Rapids and create new jobs.
These technology-oriented jobs won't move to Mexico, even if NAFTA passes, she says. ``What are we afraid of?'' she says.
Plenty, says Lana Boldi, a political coordinator for the United Auto Workers (UAW) in Grand Rapids. ``People need to understand that multinational companies have no patriotism.
``If they can make more money hiring a Mexican worker to make a product, then that's where they're going to go,'' she says. If the US signs NAFTA, ``we see it as opening the floodgates.''
Ms. Klohs, a native German, married an American and moved to the US. Ms. Boldi worked her way up to a union position from the General Motors Kalamazoo plant - now slated to close under the company's downsizing plan. Their divergence on NAFTA suggests a deeper split. Part of America's middle class is optimistic about economic growth. Another part worries that it is losing its grip on middle-class status.
This suggests why the NAFTA debate generates such strong emotions, even though its economic impact may be small.
Support for NAFTA comes not only from huge multinational corporations, as Boldi suggests, but also from smaller firms heavily involved in foreign trade. Steelcase, the office-furniture company and this area's largest manufacturing employer, supports NAFTA. So does Amway Corporation, the area's No. 3 manufacturing employer, and No. 4 Wolverine Worldwide, one of the last American shoemakers. These companies are already selling and producing products overseas.
``With NAFTA, there is far more positive opportunity than without [NAFTA],'' says Dick DeVos, president of Amway. On one consumer product alone, Amway expects NAFTA would reduce $500,000 on tariffs into Mexico. Mr. DeVos says US-based manufacturing jobs related to Mexican exports will rise 10 percent if the treaty is signed.
Whether or not NAFTA passes, the US will still lose jobs to low-wage countries.
``There's a certain inevitability'' of job loss, says Geoffrey Bloom, president of Wolverine Worldwide, based in nearby Rockford, Mich. To keep producing shoes in the US, Mr. Bloom bought a small plant in Monterrey, Mexico, to make leather uppers that are imported to the US so that the company's 1,500 Rockford workers can make finished shoes. ``If we couldn't make those uppers offshore ... do you know what would happen? We would lose all the jobs'' in Michigan, he says.
The company still does some stitching in Arkansas, but an increasing amount of the labor-intensive work is done in the Caribbean. It might be better for North America if the jobs already lost to low-cost labor areas were moved to Mexico, Bloom says.
The problem is that not just low-paid jobs are moving. So are high-paid ones.
In the early 1970s, recalls UAW local President Les Hodge, the Sunstrand refrigeration-parts factory in Dowagiac, Mich., provided 1,100 well-paid, blue-collar jobs. Then the downsizing began. In 1988, with the unionized work force down to roughly 500, the company announced it was transferring part of the work to Mexico. Today, only 80 workers remain at the Michigan plant.
``I could agree with the concept [of free trade] that everyone is trying to sell if we were on the same plane'' as Mexico, Mr. Hodge says. But when Michigan workers make eight times more than the average Mexican, the gap is too wide for free trade to work, he says. One former Sunstrand employee is working three jobs to maintain her former income.
Several respected labor economists agree that Mexico will drain away more US jobs than it creates. But the impact will almost certainly be much less than Mr. Perot's claim of 5.9 million US jobs at risk. Even the pro-labor Economic Policy Institute pegs the loss at 1/10th the level Perot predicts.
The Clinton administration and some economists claim NAFTA would create some 250,000 US jobs. Either way, the impact will be equal to no more than about 0.2 percent of the US work force.
But NAFTA remains an important symbol of opportunity for part of the American middle class and of loss for the rest.