When Free Trade Does Not Work

“Trickle-down economics is a myth. Enriching corporations — as the TPP (Trans-Pacific Partnership) would — will not necessarily help those in the middle, let alone those at the bottom.” On the Wrong Side of Globalization, New York Times, March 15, 2014

Free trade does not work if you are dealing with a country that uses slave labor or sacrifices other important issues like the environment or safety. Improving the environment does not happen without costs. The United States invests in technology to help improve our air quality and purity of our drinking water.  Saving our forest land comes with a price. Investing in solar energy helps future generations to live in a better environment but presently it is expensive compared to fossil fuels.

Slavery was banned 150 years ago, even though treating the future generations of the slaves equally is still a work in progress. If other countries still use slaves, we effectively are supporting their bondage and putting our work force at a competitive disadvantage by buying the goods and services they produce. The same is true with a minimum wage law. The company with a domestic production facility that uses unskilled workers is at a competitive disadvantage over other companies that use unskilled workers in other countries that will work for lower wages because of the forces of supply and demand and no minimum wage laws.

Inequality And Education

We need to change the way we pay for public education. There is a direct relationship between education and inequality. In the past education was less of a necessity. Here in the Midwest you could work in an auto plant without graduating from high school and earn a solid middle class living with health insurance and a pension. Things have changed.

Today you not only need a high school diploma but some additional technical training to qualify for that same line job. Further, we are all competing in a global economy and as a result the domestic auto industry can no longer go along with raising the wages of union members and pass that increased cost onto the consumer. The consumer will go elsewhere.

Emerging Countries and the U.S.

If you were living in or overseeing an emerging country like Brazil, Mexico, Kenya or South Africa how comfortable would you be to have your nation solely rely on your affiliation with the United States for your future?

From afar you see the U.S. having a difficult time taking care of its own business. You see a group of politicians threatening to shut down their government in order to prevent the enactment of a healthcare program that was passed according to law and a Supreme Court ruling it is constitutional. These politicians are willing to risk the credibility of their government in the eyes of the world for the sake of remaining in good standing with a splinter group called the Tea Party.

Kalamazoo Promise: Summary

Below is a summary of an article in the New York Times in November 2012.

The cost of tuition varies significantly. For example at Wayne State University it is $410 per credit hour and at Wayne Community College the cost per credit hour is $102.

Cost Of College

This is an estimate of what will need to be saved each year to pay for your child’s college tuition in 14 years.

This is only one scenario, but start thinking about it now.