From: yodaiken@chelm.cs.umass.edu (victor yodaiken)
Newsgroups: sci.econ
Subject: Re: NAFTA
Date: 16 Aug 92 13:44:15 GMT
Organization: University of Massachusetts, Amherst

In article <Bt1H9E.H9w@undergrad.math.waterloo.edu> sitomlin@undergrad.math.waterloo.edu (Stephen I. Tomlinson) writes:
><Bsxz2o.6tw@apollo.hp.com> nelson_p@apollo.hp.com (Peter Nelson) writes:
>>  . . . no one has made a very 
>>  convincing case one way or the other.  NPR said yesterday 
>>  that estimates range from gaining 150,000 jobs to losing 
>>  400,000 jobs.   It is very clear from reading leading economists'
>>  predictions about the economy in the Wall Street Journal, 
>>  over the last several years that economics is far, FAR from
>>  a reliable science.
>
>The prospect of losing 400,000 jobs should not greatly concern people (aside
>from those directly inconvenienced, of course).  Employment in the 
>U.S. rose from 99.3 million in 1980 to 117.9 million in 1990.  That's 
>more than 5000 new jobs per day or more than 150,000 new jobs per month.  
>And that's with the recession of the early 1980's averaged in.

Right, but what kind of jobs? Everything I've read on this topic suggests
that the 80's saw a process in which high-wage skilled labor was replaced
by low-wage unskilled labor: replacing 400K industrial skilled labor
jobs with 500K burger flipping jobs is a massive net loss to the economy.

>The most convincing argument that I have seen is the one that compares
>freer trade to advances in technology.  Forget about our unskilled 
>workers competing against low-paid foreigners--how can they possibly
>compete against machines that are paid for in one lump sum and will
>work 24 hours per day?  But today's unemployment rate is not out-of-line
>with unemployment rates of decades past, despite major advances in
>technology.  

Considering that the 3% unemployment rate was a hot political issue
in the early/mid 1960's, you are incorrect.

>
>However, while most people would agree that unskilled workers have a higher
>standard of living than many decades ago, there is considerable 
>disagreement about whether or not the lot of unskilled workers has 
>improved over the last decade.  

But, it is not unskilled workers who are most directly endangered by
the "free-trade" agreement. No-one is going to move a Burger-King
from Houston to Juarez, but they might well move a machine shop or
auto plant. 

>But the reality is that whether or not we have freer trade, advances
>in technology (among other things) are going to force workers to adjust,
>and unskilled workers are always going to have the fewest alternatives.
>We could sacrifice the gains from specializing and trading in order
>to delay this adjustment period, but in my opinion it is better to sacrifice 
>some of what we gain by allocating more resources to helping people adjust.  
>Probably a good education system is the best preventive measure.  
>A government unemployment insurance scheme which offers benefits only to 
>those who appear to need retraining and are willing to accept it may be 
>helpful, albeit expensive.  A tax collected from employers who don't
>provide x hours of training per employee per year has been suggested by 
>some, and sounds promising.  

Of course, the free trade agreements make this kind of scheme impossible.
If we tax employers to retrain workers, the employers will have no 
alternative but to move to a lower tax local. The "free-trade" agreement
essentially mandates that social services including education be equalizied
at the lowest common level, and similarly for environmental and labor
protection. Note that this is not an intrinsic requirement of lowering
trade barriers, but it is an intrinsic part of the mulitnational corporation
welfare system which is implemented in NAFTA and GAAT.

>I've never had much luck convincing you of anything in the past, Peter.
>But I'm convinced that freer trade is one of the foundations of increasing
>prosperity, with free markets, sound money, and effective social investments
>being others.  As for whether or not all Americans share in the increased
>prosperity, that's going to an ever-increasing challenge for policy-makers
>with or without freer trade.  NAFTA can help by providing more resources to 
>work with and perhaps also help by drawing more attention to the issue, 
>which matters.

It's not the idea of "free trade" which offends me, it is rather the
corporatist type of "free-trade" which our masters are imposing on us.
For example: there is no reason why a free trade agreement should not
provide for penalties which prohibit any trading partner from gaining an
unfair advantage via environmental or labor exploitaition.  One could set
up a mechanism by which company X could bar imports of products from
company Y if they could show that company Y was spilling toxic waste or
had used terror tactics to break a strike. Instead, we have agreements
which allow US state and local environmental regulations to be overriden
by international bureaucrats if it can be shown that cheaper products,
even if produced under dangerous conditions, are being kept from gaining
market share. This is not a hypothetical problem. GAAT has already attempted
to squash US bans on importation of dolphin-unsafe tuna, and the US is
attempting to squash Ontario's environmental fees on aluminum cans 
(favored by US beer companies). 


-- 


yodaiken@chelm.cs.umass.edu
Xref: sparky sci.econ:6810 talk.environment:3242 talk.politics.misc:39424 talk.politics.theory:3653