An International Living Wage Is Here If We Want It

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NAFTA is being renegotiated. If we play our cards right, this could be a chance to take one step towards an international minimum wage. Some say this is a bad idea. Counterpoint: No, it’s a good idea.

The AFL-CIO, America’s biggest labor organization, has submitted a long list of proposals for tweaks to NAFTA. One of the most meaningful is a request for a living wage for workers-an agreement that all workers covered under the agreement be paid enough to afford “food, water, housing, education, health care, transportation, clothing and other essential needs, including the ability to save for retirement and emergencies” in the region where they live. The AFL’s proposal would make it a violation of NAFTA “to export products whose production in one of the signatory countries, at any point in the supply chain, involved the payment, to any worker involved in the production process” of a less-than-living-wage. It would, in other words, set a living wage floor on all exporters in North America.


In the New York Times today, Eduardo Porter rounds up objections to this idea. They range from the perfunctory (“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?” Uh... sure, that would be awesome) to the legitimate (mandating higher wages could just push workers into the “informal” black market economy). But Porter’s ultimate rationale for saying that this idea is not very useful is this:

But the core challenge is to figure out what will help productive, competitive industries grow in North America. That is something that putting a wage floor under the Mexican labor force will not do.

Hmm. Will growing productivity ensure that workers are paid better wages?


Not at all! A central indicator of the brokenness of the American economy is the divergence between productivity, which has risen steadily, and worker pay, which has nearly flatlined since the 1970s. This is the whole fucking problem: Growing “productive, competitive industries” has failed to raise the wages of workers. Instead, it has made the rich richer. Productivity gains have gone to owners and investors, not to everyone. This sure looks like a problem begging for an effective government intervention.

There is a moral case for an international minimum wage, but on a practical level, even a more modest step like living wage floors in trade agreements can help to ensure that the race to the bottom spurred by globalization does not race quite so fast or far down. Ever rhetorically despaired over the poor Mexican workers slaving away for pennies doing jobs that used to provide middle class incomes in America? Well, here’s a way to fucking deal with that. A living wage. Quiet the jabbering CNBC voices in your head for a moment and imagine a world in which the government actually cared about the welfare of the majority of people. They would happily pursue this policy. This is a very basic way to mitigate some of the downsides of “free trade,” that have made “free trade” so unpopular that millions of people who do not understand it claim to be “against” it. Free trade is fine, as long as we ensure that it works for human beings, and not just for institutional investors and corporate officers.


This is a measure to protect workers. Which is to say, most people. Whether we pursue such a measure or not, there is another group that will definitely be sure that NAFTA protects them: corporations.

Maybe do the humans too.

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Hamilton Nolan

Senior Writer.