How has NAFTA affected the U.S. worker?

Answer 1

Overall, both countries have benefitted though the distribution of the benefits has been uneven. There is some evidence that the distribution of income has been worsened for the US but improved for Mexico.

A basic conclusion of free trade is that the relatively abundant resource in each country will experience an increase in income. For the US, this means that high skilled workers (the abundant resource compared to Mexico) will experience an increase in income. For Mexico, this means that low skilled workers (the abundant resource compared to the US) will experience an increase in income.

In contast, low skilled workers in the US will receive little or no increase in income because of competition from the much larger pool of low skilled workers in Mexico. Similarly, high skilled workers in Mexico will receive little or no increase in income because of competition from the much larger pool of high skilled workers in the US.

The distribution of income in the US will be worsened but improved in Mexico.