Moral Outrage Over Low Wages: Canada Joins Trump With Threats To Leave NAFTA

Tyler Durden's picture

Authored by Mike Shedlock via MishTalk.com,

The threat of total abandonment of NAFTA took on a second front this weekend as Canada’s biggest private-sector union said NAFTA should be scrapped if Mexico cannot agree to better labor standards.

Please consider Sharp Differences Over Labor Surface at NAFTA Talks in Mexico.

Tensions over sharp differences in pay between Mexican workers and their Canadian and U.S. counterparts surfaced on Sunday as negotiators discussed labor market rules in talks to overhaul the North American Free Trade Agreement.

 

Canada’s biggest private-sector union said NAFTA should be scrapped if Mexico cannot agree to better labor standards, clashing with Mexican business leaders who argued that workers rights were a matter for each country to resolve internally.

 

Mexican political and corporate leaders firmly resist demands to bring wages into line with U.S. and Canadian levels, arguing the big cost advantage the country enjoys over richer peers should decrease as economic development advances.

 

Labor union leaders in the two wealthier nations say laxer labor standards and lower pay in Mexico have swelled corporate profits at the expense of Canadian and U.S. workers, making resolution of the issue a major battleground of the NAFTA talks.

 

Jerry Dias, national president of Canadian union Unifor, said NAFTA had been a “lousy trade agreement for working-class people” and that the union was pushing his government to walk away from the talks if it could not secure them a better deal.

 

“If labor standards aren’t a part of a trade deal, then there shouldn’t be a trade deal,” Dias told reporters in Mexico City on the sidelines of a second round of negotiations to update the 1994 trade agreement among the three countries.

Bosco de la Vega, head of Mexican farm lobby, the National Agricultural Council, said more trade, not intervention in labor markets, was the best way for the region to grow economically.

 

“Mexico can’t interfere in the labor market issue in the United States and Canada. We ask the same: that they don’t interfere in these matters,” he told reporters at the talks.

Moral Outrage Over Free Trade

Are bad jobs at bad wages better than no jobs at all? Should the US demand third world economies pay “living wages”?

If so, and if countries don’t oblige, should the US impose tariffs so the US does not lose jobs to such countries?

This is what I think…

Moral outrage is common among the opponents of globalization–of the transfer of technology and capital from high-wage to low-wage countries and the resulting growth of labor-intensive Third World exports. These critics take it as a given that anyone with a good word for this process is naive or corrupt and, in either case, a de facto agent of global capital in its oppression of workers here and abroad.

But matters are not that simple, and the moral lines are not that clear. In fact, let me make a counter-accusation: The lofty moral tone of the opponents of globalization is possible only because they have chosen not to think their position through. While fat-cat capitalists might benefit from globalization, the biggest beneficiaries are, yes, Third World workers.

Workers in those shirt and sneaker factories are, inevitably, paid very little and expected to endure terrible working conditions. I say “inevitably” because their employers are not in business for their (or their workers’) health; they pay as little as possible, and that minimum is determined by the other opportunities available to workers. And these are still extremely poor countries, where living on a garbage heap is attractive compared with the alternatives.

And yet, wherever the new export industries have grown, there has been measurable improvement in the lives of ordinary people. Partly this is because a growing industry must offer a somewhat higher wage than workers could get elsewhere in order to get them to move. More importantly, however, the growth of manufacturing–and of the penumbra of other jobs that the new export sector creates–has a ripple effect throughout the economy. The pressure on the land becomes less intense, so rural wages rise; the pool of unemployed urban dwellers always anxious for work shrinks, so factories start to compete with each other for workers, and urban wages also begin to rise. Where the process has gone on long enough–say, in South Korea or Taiwan–average wages start to approach what an American teen-ager can earn at McDonald’s. And eventually people are no longer eager to live on garbage dumps.

The benefits of export-led economic growth to the mass of people in the newly industrializing economies are not a matter of conjecture. A country like Indonesia is still so poor that progress can be measured in terms of how much the average person gets to eat; since 1970, per capita intake has risen from less than 2,100 to more than 2,800 calories a day. A shocking one-third of young children are still malnourished–but in 1975, the fraction was more than half. Similar improvements can be seen throughout the Pacific Rim, and even in places like Bangladesh.

