Free-trade pact blamed forloss of thousands of local jobs

Last updated: February 10. 2014 9:47AM - 3773 Views
By James Johnson jamesjohnson@civitasmedia.com

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LUMBERTON — When Greg Cummings first began working as Robeson County’s economic development director back in 1986, he was warned that the job would give him gray hair. It was a claim Cummings hadn’t taken seriously until 1994, the year the United States enacted the North American Free Trade Agreement, also known as NAFTA.

Twenty years later, Cummings says even his mustache has lost its color.

“I survived three recessions, back in the late ‘70s and early ‘80s, and there was a huge difference between what happened with us then and what has happened to us now,” Cummings said. “Back in the ‘70s, we were able to eventually bounce back each time, because the industry base was still here, the companies were still here … but with NAFTA? NAFTA is a different animal.”

NAFTA, which was enacted Jan. 1, 1994, is a trade agreement signed by the United States, Canada and Mexico that served to lower trade and investment barriers among the three nations. Though it was spearheaded and openly promoted by President George H.W. Bush with a ceremonial signing in 1992, negotiations were not finalized until President Bill Clinton signed it into law in late 1993.

The act was promoted as a way of stimulating the economies of all three countries — and creating jobs — by allowing easier trades. This meant the elimination of tariffs on more than half of Mexico’s exports to the United States and a third of United States exports to Mexico.

A vocal minority voiced concern that the agreement would encourage U.S. manufacturers to move their plants — and their jobs to Mexico — where they would not be required to pay fair wages and would not be held to the same environmental standards.

According to Cummings and others in his corner, that script played out.

“The industrial developers knew what was going to happen. If you’ll recall the headlines at the time … [1992 presidential candidate] Ross Perot’s famous quote was that it was going to create ‘a giant sucking sound’ of jobs being moved to Mexico. He just didn’t say how big that pipe would be.”

According to the United States Chamber of Commerce, NAFTA is responsible for a dramatic increase in national trade in goods services with Mexico and Canada, from $337 billion in 1993, to $1.2 trillion in 2011. Nonetheless, the Economic Policy Institute reported that while NAFTA may have meant big dollars for corporations, it also led to a loss of more than 700,000 American manufacturing jobs to Mexico, with many in Robeson County.

“It got personal to me. If you see that many people lose their jobs and it doesn’t affect you, then you don’t need to be in this line of work,” Cummings said. “I see people on the street, people I know, asking, begging, for a job … these people were losing their homes, their farms, some of them were having mental breakdowns, heart attacks and I knew some that were committing suicide. Yeah. It had an effect on me.”

According to the Rev. Mac Legerton, executive director of the Center for Community Action, which is based in Lumberton, rural areas, which have traditionally been more dependent on manufacturing jobs, suffered the greatest job loss, with Robeson County being among the hardest hit in the nation.

“The impact on our county was like 10 back-to-back hurricanes … and not only taking down the trees, the trees representing the jobs and infrastructure that was destroyed, but ensuring that nothing could ever grow back in its place,” Legerton said. “ … I remember, one historian recently reflected on our nation’s history and said ‘We have always had two capitals in the United States instead of one, Washington D.C. and New York City, and only one of them is running us at one time or another [and] right now the capital of New York City is running the country. The monetary interests on Wall Street. So the international monetary folks have the strongest lobby in Washington D.C. history and it has impacted both of our major political parties.”

Legerton blames corporate interests for the creation of NAFTA and believes that so long as politicians hold those interests above those of rural workers, jobs will continue to leak outside the country.

“Funny thing is, I thought the Civil War settled who was governing our nation a long time ago,” Legerton said. “At that time we had a geographic area, the South, that stood up and said they wanted to run, govern their area and do that separately and we fought a war about it. One hundred years later, another area of our nation stood up and said they want to govern themselves. They said ‘We want to govern ourselves and want to run our sector the way we want, and we want to make up our own rules.’ This time the government said, ‘Fine. Not only can you set your own rules but we’ll allow you to sue us if you think we are protecting our own self-interests.’”

The Robeson County Office of Economic Development has determined that NAFTA led to the closing of 32 manufacturing plants and the displacement of more than 6,000 workers in Robeson County between 1995 and 2005. Since 1994 the county unemployment rate has steadily risen from 7.6 to 9.7 as of December. Some of the largest job losses were from Sara Lee Knits Products, which laid off 1,275 employees with the closure of three plants, in 1995, 1996 and 1997. In 2001, Alamac Knit Fabrics laid off 750 employees and Converse laid off 656 employees. The loss of the Lumberton Converse plant was particularly devastating, as the shoe manufacturer had previously been among the county’s largest employers, with close to 2,000 employees before 1993.

