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Revisiting Coverage of NAFTA

October 25, 2005 at 12:00 AM EDT
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TRANSCRIPT

SPOKESMAN: Across America, people going from factories to farms to offices know NAFTA means jobs going south.

PAUL SOLMAN: A dozen years ago, as a vote in Congress neared on NAFTA, the North American Free Trade Agreement, we visited Autaugaville, Alabama, where local families had earned a living for decades at Crystal Lake Manufacturing.

This was just the kind of place doomed by NAFTA, critics warned, since it made tariff-protected corn brooms, tariffs to be phased out under the free-trade agreement.

EDWARD PEARSON: There are about 100 people in this town of 1,000 people who will stand to lose their jobs within two years.

PAUL SOLMAN: According to then- vice president Edward Pearson, there’d be no joy in Autaugaville if NAFTA were to pass. So, 12 years later, what happened? Well, the allegedly happy population of Autaugaville has increased by a hundred, according to its town sign.

But as Ed Pearson, now the broom factory’s president, had predicted, there are that many fewer workers at Crystal Lake.

ED PEARSON: When you were here in 1993, we had 238 employees working here. Now we have right around 100 employees. That’s a devastating impact on a community, even though it happened over a period of time.

PAUL SOLMAN: Before any further updates, however, a few remembrances of things past. The broom factory was founded in the 1930s by the town’s top family, the Pearsons, to provide jobs for their tenant farmers, displaced by mechanization. Sixty years later, the founders’ grandchildren still ran the plant, still employed the sharecroppers’ descendents.

ED PEARSON: We’ll see some people who have been here 50 years. And you probably have got 50 percent that have been here ten years or more.

PAUL SOLMAN: The fear was that their jobs might be slurped up by cheap-wage Mexico, as H. Ross Perot had been warning at the time.

ROSS PEROT: You implement that NAFTA, the Mexican trade agreement, and you’re going to hear a giant sucking sound of jobs being pulled out of this country.

PAUL SOLMAN: “Pulled out” by Mexicans making something like a buck an hour. Could broom maker Granger Palmer, making $9 an hour, compete?

GRANGER PALMER: Not with the kind of wages that the Mexicans are earning. You know, a dollar — I can’t live off a dollar an hour.

PAUL SOLMAN: Technically, this was unskilled labor. But it took me eight minutes to do what the average worker does in one –

PAUL SOLMAN: And I’m basically hitting myself on the index finger at this point. No, that was the thumb — getting hit — getting hit.

PAUL SOLMAN: Back then, it took a year to master this skill, useless anywhere else. Today…

ED PEARSON: If you can screw in a light bulb, you can make a broom.

PAUL SOLMAN: Progress has come to Crystal Lake, in the form of pre-manufactured imported parts.

That’s Granger Palmer, who’s down to part-time and a less challenging job.

GRANGER PALMER: It takes away a sense of pride, you know what I’m saying?

PAUL SOLMAN: Because anybody could do this.

GRANGER PALMER: Anybody can do that.

PAUL SOLMAN: Even me?

GRANGER PALMER: Yes.

PAUL SOLMAN: Meanwhile, not only pride, but two-thirds of the broom jobs are gone. And though mop-making survives, the waning of another industry, textiles, is tightening the knot since it’s cut off Crystal Lake’s chief local source of mop yarn: The sweepings from cotton mill floors. No mills also means no market for local cotton. Farmer Harold Gaines:

HAROLD GAINES: Cotton producers have got to have someone to sell the cotton to. All the mills have left our countries for foreign countries.

PAUL SOLMAN: Meanwhile, Ed Pearson is buying mop yarn from Pakistan, broom parts from China.

ED PEARSON: Ironically, the Chinese are saving jobs in this factory from Mexico.

PAUL SOLMAN: Ironically says Pearson, because it’s cheaper to buy broom heads made in China, handles from Honduras, and assemble them here in the U.S. than to import whole brooms, which come a dozen to a box.

ED PEARSON: You’ve got six run one way, six run this way. Each end of that box is full. 75 percent of the box is air and empty, just where those handles happen to be in the middle. With the cost of fuel today, you can’t afford to haul air across the Pacific.

PAUL SOLMAN: But because of trade deals like NAFTA, we get the benefit of cheap brooms, right? Theresa Pearson Dunn is Ed’s sister, Crystal Lake’s chairwoman.

THERESA PEARSON DUNN: The goods may be cheaper, but at what expense is it costing us as citizens of the United States?

PAUL SOLMAN: Among the costs, a slight rise in local crime a few years ago.

But is this the devastation folks were warning of if NAFTA passed?

Shelby Broadneck still makes brooms as he did in 1993, for custom orders. Does he know of any former broom winders who haven’t found a job?

SHELBY BROADNECK: No, I don’t.

PAUL SOLMAN: So everybody here who lost their job did find another job?

SHELBY BROADNECK: As far as I know, yeah.

PAUL SOLMAN: So what about the prophecy of doom?

SHELBY BROADNECK: I’d just say it was a false alarm, I think it would be.

PAUL SOLMAN: Meanwhile the workers here, especially the fastest ones, like Sylvia Woods, are doing just fine because of piecework.

