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Mexico is already the 6th largest auto producing nation - basically the same size as Germany and South Korea. Mercedes already produces vehicles in Mexico (as does Audi, Baic Group, BMW, Stellantis, Ford, General Motors, Honda, Hyundai, Kia, Mazda, Nissan, Toyota and Volkswagen). About 70% of Mexico's vehicle production heads for the US and employs over 1M people. Mexico accounts for 23% of North American auto assembly. Mexico also imports about 50% of its auto parts from the US.
Before NAFTA, Mexico had restrictions requiring vehicles to be made domestically from domestic parts. NAFTA opened Mexico to US vehicles. Over time, Mexico's automotive industry took off assembling many US and foreign vehicles and creating lots of parts.
As of 2021, US/Canadian auto workers earned an average of around $20-21/hour. USMCA requires that 40-45% of auto workers earn a minimum of $16/hour, including all the parts manufacturing, etc. (NAFTA didn't have this wage requirement)
When you create free trade agreements, it can cut both ways. It opens Mexico to lots of US goods and services and it also means that Mexico can export to the US. At the same time, we've only seen moderate movement toward Mexican manufacturing with US/Canadian manufacturing accounting for 77% of North American manufacturing. Companies haven't just up and moved their American manufacturing to Mexico. Companies are still opening new US plants. Rivian is opening a $5B plant in Georgia (and before you say "because of the tax credits if you make EVs in the US" those also apply to countries we have a free trade agreement with like Mexico). Hyundai/Kia is opening a new plant in Georgia. Ford broke ground on a new plant in Tennessee in 2022, one of 4 new US factories. VinFast (a Vietnamese auto company) is opening a $4B plant in North Carolina. GM is spending billions on new US facilities.
So when someone says that automotive production will all be moving to Mexico because of this, it seems unlikely. Yes, Mexico will become an increasingly important part of the North American automotive industry, but we're seeing companies continue to invest in US factories - including unionized US factories. That's not to say that unions have zero impact on the planning decisions of automotive companies, but the view of the comment that you're responding to (that automotive production will simply be moved to Mexico) probably isn't going to come to pass in a clear-cut way. The US and Mexico have had a free trade agreement for 30 years now and we simply haven't seen companies run away from unions to Mexico. That's not to say that companies haven't used Mexican plants. They have. But we haven't even seen this type of thing come up in union negotiations. Mexico is producing around 30% more vehicles today than when free trade started. US production is flat, German production is down 20%, Canadian production is down 50%, Japanese production is down 25%, French down 60%, British down 40%. The US automotive industry isn't without issues, but it's doing pretty well compared to a lot of peer nations - even while Mexican imports are there.
Again, I'm not saying that it has no impact, but there's no evidence that the sky is falling. It's a political boogeyman more than a reality. It's also important to note that US vehicle production basically hasn't moved much since 1950. In fact, from 1950-1980, US production was around 8M vehicles per year. US automotive manufacturing is higher now than it was when we had more protections against cheap Mexican cars - while other high-income countries have seen declines and despite the fact that US automotive manufacturing saw no growth for 30 years when there were plenty of protections. It's not like US cars were a growth industry and then that stopped when Mexican imports happened. US auto manufacturing was a stagnating industry for decades then free trade with Mexico happened and US auto manufacturing has done better. The sky isn't falling, companies are still investing tens of billions (probably hundreds of billions combined) in new US auto manufacturing, and I don't think this vote is going to make much of a difference.
That’s proven not to be true. Ask all the SC garment workers or the New England shoe factory workers…
No, people want cheap even if that means their neighbors Steve and Diane lose their jobs, go on welfare and they end up paying more in taxes as a result offsetting their savings in cheaper textiles and shoes!
So… yeah, no. They want less expensive cars from Mexique.
And the pols want those nice Corp contributions… they do not represent their voting constituency.
Labour will be cheaper anyway, what's stopping a company from milking the local population for as much as possible, paying as low as possible and when people start to get fed up with it and they just move it to Mexico?
There's no rational basis for this fear of unions, what you fear is globalisation itself, it's already happened, and it was caused by USA-exported economics ideology since the 80s in the form of neoliberalism.
It’s about tradeoffs. There is a point where it makes economic sense to send that work to Mexico.
Considering break even points it will always make sense to move out, reasons to not move are the local incentives in the form of tax breaks and invested capital in factories, if the consideration is only about labour (which the take on unions making it easier for the move) it always make sense to move, regardless if it's a unionised workforce or not. Non-unionisation only delays this inevitability by allowing the company to milk the employees for a little longer, in the long-term it will eventually pack up and move if the incentives are not maintained (again in the form of tax breaks or if the company has recently re-invested in existing facilities).
To me, again, the fear of globalisation's side-effects is not a good excuse to promote a lack of worker solidarity, it only makes workers more powerless since at some point in the long-term the break even point is reached, without an union there's no collective force to pushback a company's decision to move their production somewhere else with cheaper labour, at least with an union there will be a conversation and negotiation around it.
We could kind of have our cake and eat it too if we became more protectionist and also modified the Union-Company relationship to be less contentious. If we prioritized the good of the American worker and society (to the disadvantage of other world economies) Wealth would be less unevenly distributed. Total wealth would decrease and efficiency would be reduced, but very likely we would have a happier American society but also likely a poorer international worker. Of course, this would also require strict immigration weighted more on ability rather than simple willingness to work for cheap.
According to you, the Austrian economy should be in shambles. Instead, Austria boasts one of of not the most livable environments on earth.
It's crazy how the USA vehemently refuses to learn anything from other countries.
Much easier to eat the higher costs, hire and fire aggressively in the US (not that I agree nor approve, but sad reality with current labor laws), and try to grease the hands of US congress to sweeten the pot ever so slightly.
Next time you see the headline about some company laying off thousands of people while simultaneously making record profits and paying their CEO some number of hundreds of millions of dollars per year, ask yourself why that never seems to happen to unionized workers.
Next time you see the headline about the "working poor" that have multiple jobs and still can't make ends meet, ask yourself why that never seems to happen to unionized workers.
Next time you see the headline about people going years without so much of a cost of living increase to their wages, ask yourself why that never seems to happen to unionized workers.
(I could go on)
Economic theory, strategic behavior, and repeated observations through history (leading to the genesis if unions).
Like rent control, unions often protect existing workers at the expense of everyone else.
And that protection can extend into retaining bad workers, punishing highly productive workers.
Not that all unions are a net negative but many are.
And of unions where the ceo and union president are golf buddies and they negotiate oh so very hard to get raises that don’t even match inflation.
There’s good and bad in both worlds. Ultimately the best defense you can have as a worker is to have in-demand skills and to think of employment as a business contract.
This tax achieves a similar outcome to unions, it makes the lives of regular workers better by reducing the number of hours they need to work and giving them options, which implicitly changes the bargaining power. But on net it has much less downsides than unions. And it's more future proof when AI starts making people unemployed, whether that happens now or in 20 years.
The fairy tale of "unions are bad" is only good for the rich who get paid either way, just more without unions.