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What Works in the Rest of the World

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Publication Date: 
July 26, 2004
Format: 
Op-Ed or News Article
Bibliography: William B. Gould, IV, What Works in the Rest of the World, New York Times (July 26, 2004). p. A17.

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What Works in the Rest of the World By WILLIAM B. GOULD IV Published: July 26, 2004 Wages declined and unemployment held steady last month. So at this week's convention and for the rest of the campaign, John Kerry is likely to make an issue of Americans' anxiety about jobs -- and his promised insistence upon labor standards as part of future trade agreements is an astute political stance. But from a practical standpoint, it will have almost no effect. The adoption of labor and environmental standards, while symbolically significant, will not slow America's job and income losses, and the prospect for significant international negotiations on such matters is remote. One problem is that global wage disparities are enormous. No serious person argues that wages, economic benefits and other aspects of employment should be equal or even comparable in the industrialized and developing worlds. That is because such a policy would lead to economic devastation for the developing world, disrupting international trade and enhancing prospects for worldwide conflict. An international minimum wage, for example, would also require that any trading partner with the United States have some form of acceptable wage. But what would the wage be, and how would it be enforced? If the United States determines such matters for itself, it risks international opprobrium for a unilateralist approach, a claim with which the Bush administration is familiar. But while international standards for economic matters like wages are not practical, the same cannot be said for so-called core standards that have been adopted by the International Labor Organization, an agency of the United Nations. These standards, intended to promote fair treatment of workers, are not binding. But the president and Congress could include them in future trade agreements -- and even insist upon their inclusion in Nafta itself and legislation promoting trade with China. This approach has its own problems. The first is that even these standards may prove difficult for the developing world to accept. Countries like India, for example, have resisted discussion of such issues at the World Trade Organization. Second, even if a Kerry administration could negotiate such provisions, most of them would not have any impact on jobs. The one economic item in the core standards -- the limited prohibition of child labor -- could conceivably have an effect. But impoverished families may then be tempted to turn to even worse options, like child prostitution. One way out of this predicament, of course, would be for the children to go to school -- but the schools are badly in need of improvement in most third world countries. To improve the prospects of workers in the third world, the United States could provide more foreign aid, which could then be spent on education. Yet the United States now ranks dead last among developed nations in percentage of gross domestic product devoted to foreign aid, and the political wherewithal to increase foreign aid is thus far not forthcoming. In many ways international trade is a domestic issue: trade brings change, and change frequently means painful dislocation that can be assuaged only by social programs. In this context national health insurance makes sense, as does a wage insurance program like the one Bill Bradley advocated in 2000. What laid-off auto and steel workers need is the same as what their outsourced service and professional counterparts need: not a new trade war, but domestic legislation on health benefits and wages. That should be the focus of the trade debate in 2004. William B. Gould IV, chairman of the National Labor Relations Board from 1994 to 1998, is the co-author of ''International Labor Standards: Globalization, Trade and Public Policy.'' He is an alternate delegate to the Democratic convention.