Why, then, the outrage of my correspondents? Why does the image of an Indonesian sewing sneakers for 60 cents an hour evoke so much more feeling than the image of another Indonesian earning the equivalent of 30 cents an hour trying to feed his family on a tiny plot of land–or of a Filipino scavenging on a garbage heap?

The main answer, I think, is a sort of fastidiousness. Unlike the starving subsistence farmer, the women and children in the sneaker factory are working at slave wages for our benefit–and this makes us feel unclean. And so there are self-righteous demands for international labor standards: We should not, the opponents of globalization insist, be willing to buy those sneakers and shirts unless the people who make them receive decent wages and work under decent conditions.

This sounds only fair–but is it? Let’s think through the consequences.

First of all, even if we could assure the workers in Third World export industries of higher wages and better working conditions, this would do nothing for the peasants, day laborers, scavengers, and so on who make up the bulk of these countries’ populations. At best, forcing developing countries to adhere to our labor standards would create a privileged labor aristocracy, leaving the poor majority no better off.

And it might not even do that. The advantages of established First World industries are still formidable. The only reason developing countries have been able to compete with those industries is their ability to offer employers cheap labor. Deny them that ability, and you might well deny them the prospect of continuing industrial growth, even reverse the growth that has been achieved. And since export-oriented growth, for all its injustice, has been a huge boon for the workers in those nations, anything that curtails that growth is very much against their interests. A policy of good jobs in principle, but no jobs in practice, might assuage our consciences, but it is no favor to its alleged beneficiaries.

You may say that the wretched of the earth should not be forced to serve as hewers of wood, drawers of water, and sewers of sneakers for the affluent. But what is the alternative? Should they be helped with foreign aid?

And as long as you have no realistic alternative to industrialization based on low wages, to oppose it means that you are willing to deny desperately poor people the best chance they have of progress for the sake of what amounts to an aesthetic standard–that is, the fact that you don’t like the idea of workers being paid a pittance to supply rich Westerners with fashion items.

In short, my correspondents are not entitled to their self-righteousness. They have not thought the matter through. And when the hopes of hundreds of millions are at stake, thinking things through is not just good intellectual practice. It is a moral duty.

Purposeful Plagiarism

I need to point out that everything above following “This is what I think…” was not written by me (but it does reflect my exact beliefs).

Believe it or not, Paul Krugman wrote that, and here is the link: In Praise of Cheap Labor.

Krugman wrote that before he lost his mind.

Fair Trade is Unfair

The unions howl they want “fair trade”. Fair to whom? The answer is fair to their self-interests, damn the enormous costs to everyone else.

Tariffs will not bring jobs back to the US, at least jobs by living, breathing human beings.

All tariffs will do is slow global trade and raise costs on everyone.

Those looking for someone to blame for income inequality and low real wages, should not look at globalization, but rather the Fed (central banks in general), insisting on rising prices in a technological deflationary world.

Repetitive asset bubbles and the demise of the middle class are the direct results.

Related Articles

  1. Disputing Trump’s NAFTA “Catastrophe” with Pictures: What’s the True Source of Trade Imbalances?
  2. Make China Great Again: Ford Bypasses NAFTA Dispute By Moving Focus Production to China
  3. Killing the Trade Golden Goose: Farmers Rattled by Trump’s NAFTA Rescinding Plans
  4. Lose Lose Lose Affair: Farm Lobby Turns Up Heat on Trump Over NAFTA

An ideal trade agreement can fit on a napkin: Effective immediately, all tariffs and all subsidies, on all goods and services ends today.

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The Count's picture

Low / No wages is what it has been about since the days of the pharaohs.

Ever wonder why you see uncontrolled immigration (like in the EU right now)? 

Simple, the King wants more slaves, not less.

Escrava Isaura's picture

Gosh. Mish with his nonsense.

Anyway, here’s the real problem, and it was pointed out by a Canadian, go figure.

"Once a nation parts with the control of its currency and credit, it matters not who makes the nation's laws. ... Until the control of the issue of currency and credit is restored to government and recognized as its most sacred responsibility, all talk of the sovereignty of parliament and of democracy is idle and futile." Mackenzie King, Canadian Prime Minister 1935-1948.

 

NoDebt's picture

Just remember, YOU are responsible for what happens in 3rd world countries.  All these old bromides about fixing the 3rd world, making things "fair" and improving their standard of living.  Only YOU can do that.  They can't.  They're helpless savages that must be directed toward improvement by YOU.  The thought of leaving them alone to direct their own destiny never enters the discussion.  The thought that every country must be hand-carried towards a carbon copy of the same industrial revolution we had 150 years ago isn't even questioned.

