Renegotiating NAFTA Won't Fill America’s 5 Million Open Jobs

Posted: Mar 03, 2018 12:01 AM
Renegotiating NAFTA Won't Fill America’s 5 Million Open Jobs

Editor's note: This column was authored by Christian Barnard. 

On February 25, the United States entered its seventh round of negotiations over the North American Free Trade Agreement (NAFTA). Donald Trump campaigned heavily on the 2016 presidential campaign trail for pulling out of the agreement, claiming he would take back manufacturing jobs America lost to competing countries. But his promises have been roundly criticized by economists and industry leaders as a pipedream. Many of those manufacturing jobs are not coming back, nor are they the future of the American economy. The more Trump blames China and Mexico for stealing American jobs, the more he neglects an important fact: America has millions of unfilled domestic jobs right now that remain open because we lack the right educational pathways.


First signed by President Clinton in 1993, NAFTA eliminated tariffs and significantly expanded trade between Mexico, Canada, and the United States. Since then, America has lost five million domestic manufacturing jobs. Though deals like NAFTA and others are responsible for some of these trends, many of these positions were not “taken” by anyone. They were eliminated by technological innovation and automation.


So, when Trump focuses almost exclusively on renegotiating NAFTA, imposing new tariffs, and other trade policy adjustments, he misses a large piece of the job-creation puzzle.


The Department of Labor has identified occupations with the highest projected domestic growth through 2026. Most of them are in healthcare, information, and business. In these three sectors, the Bureau of Labor Statistics recognizes significant domestic labor shortages that are leaving millions of open positions. These shortages should be the president’s priority, more so than better trade deals. And filling these gaps requires new educational strategies, not seven dragged-out rounds of trade negotiations.

Many employers and industry leaders point to a growing “skills gap” that is making it difficult to find qualified workers for open jobs. Leading economists maintain a dominant cause of these labor market shortages is over-education and a dearth of highly specific skills. Peter Capelli, an economist at Trump’s alma mater, the Wharton School of Business, says there is “a substantial skill mismatch in the form of individuals with more education than their current jobs require.”

Another factor exacerbating labor market gaps is the expensiveness of college and the high dropout rates. The six-year graduation rate for students beginning four-year degree programs in 2011 was below 60 percent. College dropout rates in the United States are higher than any other developed country, as are tuition fees. With average yearly college costs exceeding 20,000 dollars, nearly half of young adults claim they cannot continue their education because of the expense. 


This is an exorbitantly high price, of time and money, to pay for an education that often fails to meet America’s labor needs. Filling the jobs of the future requires alternative educational pathways that are better-tailored to the needs of employers, and more attuned to student goals and budgets. More attention should be given to vocational programs, especially apprenticeships. Apprenticeships are playing an increasing role in workforce development that policymakers should look carefully at.

Traditionally limited to construction and skilled trade industries, apprenticeship programs are being adopted more and more in other sectors. For instance, CVS has made investments in their pharmaceutical technician apprenticeship program, which has trained more than 1,500 employees since 2005. In South Carolina, Blue Cross Blue Shield partnered with state technical colleges to develop an IT apprenticeship program that has placed over 240 employees since 2009.

Apprenticeships have proven to be a worthy investment for businesses. For every dollar invested in apprentice training, employers get back $1.47 in increased productivity. Participants finish their programs debt-free with starting salaries of over $60,000. Meanwhile, the average graduate from a four-year college starts with an annual salary below $50,000. Nearly 70 percent of bachelor’s graduates finish with student loan debt, averaging over $30,000 per borrower. It is puzzling apprenticeship is not a more popular alternative.

Countries like Austria, Switzerland, and Germany have 55 to 70 percent of their young people entering apprenticeship programs right out of high school. Their model results in low youth unemployment rates, a steady supply of skilled workers, and high program completion rates. 

Despite the president’s gripes about the manufacturing jobs shipped overseas, new innovations have created unanswered demand in advanced manufacturing right here in America. But without a reliable training pipeline, hundreds of thousands of these jobs are unfilled today. To his credit, Trump has commended the value of vocational/technical schools and alternative education pathways. He even signed an executive order last year calling for expansion of apprenticeships. 

If he truly wants to be a “jobs, jobs, jobs” president, Trump will borrow from his reality TV past and continue pushing for more apprenticeships. There are currently 5.2 million unfilled jobs in industries like healthcare, finance, education, and information. Filling these jobs requires forward-thinking educational solutions, not backward-reaching protectionist trade deals.

Christian Barnard is a Young Voices Advocate and a policy researcher based in Boston, MA. Follow him on Twitter @CBarnard33.