SYLVIA WOODS: I make as much as I want to make.

PAUL SOLMAN: Are you paid in part on the basis of how productive you are?

SYLVIA WOODS: Yes. Maybe like $112 a day.

PAUL SOLMAN: $112 a day?

Not bad money around here. And if mop making, too, goes to China?

SYLVIA WOODS: I don’t know, I’ll have to find something else to do then.

PAUL SOLMAN: Would it be painful for Woods to switch jobs? Yes. Longer, more expensive commute? Almost certainly. Roadblocks by the bureaucrats in charge of government programs to retrain her? Perhaps. But this is nothing new.

Alabama lured jobs like these from the North generations ago with cheaper labor just as Mexico and China are luring them now. And Alabama is still luring jobs from the North, many of them a result of free trade.

Foreign automakers– Mercedes, Toyota, Honda, and Hyundai– have all built plants in Alabama in the last dozen years, enticed by generous tax breaks, worker training programs, and a younger work force than in the unionized Midwest, all of which makes doing business here cheaper.

Chuck Hearn, a veteran of three textile plant closings at age 35, maintains high-tech machinery at Hyundai in Montgomery.

CHUCK HEARN: Free trade, I think, has cost a lot of people their jobs, such as textiles moving south and moving west. But it’s also bringing in the auto industry. I think the auto industry itself coming from overseas to here has given us, especially the southeastern part of the United States, a much more stable work environment.

PAUL SOLMAN: Making some $25 an hour, plus overtime, Hearn calls this job a “blessing.” But he’s one of only 2,500 workers from a pool of more than 20,000 applicants. We asked what distinguishes those who got the jobs.

JEREMY COLE: I’m real good with my hands. I’m a hard worker. I mean, I never stay out of work, and I got a good work record, real good work record.

LATONA HARDNETT: When they taught me how to do things, I just picked up on it and knew what to do. I’ve got a good eye for defects.

PAUL SOLMAN: A good eye for defects.

PATRICK PURTER: They check your speed and your strength and all… any kind of things like that.

PAUL SOLMAN: So being in good shape helped you with this job.

PATRICK PURTER: Oh, yeah, oh, yeah, being in good shape would help you go a long ways, yeah.

PAUL SOLMAN: Though not as long a ways as the robots here, a whole building’s worth of them at $50,000 each who look ready to take over the earth, and remind that you automation eliminates jobs at least as quickly as free trade does, since even a human at a buck an hour is barely cost competitive with one of these guys over its lifetime.

So Alabama has become more productive since NAFTA — in the factory, down on the farms from which it’s even begun to export peanuts to Canada, beef to Mexico. Add the growth in health care and education, and you’ve got state unemployment well below the national average.

SPOKESMAN: Americans want to expand trade, but not by trading away their jobs. NAFTA –

PAUL SOLMAN: So why such opposition to free trade back in 1993? Auburn University economist Phil Gregorowicz.

PHIL GREGOROWICZ: Generally the person who gets a job because we’re more efficient, more productive, or have export markets won’t say, “I got this job because of free trade,” right? So the losers are always concentrated, and the losers tend to be vocal and the winners tend to be dispersed in the population.

PAUL SOLMAN: On the other hand, a dozen years after the tumult and the shouting over NAFTA, there does remain a class of real losers: Those who have dropped out of the work force entirely and they’re no longer are even counted among the unemployed, and those who can’t get a new job anywhere near as good as this one.

Union Vice President Henry Jenkins:

HENRY JENKINS: A lot of employers, they just won’t hire you after you get a certain age. And they have to get part-time jobs or work with a lot of these contractors, cleaning services, things of that nature, which is not even compatible to what they had.

PAUL SOLMAN: Some in Alabama, that is, now have jobs without benefits or have simply dropped out of the picture entirely, which leads observers like Harold Gaines to a grimmer view of what’s happened since 1993, even in a state with only 3 percent unemployment.

HAROLD GAINES: The richer are getting richer and the poorer are getting poorer. And I really do think our country is going toward the direction of our lower class, our poverty people, virtually not having the opportunity to provide for themselves. New Orleans is a great example.

PAUL SOLMAN: A great example but questions a key justification for free trade and even automation for that matter. But the economic growth they foster makes the pie larger, so much larger that there’s enough left over to compensate the losers. The question then is: Are the losers being served?

ED PEARSON: Corporate America is taking the biggest slice of the import pie. The foreign companies are taking the other big slice. American workers get a little bit of it in the local economy, yet, there are a lot of people who get none of it.

PAUL SOLMAN: Or very little of it. Since NAFTA passed, economic inequality has continued to grow in America.

PAUL SOLMAN: Wait a second, let’s try this again.

PAUL SOLMAN: Jobs like this still require more manual dexterity than many of us are blessed with.

PAUL SOLMAN: How come mine doesn’t break? Break, damn it!

PAUL SOLMAN: But wages for those who do them, wages for most Americans, in fact, haven’t budged in the past dozen years, meaning the Alabama broom job of 1993 might have been the best gig many of Autaugaville’s workers will have ever had.