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View Diary: Millions of minimum wage workers are getting a raise—no thanks to Congress (69 comments)

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  •  This is not the cause of inequality (0+ / 0-)

    Inequality is caused by top-down economic policies which slashed taxes for the rich, shredded the social safety net, obliterated private-sector unions, and failed to raise the minimum wage (to name a few). It's not caused by free trade, immigration, technological change or a number of misleading arguments which get thrown around occasionally. Free trade helps everyone, allowing countries to specialize in areas they are the best in and export those products. In the long run, there is no serious reason to maintain inefficient industries - it only causes consumers to pay more for inferior products. Naturally, there is frustration resulting from skyrocketing inequality, but all too often, it is directed at the wrong areas. This reminds me of senator Jeff Sessions (R-AL) who often speaks about stagnant wages for the middle class, increasing inequality but then proceeds to attack immigrants and free trade, and not his party's economic policies. What I don't understand about some people on Dailykos is how anti-immigrant sentiment is rightly so dismissed as bigotry, but its sister cousin, anti-trade sentiment, is treated seriously.

    Here's Paul Krugman, a liberal like no one else, explaining the reasoning of free trade:

    •  Free Trade IS the Cause of Poverty (0+ / 0-)

      It's exactly the reason why unions have declined and why workers are paid less than they were. The decline in wages relative to productivity exactly maps the rise of free trade. It is the cause of income inequality.

      Free trade helps the very rich at the expense of the poor. If you are sufficiently wealthy you can make a lot of money going to China to invest. But if you are a worker you cannot increase your wages by going to China.

      The U.S. is sufficiently large that we don't need to have free trade to give us economic efficiencies. The primary reason for free trade is for people with a lot of money to make more money.

      What we need instead is managed trade. We need to manage it so that it isn't consistently damaging the economy. A sufficient international minimum wage and uniform tariffs would allow us to manage trade so that production would start to return to the U.S.

      Production is the cornerstone of wealth. Wealth is created through production. If you move production to other countries you impoverish this one. That's what we've seen over the last three-plus decades.

      Unemployment in the U.S. has averaged about 0.9% higher than it did before we started shipping manufacturing overseas. That's about 1 million people out of work just because of our poor trade policies. We package up hundreds of billions of dollars each year and ship them out, never to see them again. This imbalance cannot continue.

      The deficit we need to fix is the trade deficit. Our policy should be to do that. Until we do we will continue to see a wide income gap and higher-than-normal poverty.

      •  That's a misleading reason (0+ / 0-)

        Other countries have had even more trade agreements, yet they have stronger labor unions and higher wages. That's because the laws in these countries require employers to hold quick certification votes after a union is proposed, and allow for mandatory arbitration if workers and management cannot reach an agreement. As a consequence, unionization rates are much higher, and wages/benefits are far better as well. The same goes with minimum wages, social welfare etc. Inequality is NOT caused by trade, immigration or any similar factor.

        Here, btw is senator sessions (supporter of tax cuts for the wealthy) using trade/immigration as reasons for inequality:

        •  It's the Underlying Cause (0+ / 0-)

          It gives employers the option to move out of country when they face unions. It undermines the union movement and the minimum wage. We can't support wages here if U.S. workers are competing with workers making a fraction of their wages. It exerts continuous downward pressure on wages and undermines employment levels.

          You can't compare the effects on unions here with those in other countries because they all have lower wages (except Germany, where we essentially rigged the system in the workers' favor after World War II).

          This has nothing to do with immigration. It is purely about economics. Wages for non-supervisory workers (the kind that typifies working people) have declined since 1979, but worker productivity is up over 80%. Go to the BLS and look. This is the result of a constant assault on our trade regulations.

          We need to re-establish control over trade before it completely drains the economy. We have the power to re-impose sensible regulate because the U.S. is still the largest market. If we act now, we can reverse the process and fix the economy. If we don't, then you will be earning what people do in the poorest countries in the world.

          Unless you're already rich, of course.

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