Gains - increase in exports from fabric and yarn producers....

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Gains: (1) Cheaper price of clothing in the US benefit US consumers. The US consumers now have more money to spend on other items, benefiting other industries and creating jobs in other industries. The creation of these new jobs more than compensates the loss of jobs in the US textile industry. The US is economically benefited. For example, the cost of a typical pair of designer jeans fell from $55 in 1994 to about $48 today. In 1994, blank T shirts wholesaled for $24 a dozen. Now they sell for $14 a dozen. The benefited consumers who now have more money to spend on other items. (2) The increase in US exports of fabric and yarn, or the raw materials for the production of apparels to Mexico, in turn increase the jobs in this export sector (of fabric and yarn). For example, US producers supply 70% of the raw material going to Mexican sewing shops. Between 1994 and 2004, US cotton and yarn exports to Mexico grew from $293 million to $1.21 billion which led to an
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: increase in exports from fabric and yarn producers. (3) The increase in jobs of the Mexican textile industry workers means income increase for these workers. The Mexican workers then use a part of this increased in come to buy US made products, which in turn creates jobs in the US industries. For example, as more jobs were created in Mexico, more people are employed and they have more income to spend on the American goods which is beneficial to the US economy. Loss: Reduced employment or loss of jobs in the US textile industry. For example, between 1994 and 2004, production of apparel felt by 40% and production of textiles by 20%. In the same time frame, employment in textile mills in the US dropped from 478,000 to 239,000 and employment in apparel plummeted form 858,000 to 296,000. Besides, for example, the Loom Inc. lay off 3,200 workers, or 12 percent of its US workforce....
View Full Document

This note was uploaded on 11/09/2010 for the course CLASS 4 taught by Professor Dr.francis during the Spring '10 term at United International University.

Ask a homework question - tutors are online