Wage growth has also fallen short of what Nafta's early champions had hoped, partly due to a bulge in young Mexicans entering the workforce during the 1990s and early 2000s. Average daily wages in dollar terms have risen by just 18% since 2000, to $16.70 per day, according to Mexican government statistics. Tens of thousands of Mexican small-plot farmers were forced to find work after Nafta exposed them to competition with more technologically-adept U.S. factory farms.
Nafta "has not been a silver bullet," said Fernando Turner, Nuevo León's secretary of economic development and owner of Katcon Global, a manufacturer of automotive exhaust systems.
Despite those reservations, few in Mexico think the country would have been better off without the trade pact. Nafta and open trade in general introduced competition to an economy that had been closed off for decades, with coddled public and private monopolies making low-quality goods at uncompetitive prices.
Mr. Canales, whose family used to run the conglomerate Industrias de Monterrey SA, says that before Nafta, galvanized steel produced in Mexico was so flimsy that it broke under the pressure of stamping presses. Only after the markets opened up to American competition did the quality of his family business's products improve.
"I lived through Mexico's period of closed borders, and the products we had were lousy," he said. "I remember being worried when Nafta started, thinking, 'How can we compete with American steel producers?' My uncle used to tell me, 'When you go to bed, pray for your company, but pray more for your competitors, because good competition is the best pressure a company can ask for.'"
Metalsa's factory in the Monterrey suburb of Apodaca offers a glimpse into how free trade has helped support the creation of a blue collar labor force here. The plant employs some 3,600 people and produces about 680,000 steel frames for Dodge Ram, Toyota Tundra and Toyota Tacoma pickup trucks each year. The company buys 56% of the steel and other components to produce the truck chassis from Mexican suppliers, 21% from U.S. suppliers, and 22% from Asian companies.
Alexander Calderón, 46, grew up the son of a farmer in a rural part of the Mexican state of Veracruz. He started working at Metalsa welding frames for Chrysler trucks in 1993, initially earning 600 pesos, or about $194 at the time, per month. He now earns 40,000 pesos, $1,860, per month as a supervisor in the plant's steel hydroforming division, owns a house in the Monterrey suburb of Guadalupe, and sent his oldest son to study accounting at the state of Nuevo Leon's public university.
"For me, I really started to notice the development of industries here in the last 15 years as companies from other countries came here. That's when my salary started to go up," Mr. Calderón said. "It's gotten very competitive."
Most workers at the Metalsa plant earn much less, but their lives have improved. Alfredo Treviño, 30, has been with the company 11 years, and has seen his salary grow from 50 pesos, or $13.76, per day to 360 pesos, or $16.74. He spends about a quarter of his paycheck to pay the mortgage on the two-bedroom house he shares with his wife and two children. The Volkswagen Lupo hatchback he bought in 2005 is paid off.
"In my circle, everyone has a house and a car," Mr. Treviño said.
Write to Robbie Whelan at email@example.com
(END) Dow Jones Newswires
January 26, 2017 12:07 ET (17:07 GMT)
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