You know what?  Don't piss down my back and tell me it's raining.

 

11b40's picture

This was one big pile of BS.  The author is quite a nit wit, very generous with extracting charitable donations from someone else's pockets.  Like we really haven't "thought it through."  Thought it through?  WTF, we have been living it.  I personally have been railing against it for more than 30 years.  This bozo is the one who has not thought it through.  No protected markets throughout the world = the (more rapid) plunder of 3rd world countries.  Western business, including subsistence agriculture, would decimate markets critical for 3rd world survival.  And, speaking of 3rd world survival, if you ride around in the places where most of us 'deplorables' live, you can see the hollow shells of factories, the withered communities, the people struggling to hang on with depressed wages. 

Where is this guy from? Bangladesh?

strannick's picture

The unions howl they want “fair trade”. Fair to whom? The answer is fair to their self-interests, damn the enormous costs to everyone else.

Damn the enormous costs to Exxon Monsanto JPMorgan and Springfield's Mr Burns. Effing uppity Bangledeshis and Indnnesians. How big of a garbage pile until your happy?

Go back to your inflation -denying, Mish

 

847328_3527's picture

Which bathroom did you say TrueDoh uses?

sincerely_yours's picture

We could have had LOW WAGES in the US, if the US$ was not destroyed (i.e., inflation) by the (((usual suspects))). http://wp.me/p4OZ4v-2GY

Pure Evil's picture

If the worker in some 3rd world hell hole is only making 30 to 60 cents an hour sewing a pair of sneakers together then why am I paying $40 to $200 dollars for that sneaker.

Just so some top executive at Nike can live like a king.

The fact is these Fat Cat Corporate CEOs can hide the fact that they're raking in huge margins selling these goods to gullible Americans that seem to believe they can live beyond their means.

These same items could be manufactured in the US and sell relatively for the same price, but of course, the CEO's would have to forego multi-million dollar salaries andbonuses every year.

Why is it Ford can build factories in Mexico and pay their workers $5.00 an hour while selling their overpriced cars in the US.

Myth #1 about offshoring: Products made overseas at slave labor wages result in lower priced items in the US at the same or better quality.

Ajax-1's picture

How is that really any different than what is happening now. Ownership of these companies whether public or provate via an unholy alliance with the Federal Reserve have unfairly enriched themselves by destoying savers, pensioners in exchange for low interest rates.

Sean7k's picture

Here is an idea ripe for discussion!

Why should we buy any product from outside our country or state?

Why should we encourage the development of new slave societies amongst people accustomed to traditional lifestyles?

Are the benefits of pollution, war and slavery so overwhelming? The rigidity of the law and regulation? Just so a small segment can live in luxury?

Is our medical care so wonderful we can heal people? Or is a drug addled population the best we can imagine?

Poisoned water, food and air; species depletion and superfund sites, nuclear weapons- are these the joys of globalism and consumerism run amok?

Maybe life is better "down on the farm"...

jin187's picture

It comes down to one choice. Are you a nationalist that thinks we should strive to improve our own lot as much as possible, and only help when it's convenient to us? Are you a globalist, that thinks there are no borders, and that every person's problems are your own, and that we should make ourselves less until everyone has reached the same common denominator?

There's a finite amount of stuff in the world. Everyone wants stuff, but not everyone has an opportunity to obtain what they want, and even less have the ability to create it. Using top-down redistribution doesn't work due to corruption, and decentralized capitalist distribution results in inequality.

So in the end, which method you support of dividing up the world's stuff just comes down to which imperfect solution you believe is less evil. I've reached the point where I really don't care anymore. 90% of the people in the world just live day-to-day in poor conditions. It doesn't seem to change much from one place to another aside from small shifts in the percentage, which has more to do with how corrupt the leaders are than which system is used.

Sean7k's picture

Sorry, the statement: "decentralized capitalist distribution results in inequality" is a common lie.

The marriage of government(law/regulation) and capitalism results in inequality. Capitalism itself is an economic system which rewards capital, investment and savings. Those are actions any person can participate in and profit from.

