The Big Myth: How American Business Taught Us to Loathe Government and Love the Free Market

by Naomi Oreskes

Between 1993 and 1995, 64 percent of U.S. manufacturing firms in key industries used the threat of moving plants to Mexico to weaken unions and depress wages; by 1999 the figure was 71 percent. This created downward wage pressure in NAFTA-vulnerable industries—even when the companies stayed in place—and the effect rippled outward: Hakobyan and McLaren found that service industry wages in NAFTA-impacted regions fell significantly as well. “The blue-collar diner worker in the footwear town is hurt by the agreement, as is the blue-collar footwear-factory worker in a town dominated by insurance companies. Worst hit of all is the blue-collar footwear worker in a footwear town, particularly if that worker never finished high school.” College-educated workers, however, “skate away mainly unharmed.”