While we are
looking at the debates about free trade in the Americas, here’s more fuel for
the Free Trade bonfire.
Key words:
2004 Politics, variable global minimum living wage, FT, Jeffrey Sachs, No
Nation is an Island anymore, and gasp! - moral
economics.
- KWC
RONALD BROWNSTEIN /
WASHINGTON OUTLOOK
Gephardt's Revolution Begins With
a Global Minimum Wage
LA Times, January
12, 2004
Every day, the borders that separate America from the rest of the world
continue to dissolve.
The last few weeks' headlines have been an extended testimonial to this
interdependence. Our stake in the world economy was dramatized early last week
when industry analysts reported that in 2003, foreign auto manufacturers
captured a larger share of the American market than ever. The mad cow scare
demonstrated that the health of the nation's beef industry, not to mention the
health of the beef-eating public, could depend not only on our own food safety
regulations but also on the standards in Canada.
Likewise, the repeated cancellations of foreign flights to the United States
over the last few weeks showed that our first line of defense against terrorism
is now in other countries. And
President Bush's new immigration reform initiative acknowledged that the United
States could only control its borders by reaching an agreement with Mexico to
regulate migration.
These disparate developments all sent the same message: No nation is an island
anymore. America can safeguard neither its security nor its prosperity on its
own. Decisions made abroad affect our lives more intimately than ever.
That's the insight at the heart of one of the most ambitious and intriguing
ideas emerging from the 2004 presidential campaign: a proposal from Democratic
Rep. Dick Gephardt of Missouri to establish an international minimum wage.
After a quarter-century in the House of Representatives, Gephardt is battling
for his political life as he struggles to overcome Howard Dean's lead in next
Monday's Iowa caucuses. But whatever happens to Gephardt's own ambitions, he
has produced a path-breaking concept that deserves to be considered long after
this presidential race is over.
The idea is simple. Gephardt says that as a condition of membership in the
World Trade Organization, every nation should be required to adopt a minimum
wage. The level would vary from country to country, depending on productivity
and the level of development. But everywhere, he says, workers should be
guaranteed a wage high enough "to allow someone to live like a human
being."
The International Labor Organization estimates that at least 85 countries have
a minimum wage on the books. But in many places, it is honored more in the
breach. Gephardt, who has always valued the practical over the prophetic, is
preaching a revolution: the idea that any country seeking to participate in the
global economy should be required to pursue a decent level of existence for its
workers.
Gephardt's call for an international minimum wage represents an important
broadening of his perspective on trade. For most of his career, Gephardt has
framed his opposition to lowering trade barriers primarily as a means of
protecting American jobs.
That left him standing on narrow ground against free-traders who have
persuasively argued that the expansion of trade, while disruptive in some
communities, ultimately creates more jobs than it destroys and makes the nation
more prosperous over time.
Gephardt still argues that raising wages abroad will benefit American workers,
by creating more middle-class consumers for our exports, and reducing the
incentive for U.S. manufacturers to relocate in search of cheaper labor.
But the idea of an international minimum wage has allowed Gephardt to connect
the trade debate to a much larger cause, one as much moral as economic: the
pursuit of dignity and security for more of the multitudes living in crushing
poverty around the globe.
"We need to stop the human exploitation that is going on in this
world," he recently told a group of Iowa Democrats, his face reddening and
his voice rising. "I've been in the villages…. The [manufacturing] plants
are as good as anything in the United States. But the people live on the
ground. They live in the cardboard boxes that bring the products back to the
United States…. They live in worse conditions than most animals do in
Iowa."
Even some advocates for the world's poor aren't sure that Gephardt's answer is
the best solution. Jeffrey Sachs, director of the Earth Institute at Columbia
University and a leading crusader for developing countries, is a surprising
critic.
Sachs worries that even a variable minimum wage would drive jobs away from the
poorest countries by requiring companies to pay workers more than their
productivity and skills justify. "If we were to set minimum wages that had
some bite to them, what it would do would be to really block those countries
from getting the first foot on the ladder," Sachs says.
A better alternative, Sachs argues, would be to increase foreign aid to improve
health and education — thus generating the productivity that could eventually
justify higher wages — while reducing tariffs and quotas that inhibit poor
countries from selling agricultural or light manufacturing products like
textiles to the U.S.
But Gephardt, correctly, doesn't see such an agenda as incompatible with his own.
As president, he says, "I would go to the WTO meeting myself" and
present developing countries a grand bargain: more foreign aid and lower
tariffs in return for a commitment to lift wages. "You've got to cut a
deal," he says, the diplomat as legislator.
Such a bargain could allow poor countries to raise their living standards by
increasing their workers' skills while expanding their access to the American
market. But it would also end the competition to lure employers with the lowest
possible wages and create more middle-class consumers who could one day buy
products built or designed in America.
This approach would face enormous political hurdles, at home and around the
world. But it establishes a direction that could ultimately benefit rich and
poor countries.
"You can't do this overnight," Gephardt says. "It's a vision.
But it provides a goal of where the world needs to go, and that's what has been
lacking."
http://www.latimes.com/news/columnists/la-na-outlook12jan12,1,2454990.column
