AP U.S. History · Lesson 2

Globalization, technology and a changing nation

Know Know it

After 1980 the American economy became more tightly tied to the rest of the world, a process called globalization. The North American Free Trade Agreement (NAFTA), in force from 1994, removed most tariffs on trade among the United States, Canada and Mexico, and the United States joined the new World Trade Organization in 1995. Trade with China grew fast after China joined that organization in 2001. Cheaper imports and new markets helped consumers and exporters, while many companies moved production to places with lower wages.

Manufacturing jobs kept disappearing from the older industrial cities of the Northeast and Midwest, a process called deindustrialization, while jobs grew in services, finance, health care and technology. Union membership fell, and the gap between high and low earners widened: incomes rose fastest for people with college degrees and for the top earners.

A digital revolution changed daily life. Personal computers spread in the 1980s, the World Wide Web opened the internet to the public in the 1990s, and by the 2010s most Americans carried smartphones. Companies such as Microsoft, Apple, Amazon and Google grew into some of the largest in the world.

Immigration reshaped the population. After the 1965 law ended the national-origins quotas, most newcomers came from Latin America and Asia. The Immigration Reform and Control Act of 1986 gave legal status to about 2.7 million people living in the country without authorization and penalized employers who knowingly hired unauthorized workers. Debates over border security and the status of unauthorized immigrants continued into the 2000s. Americans also grew older on average and kept moving south and west.

In 2007 and 2008 a housing bubble burst and a financial crisis spread through banks worldwide, starting the Great Recession. Congress passed the Troubled Asset Relief Program (2008) to stabilize banks and the American Recovery and Reinvestment Act (2009) to boost spending, and unemployment rose to about 10 percent before slowly falling.

Trap Globalization did not begin in the 1990s

Americans traded and invested abroad long before NAFTA, and after World War II the United States led efforts to lower tariffs around the world. What changed after 1980 was the speed and scale: cheaper shipping, computers and new trade agreements let companies spread production across many countries.

Worked example Easy

What did the North American Free Trade Agreement do?

  1. It created a single currency shared by the three North American nations
  2. It opened the border between the United States and Mexico to all migration
  3. It set up a military alliance of North American nations
  4. It removed most tariffs on trade among the United States, Canada and MexicoAnswer

How to solve it

  1. NAFTA is a trade agreement, as its name says.
  2. Its main tool was removing tariffs among the three nations.

Why each choice is right or wrong

  • A. Incorrect. NAFTA did not create a shared currency; each nation kept its own money.
  • B. Incorrect. NAFTA dealt with trade in goods and investment, not with open migration.
  • C. Incorrect. NAFTA was a trade pact that took effect in 1994; it created no military alliance.
  • D. Correct. NAFTA phased out most tariffs among the three countries, beginning in 1994.

Explain Explain it

Task verbs: explain, identify

To explain an economic change, name the force behind it (trade, technology or policy) and then the people it affected and how. Effects were uneven: the same change could help consumers and exporters while hurting workers in particular places and jobs. To identify a change in who Americans are, compare where newcomers came from before and after a turning point, and name the law or event that marked it.

Worked example Medium

From Bill Clinton, remarks on signing the North American Free Trade Agreement Implementation Act, December 8, 1993 (public domain)

This is the world we face. We cannot stop global change. We cannot repeal the international economic competition that is everywhere. We can only harness the energy to our benefit.

Which group most strongly opposed the agreement Clinton is defending in this excerpt?

  1. Large exporters seeking new markets in Canada and Mexico
  2. Labor unions that feared factory jobs would move to MexicoAnswer
  3. Major national business groups such as the U.S. Chamber of Commerce
  4. Most Republicans in the House of Representatives

How to solve it

  1. Clinton argues that global competition cannot be stopped, only used.
  2. The strongest opposition came from those who expected to lose jobs: organized labor.

Why each choice is right or wrong

  • A. Incorrect. Exporters stood to gain from lower tariffs and mostly backed NAFTA.
  • B. Correct. Unions such as the AFL-CIO fought NAFTA, warning that companies would move production to lower-wage Mexico.
  • C. Incorrect. Major business groups supported NAFTA as a way to expand trade and investment.
  • D. Incorrect. Most House Republicans voted for NAFTA; it passed with more Republican than Democratic votes.

Identify Your turn

Identify where most new immigrants to the United States came from in the decades after 1965, and identify one law Congress passed to deal with unauthorized immigration.

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A full answer does this

  • Identifies Latin America or Asia as the main source of immigrants after 1965
  • Identifies a law Congress passed to deal with unauthorized immigration

Model answer

After the 1965 law ended the national-origins quotas, most new immigrants came from Latin America and Asia, from countries such as Mexico, the Philippines, China and India, rather than from Europe. To deal with unauthorized immigration, Congress passed the Immigration Reform and Control Act of 1986, which gave legal status to about 2.7 million people and penalized employers who knowingly hired unauthorized workers.

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