The proposed North American Free Trade Agreement (NAFTA) will result in lower wages, fewer jobs, and generally reduced living standards for the majority of U.S. workers. Substantial costs to the U.S. economy will occur in job and income loss and few off-setting benefits for most workers. Proponents argue that NAFTA will create upward mobility for U.S. workers as low-wage jobs move to Mexico. Available data and past experience show that U.S. workers displaced by trade end up moving down the job ladder to lower-paying jobs or off the ladder to permanent unemployment, not up to better jobs. Most of the conventional studies that have attempted to quantify NAFTA's impact on the U.S. economy have either ignored the shift of investment from the United States to Mexico or have examined only the Mexican side of the equation. The extent to which investment in Mexico replaces investment in U.S. plants clearly will determine NAFTA's overall impact on U.S. jobs. Perhaps the greatest danger to the U.S. economy from adopting NAFTA is that it will encourage U.S. firms to seek a low-wage solution to the challenge of global competition. NAFTA would undercut chances of a "high wage" strategy of investing in the labor force of Mexico or the United States. U.S. interest in a NAFTA should not lie in expanding free trade but in improving living standards for the Nation. (Appendixes include 29 endnotes and 37 references.) (YLB)