Congress seems ready to give President Bush the go-ahead to negotiate free trade with Mexico. It should vote a resounding "Yes," because joining the two markets will spur economic growth in both. The result will be to create new, well-paid jobs in the U. S. to offset any shift to Mexico of low-wage jobs. And with a bigger, integrated market as a home base, U. S. companies will be more competitive against Japanese and European rivals.
There's a cloud in this prospect, however. As low-skilled industries move south of the Rio Grande, economic textbooks say, American workers and resources can be shifted into higher-tech, better-paid operations that require more skills. But those textbook arguments assume a smoothly functioning U. S. labor market with educated workers. The reality is that the U. S. also has a large pool, estimated at 27 million, of workers and unemployed people who are functional illiterates. With that handicap, many who have been able to hold low-skilled jobs can't possibly qualify for the more demanding jobs that are created. If free trade widens the gap between employed and unemployable Americans, it will be a social disaster.
To avoid this trap, the U. S. must do much more than it has in the past to train workers. President Bush has pledged aid to retrain workers who lose their jobs to Mexico. But that, by itself, would be too little, too late. He must also offer incentives to employers to upgrade workers' skills while they still have jobs, and to recruit and train workers from the ranks of the poorly educated and unskilled. Paradoxically, companies such as Ford Motor Co. are already doing just that--in Mexico. Congress should insist that stepped-up training go hand in hand with free trade--for American as well as Mexican workers.