For decades, American labor unions were supposed to be the guardians of working-class prosperity, fighting for higher wages, better benefits, and job security. But when globalization took hold, many of these unions—especially the United Auto Workers (UAW)—chose expansion and international partnerships over protecting the very workers they were supposed to represent. Instead of resisting offshoring and corporate outsourcing, unions enabled it, often prioritizing foreign labor over American jobs.
The result? The destruction of stable, well-paying manufacturing work in the United States, a gutting of the middle class, and the rise of economic despair in former industrial strongholds. While some economists promised globalization would lead to better opportunities, the opposite happened—jobs vanished, wages stagnated, and entire communities fell into decline. This article will expose how American unions failed to protect their own members, how globalist economic policies accelerated job losses, and what can be done to reverse decades of damage.
Unions and the Early Betrayal: The Auto Pact of 1965
One of the earliest examples of American unions failing their own workers was the Auto Pact of 1965, an agreement between the United States and Canada that eliminated tariffs on cars and parts only if manufacturers invested in Canadian production.
The UAW, which represented both American and Canadian autoworkers, supported the deal—despite the fact that it created an incentive for companies to shift production out of the U.S. The agreement ultimately protected Canadian jobs at the expense of American ones, as U.S. automakers took advantage of cheaper labor and government-funded healthcare in Canada.
Instead of opposing the shift, the UAW justified it as a necessary compromise, arguing that it prevented even worse offshoring to Mexico or Asia. But this decision would set a dangerous precedent: unions were no longer fighting solely for American jobs—they were now making concessions in the name of international labor solidarity.
By the 1980s, American auto jobs were already in decline, and rather than pushing back against outsourcing, the UAW would continue to accommodate corporate demands.
NAFTA and the Death Blow to U.S. Manufacturing (1994-Present)
If the Auto Pact of 1965 was the first betrayal, NAFTA (the North American Free Trade Agreement) in 1994 was the final nail in the coffin for American manufacturing.
NAFTA opened Mexico to U.S. auto companies, allowing them to build factories where they could pay workers a fraction of what they paid in the U.S. Unlike Canada, which had unionized labor, Mexico had no real union presence, making it an even more attractive offshoring destination.
The UAW’s Critical Failure
The UAW failed to unionize Mexican workers, leaving them at the mercy of corporate-controlled “protection unions” that ensured wages remained low and benefits nonexistent. This was a disastrous miscalculation.
Had the UAW aggressively organized in Mexico, it could have:
- Prevented American companies from using Mexican workers as leverage to force wage cuts in the U.S.
- Stopped the collapse of auto wages by ensuring all workers—regardless of country—had bargaining power.
- Slowed the offshoring of American jobs by making Mexican labor less attractive.
Instead, the UAW ignored Mexico, assuming American automakers would remain loyal to their U.S. workforce. But as soon as NAFTA made it profitable, companies rushed south, setting up non-union factories and cutting thousands of American jobs.
How Automakers Used Globalization Against American Workers
American auto companies used a three-step strategy to systematically weaken unions and drive wages down:
- Outsource Jobs to Canada (1965-1994)
- The Auto Pact allowed automakers to shift production to Canada without penalties.
- The UAW, instead of opposing this, supported it—favoring Canadian jobs over U.S. jobs.
- Move Production to Mexico (1994-Present)
- Once NAFTA eliminated trade barriers, automakers moved thousands of jobs to Mexico, where non-union factories paid workers a fraction of U.S. wages.
- American workers were now competing with $3-an-hour labor, making it impossible to demand raises.
- Use Mexico as a Bargaining Chip
- Whenever the UAW negotiated contracts, automakers threatened to move even more jobs to Mexico unless workers accepted lower wages.
- This strategy worked, as the UAW repeatedly agreed to concessions that eroded worker protections.
By the 2000s, Mexico had surpassed the United States in auto exports, while American workers were left with fewer protections, weaker pensions, and lower wages.
The Free-Market Fantasy: How Economists Got It Wrong
While unions were failing to protect workers, free-market economists were telling Americans not to worry.
Milton Friedman and the Myth of Globalization
Milton Friedman, one of the most influential economists of the 20th century, championed globalization, arguing that:
- Offshoring was just part of economic progress—low-skill jobs would be replaced with better opportunities.
- Cheaper imports would benefit consumers more than lost jobs would hurt them.
- Government intervention (tariffs, subsidies, or labor protections) would stifle growth.
But Friedman overestimated the market’s ability to create new jobs. The high-paying manufacturing jobs that left never returned. Instead, workers were forced into low-wage service jobs—often with no benefits, no pensions, and no job security.
In industrial towns like Detroit, Flint, and Youngstown, globalization didn’t lead to prosperity. It led to abandoned factories, rising unemployment, and generational poverty.
The reality was clear: Friedman’s free-market theories only worked in an economy where companies still valued their home country. But in an era of corporate greed, they simply chased the lowest wages, leaving American workers behind.
The Social Cost: How Working-Class America Collapsed
The economic consequences of globalization were devastating, but the social consequences were even worse.
- The Rise of the “Rust Belt”
- Cities built around manufacturing collapsed as factories closed.
- Entire neighborhoods were abandoned, leading to crime and urban decay.
- Opioid Addiction and Despair
- With no stable jobs, many turned to drugs—leading to an opioid crisis that killed hundreds of thousands.
- Political Instability and Populist Revolt
- Working-class frustration fueled political upheaval, as workers demanded protectionist policies after decades of decline.
Can the U.S. Reverse the Damage?
The question now is: Can America bring back good jobs?
The answer is yes—but only with strong action.
- Tariffs on Foreign-Made Vehicles
- A 25% tariff on foreign-made cars would force automakers to reinvest in U.S. production.
- Tax Incentives for Domestic Manufacturing
- The government should offer major tax breaks for companies that open new factories in the U.S.
- End Union Globalism—Unions Should Be National Only
- Unions should only operate within one country, preventing conflicts of interest that favor foreign workers.
- Aggressively Reshore Jobs
- Government contracts should only go to companies that build products in the U.S.
Final Thoughts: The Fight for the American Worker
American workers were betrayed—not just by corporations, but by unions that failed to protect them, economists who underestimated globalization’s destruction, and policymakers who refused to act.
Now, the country faces a choice: continue down the same path of decline—or fight to rebuild the middle class by prioritizing American workers once again.
The only question left is: will policymakers finally take action, or will they let history repeat itself?