The plant was Converse’s last remaining facility in America, according to Cummings.

“When I saw Converse shut down, I knew right then we were in for it,” Cummings said. “See, when a plant like that shuts down, you lose more than that plant, you lose its suppliers. You are going to lose textile, rubber, cloth and glue. Suddenly the makers of all those parts that Converse was paying for, they are having to shut down too.”

Now there are about 540 textile workers in Robeson County, according to Cummings.

In 2004, Legerton teamed up with Leslie Hossfeld, professor of sociology for The University of North Carolina at Wilmington, on a research project titled “The Economic and Social Impact of Job Loss in Robeson County, North Carolina: 1993-2003.”

In the study, Hossfeld and Legerton concluded that NAFTA had created a $4.78 billion loss in jobs, income and tax revenue in the region, as defined by Robeson and those counties that depended on Robeson, including Scotland, Hoke, Columbus, Bladen, Cumberland and Dillon, S.C. This was due to what the study referred to as a “ripple effect” that the loss of manufacturing jobs had on every other sector of the community, thanks to a more than $674 million annual loss of household income in the county.

Women of Robeson County were particularly affected by the job losses, as, according to Hossfeld, many of the textile factories had mostly female employees. Hossfeld said that many of the displaced workers that she and Legerton interviewed for the study had far greater trouble finding new jobs because of a lack of training in other fields of work. A number of the woman, Hossfeld said, had grown up with the assumption that these jobs would always be here and began working immediately after high school.

“Doing some of these interviews, it was painful at times,” Hossfeld said. “Because we would try to get a scientific perspective, and remain emotionally distant, but then we would have these women who would ask us during the interviews, ‘Will this help? Will we get the jobs back?’ … and I had to say ‘No, those jobs are just gone.’”

Hossfeld remembers one woman who said that she had been sent to Mexico by her employer on what she thought was a vacation as a reward for her many years of service. The woman soon realized that she had been sent to train Mexican employees who would replace her.

“These were very good jobs that we lost. Jobs that would allow home ownership. Most of these women didn’t see a point in attending college or even finishing high school because these jobs were so good,” Hossfeld said. “These were supposed to be cradle-to-grave jobs.”

Though there existed some opposition, the agreement passed with bipartisan support, with 132 Republicans and 102 Democrats voting in favor of it in the House of Representatives and 34 Republicans and 27 Democrats voting in favor of it in the Senate. Today, however, the agreement has fallen out of favor with many politicians who represent rural areas.

“While some may have supported NAFTA under the assumption that the agreement would promote overall economic growth, the truth was that North Carolina got a bad deal,” said Rep. Mike McIntyre, a Lumberton native who represents District 7, which used to include all of Robeson County. “Over the first five years of NAFTA implementation, North Carolina had the highest number of job losses of any state in the country with over 27,000 North Carolinians losing their jobs … NAFTA has been a disaster for our rural communities, and has cost our state countless industrial, agricultural, and manufacturing jobs. You don’t have to look any further than Robeson County to see how devastating the effects of these free trade agreements can be.”

According to McIntyre, hearing the stories of those who he believes were left “high and dry after their jobs were swept out from under them,” inspired his attempts to repeal NAFTA multiple times.

Still, even among those who believe that the trade agreement has caused irreparable damage to the economies of rural communities like Robeson County, a repeal seems unlikely.

During his first bid for election in 2008, then-Sen. Barack Obama said during a town hall meeting in Ohio that though he believed that NAFTA was bad for the country, he felt that after more than a decade the trade agreement had been far too ingrained in the nation’s economy to repeal it.

“I don’t think it’s realistic for us to repeal NAFTA,” Obama said. “ … It would actually result in more job loss than job gains.”

Even so, Cummings believes that Robeson County will inevitably bounce back. He feels the county has positioned itself through education and infrastructure investments to be able to better accommodate a business than it had been before NAFTA.

“Initially we saw a large amount of business headed to Mexico, and then going to China, and the initial years were somewhat successful, but with time things became more difficult for these businesses, and I think after 9/11 people have just become less interested in doing their business offshore,” said Ron Roach, CEO of Contempora Fabrics in Lumberton. “… I am not sure the country down there was ready to handle everything that was headed their way.”

Contempora is among the few textile plants that remained in Robeson County after NAFTA was passed. Roach credits a dedication to using the best possible workers, as opposed to seeking employees who will work for lower wages. According to Roach, the company has found that their clients prefer paying a little more to provide fair wages, to paying less to a factory based out of Mexico and receiving lower quality stitching.

“Customers prefer quality,” Roach said. “And companies are finding that the cheapest price, isn’t always the best cost.”

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