The wage earners who took the biggest hit from NAFTA were not blue-collar men

"America First"
"America First"

The beleaguered, blue-collar male, they guy lost his job when it went to Mexico and can’t find his way in the new economy, is who most of picture when we think about Americans who didn’t benefit from globalization. But a new paper argues the biggest losers from trade agreements like NAFTA weren’t men after all.

Most of the costs, it turns out, were borne by another demographic: married, blue-collar women.

The study, by economists Shushanik Hakobyan of the IMF and John McLaren at the University of Virginia, looks at changes in earnings among different populations of workers before and after NAFTA, which eliminated tariffs among the US, Mexico, and Canada. The authors of the study did not find large or significant changes in earnings for blue-collar married men after the trade pact was established. Among single people, of both genders, there was a drop in wages, but it was small and not always statistically significant. But no matter how they specified their model, wages for uneducated, married women tanked after NAFTA. The author note:

In particular, married female high-school dropout workers with an employed spouse, working in the most highly-protected industry with an initial tariff of 8.8 percent, would see wage growth 33 percentage points lower if it lost its protection right away than similar workers in an industry that had no protection

They conclude most of the costs of NAFTA, in terms of blue-collar wages, was almost entirely borne by married women alone.

The study tries to understand exactly what happened to these women. A few different explanations were considered, and ruled out. For example, the researchers looked for but did not find evidence that married women tended to work in more vulnerable occupations. They also looked at whether married women were less able to move for a new job because their husbands’ work took priority, but this also did not seem to be a factor.

The study does find evidence, however, that married women were more likely to leave the labor force after NAFTA. Whereas men, regardless of marital status, face a bigger social stigma for not working, and single women often have to work because they have no other source of household income, the researchers speculate married women are simply less attached to the labor force and more likely to give up on work if it pays less or if it becomes hard to find a job.

But this does not tell the whole story. The authors of the study say that if both spouses in a given household worked in a job hurt by NAFTA, the woman was more likely to drop out than the man. But they also observed that married women’s wages fell whether or not their spouses worked. Some of the decline in blue-collar women’s wages remains a mystery.

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