Mexico is not just “taking jobs” from the US. It’s also adding them

Image: AP Photo/Mark Lennihan
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Republican presidential candidate Donald Trump repeatedly lamented the loss of jobs to Mexico during his facedown with Democratic nominee Hillary Clinton on Sept. 26.

Putting aside the fact that some of his claims were untrue—the social media folks at Ford had to jump in on Twitter mid-debate to deny Trump’s claim that the car company is leaving the US—his views offer an extremely one-sided view of the relationship Mexico and the US have built under the North American Free Trade Agreement, particularly when it comes to jobs.

He didn’t mention, for example, that as a partner under NAFTA, Mexico is also supporting employment in the US.

Consider the increase in foreign direct investment to the US from Mexico, which nearly doubled from 2008 to 2015, government data shows.

It’s only a fraction of the US’s $107 billion in foreign direct investment in Mexico (that’s based on data from 2014, the most recent available from the Office of the US Trade Representative) but surely not insignificant for Americans employed by Mexican companies in the US. There are some 123,000 of them at the US operations of firms such as bakery giant Bimbo and car-part manufacturer Nemak, according to an analysis by the Wilson Center’s Mexico Institute. Even the United States’ newspaper of record, the New York Times, is partly owned by a Mexican, the tycoon Carlos Slim.

Mexico also creates US jobs indirectly. A 2014 paper by two analysts associated with the Peterson Institute for International Economics found that the more US companies grow in Mexico, the more they grow in the US.  Between 1990 and 2009, every 10% increase in employment at the Mexican affiliates of American firms led to a 4.1% jump in R&D spending, a 1% rise in sales, and 1.3% job growth in their domestic operations.

For the average firm considered in the study, which employed nearly 26,000 workers in the US and some 1,300 in Mexico, that means more than 300 new American jobs.