After the passage of the North American Free Trade Agreement, which made it less expensive to import goods from Mexico, workers in some industries found their factories being relocated to Mexico to take advantage of lower labor costs. These workers experienced what type of unemployment?

The correct answer is Structural

Structural unemployment is that generated by the introduction of new technologies or systems and processes aimed at reducing costs. These new elements affect the sectors of the economy of a country (industry, commerce and services), causing dismissal, generally, in great quantity.

The globalization of the economy, which gained strength since the 1970s, played a major role in increasing structural unemployment worldwide. Economic globalization has increased competitiveness at the international level, mainly through foreign trade, making companies look for ways to reduce production, marketing and transportation costs. Among these forms, we can mention the main causes of structural unemployment: adoption of new technologies and reduced cost administrative and productive systems (both with a decrease in labor).

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