The NAFTA (North American Free Trade Agreement) had a negative impact on US manufacturing jobs.
What was NAFTA?
NAFTA was an agreement signed by the US, Canada and Mexico to promote trade among the countries. It went into effect on January 1, 1994. The agreement ultimately phased out tariffs.
On July 1, 2020, NAFTA was replaced by USCMA (United States-Canada-Mexico Agreement). This agreement modified NAFTA on issues pertaining to intellectual property rights, labor concerns and rules of origin for the automotive industry.
Impact to US Manufacturing Jobs
According to the Federal Reserve of St. Louis, there were 17.2 million US manufacturing jobs in 1994. This level of jobs held steady through 2001. However, by 2010, the number of US manufacturing jobs dropped to 11.4 million. This was a loss of 5.8 million jobs over that timeframe.
From 2010 to 2020 the number of jobs went back up to 12.8 million. It has essentially held that level, except for the brief pandemic dip. The number of jobs currently stands at 12.9 million.
Mexico was a net beneficiary for manufacturing jobs. Manufactured exports grew from 9% of GDP in 1993 to 37% in 2013.
Since the Covid Pandemic
The Covid pandemic happened primarily in the year 2020. There was a lot of talk about reshoring manufacturing jobs to the US and North America due to supply chain issues. One survey indicated that 64% of companies in the manufacturing sector were likely to reshore operations.
Since January 2020, the number of manufacturing jobs in the US has increased from 12.8 million to 12.9 million. This is not much of an increase and is a long way from the 17.2 million US manufacturing jobs in 1994.
Perhaps the reshoring is moving manufacturing jobs from China to Mexico.
It is possible that manufacturing trends in automation are having an impact.
Perhaps the availability of a qualified workforce is holding down manufacturing job increases in the US.
About C&C Machine
We are a precision CNC machine shop located in Oklahoma, USA. We have been manufacturing quality products since 1980.
