NAFTA: Estimated U.S. Job “Gains” and “Losses” by State Over 5½ Years

NAFTA: Estimated U.S. Job “Gains” and “Losses” by State Over 5½ Years

98-782 E
CRS Report for Congress
Received through the CRS Web
NAFTA: Estimated U.S. Job “Gains” and
“Losses” by State Over 5½ Years
Updated February 2, 2000
Mary Jane Bolle
Specialist in International Trade
Foreign Affairs, Defense, and Trade Division
Congressional Research Service ˜ The Library of Congress

ABSTRACT
U.S. job "gains" and "losses" from trade with Mexico and Canada stem from changes in trade.
Job "gain" data cover the North American Free Trade Agreement (NAFTA)'s first five years
and job "loss" data cover a little more than NAFTA's first five and one-half years. Between
January 1, 1994 and September 28 1999, approximately 259,618 workers were certified as
potentially suffering NAFTA-related job "losses." These data are sorted by state. Earlier
versions of this report also included a table which sorted these data within states by business,
indicating for each business, its products, reason for certification, and industry. Because of
its increasingly unwieldy size, this table has been dropped from this report. However, these
data for any state are available from CRS by calling the author at 7-7753. In addition,
between January 1994 and the end of December 1998, nearly 710,000 net jobs were "created"
from new exports to Mexico and Canada. These figures are sorted by state. In all, six tables
present the data from varying perspectives, including major industries of job certifications and
major industries of increased exports to Mexico and Canada . This report is generally
updated once or twice a year.

NAFTA: Estimated U.S. Job “Gains” and “Losses”
by State Over 5½ Years
Summary
What has been the effect of the North American Free Trade Agreement
(NAFTA) on jobs in individual states? NAFTA — the trade agreement between the
United States, Mexico, and Canada — appears to have served primarily to accelerate
trade-related job trends that were already ongoing. Thus, any reference in this report
to effects “of NAFTA” is really a reference to effects “since NAFTA.” Since NAFTA
went into effect January 1, 1994, both imports from and exports to Mexico and
Canada have increased — boosted by reductions in tariff, nontariff, and investment
barriers, particularly in Mexico.
U.S. job “gains” and “losses” from trade with Mexico and Canada stem from
changes in trade. In 1998 the value of trade with Mexico was slightly more than half
the value of trade flows with Canada. Since NAFTA went into effect through the end
of 1998, exports to Mexico and Canada combined have increased 64%, while imports
have increased by 78%. Between 1993 and 1998, the annual merchandise trade
deficit with Canada increased from $13 billion to $24 billion, while a $1 billion surplus
with Mexico evolved into a $17 billion deficit. (The U.S. trade positions with both
Mexico and Canada worsened in 1998 over 1997.)
“Job gain” data cover NAFTA’s first five years, and “job loss” data cover
NAFTA’s first five-and-a-half years. Measuring “job gains” and “losses” from trade
with NAFTA partners is an inexact process. “Job loss” and “job gain” data were
derived from different methods and databases and, therefore, are not comparable. In
addition, job loss figures represent the outside limit of, rather than actual job losses.
That is, they represent total employment at plants where workers have been certified
to receive NAFTA-Transitional Adjustment Assistance (NAFTA-TAA) benefits.
Only 20-30% of these workers actually collect benefits. Trying to further apportion
these job gains and losses by state compounds the problems. Thus, the figures come
with strong caveats. Nevertheless, they provide some useful information.
Moreover, estimates of NAFTA-related job “gains” and “losses” are small
relative to total U.S. employment. Approximately 259,618 workers were certified
between January 1, 1994, and September 28, 1999, as potentially suffering NAFTA-
related job losses. This represents less than the number of jobs created in a single
month in 1998. On the other hand, an estimated 1,212,357 gross jobs and 709,989
net jobs were created from new exports to Mexico and Canada between 1994 and
1998. (The net figure factors in job losses from countervailing productivity growth
and inflation).
States suffering the greatest potential total job losses from trade with Mexico
and Canada since NAFTA went into effect are North Carolina (27,725), Texas
(23,386), Pennsylvania (18,663), New York (17,487), California (14,825), Georgia
(12,457), and Tennessee (12,191). States estimated to have experienced the greatest
gross job gains (not reduced by productivity and inflation growth) from trade with
Mexico and Canada since NAFTA went into effect are Texas (175,407), Michigan
(149,382), California (147,284), Illinois (60,181), New York (56,256), Ohio
(53,895), and Indiana (43,192).

Contents
Estimated Job “Losses” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Estimated Job “Gains” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Perspective on NAFTA-Related Job Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Appendix:
Data and Explanation of Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Algebraic Formula:
Relationship Between Gross and Net Jobs Created from New Exports since
NAFTA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
List of Figures
Figure 1. Quick NAFTA State Data Finder . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
List of Tables
Table 1. NAFTA-TAA Certification by Reason, January 1, 1994-September 28,
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Table 2. Potential Job Loss by State: Number of Cases and Workers Certified by the
NAFTA-TAA Program, January 1, 1994-September 28, 1999 . . . . . . . . . . 4
Table 3. Job Gain by State: Estimated Number of Gross and Net Jobs Supporting
New Merchandise Exports to Canada and Mexico Combined, 1993-98 . . . 7
Table 4. Major Industries of NAFTA-TAA Job Certification, Jan.1, 1994 -Sept. 28,
1999 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Table 5. Major Industries of Increased Exports to Mexico
and Canada, 1993-1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Table 6. Merchandise Exports to Canada, Mexico, and Combined,
1993-1998 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Table 7. Gross and Net Jobs Supported by New and All Merchandise Exports to
Mexico and Canada Combined, by State, 1993-1998 . . . . . . . . . . . . . . . . 12
Special thanks to Cathi Jones for assistance in compiling data for this report.

NAFTA: Estimated U.S. Job “Gains” and
“Losses” by State Over 5½ Years
What has been the effect of the North American Free Trade Agreement NAFTA
on jobs in individual states? NAFTA — the trade agreement between the United
States, Mexico, and Canada — appears to have served primarily to accelerate trade-
related job trends that were ongoing before NAFTA. Thus, any reference in this
report to effects “of NAFTA” is really a reference to effects “since NAFTA.” One
broad observation that can be made is that since NAFTA went into effect in January
1994, both imports from and exports to Mexico and Canada have increased —
boosted by reductions in tariff, nontariff, and investment barriers, particularly in
Mexico.1
U.S. job “gains” and “losses”
Figure 1. Quick NAFTA State
from trade with Mexico and Canada
Data* Finder
(the U.S.’s first and third largest
trading partners) stem from changes
Job Losses from New Imports
Page
in trade flows, but are also affected
Potential Job Losses . . . . . . . . . . . . . 4
by domestic increases in
productivity. Since NAFTA,
Gross and Net Job Gains from New
exports to and imports from Canada
Exports
have each increased by about 55-
Total, 1993-98 . . . . . . . . . . . . . . . . . . 7
60%. This has resulted in relatively
By Year . . . . . . . . . . . . . . . . . . . . . . 12
suggests few net job effects from
trade with Canada. Exports to and
Exports
imports from Mexico, however,
Total Exports to Mexico and
have more or less doubled (exports
Canada . . . . . . . . . . . . . . . . . . . . . . . 11
less and imports more than
doubled). This suggests some
* State data may include data on the District of
sectoral job “losses” from
Columbia and U.S. territories.
production shifts to Mexico.
However, since about two-thirds of
the increase in imports is covered by an increase in exports, net job effects are
estimated to be relatively small in relation to overall U.S. employment.2
In fact, NAFTA’s overall effect on the U.S. economy has been relatively small.
Foreign trade itself accounts for about 14% of U.S. gross domestic product (GDP);
1For details on exports and imports traded with NAFTA partners, by industry, see NAFTA:
Estimates of Job Effects and Industry Trade Trends After Five and One-Half Years, by Mary
Jane Bolle. CRS Report 98-783E.
2See also, U.S. Library of Congress. Congressional Research Service. NAFTA, Mexican
Trade Policy, and U.S.-Mexico Trade: A Longer-Term Perspective, by J.F. Hornbeck. CRS
Report 97-811 E.

CRS-2
and trade with Mexico and Canada represents roughly one-fifth all U.S. trade. Larger
effects on the overall U.S. economy result from structural changes taking place as
companies shed employment due to trade and other economic factors. At the same
time, however, the U.S. economy is both dynamic and robust. As jobs are eliminated
in one industry, they are added in another. The United States, as a job-creating
nation, is the envy of many developed countries, particularly Canada and many
European nations, where employment growth has stagnated in recent years, and
where unemployment is in some cases one-and-a-half to two times the U.S. rate.
This report provides estimates on NAFTA-related job effects. Included, by state,
are estimates of job gains covering NAFTA’s first five years, and potential job-losses
covering roughly NAFTA’s first five-and-a-half years. (State export data, from
which job gains by state are derived, are available only annually.) Measuring job gains
and losses from trade with NAFTA partners is an inexact process. Trying to further
apportion these job gains and losses by state compounds the difficulties. Thus, these
figures come with strong caveats:
First, the terms “job gains” and “losses” are, to a certain extent, misnomers. In
an economy operating at full employment, trade results in neither net job gains nor
net job losses, only in relocations from less efficient to more efficient industries.
Economy-wide, job gains balance out job losses. However, at the industry and firm
level, job “gains” from trade will not likely equal job “losses” from trade.3
Second, it should be emphasized that job-effect estimates included in this report
were developed by different methods and are arguably incomplete and incompatible.
In particular, job “losses” captured by Department of Labor (DOL) certifications
arguably both underestimate and overestimate the actual number of job losses from
NAFTA, for reasons mentioned below. Job “gains,” while perhaps reasonably
reflective of actual job gains from exports at the national level, are not as accurate at
the state level, for reasons discussed below.
Estimated Job “Losses” 4
The DOL certifies the eligibility of workers to apply at the state level for benefits
under the NAFTA-Transitional Adjustment Assistance (NAFTA-TAA) Program. The
certification identifies potential dislocated workers who, if separated from their jobs,
would be eligible for training and income replacement benefits because, either
imports from Mexico and Canada “contributed importantly” to their job loss, or their
plant relocated to Mexico or Canada. Hence, the certified NAFTA job losses are but
a subset of total job losses from NAFTA; they include only those job losses for which
3Economists continue to debate what level the full-employment rate of unemployment should
be. Many believe unemployment rates below 5.5% suggest an excess demand for labor.
During the past several years, unemployment rates have dipped to under 4.5% — the lowest
they have been since the late 1960s.
4 The lengthy table included in previous versions of this report that listed each certified
business in each state, together with reasons for certification, has been omitted because of
size. However, these data for any state are available from CRS by calling the author at 7-
7753.

CRS-3
the displaced worker applied for benefits and a direct linkage to trade with Mexico
or Canada, or a shift in production to either of these countries, can be verified.
However, NAFTA-TAA certification figures may overestimate job losses among
certified workers. This is because not all workers certified actually lose their jobs.
In fact, recent data from the Department of Labor suggest that as few as 20- 30% of
the certified workers actually collect NAFTA-TAA benefits. (The others who were
precertified may either not have actually lost their jobs, may have found another job
in lieu of needing benefits, or for other reasons may not have collected their benefits.)
Table 1. NAFTA-TAA Certification by Reason,
January 1, 1994-September 28, 1999
% of all
certified
Reason for Certification
Cases
Workers
workers
C-1 Production shift to Mexico
948
120,888
47
C-2 Production shift to Canada
233
23,010
9
C-3 Increased customer imports from
196
22,852
9
Mexico
C-4 Increased customer imports from
168
14,955
6
Canada
C-5 Increased customer imports not
identified by source country
214
27,497
11
C-6 Increased company imports from
194
26,352
9
Mexico
C-7 Increased company imports from
66
8,802
3
Canada
C-8 Increased company imports not
19
3,419
1
identified by source country
C-9 High and Rising aggregate imports from
141
11,843
5
Mexico and/or Canada1
TOTAL CERTIFIED
2,179
259,618
100
Source of data: U.S. DOL Office of Trade Adjustment Assistance. Compiled by CRS.
1 C-9 represents a new category in 1997.
Table 1 sorts certified workers by reason for certification. The growth in the
number of workers certified under the NAFTA-TAA program has leveled off in the
past year. The single most important reason for certification, and with it eligibility to
receive income and job training benefits under NAFTA-TAA, continues to be
production shifts to Mexico. This accounts for the largest and the largest growing
part of all worker certifications — 47%. Numbers of workers potentially dislocated
are sorted by state in table 2.5
5 The DOL Office of Trade Adjustment Assistance keeps several different lists of numbers
reflecting workers certified under the NAFTA-TAA program. Thus, totals in table 1 do not
(continued...)

CRS-4
Table 2. Potential Job Loss by State: Number of Cases and Workers
Certified by the NAFTA-TAA Program,
January 1, 1994-September 28, 1999
Total
Total
Jan. 1, 1994-
Jan.1, 1994-
Sept. 28, 1999
Sept. 28, 1999
NAFTA-TAA
NAFTA-TAA
Certified
Certified
STATE
Cases
Workers
STATE
Cases
Workers
North Carolina
171
27,725
Arizona
30
2,054
Texas
252
23,386
Minnesota
20
1,921
Pennsylvania
193
18,663
New Mexico
12
1,771
New York
126
17,487
Maine
18
1,702
California
124
14,825
Kansas
13
1,364
Georgia
110
12,457
West Virginia
18
1,343
Tennessee
109
12,191
Connecticut
11
1,291
Indiana
59
9,406
Mississippi
4
1,144
Arkansas
48
8,993
Puerto Rico
2
1,090
Michigan
74
8,334
Utah
13
1,047
Wisconsin
52
7,776
Montana
24
790
Washington
85
7,351
Alaska
5
780
New Jersey
69
7,064
Wyoming
19
620
Alabama
40
6,627
South Dakota
5
566
South Carolina
46
6,551
Iowa
9
454
Virginia
64
6,513
Vermont
4
429
Ohio
53
6,074
North Dakota
4
393
Missouri
67
5,984
Maryland
3
390
Florida
72
5,756
Oklahoma
12
331
Illinois
50
5,718
Nebraska
4
283
Oregon
90
4,907
Nevada
10
257
Louisiana
18
4,688
New Hampshire
7
224
Idaho
38
3,073
Delaware
0
0
Kentucky
30
2,904
Rhode Island
0
0
Massachusetts
31
2,562
Hawaii
0
0
Colorado
28
2,359
Dist. of Columbia
0
0
TOTAL
2,346
259,618
Source: U.S. Department of Labor, Office of Trade Adjustment Assistance. Database sorted
by CRS.
5(...continued)
agree precisely with totals in table 2 because of errors in the data base. (Entries for which
certain data are missing are not picked up by various “sorts” of the data.)

CRS-5
While certification figures may overestimate some potential NAFTA job loses,
they may miss others. Other workers whose job losses may be related to NAFTA, but
who are not counted in the NAFTA-TAA figures, include the following major groups:
(1) primary job losers who for some reason either: (a) did not apply for NAFTA-TAA
benefits; or (b) applied and were rejected because they did not meet the criterion for
certification (e.g., trade with Mexico or Canada contributed “somewhat” rather than
“importantly” to their job loss); (2) some secondary job losers (who typically account
for more than half the total number of job losers) in supplier or distributor industries,
who for reasons similar to (1) above were not certified to receive NAFTA-TAA
benefits; and (3) other job losers whose job loss is less directly related to NAFTA.6
Some workers may be able to claim loss of jobs due to NAFTA even though
other factors may be involved. For example, some argue that labor-intensive jobs are
shifted out of the United States to Mexico because the U.S. job market is tight and
Mexico has a ready supply of workers willing to work for lower wages.
Estimated Job “Gains”
NAFTA-related job-gain estimates are based on Department of Commerce
(DOC) data. The DOC publishes data on the number of total jobs in the economy
supported by exports. This figure is derived through an input-output model which
incorporates output-per-worker ratios for each sub-industry. Thus, the model
estimates jobs added to the economy when output for any given sector increases.
DOC data on all jobs supported by total merchandise exports can be used to derive
the average number of jobs supported by $1 billion in merchandise exports each year.
The number of jobs supported by $1 billion in exports declines each year because of
productivity gains and inflation.7
Table 3 (p. 7) includes two measures of job gains from exports. One is a gross
number. It focuses only on jobs created by new exports each year. The other is a net
number. It takes into consideration jobs created by new exports and jobs lost by
productivity gains among workers producing for export both before and since
6U.S. Department of Commerce, Economics and Statistics Administration. U.S. Jobs
Supported by Goods and Services Exports, 1983-94, p. 27 suggests that approximately two
additional jobs support each manufacturing job by producing intermediate inputs, capital
goods, and transportation and other services to the goods going to market. The NAFTA-TAA
program covers some workers whose job loss is indirectly linked to trade with Mexico or
Canada — for example, workers in a business which supplies a company directly affected by
trade with Mexico or Canada. Others, however, whose supplier relationship is less direct,
may “slip between the cracks.”
7Data published by the Department of Commerce Economics and Statistics Administration
included in a November 1996 report: U.S. Jobs Supported by Goods and Services Exports,
1983-1994 and updated by a separate data release, show that the number of jobs supported
by $1 billion in merchandise exports was 15,123 in 1993,14,361 in 1994, 13,774 in 1995,
13,258 in 1996, and 12,755 in 1997. The average annual decline in the number of jobs
supported by a billion dollars worth of exports is about 4%; thus, the estimated figure for
1998 is 12, 245.

CRS-6
NAFTA went into effect. Thus, the net figure measures the difference between all
workers needed to produce exports to Mexico and Canada in 1998 and all workers
needed to produce exports in 1993. Gross and net numbers would be identical if
productivity gains and inflation did not reduce the number of workers required to
produce a given dollar value of exports each year. (More detail on the mathematics
of this is included in the appendix, p. 14.)
Results of the gross and net measures of NAFTA-related job growth are shown
in table 3. Figures in table 3 are derived using data from two sources: 1) DOC state
export data (included in appendix table 6, p. 11); and 2) DOC averages of jobs
supported by exports (listed in footnote 6). From these numbers it can be estimated
that increased merchandise exports to Mexico and Canada combined during NAFTA’s
first five years (1994 through 1998) have created approximately 1,212,357 gross
export-related jobs in the United States (table 3, TOTAL). It can also be estimated
that when job losses from productivity gains among those producing for export before
and since NAFTA are additionally taken into consideration, new exports since
NAFTA have added to the total number of workers producing for export to Mexico
and Canada combined, only about 709,988 net jobs.
Estimated numbers of net jobs in each state which support total exports to
Mexico and Canada for 1993, and 1998 are included in columns (5) and (6) of table
7.
For the country as a whole, the net jobs-from-new-NAFTA-exports figure
covering the period 1994-1998, is less than two-thirds the gross figure (59%).
However, net job gains may be a much higher percent of gross job gains in specific
states whose export levels started out small and increased since NAFTA went into
effect. See, for example, in table 3, Alaska, (right hand column) where the net figure
is 76% of the gross figure. For Alaska, exports, initially at a low level, grew by 172%
between 1993 and 1997 (as can be seen in appendix table 6, p. 11).
It should be emphasized that estimates of jobs supporting exports in each state
(in table 3) are only very rough estimates, and not an accurate reflection of actual jobs
supporting exports, for two reasons. First, state export data on which these figures
are based reflect total sales, not value added by each state. Second, the jobs-
supporting-each-billion-dollars-worth-of-exports figure includes jobs both directly
and indirectly involved in manufacturing the merchandise. Since more than half the
jobs are indirect — either “upstream” (primarily supplier) or “downstream” (primarily
distribution) — and indirect jobs can be carried out anywhere in the country, they are
not necessarily attached to the state which the export figures represent.

CRS-7
Table 3. Job Gain by State: Estimated Number of Gross and Net Jobs Supporting New
Merchandise Exports to Canada and Mexico Combined, 1993-98
Jobs added in export industries
Jobs added in export industries
1993-1998
1993-1998
(3)
(3)
NET jobs added
NET jobs added
(2)
GROSS
(2)
adjusted for
adjusted for
(1)
jobs
productivity
as a % of
(1)
GROSS
productivity
as a %of
STATE
added
changes*
gross jobs
STATE
jobs added
changes*
gross jobs
Texas
175,407
116,816
67
Connecticut
8,990
3,237
36
Michigan
149,382
79,304
53
Colorado
8,402
4,312
51
California
147,284
101,406
69
Louisiana
6,594
4,858
74
Unallocated1
79,859
27,713
35
Delaware
5,802
3,124
54
Illinois
60,181
37,389
62
Vermont
5,501
(996)
(18)
New York
56,256
28,387
50
Mississippi
5,262
3,991
76
Ohio
53,895
24,583
46
Arkansas
5,123
3,207
63
Indiana
43,192
24,591
57
Oklahoma
4,784
2,812
59
Pennsylvania
38,565
23,261
60
Puerto Rico
4,296
2,186
51
N. Carolina
35,298
24,559
70
N. Hamp.
4,229
2,623
62
Minnesota
27,733
19,206
69
Nebraska
4,163
2,775
67
Wisconsin
23,119
14,798
64
Maryland
4,115
2,019
49
Kentucky
20,636
15,112
73
W. Virginia
3,297
2,217
67
Tennessee
20,506
12,212
60
Utah
2,947
1,598
54
New Jersey
20,049
8,775
44
Nevada
2,526
1,903
75
S. Carolina
19,652
14,157
72
N. Dakota
2,387
1,479
62
Arizona
19,128
12,861
67
Maine
2,126
763
36
Georgia
19,036
12,701
67
Alaska
2,075
1,584
76
Missouri
14,860
8,791
59
Idaho.
1,973
1,195
61
Mass.
14,474
4,304
30
D. of Col.
1,799
1,481
82
Washington
13,672
6,833
50
Rhode Island
1,392
428
31
Virginia
13,437
8,692
65
Montana
1,387
877
63
Florida
12,525
5,365
43
S. Dakota
1,005
576
57
Louisiana
11,938
8,190
69
Wyoming
544
366
67
Alabama
11,760
8,132
69
Hawaii
128
23
18
Oregon
10,084
6,991
69
New Mexico
(7)
(407)
5,758
Kansas
9,664
6,719
70
V. Islands
(67)
(106)
158
TOTAL
1,212,357
709,988
59
1 Unall: unallocated among states.
* Net jobs added takes into account estimates of people already working to produce exports who would have lost their jobs to
productivity improvements between 1994 and 1998, and subtracts this from the number of jobs added from new exports.
Thus, a negative net jobs added number generally means either very slowly growing exports, or an actual decline in
exports to Mexico and Canada combined.
Source of data: calculated by CRS from DOC data. This table is a condensation of appendix table 7, p. 12. See footnotes to
that table. For explanation of difference between gross and net jobs, see discussion on p. 5, and discussion of the algebraic
formula beginning on p. 14.

CRS-8
Perspective on NAFTA-Related Job Effects
As mentioned, data on job losses and job gains due to trade are derived from
different methods and data bases. They are therefore incompatible and comparisons
between the two could be inaccurate.
Estimates presented above on NAFTA-related job losses are relatively small.
The more than 259,618 workers certified as of September 28, 1999 as potentially
suffering NAFTA-related job losses represent less than the number of U.S. jobs
created in a single month in 1998.
According to the Department of Commerce,8 roughly half of all jobs supporting
exports are included in the manufacturing sector. This suggests that of the
approximately 710,000 estimated net jobs gained from trade with Mexico and Canada
between 1993 and 1998, about 355,000 would be in manufacturing. After four
straight years of decline just prior to NAFTA, during NAFTA’s first four years,
manufacturing jobs increased from about 18 to almost 18.7 million. The NAFTA-
related estimated job gain in manufacturing represents about 50% of all manufacturing
jobs gained between 1993 and 1998. Therefore, it can be argued that NAFTA may
have made a significant contribution to the manufacturing employment turnaround.
To complete the larger picture, tables 4 and 5 identify major industries of
potential job loss and export gains since NAFTA. (Job gains from increased exports
have not been estimated for specific industries because the number of jobs supported
by each billion dollars worth of exports varies by industry.) Several industries
[identified by boldface type and by an asterisk (*)] are included on both lists. These
are: electronics, transportation equipment, nonelectrical machinery, apparel, paper
products, and scientific instruments. This suggests that certain less efficient parts of
these industries are being shifted to Mexico and Canada while more efficient parts are
expanding domestically. The apparel industry is the biggest potential job loser, with
28% of all NAFTA-related potential job losses. Electronics is second, with 13%.
As mentioned at the beginning of this report, in an economy operating at full
employment, trade results in neither net job gains nor net job losses, only in
relocations from less efficient to more efficient industries. Job gains from trade with
Mexico and Canada under NAFTA do not necessarily have to equal job losses from
such trade under NAFTA. Even before NAFTA went into effect there were some
estimates that job losses would be concentrated in early years after NAFTA was
adopted. Tables 4 and 5 document mid-term industry relocations.
8U.S. Jobs Supported by Goods and Services Exports, 1983-94, op. cit., p. 27.

CRS-9
Table 4. Major Industries of NAFTA-TAA Job Certification,
Jan.1, 1994 -Sept. 28, 1999
% of all
No. of jobs
NAFTA-TAA
SIC

Industry
certified
certified jobs
23
*Apparel
73,568
28
36
*Electronics
33,684
13
37
*Transportation equip.
17,090
7
34
Fabricated metals
15,372
6
22
Textiles
14,150
5
35
*Nonelec. Machinery
11,747
5
24
Lumber
9,826
4
38
*Scientif. instruments
9,433
4
26
*Paper products
8,982
3
30
Rubber
7,722
3
31
Leather
7,521
3
SUBTOTAL
209,095
81
Other Manufacturing
35,171
14
ALL MANUFACTURING
244,266
95
Non-Manufacturing
15,352
6
TOTAL
259,618
101

SIC: Standard Industrial Classification codes. Manufacturing includes 20 2-digit codes which span
numbers 20-39.
Source: NAFTA-TAA database, sorted by CRS. See also text footnote 5.
* indicates industries listed in both tables 4 and 5.
Table 5. Major Industries of Increased Exports to Mexico
and Canada, 1993-1998
Growth in Industry
Export Value 1993-98
% of total
NAFTA
% change
commodity
SIC
Industry
in $billions
93-98
export gain
37
*Transportation Equip
16
56
18
36
*Electronics
17
81
18
35
*Nonelectric machinery
16
74
17
28
Chemicals
8
72
9
33
Primary metals
4
76
5
30
Rubber
4
81
5
38
*Scientific instruments
3
48
3
26
*Paper products
2
69
3
23
*Apparel
2
100
2
20
Food
2
45
3
SUBTOTAL
74
—
82
Other Manufacturing
12
—
13
TOTAL MANUFACTURING
87
66
95
Nonmanufacturing
4
44
4
TOTAL
91
64
100
Source: DOC Office of Trade and Economic Analysis.
* indicates industries listed in both tables 4 and 5.

CRS-10
Appendix:
Data and Explanation of Methodology
This appendix includes supplemental data and explanations. Table 6 includes
state exports to Canada, Mexico, and the two countries combined for 1993, 1997, and
1998, and also shows growth rates for exports for 1993-98.
Table 7 includes calculations supporting job gain figures in table 3. In table 7,
column (4) lists gross job gains, by state during NAFTA’s first five years. The same
figures also appear in table 3, p. 7, column (2). In table 7, column (7), lists net job
gains. The same figures also appear in table 3, p. 7, column (3). Net job gains are
gross job gains from new exports minus job losses from productivity growth and
inflation in manufacturing and services. Actual calculations are explained in the table
7 footnotes. In table 7, estimates of the total number of workers supporting all
exports to Mexico and Canada combined for 1993 and 1998, are included in columns
(5), and (6), respectively.
Pages 14 and 15 include an algebraic formula showing how the numbers were
calculated.

CRS-11
Table 6. Merchandise Exports to Canada, Mexico, and Combined,
1993-1998
U.S. Exports to
U.S. Exports to
U.S. Exports to
Mexico and Canada
Canada
Mexico
Combined
(in $millions)
(in $millions)
(in $millions)
% ª
STATE
1993
1997
1998
1993
1997
1998
1993
1997
1998
93-98
U.S.
100,190
150,124
154,151
41,635
71,378
79,010
141,826
221,503
233,161
62%
TOTAL
Ala.
622
1,251
1,281
185
814
380
807
2,065
1,661
106%
Ak.
84
305
229
1
2
5
85
307
234
175%
Ariz.
533
1,072
1,059
1,087
1,963
1,993
1,621
3,035
3,052
88%
Ark.
421
820
688
69
141
179
490
961
867
77%
Calif.
7,158
11,492
12,644
5,117
9,942
10,798
12,274
21,434
23,442
91%
Colo.
595
672
729
604
1,418
1,105
1,200
2,090
1,834
53%
Conn.
1,407
1,848
1,872
336
530
544
1,743
2,377
2,417
39%
Del.
628
788
938
159
308
290
788
1,097
1,228
56%
D.C.
36
142
158
17
17
29
53
159
187
253%
Fla.
1,572
1,928
2,058
770
1,221
1,272
2,341
3,149
3,330
42%
Ga.
1,469
2,000
2,116
324
686
1,136
1,793
2,685
3,252
81%
Hi.
14
33
17
0
1
2
14
34
19
36%
Idaho
157
278
280
36
44
56
193
322
336
74%
Ill.
4,860
8,044
7,943
1,364
2,190
2,798
6,224
10,234
10,741
73%
Ind.
4,265
5,060
5,672
1,168
2,573
3,046
5,432
7,634
8,718
60%
Iowa
919
1,569
1,742
78
168
158
997
1,737
1,900
91%
Ks.
473
834
879
187
449
485
660
1,284
1,364
107%
Ky.
1,058
2,369
2,325
190
345
451
1,248
2,714
2,776
122%
La.
372
663
736
61
133
196
433
796
932
115%
Maine
362
557
528
29
18
17
391
576
545
39%
Md.
601
653
690
96
199
337
698
752
1,027
47%
Mass.
2,541
3,677
3,388
374
468
564
2,915
4,145
3,952
36%
Mich.
11,434
19,760
19,666
5,630
6,458
7,888
17,065
26,218
27,554
61%
Minn.
1,950
3,190
3,390
229
823
870
2,179
4,013
4,260
96%
Miss.
306
430
493
25
127
242
331
558
735
122%
Mo.
1,113
1,490
1,570
540
1,042
1,190
1,653
2,532
2,760
67%
Mont.
145
236
193
1
21
59
146
257
252
73%
Neb.
296
529
524
61
142
143
357
671
667
87%
Nev.
123
272
301
13
60
23
137
332
324
136%
N.H.
377
672
643
40
74
86
417
746
729
75%
N.J.
2,539
3,837
3,873
789
884
954
3,328
4,721
4,827
45%
N.M.
47
56
68
106
87
87
152
142
155
2%
N.Y.
6,581
10,616
9,957
1,171
1,805
1,936
7,752
10,421
11,893
53%
N.C.
2,289
3,748
3,719
365
1,321
1,565
2,654
5,069
5,284
99%
N.D.
227
428
387
3
18
18
230
445
405
76%
Ohio
7,672
10,472
10,669
927
1,584
1,959
8,598
12,055
12,628
47%
Okla.
426
670
656
158
240
295
584
910
951
63%
Ore.
871
1,082
1,329
109
89
452
980
1,170
1,781
82%
Penn.
3,730
5,616
5,857
627
1,140
1,425
4,358
6,756
7,282
67%
R.I.
286
330
372
42
77
68
328
407
440
34%
S.C.
1,009
1,621
1,711
293
936
1,054
1,303
2,557
2,765
112%
S.D.
108
167
166
4
11
19
112
179
185
65%
Tenn.
1,679
2,389
2,589
650
1,188
1,288
2,329
3,577
3,874
66%
Texas
3,811
8,118
8,506
12,861
18,864
21,627
16,672
26,982
30,133
81%
Utah
343
514
505
30
73
87
374
587
592
58%
Vt.
2,075
2,310
2,486
12
9
11
2,087
2,319
2,497
20%
Va.
1,052
1,536
1,836
302
430
547
1,355
1,966
2,383
76%
Wash.
1,723
2,457
2,360
208
272
583
1,931
2,730
2,943
52%
W.Va.
285
479
503
21
34
56
306
513
559
83%
Wis.
1,947
3,096
3,457
288
427
512
2,235
3,524
3,969
78%
Wyo.
38
88
76
4
5
6
42
93
82
95%
P.R.
387
690
657
129
217
160
517
906
817
58%
V.I.
10
4
3
0
4
1
10
8
4
-60%
Unall.
15,163
17,162
17,658
3,744
9,288
7,958

18,907
26,451
25,616
74%
Source: DOC, Office of Trade and Economic Analysis. Website: http://www.ita.doc.gov. Go to “Trade Statistics” and
then to “State Export Data.”
%ª = % change.

CRS-12
Table 7. Gross and Net Jobs Supported by New and All
Merchandise Exports to Mexico and Canada Combined, by State, 1993-1998
(See column explanations at end of table)
NET Jobs (after compensating for
NET as
GROSS Jobs Added Each Year by New Exports to Mexico
Productivity Growth and inflation)
% of
and Canada
from All Exports to Mexico and Canada:
GROSS
(4) 1
(7)
(8)
(1)
(2)
(3)
TOTAL
(5)
(6)
TOTAL
Col. (7)
STATE
1994
1997
1998
1994-1998
1993
1998
1993-1998
/Col. (4)

ALL U.S.
334,167
410,175
142,777
1,212,357
2,144,834
2,854,823
709,989
59%
Alabama
2,939
7,175
(4,947)
11,760
12,205
20,337
8,132
69%
Alaska
534
1,589
(894)
2,075
1,281
2,865
1,584
76%
Arizona
3,304
5,651
208
19,128
24,508
37,369
12,861
67%
Arkansas
1,800
3,114
(1,151)
5,123
7,409
10,616
3,207
63%
California
24,953
39,157
24,586
147,284
185,618
287,024
101,406
69%
Colorado
(556)
7,367
(3,134)
8,402
18,143
22,455
4,312
51%
Conn.
2,580
3,211
478
8,990
26,357
29,594
3,237
36%
Delaware
1,686
901
1,616
5,802
11,912
15,036
3,124
54%
D.C.
1,399
615
343
1,799
809
2,290
1,481
82%
Florida
2,256
9,957
2,216
12,525
35,408
40,773
5,365

43%
Georgia
4,635
3,464
6,930
19,036
27,116
39,817
12,701
67%
Hawaii
78
(463)
(184)
128
210
233
23
18%
Idaho
709
106
171
1,973
2,919
4,114
1,195
61%
Illinois
19,598
20,687
6,208
60,181
94,124
131,513
37,389
62%
Indiana
9,392
6,045
13,285
43,192
82,152
106,743
24,591
57%
Iowa
3,665
4,455
1,996
11,938
15,074
23,264
8,190
69%
Kansas
3,980
(707)
992)
9,644
9,982
16,701
6,719
70%
Kentucky
7,970
6,741
759
20,636
18,877
33,989
15,112
73%
Louisiana
1,790
1,369
1,665
6,594
6,553
11,411
4,858
74%
Maine
738
951
(367)
2,126
5,910
6,673
763
36%
Maryland
341
1,584
2,143
4,115
10,556
12,575
2,019
49%
Mass.
6,900
3,437
(2,363)
14,474
44,084
48,388
4,304
30%
Michigan
155,574
(5,334)
16,358
149,382
258,067
337,371
79,304
53%
Minnesota
3,724
3,904
3,024
27,733
32,953
52,159
19,206
69%
Miss.
1,243
1,004
2,179
5,262
5,008
8,999
3,991
76%
Missouri
6,722
1,981
2,792
14,860
25,002
33,793
8,791
59%
Montana
(11)
642
(61)
1,387
2,208
3,085
877
63%
Nebraska
1,140
1,075
(49)5
4,163
5,392
8,167
2,775
67%
Nevada
386
729
(98)
2,526
2,064
3,967
1,903
75%
N.Hamp.
704
510
(208)
4,229
6,303
8,926
2,623
62%
N.Jersey
9,822
8,446
1,298
20,049
50,327
59,102
8,775
44%
N.Mexico
(157)
(114)
147
(7)
2,305
1,898
(407)
(5758%)
New York
15,213
27,566
(6,456)
56,256
117,231
145,618
28,387
50%
N.C.
8,929
7,986
2,632
35,298
40,138
64,697
24,559
70%
N.Dakota
320
701
(502)
2,387
3,480
4,959
1,479
62%
Ohio
19,045
14,411
7,004
53,895
130,034
154,617
24,583
46%
Oklahoma
753
2,040
502
4,784
8,832
11,644
2,812
59%
Oregon
2,323
2,901
7,469
10,084
14,816
21,807
6,991
69%
Penn.
8,262
14,073
6,440
38,565
65,900
89,161
23,261
60%
R.Island
(452)
778
404
1,392
4,959
5,387
428
31%
S.C.
5,748
5,314
2,547
19,652
19,698
33,855
14,157
72%
S.Dak.
352
87
86
1,005
1,689
2,265
576
57%
Tennessee
5,740
5,918
3,636
20,506
35,221
47,433
12,212
60%
Texas
36,236
60,951
38,581
175,407
252,132
368,948
116,816
67%
Utah
746
865
61
2,947
5,650
7,248
1,598
54%
Vermont
(101)
(857)
2,179
5,501
31,569
30,573
(996)
(18%)
Virginia
3,329
3,409
5,106
13,437
20,485
29,177
8,692
65%
Wash.
4,836
479
2,620
13,672
29,201
36,034
6,833
50%
W.Va.
651
1,480
563
3,297
4,627
6,844
2,217
67%
Wisconsin
8,839
6,218
6,461
23,119
33,798
48,596
14,798
64%
Wyoming
151
260
(135)
544
638
1,004
366
67%
P.R.
4,185
1,321
(1,102)
4,296
7,817
10,003
2,186
61%
V.I.
16
(139)
(49)
(67)
155
49
(106)
158%
Unalloctd
(70,790)
115,159
(10,211)
79,859
285,929
313,642
27,713
35%

For explanation of calculations, see next page. Numbers in parentheses are negative. Numbers may not total exactly because of
rounding.
1 Figures for 1995 and 1996 are not shown [(between columns (1) and (2)] because of space constraints.
Explanation of columns in table 7: (Export data are taken from table 6).

CRS-13
Columns (1)!(4): GROSS jobs supported by new NAFTA-related exports (i.e.,
additional exports to Mexico or Canada since NAFTA).
Column (1):
Total number of gross jobs supported by new exports to Mexico and
Canada in 1994: Value of export growth in 1994 (in $billions) times
14,361 (the estimated number of workers supported by each $billion
in exports in 1994). Not shown are figures for 1995 and 1996: the
value of export growth times 13,774 and 13,258, respectively.
Column (2): Same figure for 1997: Value of export growth in 1997 times 12,755.
(The number representing additional workers supported by each
$billion in exports each year takes into consideration both productivity
changes and inflation since the previous year.)
Column (3):
Same figure for 1998: Value of export growth in 1998 times 12,245.
Column (4):
Total number of gross jobs supported by new NAFTA-related exports
during NAFTA’s first five years (94 + 95 + 96 + 97 + 98).
Columns (4)!(8): NET jobs supported by NAFTA-related exports
Column (5): Total estimated number of net jobs supported by exports to Mexico
and Canada combined in 1993: Value of exports in 1993, in $billions,
times 15,123 (number of workers supported by $1 billion in exports).
Column (6): Same figure for 1998: Value of exports in 1998 times 12,245.
Column (7): Net job growth from new NAFTA-related exports, 1993-1998:
Columns (6)-(5).
Column (8): Net NAFTA-related job growth as a percent of gross NAFTA-related
job growth: Column (7)/column (4).

NOTE: See p. 14 for the algebraic formula by which these figures were calculated.

CRS-14
Algebraic Formula:
Relationship Between Gross and Net Jobs Created
from New Exports since NAFTA
This section sets forth the equation that quantifies the relationship between the
gross and net methods for calculating job changes from trade with Mexico and
Canada since NAFTA went into effect. (Gross and net job changes are included in
table 3, p. 7, and table 7, p. 12.)
The estimated gross number looks only at the increase in the dollar value of
exports each year, in billions, and multiplies it by the number of workers required to
produce a billion dollars worth of exports. It ignores any decline in employment of
those already working to produce exports, which occurs because productivity growth
renders them “redundant” or no longer necessary.
The net number looks at the total value of exports each year, in billions of
dollars, and multiplies that by the number of workers required to produce a billion
dollars worth of exports.
The estimated number of net workers added to the payrolls to produce exports
for each state calculated in this way reflects three things:
1. Additions to the number of workers because of an increase in exports;
2. Subtractions to the number of workers from:
a. productivity gains that occurred during
that year; and
b. inflation (meaning that fewer items
produced would represent the same value
as the previous year.)
For any state, the difference between the two numbers (gross and net) is equal
to the sum, for each of the years (1994, 1995, etc.) of:
the value of exports (in $billions) to Mexico and Canada
combined in that year times the number of jobs supporting each
billion dollars worth of exports which are lost to productivity and
inflation in that year.
MATHEMATICS of CALCULATION:
Let symbols represent values as follows:
L = gross jobs supporting new exports to NAFTA partners, 1993-1998.
g
L = net number of jobs supporting new exports to NAFTA partners, 1993-1998.
n
X = value of exports in initial year “i” in billions of dollars (numbers listed in
i
table 6 divided by 1,000)

CRS-15
J = number of jobs estimated to produce a billion dollars worth of exports in
i
initial year; and
J = number of jobs estimated to produce a billion dollars worth of exports in
f
final year (“f”).
Where, for both X and J:
i = 1993;
i+1 = 1994;
i+2 = 1995;
i+3 = 1996;
i+4 = 1997; and
i+5 = f = 1998.
And in actual numbers,
J = J = 15,123;
i
93
J
=J = 14,361;
i+1
94
J =J = 13,774;
i+2
95
J =J = 13,258;
i+3
96
J =J = 12,755;
i+4
97
J
= J =J = 12,2459
i+5
f
98
The gross number of jobs supporting new exports to NAFTA partners can be
represented by multiplying the number of jobs supporting a billion dollars worth of
exports in a given year by the growth in exports for that year:
(1) L =J
(X —X )+J (X —X )+J (X —X ) . . . J (X —X ).
g
i+1
i+1
i
i+2
i+2
i+1
i+3
i+3
i+2
f
f
f-1
The net number of jobs supporting new exports to NAFTA partners can be
represented by the following equation showing the difference between the number of
jobs supporting a billion dollars worth of exports and the value of exports for the
beginning and end years:
(2) L = J X —J X
n
f
f
i
i.
To find the difference between the gross and net numbers of new jobs created from
trade with Mexico and Canada since NAFTA went into effect equation (2) is
subtracted from (1):
Thus, for any state, for any year, the difference between the gross and net
estimates of jobs created from new exports to Mexico and Canada combined since
NAFTA went into effect represents the sum total of the number of jobs held by
previously employed workers producing exports which are subsequently lost to
productivity growth.
9 The figure for 1998 is a CRS estimate based on Department of Commerce estimates for the
previous 5 years.