Editors' note: We hope this opinion piece submitted by frequent contributor Charles Andrews will kick off a discussion on what would be a class approach to US trade policy, a topic likely to arise soon in Washington DC. We invite responses and further contributions.
Trade, Trump, and Us
Imagine several people seated around a table.
* A 55-year old man pushed into early retirement from his job in a faucets factory; Chinese imports killed the business,
* A 25-year old with a college degree who works as a bartender, almost ready to give up her hopes of getting into nursing school,
* A 35-year old immigrant from Mexico who has a low-paid, accident-prone job in a chicken processing plant,
* A 43-year old elementary school teacher in an inner-city school district; it keeps closing schools as enrollments decline, and
* An unemployed 22-year-old who did not finish high school.
Life is not easy for these people, and they represent tens of millions trying to cope with similar problems. When economic pressures rise throughout a society, people look for political solutions. In the presidential politics of 2015-16, most of the people around our table saw no real choice. They did not vote. Or they supported an alternative in Bernie Sanders – until the Democratic Party machine killed his campaign. Or they voted for Hillary Clinton, trying to stop a man who campaigned on hatred of Muslims, hatred of Mexicans, hatred of immigrants, and disrespect of women.
However, Donald Trump also spoke out for victims of factory outsourcing. He pointed to the flood of imports that we see in the aisles of Walmart, in consumer electronics, in drywall and other construction supplies, and on and on. "I'm sick of always reading about outsourcing. Why aren't we talking about ‘on-shoring'?" "I'm going to bring jobs back from China, Mexico, Japan, Vietnam. They are taking our jobs." "I am not going to let companies move to other countries, firing their employees along the way, without consequences.”
Hillary Clinton could not respond. She and Bill Clinton have been ardent promoters of global trade and investment agreements. They sell political influence to foreign businesses and governments through the Clinton Foundation. Hillary Clinton pushed the latest big pact, the Trans Pacific Partnership, while she was Secretary of State. When she declared her opposition to it in response to Bernie Sanders' criticism, everyone saw that it was pure hypocrisy. One of Trump's television commercials quoted her remarks to bigwigs in India in 2005: "I don't think you can effectively restrict outsourcing, there is no way to legislate against reality so I think that the outsourcing will continue."
Bernie Sanders occasionally called for fair trade not free trade, but he never spelled it out.
No wonder some discarded workers in the Midwest Rust Belt voted for Trump. He lost the national tally by almost three million votes, but he won three industrial states by razor-thin margins: 10,000 votes out of five million cast in Michigan, 44,000 votes out of six million in Pennsylvania, and 23,000 out of three million in Wisconsin. Their weight in the Electoral College made Trump president.
Will Donald Trump stop cheap-labor outsourcing? Early in his presidential run, August, 12, 2015, Trump revealed the "art of the deal" as he would apply it to outsourcing. He said U.S. automakers should move production from Michigan. "You can go to different parts of the United States and then ultimately you'd do full-circle – you'll come back to Michigan because those guys are going to want their jobs back even if it is less." After Michigan "loses a couple of plants – all of sudden you'll make good deals in your own area ... We can do the rotation in the United States – it doesn't have to be in Mexico."
Slap a Wage Gap Tariff on cheap-labor imports
A workers' demand on trade is simple: a Wage Gap Tariff (WGT) – a charge on imports equal to the gap between the wage paid the workers who made the product in China or wherever and the U.S. wage. If it took two hours to make the product, multiply the hourly wage gap by two, and that is the charge per item. A WGT tells businesses that it will not pay to bring in products whose principal market advantage is cheap labor.
The demand for a Wage Gap Tariff draws the line between workers and outsourcing corporations. When a boss demands lower wages, his threat to move production out of the country would be empty.
The demand for a WGT serves as a yardstick to measure whatever president Trump comes out with.
It also exposes a remarkable thing about globalization: progressives have the weakest of answers for it. Jeff Faux put forward a typical proposal. He is the founder of the Economic Policy Institute, which has done excellent work documenting trade and other problems. Faux calls for "restrictions on currency manipulation by trading partner nations and requirements that they abide by minimal labor and human rights standards." That's it. The fact is that each country has sovereign control over its currency; world money markets are slippery things even for the U.S. to control. As for the World Trade Organization (WTO), the North American Free Trade Agreement (NAFTA), and so on, their whole reason for being is to open doors to corporate investment around the world. Investigative groups expose the lack of labor standards and basic fire safety at sweatshops in China, Bangladesh, and so on, but they do not address cheap-labor imports.
No wonder Donald Trump's demagogy appeals to some working people. They see no one else who takes globalization head on. That is why we need to raise the banner of a Wage Gap Tariff.
The five people we imagined around a table each have a distinct grievance, and there is a militant class demand for each of them. The Wage Gap Tariff must be on the list. The unity that will move us forward is the class unity of working people. Address the needs of each worker and put forward the broad, plain vision of what we need:
* We want jobs.
* We want a comfortable minimum wage.
* We want guaranteed health care, good schools and free college, retirement security, and affordable housing.
* We want this for everyone, because in common prosperity it is amazing how people can all get along together.
If capitalism, whether headed by a slick elitist like Hillary Clinton or a self-absorbed demagogue like Donald Trump, cannot achieve these things, then it is time for no-rich, no-poor socialism.
Charles Andrews is the author of The Hollow Colossus and No Rich, No Poor.