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Unhealthy wages

Tuesday, June 30, 2020

Washington’s food banks are in desperate need of funds, as more-and-more families turn to them in hunger. With the state’s unemployment exceeding 15 percent in late May—more than three times the unemployment level at the same point last year—thoughts of Washingtonians overwhelming food charities illustrate just how unprepared many are to deal with the economic downturn that COVID-19 has sparked.

The reason many of our neighbors are struggling—even with unemployment benefits and stimulus checks—is rooted in the recent economic history of the United States, in which the welfare of working families has been sacrificed on the altar of corporate profits. Nowhere has this trend been more pernicious than in international trade policy.

After being left scrounging the globe for life-saving products that not long ago had been “Made in the U.S.A.,” public officials are finally beginning to second-guess trade deals with China and others that have offshored production of medical equipment like protective masks, ventilators and prescription drugs. 

The disruption of supply chains in the time of COVID certainly needs to be addressed—but so, too, do trade agreements that have promoted a global race-to-the-bottom in wages.

Even before the global economy was paralyzed by the pandemic, the U.S. carried a 2019 trade deficit totaling $616.8 billion, according to the U.S. Census Bureau. The United States’ trade deficit with its biggest trading partner, China, accounts for more than half.

The growth of the U.S. trade deficit with China since 2001, when U.S. policymakers first approved China’s entry into the World Trade Organization (WTO), is responsible for the loss of 3.7 million U.S. jobs, according to a January study by the Economic Policy Institute (EPI). An estimated 67,400 of those displaced jobs were from Washington.

Nationwide, decades of outsourcing has cost working families billions in lost income. In one year alone, EPI estimates that trade deals with China and other low-wage nations reduced the wages of all U.S. workers without college degrees by a total of $180 billion.

In other words, the downward pressure on wages and benefits caused by outsourcing is hurting most Americans, even if their own jobs have not been outsourced.

The EPI study, which is considerably more conservative than others, found that outsourcing costs the majority of American workers 5.5 percent of their income. That’s even after the benefits of lower-cost electronics, clothing, and other imported sweatshop is considered.

For the average household today, that’s almost $3,500 out of your pockets each and every year. An extra $3,500 in the family bank account sounds rich right about now, as workers are facing unprecedented furloughs and layoffs.

Extend that $3,500 over ten years, and you can understand just how badly America’s working families have been robbed by bankrupt trade policies.

The COVID crisis has already drawn some attention to the need to rebuild domestic medical manufacturing capacity.

If we want Washington families and communities to be more economically resilient, too, we’ll need trade policies that prioritize higher wages over higher corporate profits moving forward. 

Hillary Haden is the executive director of the Washington Fair Trade Coalition—a statewide non profit that works on getting a trade policy that works for workers and communities.

Past Columns
On Police Reform

July 21, 2021

Washington Can’t Wait

March 3, 2021

Emissions-Free Future

November 11, 2020

Restoring the Grizzly

July 22, 2020

Iowa Fiasco

February 5, 2020

Oil Slick

October 23, 2019

Rethink Our Food System

September 25, 2019

The Kampuchean Lobbyist

April 10, 2019

The Public Charge

November 28, 2018

Road to Damascus

April 18, 2018

Orcas and Oil Don’t Mix

February 21, 2018

End Cash Bail

February 7, 2018

A Sorry State

January 31, 2018

Backyard Cottages

January 17, 2018

Fight City Hall

January 10, 2018

Net Neutrality

November 29, 2017

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