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Wealth Concentration
Nostalgia for NAFTA? Our Wealthy Will Have Plenty
Over the last quarter-century, new data from Forbes make clear, NAFTA has helped create an incredibly rich people-friendly economic order.
NAFTA will soon be no more. The Trump administration has a new trade deal with Canada and Mexico — and a new name for the North American trade order.
Trade union and other fair-trade experts are now parsing the details of the new Trump agreement, and we don’t yet have a full sense of exactly how this new “USMCA” — the plodding shorthand for “United States-Mexico-Canada Agreement” — will play out politically over the next few months.
But we do know, no matter what happens with the new deal, that America’s most wealthy will always look back fondly at NAFTA’s 25-year run. For America’s richest — and the most financially favored of Canada and Mexico as well — NAFTA has been the gift that never stopped giving.
The NAFTA quarter-century, simply put, may well go down in history as the most lucrative quarter-century North America’s privileged have ever experienced.
Forbes magazine has just delivered the most up-to-date evidence of just how lucrative — for our wealthiest — the last 25 years have been. That evidence comes from the latest Forbes annual list of America’s 400 richest. Put this new list in a bit of historic perspective, and the picture we see would thrill even the most jaded of deep pockets.
In 1992, the year before Congress gave NAFTA the green light, America’s richest had to hold a personal fortune worth at least $373.7 million to make it into the lofty ranks of the Forbes 400.
To enter the just-announced Forbes 400 list for 2018, an American deep pocket needs at least $2.1 billion.
Back in 1992, the richest American on the Forbes list — Bill Gates — had a personal fortune worth $6.3 billion. The richest single individual on the new Forbes list? Amazon’s Jeff Bezos. He’s sitting on a fortune worth $160 billion.
Adjust these numbers for inflation, and the results still come across as staggering. Over the past quarter-century, after taking inflation into account, the real net worth of America’s richest single individual has tripled and then more than quadrupled, rising 13.9 times in all.
The average Forbes 400 fortune over that same span, meanwhile, has doubled, then tripled — all at a time when average wages in the United States have generally stagnated.
Could America’s rich keep piling up riches at the rate of the last 25 years over the next 25 years? Hard to see how. If the NAFTA-era rate of wealth accumulation did somehow hold, the nation’s grandest personal fortune a quarter-century from now would total an unimaginable $2.2 trillion.
Other factors besides NAFTA, of course, have been concentrating North America’s income and wealth since the mid 1990s. But NAFTA has powerfully shaped our overall economic and political environment.
NAFTA, as a Public Citizen analysis noted earlier this year, has relentlessly “placed downward pressure on wages for the middle and lower economic classes by forcing decently paid U.S. manufacturing workers to compete with imports made by poorly paid workers abroad.”
NAFTA also let U.S. agribusiness interests dump subsidized corn into Mexico, and small Mexican farmers could not compete. Mexico would hemorrhage 900,000 farming jobs in the deal’s first decade alone. Those lost jobs devastated rural Mexican communities — and generated a huge spike of emigration into the United States. U.S. employers took full advantage, depressing wages even more.
We’re still feeling the political fallout from that depression. Faux “populists” led by Donald Trump have parlayed frustrations over NAFTA-induced economic insecurity into ballot-box triumphs that have served only to enrich our richest. The wealthy have done just swell since President Trump’s inauguration.
In fact, Forbes ever so thoughtfully points out, the United States now hosts 204 billionaires not “wealthy enough to crack the club” — the Forbes 400 — that has become America’s most exclusive.
NAFTA’s initial cheerleaders promised us prosperity. For the already prosperous, they delivered.
Sam Pizzigati co-edits Inequality.org. His latest book, The Case for a Maximum Wage, has just been published. Among his other books on maldistributed income and wealth: The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, 1900-1970. Follow him at @Too_Much_Online.