Migration of textile companies to Mexico
Very according to the Whitehall Textiles Group and Fruit of the Loom Inc case study, the passage of NAFTA, prompted most textile and garment companies to migrate operations into the nation of Mexico. Numerically the most dramatic effect NAFTA has had on the textile industry is the increasein Mexican garment production for export. Critical review of textile and apparel's case studies sincethe implementation of NAFTA indicate that, until recently, the textile industry has been the largestUnited States manufacturing sector when it comes to employment. North Carolina has been one of thehardest hit states as a result of the effects of NAFTA on the economy. The textile industry in the stateof North Carolina showed specific decline, according to information provided by the North CarolinaDepartment of Commerce.
It’s a well known corporate fact that Mexico carries an abundance of
nonunionized workers. However, it has also been noted that secondary reasons for the large scaleclosure of textile factories in North Carolina can be attributed to a failure to modernize and launchpolicy changes to remain competitive with foreign markets. Statistically, during the first seven yearsof NAFTA, 52,419 employees lost their jobs as a result of the closing textile factory. According to the
Autex Research Journal
, the most notable impact of NAFTA on the industry's resource is a drop inemployment. In the year 1994, the US textile employment rate has been on a steady decrease. InMexico
the wages for worker were much lower and ‘disunionize’.
The Mexican industry's wagesand benefits don't even top $2 per hour versus $13 to $14 per hour in the States. Textile and garmentcompanies could save more on vast production than manpower where are easily available. However,it is important to note that a reduction in textile employment is U.S is not due solely to the effects of NAFTA on the industry. It is worth mentioning that cheap advancements in technology have alsosignificantly impacted the job migration in the textile industry to Mexico. Mexico has a strongcapability when it comes to skilled and professional labour as such engineers and technician in textileindustry have been operating in the country for over 30 years before even NAFTA was been put intoeffect which is cheaper to hire, providing equal level of consultation with the States. Aside from that,technological advancement and machinery has increased productivity and efficiency in the industry,but has decreased the need for tangible human interaction in terms of production.