Research Symposium

BIO

Andrea Hernandez is an Economics student at Florida State University, minoring in Environmental Science & Policy. Born in Chicago, Illinois, she is interested in how economic systems shape real-world outcomes, particularly in the intersection of environmental policy, labor, and development. Set to graduate in Fall 2028, Andrea's academic work explores how institutions and policy design influence economic behavior. She plans to pursue a master's degree in economics to further study applied economic policy and its tangible impacts. In her free time, she enjoys cooking, hiking, reading, and painting her nails.

Enforcement, Displacement, and Informality: Labor Market Adjustment under the USMCA's Rapid Response Mechanism

Abstract

Designed to be at the vanguard of enforceable labor rights in trade agreements, the USMCA’s Rapid Response Mechanism (RRM) was conceptualized to protect collective bargaining rights and strengthen labor standards in Mexico. This paper examines the cumulative impact of RRM investigations on wages, employment composition, and job quality across Mexican states and cities, leveraging facility-level case variation and quarterly labor data. The findings reveal a sequential adjustment process, rather than immediate, uniform gains for workers. In the short term, enforcement of the RRM appears to increase worker displacement reflected in an immediate decline in permanent or unionized employment contracts and a subsequent rise in non-agricultural informal employment. However, over longer post-treatment periods RRM enforcement correlates with improvements in reported job-quality indicators, including gains in non-mandated employment benefits. These patterns plausibly suggest the recognition and enforcement of collective bargaining agreements central to the RRM.

Keywords: USMCA, collective bargaining, trade agreement, policy