CUED
Center
for Urban Economic Development
University of Illinois at Chicago
Transnational
Investment and Job Loss in Chicago:
Impacts on Women, African-Americans and
Latinos
Project Number: 350-D
Report Date:
January 1993
Author(s): David Ranney, William Cecil
View Paper in PDF format (33k)
A major argument advanced in favor of the North American Free Trade Agreement (NAFTA) and the Uruguay Round proposal for the General Agreement on Tariffs and Trade (GATT) is that the increased trade and investment they will generate will produce export-led growth that will benefit the peoples of all nations involved. The past decade has seen a remarkable increase in trade and investment and a decline of tariffs and other barriers to such activity. It would stand to reason, therefore, that if NAFTA and GATT are to bring great economic benefits to the people of the U.S., that both the costs and benefits of past economic integration would already be evident.
This study examines the relationship between transnational economic activity and manufacturing employment in Chicago and Illinois during the decade of the 1980's. During this period the City of Chicago lost 79,744 manufacturing jobs due to plant closings and major layoffs by transnational corporate parents. Additional job loss generated by these closings and layoffs in Cook County (which includes Chicago) brought the total to 106,200 jobs. We have also estimated that in the State of Illinois, 67,088 jobs were lost to firms with operations in Mexico's maquiladora industries.
Furthermore, our research estimates that these job losses are particularly great for women, African-Americans and Latinos. 34% of the jobs lost in the City of Chicago were held by women workers. 27% were held by African-Americans and 23% by Latinos.
In addition to the numbers of jobs lost, the occupations of the dislocated women, African-American and Latino workers were concentrated in the categories of clerical, assembly and machine operator work. While the demand for clerical workers is growing, the number of people seeking these jobs is growing even faster. In the case of assembly and semi-skilled machine operators, demand is down while the supply of such workers is high. Ultimately, this means that the losses suffered by women, African-American and Latino workers imposes a heavy burden of finding replacement jobs without extensive retraining.
An implication of this research is that NAFTA and GATT are apt to impose particularly serious costs on women, African-Americans and Latinos. Not only should there be some provisions in such agreements to minimize these costs, but the victims of economic integration must be specifically compensated.
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