Free Trade and the Bogus "Race to the Bottom"

An interesting corrective to union propaganda:

MOREOVER, THE "race to the bottom" is a myth. Consider the highly debated North American Free Trade Agreement (NAFTA). According to the Bureau of Labor Statistics, after the enactment of NAFTA, the U.S. unemployment rate fell from an annual average of 6.9 percent in 1993 to 4 percent in 2000.

If the doomsdayers were right, we would have seen either gigantic job losses to Mexico following NAFTA's enactment, due to the lower wage costs prevalent there ($2.63 compared to $23.65 hourly compensation in the U.S., in 2005), or weakened labor and environmental standards in the U.S. Neither occurred.

The same is true of manufacturing. The decline in manufacturing's share of U.S. employment simply means that American productivity is increasing. Between 1993 and 2006, manufacturing output per hour increased by 73.8 percent.

Instead of protecting manufacturing jobs by force, the economy can develop and become more innovative, which can then lead to the creation of new jobs in other sectors of the economy.

Mandating and enforcing more stringent labor and environmental standards would price workers in developing countries above what their labor will earn in the market -- thus shutting them out of the market altogether. This will drive out foreign investors, leading to increased unemployment.

Unions don't like free trade because they cannot compete in a free market. They cannot compete in a free market because they exist to drive up the price of labor so that their non-laboring leadership can live high on the hog off the sweat of journeymen and apprentices. Thus, they invest some of the money they wring out of the working men they claim to "support" in buying politicians to attack free trade on all fronts, then whine about the "plight" of union members, a plight which would end overnight if unions adopted the secret ballot, thus ending compulsory unionization.

Meet the new boss. Same as the old boss.

Four legs good, two legs better.