Inequality results from barriers to entry and taxation benefiting one class over others.

jin187's picture

Your argument that capitalism itself isn't flawed, but its marriage with government is, has one problem. Find me a capitalist economy where government doesn't meddle, and everyone gets the same opportunity. That's the same defense the communists and anarchists use.

It doesn't matter if the system is perfect, because people are not. The scum always rises to the top, and corrupts the entire system. The people at the top of capitalist economies typically get there, and stay there, using the same strong arm cutthroat means they do in communist ones. Only the specific tactics change depending on what they can get away with without being caught.

Sean7k's picture

It is not a matter of finding one, you are placing blame where it does not belong. Eliminate government, law and legal tender laws and the economy will find its' own way.

While the "scum" may rise to the top, they have fewer opportunities without systems which allow for their advancement.

Trying to bad mouth the argument using hot words like communist and anarchist does nothing to support your contention.

tdag's picture

Leave it to Krugman to present an argument for Globalization. Dickhead. Bet he has one for getting rid of borders, too.

Yog Soggoth's picture

Trudeax is a terrorist loving, card carrying NAMBLA member, he could care less aboot what is good for Candida.

Village-idiot's picture

"...it matters not who makes the nation's laws. "

I think we all know who MacK was referring to.

MoreFreedom's picture

I can't say I agree with you.  Gold is a currency, and I'd prefer the government use it, and it's outside the control of the government.   Using it keeps the government from just printing money, and requiring agreement from people who are taxed.  It makes it harder for government spend our children's future, and to borrow excessively (including from itself). 

One thing this does show, is that Trump's bluster (and I hope it's that) to get nations to open their trading doors, might just do the opposite causing nations to close their trading doors and tank the world economy as a result. 

It's like when the GOP claims it wants a tax cut, and the Democrats demand more spending to offset it.

 

BandGap's picture

Ross Perot was right.

NAFTA has never benefitted any country BUT Mexico.

deer_flasher's picture

If by benefit you mean anhilitating mexico's corn industry with your monsanto GMO's and cheap corn syrup, then, maybe.

BandGap's picture

Because when I think of Mexico I think of the corn industry. Asshole.

Apparently the Mexican government can be easily bought by Monsanto. Couple of peso here, a bottle of tequila there.

What a shithole country.

Bes's picture

this whole Mexico winning is a big myth

almost all of the money that is "lost" goes

directly into the hands of American corporations and their shareholders.

winning all the way to the 1%

-----

american oligarchs, with the help congress - all sides (nafta talks started with Bush 1-remember you voted for him)

coordinated to use mexican slave labor to destroy the american middle class

by destroying the unions that helped build it

same thing with China, India, Thailand, etc....

----

none of those jobs come back until americans are the slaves or replaced by a robot.

jin187's picture

Exactly. NAFTA essentially opened the door for multinationals to use defacto slave labor. As bad as NAFTA is, it was just the first stop for the slavers. Once they realized China was cheaper than Mexico, and Malaysia was cheap than China, etc, then the race began to see what person in the world was willing to work all day for less than a penny.

However, the US oligarchy isn't the only one to benefit. Mexico ranks among the top five countries in the world for billionaires. Exports to the north, and to Europe, have made a small number of Mexicans obscenely rich, with barely a dime of that trickling down to the rest of the country. They pay more bribes than taxes to ensure nothing about that changes.

Bes's picture

kickbacks and bribes all the way up to a few mexicans to sell out and destroy what was their own middle class and entrepreneuers

to pave the way for american corporations

Yog Soggoth's picture

It benefited China. When the Tico farmers got invaded by Nicaraguans, while gringos raised property prices, it destroyed their base economy. Costa Rica was ripe for exploitation. China then traded mineral rights for a soccar stadium and some trinkets.

Martian Moon's picture

Actually no

The king has robots on their way, even sexy ones

Peasants need to be killed off, and the greatest killers of peasants in history have been Islam and Collectivism, in that order

And Globalists are administering a double dose of both wherever they can

DEMIZEN's picture

CAN is leaving NAFTA and joining PUFTA

VIS MAIOR's picture

PUTA..))  DIESEL IS NAFTA.

