Sunday, April 30, 2006

Free trade means free trade of labor too

This article states better than any of my inept ramblings why it is that this whole immigration brouhaha is a bunch of protectionist crap.


From the standpoint of economic theory, liberalizing the flow of labor is no different from liberalizing trade. Both redistribute a nation's wealth, with a net positive effect. The difference is that liberalizing trade disproportionately benefits richer countries, while easing immigration
restrictions would help the world's poor.

Dani Rodrik, an economist at Harvard, estimates that a worker in the first world earns 10 times more than someone with similar qualifications in the third. Even a light loosening of immigration restrictions, Rodrik argues, would provide a far bigger boost to the world's poor than knocking down all the famously crippling agricultural subsidies.

I am big on eliminating farm subsidies to begin with. Africa can produce higher quality cotton at a fraction of the rate of the US before our ag subsidies kick in, and NAFTA destroyed Mexican corn farmers by flooding the market with cheap, subsidized American corn while Mexican officials ignored the quota system put in place to soften the blows to Mexican farmers. Even while competing with massive US subsidies, Brazil kicks everyone's ass when it comes to soy production. But Rodrik is right, if one immigrant African worker makes 10 times more money in the US than at home there is no way that eliminating ag subs could come anywhere near to improving the poverty that remittances from the US could. If an immigrant sends home just 10% of their pay- they have contributed an entire year's wages to their family.
After all, for many in those countries, their biggest asset is their labor,
and the current system forces them to sell it at much lower than market value.
If free trade is a tide that lifts all boats, then so is free labor. But this
time, the smallest boats get the biggest boost. If we're going to ask countries
to let in our goods, we should be willing to let in their workers.

I know very few of us who would be willing to give up the niceties that we get for cheap from imported sources. I'm sitting here right now in a skirt made in China and a t-shirt made in Guatemala. I know the horrible conditions these clothes were made under- yet I still wear them. So is it that you don't mind the crushing poverty wages as long as you don't have to see it. Or maybe you don't like the idea of competing with someone who is more desperate than you for work. If that's the case- then legalize the immigrant workers and let them organize. I can promise you that if they have legal rights to better pay then they will use them. The only reason they work for less than minimum wage now is that they have no recourse. But think about it- would you work for less than minimum wage if you had legal recourse- hell no!


1 comment:

DeeK said...

Wanting to control immigration is not the same as stopping immigration. Our current policy benefits some at the expense of others. Mexico is likely the largest offender. In their case, why should look the other way when their government encourages emigration to the US when it limits immigration from nations south of their border?

I also think the knee-jerk liberal reaction that immigrants are better off here than in their own cultures needs to be examined. It implies the "we are the greatest country in the world" bullshit I so abhor.

There are two issue here: immigration needs to considered over a 30, 50, 100 year period rather than just what is happening in the here and now. Given that our environment will be on shaky ground over the next century and longer, we need to consider the problem more comprehensively.

The second issue is subsidies. You mention them as if we should just accept them rather than examine their overall worth to the general population. The immigration issue needs to be examined in all its parts, including how subsidies encourage people leaving their own nations.

The issue is complicated, but no so complicated that we cannot bring all the components out in th open.