When a company moves its factory to Mexico for cheaper labor, a small U.S. town can experience job losses, decreased local spending power, and a decline in the overall economy and infrastructure.
When a company decides to move its factory to Mexico because their unskilled labor is cheaper, a small U.S. town can experience several consequences. One major effect is the loss of jobs in the town as the factory relocates. This can lead to higher unemployment rates and a decrease in the town's economic activity.
Additionally, the remaining businesses in the town may also suffer due to the decrease in local spending power. With fewer jobs and lower wages, people may have less disposable income to spend on goods and services within the town.
Furthermore, the town's overall economy and infrastructure may be affected. If the factory was a major source of revenue for the town, its closure may result in a decline in tax revenue, making it harder for local government to fund essential services and infrastructure projects.