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The Day America Sold Its Soul: How NAFTA Shattered the American Dream

Thirty-one years ago, in December 1993, Bill Clinton signed the North American Free Trade Agreement into law. The ceremony was grand, attended by former presidents, with Clinton declaring that “NAFTA means jobs. American jobs, and good-paying American jobs”. It was political theatre masquerading as economic policy, and it marked the precise moment when America began its descent from industrial superpower to a nation where dreams go to die.

The numbers tell a story of national betrayal. NAFTA caused the loss of approximately 700,000 jobs as production moved to Mexico, with 61% of these losses, 415,000 jobs, concentrated in relatively high-paying manufacturing positions. But these sterile statistics obscure a more profound truth: NAFTA shattered the foundational promise of American life, that hard work in honest industries would provide a pathway to prosperity.

The devastation was swift and merciless. Manufacturing employment collapsed by 26%, from 16.8 million jobs at the end of 1993 to 12.4 million at the end of 2016. States that had built their identities around making things, Michigan, Ohio, Pennsylvania, Wisconsin, watched their industrial hearts ripped out. Manufacturing industries were responsible for 78% of the net jobs lost under NAFTA, totalling 686,700 manufacturing jobs.

The majority of workers displaced by NAFTA were relocated to the service industry, where average wages are just four-fifths of manufacturing sector pay. Families that had spent generations building middle-class lives through industrial work suddenly found themselves serving coffee or stocking shelves for poverty wages. The Labour Department reports that two in five manufacturing workers who lost jobs and were rehired experienced wage reductions, with one in six suffering cuts of more than 20%, an annual loss of at least $8,200.

The architect of this disaster was Bill Clinton, who “fundamentally reoriented the Democratic Party from being the party of the working class and middle class to being a party that actually fought to compete with the Republicans for Wall Street’s favour”. This was a deliberate choice to prioritise corporate profits over American workers.

Clinton’s administration was stuffed with Wall Street operatives who stood to gain enormously from NAFTA’s passage. Key appointees such as Treasury Secretary Robert Rubin, Commerce Secretary Ron Brown and Deputy National Security Advisor Sandy Berger came from Wall Street finance houses or corporate law firms whose clients would benefit enormously from new protections for foreign investment and liberalisation of the Mexican financial sector.

The contempt for American workers was palpable. Clinton’s promise that “NAFTA will create a million jobs in the first five years” was literally a placeholder number accidentally left in the speech, a fitting metaphor for how little genuine consideration was given to working families’ welfare.

The business community mounted an unprecedented propaganda campaign to sell this betrayal to the American people. More than 100,000 pieces of promotional material were distributed in 1993, including state-by-state analyses of NAFTA’s economic impact circulated to each member of Congress. Corporations weaponised their own workforces, getting their workers, retirees, stockholders and suppliers to write Congress in support of NAFTA, with company appeals going out in employee paychecks.

The White House actively coordinated this corporate assault on democracy. Clinton’s aides used campaign contributor lists to identify large donors with business interests in NAFTA, then asked them to lobby lawmakers they had previously backed. This was corporate capture of the democratic process.

NAFTA was the blueprint for a new form of economic colonialism. NAFTA served as the template for rules of the emerging global economy, in which the benefits would flow to capital and the costs to labour. The agreement included provisions giving multinational corporations the right to sue governments for infringement of “investment rights”, essentially allowing companies to override democratic governance when it interfered with profit maximisation.

This established the fundamental principle that would govern American economic policy for the next three decades: U.S. corporations could relocate production elsewhere and sell back into the United States, undermining the bargaining power of American workers. The social contract that built the middle class, that companies had obligations to the communities that sustained them, was formally dissolved.

The consequences extended far beyond economics. NAFTA represented a fundamental rupture in American society. For generations, the promise of America was simple: work hard, play by the rules, and you could build a better life for your family. Manufacturing jobs were the engine of that promise, providing good wages, health benefits, and pension security to workers without university degrees.

The agreements traded away the interests of American workers in favour of American corporations eager to produce for the U.S. market at wages Americans can’t live on. The result was predictable: twenty years of stagnant wages, the upward redistribution of income and wealth, and the hollowing out of communities across the industrial heartland.

Today, we live with the consequences of Clinton’s betrayal. More than 980,000 specific American jobs have been certified as lost to NAFTA outsourcing under just one narrow government programme that undercounts the damage. Entire communities have been devastated. The rust belt cities that once symbolised American industrial might now stand as monuments to corporate treachery and political cowardice.

NAFTA directly cost the United States a net loss of 700,000 jobs, turned the trade surplus with Mexico into a chronic deficit, and increased the flow of undocumented workers into the United States, the exact opposite of every promise made to secure its passage.

NAFTA destroyed faith in the American system itself. It proved that the game was rigged, that the Democratic Party had abandoned its core constituency, and that the promises of politicians were worth precisely nothing when measured against corporate campaign contributions.

The American Dream didn’t die of natural causes, it was murdered by Bill Clinton and his corporate accomplices in December 1993.