The rich always seem to get richer and they usually do it at the expense of those who can least afford it. To be truthful, I've been looking at different articles on the internet including IMF reports and blogs. It's sometimes hard to find sources that can be trusted for accurate information. I found the following excerpt from the National Bureau on Economic Research (which I know nothing about). Before the article there is a quote
"Wage gains were largest for more educated workers living close to the United States and were smallest for less-educated workers living in southern Mexico." In
What Has Happened to Wages in Mexico Since NAFTA? Implications for Hemispheric Free Trade (NBER Working Paper No. 9563), Hanson divides his analysis into two parts. In the first part he examines the substantial research already done on NAFTA's impact on the Mexican labor market in the 1980s. The evidence suggests that tariff reductions increased relative wages for skilled workers, increased foreign investment, raised relative demand for skilled labor, and reductions in tariffs and quotas altered inter-industry wage differentials. Mexico's economic opening thus appears to have raised the skill premium and reduced industry rents going to labor. It also appears to have increased wages in states along the U.S. border relative to the rest of the country.
Hanson concludes from this analysis that Mexico's comparative advantage in low-skill activities was not as strong as many had thought. Trade liberalization exposed Mexico's vulnerability in very low-end manufacturing; thus producers of basic consumer goods in this area lost out to imports, especially from China and from elsewhere in Asia. However, Mexico appeared to have a cost advantage in assembly services for the U.S. economy. Therefore, Mexican manufacturing in effect reoriented itself from producing simple consumer products to being a subcontractor for more upstream industries in the North American economy. Meanwhile, the concurrent loosening of restrictions on foreign direct investment allowed plants in Mexico to become part of North American production networks, and this too played a role in the change in wage patterns.
In the second part of his study, Hanson uses Mexican census data from 1990 and 2000 to examine changes in wages over the period in which NAFTA was implemented. His most striking finding is that wage gains were largest for more educated workers living close to the United States and were smallest for less-educated workers living in southern Mexico. Hanson also notes that the dramatically increased openness of Mexico's economy to the rest of the world as seen over the past two decades was concurrent with shocks to wage levels. These include periodic if temporary wage declines (mostly related to such matters as Mexico's macroeconomic and currency problems), wage growth along the U.S.-Mexico border relative to wages in the rest of Mexico, and a steady increase in skills in the country. All of this, Hanson observes, resulted in a general increase in wage disparity in Mexico.
What then are the implications of the Mexican experience for the rest of Latin American wage structures in view of the proposed Free Trade Agreement of the Americas, which is to be implemented by 2005? For one thing, Hanson notes, prior to the trade reform in Mexico, the country had relatively high tariffs on less-skill-intensive industries. These industries thus bore the brunt of adjustment to Mexico's economic and trade liberalization. But similar tariff adjustments following an FTAA, says Hanson, are unlikely to be common in the rest of Latin America. One reason is that many countries have already liberalized their unilateral trade. Colombia, for example, reduced its trade barriers a decade ago, with special tariff reductions in its less-skill-intensive industries. Thus the shock of trade reform related to tariff reductions in low-skill industries, Hanson theorizes, may already have been absorbed in much of Latin America.
http://www.nber.org/digest/sep03/w9563.htmlI think there are a lot of factors that come into play when trying to look for answers to questions like "who benefitted and who got the shaft?". I don't know enough to even begin to answer the question and, frankly, the more I read the more I don't know. There are some reports from various institutions that say it was a good thing (they cite the increase of trade) and there are some reports that say it was a bad thing. Is the average person better off because of NAFTA? I don't know. Were jobs lost? Yes. Were some jobs created? Yes. I think it depends upon what particular answers you're looking for.