I'm very confused about the business of free trade. Obviously
Bush is doing the wrong thing, but are the Democratic candidates
doing the right thing? Should we have protectionist trade
policies? Will saving all the jobs being offshored save our
economy? Or will people just lose jobs faster than ever because
businesses will start fleeing the country altogether, and
prices for domestic goods will be too high to keep the consumer
I can't imagine either strategy (protectionism or free
trade) really being good for everyone in the long run, but
what's the answer?
Auntie can only give you an opinion, for what it's worth
- which is not all that much, since I am not an economist
or a scholar in this area. You make some interesting observations,
though, and I think you do a good job of stating the central
dilemma, which is, as you observe, that both 'free trade'
and 'protectionism' have substantial down sides.
Now, as I said, I am not an authority. But what I can't understand
is why we cannot have some of the best of both worlds, while
(hopefully,) dodging the worst of the downsides to each?
There is a lot of truth in the free traders' contention that
trying to protect jobs that can be done more cheaply elsewhere
is ultimately a losing proposition. And there is probably
some truth in the notion that protecting some jobs is a bit
like subsidizing buggy whip manufacturers when the horseless
carriages were taking over.
And yes, there is also a certain amount of factual accuracy
in the contention that many jobs simply can't be moved, and
there can still be plenty of jobs to go around. In fact, we
have created many new jobs in the last twenty years even while
opening up trade with NAFTA and other globalization efforts.
With that out of the way, let's look at those 'jobs' that
are being created (or at least, the ones the 'free traders'
tell us will be created in a booming economy boosted by free
trade.) Do they have the benefits and pay levels that will
enable a full-time worker to support a family?
Auntie hasn't seen much evidence of this. More low-wage,
low-quality jobs, and an inadequate net of resources and assistance
to help families make ends meet, does not a prosperous economy
Maybe the reshaping of the economy is irreversible, and we
will never go back to a day when workers can count on their
employers for job security, health insurance, retirement benefits,
regular cost of living increases, etc. Maybe we don't even
necessarily want to. Auntie knows many young people who regard
a "job" as a three-to-five year commitment at best, and who
seem to have no problem being virtually self-employed.
The number of people who patch together a living from part-time
work for a 'regular' employer, contract work, and maybe a
little home-based business, etc., continues to grow, and many
people seem to like it, except for the big problem of health
insurance, disability and retirement security, etc.
Now, I'm not too gung-ho on this notion, Anne, because I
really don't know enough to be sure it would have a reasonable
chance of working. But perhaps the Democratic economic policy
should not be trying to stuff the genie of globalization and
offshoring back in the bottle. Perhaps what we should be doing
is concentrating on policies that will enable the coming generations
of young people to successfully support families and create
secure futures for themselves in this new economic environment.
What would this look like?
Well, for one thing, it would include a higher minimum wage
for those service economy jobs that cannot be sent off-shore,
so that they offer a hard worker an opportunity to actually
support a family.
It would include the closure of tax loopholes and do-arounds
that allow corporations doing business in America to pay absurdly
low taxes, while we provide them with a generous infrastructure
of transportation, workforce development, communications,
economic and legal protections, etc.
It might include an array of well-coordinated totally private,
partially-subsidized private, and publicly-operated 'security
net' services, like health insurance, education and retirement
saving/planning, disability insurance, unemployment insurance,
etc., that will enable families to have a steady infrastructure
of security regardless of the number of part-time and self-employed
and temporary and other types of jobs they patch together
to make their living.
It might include some "give back" programs that would reduce
the impact of offshoring and job elimination by charging companies
"job exit" fees that will help pay for a sturdy, ongoing infrastructure
of retraining and workforce development/adjustment programs.
And it might include some tax credit incentives to help employers
keep some jobs here in America.
I don't know how realistic these ideas actually are, Anne,
and maybe they are hopelessly utopian. But on the other hand,
maybe they represent a middle ground that can bring 'free
traders' and 'protectionists' back together with the common
mission of ensuring that tomorrow's economy works for everyone.
Thanks for asking Auntie Pinko!
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