One of the only things that economists agree on regarding the North American Free Trade Agreement (NAFTA), which marked its 20th anniversary of being in effect on New Year’s Day, is that such trade pacts are a major contributing factor to growing U.S. income inequality. Obama is expected to dedicate much of his State of the Union address to plans for battling income inequality while he is also pushing for Congress to Fast Track the TPP, which would expand the NAFTA model to more nations.
“Democrats want to talk about job creation and tackling income inequality, which are also expected to be the main themes in President Obama’s State of the Union speech, but the 20-year record of NAFTA shows that deals like the Trans-Pacific Partnership would only contribute to income inequality as more middle-class jobs are lost,” said Lori Wallach, director of Public Citizen’s Global Trade Watch.
Since the January 1, 1994, implementation of NAFTA, the share of national income collected by the richest 10 percent has risen by 24 percent, while the top 1 percent’s share has shot up by 58 percent.