DeeZ_nutZ's picture

yeah, canada is going to learn you all, fuckers.  the secret of canadian success is gay pride parades, unbridled and government sponsored/promoted homosexuality and strength through diversity and shit.  you better recognize, bitzhez!

archie bird's picture

 

Dude, that is the most ignorant, out of touch statement bloviated from a 1%'r I have ever heard.  Have you NOT noticed that the GOP 'owns' 3/4s of all State governorships, 2/3rds of all State Houses and trifecta majorities in the Fed government. They have help make the US a third world country! 

They have all cut, cut again, and re-cut these programs so that they are nothiNg but thread bare shells of what they once were.

Ya know, if health insurance wasn't so expensive MOST ppl wouldn't have to have govt insurance.  

So the question is, do you want businesses to pay liveable wages and HEALTH INSURANCE to its workers or do you want workers to use TAXPAYER monies to take care of its citizens?  You can't have it both ways.

BandGap's picture

Hopefully they will get off their asses and undo this progressive bullshit. It takes time.

Sean7k's picture

So, your ignorance is just bliss?

Just over half of the governorships.

Since the republicans have done nothing since obama left, this would mean democrats were just as responsible for cuts.

Health insurance is expensive because one, we provide unlimited debt financed funding and two, people use it instead of caring for their health. Drugs don't heal, they harm. As does surgeries which are unnecessary.

Wages are a reflection of labor demand, not government fiat. If you want your money to stretch- cut taxation. Then stop accumulating debt from consumer addiction.

The answer is NEVER "the government can..."

jin187's picture

Does it even matter in the end? The cost of healthcare doesn't matter to the poor in our country, because they can walk into any emergency room and get treated, along with any number of free/cheap clinics for checkups and dental. No "taxpayer monies" care for the citizens either. The government just prints anywhere from 20-40% of it. Everyone is on the government dole, especially the big corporations.

Pure Evil's picture

Please explain why any buisness is responsible for their workers health care.

Are they also responsible for the house payment, the car payment, the groceries, the utilities, cable, cell phone? How about the kids college education.

When are people responsible for their own wants and needs.

A. Boaty's picture

Paging Ross Perot... I can hear the giant sucking sound.

45North1's picture

Gresham's law 2.0

Bad jobs drive out good jobs.

aka

The lowest bidder will receive serious consideration.

Village-idiot's picture

Try to explain that to millitant unions, and the socialists who keep trying to push up minimum wages.

archie bird's picture

*militant

Yeah, And that $37k in freebies includes $100 in groceries one health physical a year and maybe a couple prescriptions.

Dude, that is the most ignorant, out of touch statement bloviated from a 1%'r I have ever heard.  Have you NOT noticed that the GOP 'owns' 3/4s of all State governorships, 2/3rds of all State Houses and trifecta majorities in the Fed government. They have help make the US a third world country! 

They have all cut, cut again, and re-cut these programs so that they are nothiNg but thread bare shells of what they once were.

Ya know, if health insurance wasn't so expensive MOST ppl wouldn't have to have govt insurance.  

So the question is, do you want businesses to pay liveable wages and HEALTH INSURANCE to its workers or do you want workers to use TAXPAYER monies to take care of its citizens?  You can't have it both ways.

archie bird's picture

*militant

Yeah, And that $37k in freebies includes $100 in groceries one health physical a year and maybe a couple prescriptions.

Dude, that is the most ignorant, out of touch statement bloviated from a 1%'r I have ever heard.  Have you NOT noticed that the GOP 'owns' 3/4s of all State governorships, 2/3rds of all State Houses and trifecta majorities in the Fed government. They have help make the US a third world country! 

They have all cut, cut again, and re-cut these programs so that they are nothiNg but thread bare shells of what they once were.

Ya know, if health insurance wasn't so expensive MOST ppl wouldn't have to have govt insurance.  

So the question is, do you want businesses to pay liveable wages and HEALTH INSURANCE to its workers or do you want workers to use TAXPAYER monies to take care of its citizens?  You can't have it both ways.

tripletail's picture

We've never had fair trade - only managed trade for the benefit of the few. Moreover, there are no free markets, only markets managed by multinationals and governments. A truly open, fluid, fair and free global marketplace would be a mind-blowing experience.

dark pools of soros's picture

free trade will never equal fair trade.. you are spouting some naive bullshit

south40_dreams's picture

Where's the prancing prince? Anointing his new mooslim subjects?

thinkmoretalkless's picture

Trudeau better start walking around with his shirt off and batting his eyelashes

Anderson Coopers Gerbil's picture

He did punch out a drunken Indian once