FTAs hurt middle-class America and favor rich


Down with TPP: Are Free Trade Agreements beneficial to the United States?



While polarization has taken root within the world of politics, there is something major presidential candidates have agreed upon: the negative effects of free trade on the working class.

Both Republican nominee Donald Trump and former Democratic candidate Bernie Sanders have fought hard against free trade agreements such as the North American Free Trade Agreement (NAFTA)—a treaty involving the United States, Canada, and Mexico—and the Trans-Pacific Partnership (TPP), which includes twelve Asian nations.

Only recently has Democratic nominee Hillary Clinton begun opposing the passage of TPP.

And, surprisingly, both candidates have facts on their side.

According to economist Robert E. Scott of the Economic Policy Institute, allowing China into the World Trade Organization (WTO), an intergovernmental organization that regulates international trade, cost the United States 3.2 million jobs between 2001 and 2013. In addition, the U.S. lost 2 million jobs to TPP countries in 2015 alone—and it only gets worse.

Roughly two-thirds of these jobs were manufacturing-based, meaning that products are no longer being made locally and middle-class America is suffering. However, the one-percenters can’t complain.

Allowing free trade gives major corporations permission to easily move between countries and leave their U.S. workers and factories at home in return for cheap labor and increased profits elsewhere.

For example, Carrier Air Conditioning recently decided to close its Indianapolis factories and outsource to Mexico.

According to USA Today, this will displace 2,700 workers and cost the Indiana economy more than $100 million every year.

The excess profits generated from outsourcing either go toward reinvestment in the company itself—investments in labor, machinery and processing or research and development—or into the hands of stockholders.

In essence, NAFTA proliferates profits for Mexico, Canada and corporations—everyone but the middle class.

Granted, this does decrease prices for many goods and services nationwide, an apparent benefit to the American people, but, as historian Morris Berman described it, “that rising tide lifted all yachts, and not all boats”.

Without jobs, middle-class America can no longer afford necessary products, regardless of price.

According to estimates by economist Josh Bivens in 2011, the increase of trade with low-wage countries reduced the average wage for full-time American workers without a college degree by about $1,800.

Hypothetically, free trade benefits the whole community by lowering prices and increasing productivity.  

However, as of today, the top one percent of Americans own 40 percent of the nation’s wealth, and statistics have indicated an increasing disparity within the class system, exacerbated by free trade.

Politicians will continue to debate about wages and causation, but it’s as simple as this: hard-working Americans are losing jobs.


Rebekah Tuchscherer is a political science and journalism major from Milbank, S.D.

Blog at WordPress.com.

%d bloggers like this: