Agreements like GATT and NAFTA have hastened the corporate takeover of local markets in various countries, squeezing out smaller businesses and worker collectives. Under NAFTA, better-paying US jobs were lost as US firms contracted out to the cheaper Mexican labor market. In its first few years over 600,000 jobs in the United States were eliminated under NAFTA. New jobs created in that period were mostly in the lower-paying sector of the US economy. Meanwhile, Mexico was flooded with cheap, high-tech, mass-produced corn and dairy products from giant American agribusiness firms (themselves heavily subsidized by the US government), driving small Mexican farmers and distributors into bankruptcy and displacing large numbers of poor peasants and small businesses. With the advent of NAFTA, the incomes of poor Mexicans was halved, poverty spread from 30 percent to at least 50 percent of the population, and Mexican sweatshop profits skyrocketed.13
Under NAFTA, wages have fallen in the United States, Mexico, and Canada, and union membership has shrunk dramatically. Canada has lost tens of thousands of well-paying jobs. Companies now can more easily move operations across borders to cheaper labor markets, a threat that has further undermined union organizing and deterred wage demands.14
African nations like Ghana, Uganda, and Mali found that their gross domestic product (GDP) declined sharply with the advent of free trade. Contrary to the promises of prosperity put forth by free trade advocates, when poor countries phase out tariff protections, import quotas, and import duties designed to protect their local industries, “imports climb sharply and local producers are priced out of the market by cheaper, often subsidized Western goods. This also depresses prices.”15
North Americans are told that to remain competitive in this newly globalized world marketplace, they must increase their output while reducing their labor costs; in other words, work harder for less pay in what has been called a race to the bottom. This is happening. The work-week lengthened by as much as 20 percent (from forty hours to forty-six and even forty-eight hours) and real wages flattened or declined during the reign of George W. Bush, continuing into the Barack Obama era.
During the deep recession ushered in by the financial crises of 2008, some of the millions of unemployed eventually were able to gain reentry into the US workforce. But many of the new jobs were part-time, of limited duration, lower pay, and lacking in benefits. Bosses had their pick of workers willing to accept less secure positions. Many have been rehired as “self-employed contract workers,” often doing the same work they once did as full-time employees, only now for a limited duration and for lower pay and no benefits. By 2005 almost one-third of the workforce consisted of these so-called contingent workers. By the end of the decade the number was estimated at closer to 40 percent.16
In sum, globalization diminishes the living standards of working people not only in the Third World but in the major industrial countries as well. As represented by the free trade agreements, globalization is not an inevitable “natural” development. The trade agreements have been consciously planned by big business and its government minions over a period of years in pursuit of a totally deregulated world economy that undermines all democratic checks on business practices. The people of any one province, state, or nation are now finding it increasingly difficult to get their governments to impose protective regulations or develop new forms of public-sector production out of fear of being overruled by some self-appointed international free trade panel.17