Can Nafta be re-engineered to raise workers’ wages?þþOrganized labor thinks so. As the United States sets out to renegotiate the North American Free Trade Agreement with Mexico and Canada, union officials are pinning their hopes on President Trump’s nationalist pronouncements, betting he can deliver what President Bill Clinton failed to put on the table nearly a quarter-century ago: real protection against cheap Mexican labor.þþFooled once by a labor “side agreement” that Mr. Clinton added to Nafta to gain union approval, but that proved unable to constrain employers’ misdeeds in any significant way, labor is aiming this time for the heart of what it considers unfair competition. It is demanding a guarantee that wages — especially Mexican wages — rise to ensure a “level playing field.”þþAmong an extensive set of recommendations presented to the United States trade representative, the A.F.L.-C.I.O. asked that Nafta guarantee that “all workers — regardless of sector — have the right to receive wages sufficient for them to afford, in the region of the signatory country where the worker resides, a decent standard of living for the worker and her or his family.” A decent standard of living, the labor federation specified, includes food, water, housing, education, health care, transportation, clothing and other essential needs, including the ability to save for retirement and emergencies.þþExporting a product that involved workers paid less than this living wage, at any point in the production chain, would be an outright violation of Nafta, subject to standard punitive procedures.þþMexican workers would undoubtedly appreciate being able to pay for all that stuff. Demanding a wage floor is the kind of straightforward arm-twisting that Mr. Trump might appreciate. Still, using Nafta to protect American jobs by mandating Mexico’s standard of living remains a fairly loopy idea.þþ“Stipulating that countries must pay above-market wages when producing export goods for the U.S. feels like outrageous economic imperialism,” said David Autor, an economist at the Massachusetts Institute of Technology. “Should Germany also impose this rule on the U.S., since our manufacturing workers surely make less than their German counterparts who are working under industry-level labor agreements?”þþIt is not the first time organized labor has thought along these lines. In the early ’90s, when Nafta had yet to become law, the union-backed Alliance for Responsible Trade argued that minimum wages in the tradable-goods sectors of all three North American countries should “move as quickly as possible toward that of the highest-wage country” and allow for a decent quality of life.þþThis time, though, labor has a better hand. It can afford to be bolder. A quarter of a century ago, unions reluctantly acquiesced to Nafta based on the premise that American workers would get the better end of the deal — new high-skilled, well-paid jobs in a regional supply chain that sent only its low-skill, low-wage bits south of the border.þþWhat’s more, the cheap labor they so feared would become more expensive over time. Investment in Mexico by multinationals serving the North American market would naturally lift Mexico’s standards of living to converge with those of its neighbor to the north, turning Mexicans into rich consumers hungry for American-made products.þþThis didn’t quite happen. American manufacturing has lost millions of jobs, and typical household incomes have increased by less than half a percent per year. Most troubling for American workers staring into a future in which Nafta is still the name of the game, the wage gap with Mexico has not closed, even with the tepid wage growth in the United States.
Source: NY Times
