Thursday, November 17, 2011

With Free Trade You Get Egg Roll


In the movie "You've Got Mail" small book shop owner Kathleen Kelly is talking to Joe Fox, whose large corporate bookstore is causing Kelly's store to go out of business. They have a conversation about Fox's decision to locate a store close to Kelly's.

Joe Fox: It wasn't... personal. 
Kathleen Kelly: What is that supposed to mean? I am so sick of that. All that means is that it wasn't personal to you. But it was personal to me. It's personal to a lot of people. And what's so wrong with being personal, anyway?

We're seeing this dynamic all across our nation. International corporations shutter their factories in the United States so they can move somewhere in the world where they can make their products at a lower cost and compete more effectively in the global marketplace.
It isn't personal to the heads of the corporations. If they fail to respond to the demands of the global economy, the futures of their companies are doomed. But to the people who have lost their jobs it is very personal.
I see a problem with the globalization of commerce. To put it simply, factories are allowed to move, but factory workers are not.
Recently a GM plant stopped assembling cars at a plant in Tennessee. Many workers were given the option to relocate to a different state and work at another GM plant. This option isn't available when a plant moves to another country.
A friend of mine is planning to move to Thailand. He has married a woman there, likes the culture and the low cost of living. Since he is moving from the United States, with its much higher cost of living, he has an advantage when he relocates to Thailand.
Throughout history workers have moved to where the jobs are. Agricultural workers follow the crops. Farmers relocate to cities when factories open. But, aside from illegal immigration, this isn't permitted on an international level.
If we're going to have global free trade, shouldn't we also allow for global free movement of workers? When signing a "free trade agreement" with nations perhaps part of the agreement should be to allow for free immigration between each participating nation.
That would address Kathleen Kelly's complaint. If individuals were allowed to immigrate as freely as corporations are allowed to relocate, then globalization would become "personal."
If this idea sounds crazy, think of it this way. There are huge global pressures to keep wages low. Workers in the United States feel these pressures. Their wages do not increase. In fact, in many cases they go down. New workers in automobile plants in the United States are often forced to accept a lower pay scale than workers who are already working at the plants.
Essentially what this is saying to the new workers is, "If you want to work for us, we're going to have to treat you, at least in part, like we would treat workers at an assembly plant in China."
However, the workers don't have the option to live in a lower cost Chinese neighborhood. That's what makes this system "out of whack."
Why not give workers the option to relocate to a foreign country when their factories relocate? You might say, and rightly, that American workers wouldn't do that. But some would. And over the years the number of workers who would be willing to relocate would grow.
But, even more important than this is that it would make world leaders a lot more careful about negotiating "free trade" agreements if they knew free immigration was part of the deal.
As I see it, there is no way around the fact that ultimately free global trade will equalize incomes and standards of living throughout all participating countries. That's probably good for some people, bad for others.
Allowing for free immigration will speed this up and, if nothing else, make the painful process of accepting a lower standard of living within the developed world go by more quickly, like pulling a bandaid off with one quick yank.
By the way, if you remember "You've Got Mail" at least one worker from Kelly's bookstore follows the work and "immigrates" to the corporate bookseller.