Haven’t increased exports created more jobs?
A. During the first eight years of Canada-US free trade the Canadian surplus in manufacturing trade with the US improved by $29 billion. Yet there was an overall net decline of 254,500 jobs in Canadian manufacturing over the same period. Productivity (output per worker) rose by an average of 2% per year but real wages in the manufacturing increased by just 0.2% a year. These trends can be explained in large part by the fact that fewer workers are producing more goods, but employers are not recognizing this higher productivity with pay increases. A similar pattern has occurred in Mexico. Over the years 1994-1998 Mexican manufacturing output grew by 28%, but manufacturers employed 2.4% fewer workers. Productivity also increased in Mexico while salaries went down. Average wages in manufacturing fell by 19%. Q. But the theory of “comparative advantage” says that everyone benefits from trade… A.
