Sep 16 2008
Is Free Trade Good for America? (Part 1)
Is free trade good for America? With our economy in a difficult position, is it time for the United States to re-think free trade? America since the end of World War II has pursued the economic policy of free trade with reckless abandon without really thinking about the consequences. What is free trade you ask? It is the trade of goods and services between countries unhindered by government taxes/tariff or quotas. Supporters of free trade would argue that it lifts the quality of life for all because it lowers the price of goods and services. This is a nice benefit of free trade but what are the other benefits? The other benefit is that corporations have access to more markets overseas, where they can sell their goods and services. These are probably the only two things that I would classify as benefits to American consumers but not the worker.
I believe that the United States should re-think its free-trade policy for a variety of reasons. The first reason is because it is costing us thousands if not millions of jobs a year. There has been a steady flow of U.S. based corporations shipping their jobs overseas to workers that will do the job American do alot cheaper. How can you compete with someone in India that will do the same job for less? Free trade does not take into account the cost of living in a given country. For example a worker making $15/hr in the U.S., needs this wage to live comfortable, while a worker in India can make $7.50 and have what they need to live comfortable. Who do you think corporations are going to want to hire? This is the type of decisions businesses in America are making everyday. Free trade might create jobs but not in the U.S.! The policy-makers in Washington need to remember that American workers need jobs in order to buy goods and services! Stay tuned for Part two..
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Hmmm.. what’s the alternative though? Socialism? I use to think Socialism was alright but then I realized it goes complete against human nature in my eyes. The real problem with Capitalism is greed, but it’s not Capitalism itself. Your argument seems a bit of a throw the baby out with the bath water type of solution.
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Yes, jobs are being outsourced, but is that always bad? It is keeping some U.S. companies in business where if they didn’t outsource work, they wouldn’t be able to operate at all. So while some jobs are being lost, some are also being retained. So there could be a greater loss of jobs if outsourcing didn’t occur in some businesses. I have done some research, and I feel that free trade helps America more than it hurts. There are some negative effects, but the advantages outweigh the disadvantages. It helps our economy grow, and raises real per capita GDP. The article that I believe will best help you understand where I am coming from can be found at http://www.heritage.org/research/tradeandforeignaid/bg2024.cfm .
I completely agree that it hurts Americans that lose their jobs to outsourcing, but what percentage of Americans is that? Check it out. America has been steadily moving from a manufacturing economy to a service economy. We can’t stop this movement and to try to do so will kill our already brittle economy. We cannot continue to pay $30-40 for a person to build a car, when a robot or somebody else can do the work for a fraction of the cost. Is it unfortunate that somebody must lose their job? Definately. The answer for people that lose their jobs to outsourcing is education.
This is a Jamie Hamlin original idea, not something pushed by members of the government. If a person loses their job because it was outsourced, the company that sent the job elsewhere should have to pay for college tuition and books for the employee that lost their job. This should be done on a pro-rated basis as follows. For every year the employee put in at the company the company pays 10% of their education. So if they work 1 year, the company pays 10%, if the employee works 10 years, the company pays the entire cost of tuition and books for a college education that will help somebody find a job that won’t get outsourced. This would help to ensure that jobs are not sent elswhere to save mere pennies. It needs to be a rational reason as to why a job is outsourced.
As for food safety, the FDA needs to step up thier efforts. With free trade though, we don’t just ship in any quality product. We have legislature that is to ensure that the quality of the product or service meets or exceeds the quality that can be provided or performed domestically. The government did know where the contaminated tomatoes came from, but they didn’t want to create a panicked environment. They didn’t want the American people to boycott every food product that came in from Mexico.
I do agree that being dependant on foreign countries leaves us vulnerable, especially if we are dependent on a country that doesn’t like us. We need alternatives so if something politically goes awry, we are not dependent on an enemy. We need to treat imports like an investment, diversify. Don’t put all your eggs in one basket. Make sure that you are able to obtain goods and services from multiple sources before deciding to stop production, or bringing it here.