To see why Trump’s anti-Nafta talk touches such a nerve, visit Scottsville, Ky.
A relocated factory breeds anger in Kentucky and brings low-wage work to Mexico “Nafta is the worst thing that’s ever happened to the U.S.”
Amid the rugged cattle farms that dot the hills of southern Kentucky, in a clearing just beyond the Smoke Shack BBQ joint and the Faith Baptist Church, lie the remains of the A.O. Smith electric motor factory. In the eight years since it closed, the building’s bluemetal facade has faded to a dull hue. Rust eats away at scaffolding piled up in the back lot, and crab grass is taking over the lawn. At its peak the plant employed 1,100 people, an economic juggernaut in the tiny town of Scottsville (population 4,226).
Randall Williams and his wife, Brenda, were two of those workers. For three decades they helped assemble the hermetically sealed motors that power air conditioners sold across the U.S. By the end, each made $16.10 an hour. That kind of money is just a dream now. Randall fills orders at a local farm supply store; Brenda works in the high school cafeteria. For a while their combined income didn’t even add up to one of their old factory wages.
Just as the Williamses were being told by A.O. Smith that they’d be let go in 2008, a young Mexican woman named Zoraida González was hired 1,200 miles away in the hardscrabble town of Acuña, just across the Rio Grande. To replace its Kentucky output, A.O. Smith ramped up production in lower-cost Mexico, a move facilitated by the implementation 14 years earlier of the North American Free Trade Agreement.
González was brought in to help handle phone calls. Now 30 years old and in charge of payroll, she makes about $1.75 an hour, on par with wages earned on the plant’s assembly line. It may not seem like much by U.S. standards, but to González the money has been lifechanging. It’s given her things she says her mother never had: a washing machine, cable TV, a minivan, and the hope that her 11-year-old son, Angel, will be the first member of her family to attend college.
González doesn’t know much about Nafta, and even less about Republican presidential candidate Donald Trump or the way he blames U.S. trade deficits with Mexico and China for the loss of jobs in America. But Williams sure does. He caucused for Trump in Kentucky. So did a lot of his neighbors. In Allen County, a collection of eight towns along the Tennessee border, Trump won 42 percent of the vote on his way to a narrow victory in Kentucky.
It was one of those kinds of results— in the heart of Southern Baptist country, where support was expected to go to the socially conservative Ted Cruz—that revealed the extent to which Trump’s anti-free-trade tack has touched a nerve with millions of working-class Americans. “Nafta is the worst thing that’s ever happened to the U.S.,” says Beverly Anderson, a Scottsville councilwoman who worked at the electric motor plant for 28 years.
Before Nafta, trade between the U.S. and Mexico was a relatively tame affair. The two sides alternated between deficits and surpluses—small figures, typically no bigger than a few billion dollars. U.S. exports quickly jumped after the accord went into effect in 1994, but the imports pouring in from Mexico climbed faster, and by 2015 the U.S. was posting a deficit of almost $60 billion.
Robert Scott of the Economic Policy Institute, a think tank critical of freetrade deals, estimates the deficit with Mexico alone has cost 850,000 American jobs. This, in turn, has a “chilling effect,” he says. “It actually causes wage losses for everybody who doesn’t have a college degree.” After accounting for inflation, hourly pay at U.S. factories has been stagnant since the early 1970s.
Trump and, to a lesser extent, Democratic candidate Bernie Sanders have found so much success in expressing the working man’s anger that no candidate, not even Hillary Clinton, whose husband signed the Nafta deal, is willing to fully embrace free trade. Trump’s proposed
solution is to impose restrictions on imports, a strategy backed by almost two-thirds of Americans in a Bloomberg Politics national poll conducted from March 19-22. Little if any talk on the campaign trail is dedicated to the benefits of the surge in cheap imports, such as subdued inflation that preserves consumers’ purchasing power.
On the Mexican side of the border, the benefits are clearer. Hundreds of thousands of manufacturing jobs have been created in the past two decades. Acuña has some 38,000 factory workers today. The town’s population is 136,000, vs. 42,000 in 1980. While evidence of sharp wage growth is hard to find in these industrial communities, other data underscore the role Nafta has had in helping boost the lives of many Mexicans: Gross domestic product per capita has climbed 23 percent since 1996. More important, the decades-old surge of illegal immigrants crossing the border in search of work has receded. Since 2005, more Mexicans have left the U.S. than have entered it, according to Pew Research Center.
Acuña is a sun-drenched, dusty town carved out of the broad mesa that stretches across northern Mexico. On the opposite side of the border sits Del Rio, Texas, home to Laughlin Air Force Base. Before the factories came, Acuña was best known for bars and strip clubs that catered to off-duty U.S. airmen, a culture that rock band ZZ Top glorified in a raunchy, racially charged 1975 hit, Mexican Blackbird.
Some of those seedy elements remain, but they’re surrounded by block after block of residential and commercial developments. Next door to the electric motor plant—which Regal Beloit acquired from A.O. Smith in 2011—there’s a Blueline factory, where workers make paper products; farther down the street, Magna Seating employees churn out car seats and seat covers. Then there’s a textile operation run by Müller Textil, a Germany-based company. Neither A.O. Smith nor Regal Beloit responded to requests for comment.
Across town, González and her boyfriend, Manuel Aragón, who works in the car seat factory, live with their two children in a subsidized-housing community. Kids play in the middle of the road. Dogs bark at passing strangers. The houses are almost all identical, save the differing shades of pastel paint that coat the exteriors.
Some in the neighborhood complain about the grind of factory life. Not González. Sure, she’d like a bit more pay and a few more creature comforts, but “we have food to eat,” she says. “We’re together, we have work and health.”
Back in Scottsville, such optimism is rare. Politicians “keep saying things are going to get better,” Williams says. “They’re not going to get better.” Jeff Woods, another Scottsville resident, is still angry, too. His mother worked at A.O. Smith. Today she’s a pharmacy technician, making a fraction of her old wage. “Somebody works there all their life, and you get to be fiftysomething years old and your income gets cut in half because the place moves to Mexico,” he says. “That’s not right.” The bottom line The economics of Nafta have left some U.S. workers underemployed and angry while raising parts of Mexico out of poverty.