The Curse of Free Trade 

The Curse of Free Trade

I need help understanding something. I'm not a trained economist. I haven't taken an economics class since the eleventh grade, nearly thirty years ago. My grasp of this topic is limited to what I can actually see in front of me. And because of what I see, I fail to grasp the advantages, to the American people, of the free trade movement.

In his recent book, The Great Unraveling, much of which I profoundly agree with, Paul Krugman chides the American Labor Movement for their resistance to the free trade movement, saying that by resisting free trade they are "working against the interest of the world's poor." He argues that a total ban in this country on manufactured imports from third world countries would raise blue collar wages in this country no more than three or four percent. And it may be that from where he sits, that's the situation in the world. From Paul Krugman's vantage point that 3 or 4% doesn't make much difference. From the vantage point of a New York Times columnist, a Princeton Economics professor, a best selling author, that may be negligible. I'll wager that he could forego that kind of money and not notice it. From my vantage point it looks different.

I see Hewlett Packard lay off 1000 workers in the San Francisco Bay Area while opening a new manufacturing plant in Southeast Asia and I see 1000 jobs leaving this country that will not be replaced. A thousand homes with probably their chief source of income cut off. And that's a thousand jobs cut following 10,000 others that preceded them. These people are being thrust into a labor marketplace in which many, if not most, of them will never make the kind of money they had made before. Most will get some kind of job again. Again, for many, if not most of them, those jobs will be in the service sector, making just a fraction of their previous wages. They would love to see a cut of 3 to 4%.

I see Levi Strauss close the last of its US manufacturing plants while opening plants in Mexico. Again 100s of American workers are out of work, jobs taken out of the workplace that will not be replaced by equivalent jobs. 100s of families lost, many of them losing their homes as they can no longer afford a mortgage. For these people, the American dream has been turned upside down. And with Free Trade, with more American jobs going overseas, 100s of thousands, maybe millions more will join them.

I understand that some day an equilibrium will be reached. American wages will drop because of this glut of workers and this will balance against the added cost of shipping materials and goods across the seas. You can bet, though, that this drop in wages, which will affect the lifestyles of millions of Americans, won't affect Princeton professors or New York Times columnists. From the halls of academia, these are problems that affect other people.