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US Trade Policy and it's Impact on the Middle Class

 Including the Middle Class Into America’s Modern Trade Policy  

Instead of joining the cacophony, organize and choke them with solutions.

          By Dennis Pulley

    American trade policy is out in the open.  Right this moment. The Democratic candidates were really having a problem with holding interest and this is the obvious stepchild. The performance data is as versatile as it gets and can substantiate or destroy any angle on any given day. I think that the big picture is mainly positive on paper but for every dollar made, a dollar is lost. Unfortunately, the policy rarely favors those whom need it the most. The upper-lower and middle classes in America pay dearly for the gain of those more fortunate and our income gap widens. This is as unjust as any violent crime committed in the free world. We deprive entire bloodlines of success. We allow overfilled cups to siphon off the equal footing of others in their pursuit of happiness. The affected lack the resources needed to assemble and structure a solution, not to mention the battle of implementation.       

   With that out of the way, I offer a solution or two. Free trade agreements are primarily positive but here in the US, we have hollowed out our center. Middle class is becoming out of reach as we lose manufacturing capability. Free trade agreements will never be equal as long as we have competing wages. Not only can China build a DVD player cheaper than we can in America, but can ship it around the world to boot. Importing goods that directly compete with our own interests is just stupid policy. Flat out. And when you factor in the disadvantages America faces in labor pricing, it’s treasonous. How could this have even happened?  Our countrymen are being undermined by the very ones elected to look out for them. Our wealthy feed on the poor and the politicians have enacted legislation that deprives so many of so much..

      We can fix these “oversights” by organizing and agreeing on a solution such as targeted tariffing. Why don’t Americans manufacture DVD players? Because we can’t compete on price due to the low wages paid to overseas workers and disposable is the new quality. (If you recall the large wooden console televisions of the 70’s and 80’s, these were American made and lasted an average of 26 years. Modern televisions are made to be light, to cut shipping costs, and have an expected lifespan of about 9 years. Much more plastic is used in place of metal or wood to keep down the weight and circuit boards contain thinner coatings of cheaper metals.) Price rules this market, leaving little room for competition of quality. So how can American factories compete?  What if we taxed every imported DVD player $20? Instead of being able to buy one at Wal-mart for $50, they would now cost $70. My numbers are merely variables but at some point, an American will see an opportunity to make money and perhaps open a factory to build them. A US based DVD player factory would mean some decent jobs for some American families, fewer Americans on welfare or government assistance, an improving GDP, $70 dollars per domestic unit sold that will remain within our borders and the addition of new dollars into the US for every unit exported. All we gain from the free trade member imports is a $20 cheaper DVD player. Pretty simple but this must be a very selective and strategic process because even this seemingly small move will echo across the world. This can be implemented wherever social or economic strengthening is needed. US based automobile manufacturers once provided the now bankrupt city of Detroit with thousands of well-paying jobs (that have all but disappeared as this factor raised prices out of competitive range,) the kind of jobs that defined American middle class, but lost to cheap labor pools overseas. DVD manufacturing countries aren’t going to like this. A free trade agreement with the US is the new SILK Road but it must be on equal terms. All goods eligible for unrestricted trade will have to follow uniform guidelines when it comes to wages. Again, why would we allow any goods into the country that undermine our own policies? Because it favors those that own, plan or finance the factories because they ALREADY HAVE MONEY! This money pays for lobbyists, organization and politicians because this is what it takes to build legislative policy. If factory workers had as many lobbyists, blue collar life would be much different. (Labor unions filled this role at one time but are largely extinct these days because they also lacked the resources to defend themselves against the above mentioned powers)   I don’t know the renewal dates of these but I would suggest waiting till then to renegotiate, assuming it’s not too far in the future.  I would also suggest member countries follow this template and look out for their own people.

     Free trade agreements favor those with investment capital and I’d like to simplify what I mean by that because manufacturers are quickly developing mechanisms and practices that can benefit those with little capitol to invest. China has a vast factory empire and a low cost labor pool in which to man them. Couple that with the ability to  efficiently retool and prices have never been lower.

     Bottom line: Americans shouldn’t even allow labor the import of labor intensive goods from countries that don’t commit to comparable waging of their workforce. 1. We can’t compete. 2. It’s a human rights violation to exploit your own people. After all, we outlaw these ‘sweatshops’ in country.     I wish sarcasm translated better on paper because my last sentence was filled with it.  Our country has a minimum wage law. This law was put into place in 1938 to insure livable wages and safety for employees. This benefits the entire workforce by  providing a benchmark in which skilled labor is measured against and paid for accordingly. Understand that if you are a top-notch carpenter making $19 or $20 an hour, it’s because your wood toter makes at least minimum wage. If your toter made $3 an hour, scale pay for a tradesman would be directly proportionate. ( you’d make about $11) The minimum wage is also supposed to protect taxpayers from a large welfare bill. As Americans, we abhor shantytowns and do our best to move the homeless down the highway to the next town. We don’t want to see it, be responsible for it or directly pay for it, but the minimum wage has slipped well below a “livable wage” because of conflicting policy when it comes to importing of goods and corporate tax structure. Minimum wage means nothing if the jobs have moved to China or India for the cheap labor pool. This is how free trade agreements turn sour. Our own people lobby against us and exploit loopholes that bypass the entire thing. There are those that believe that the free market will come to its own efficient conclusion, benefitting everyone, but I guarantee that none of these people are hourly workers.