I wonder if this would work
Here's a thought. Add a simple provision to CAFTA requiring that every nation that signs have a minimum wage that's half that nation's median wage.
Let me repeat: A minimum wage that's half the median.
So when the median wage in places like Honduras or Guatemala starts to rise -- as it surely will when these nations reap more gains from trade -- workers in the bottom half will get a piece of the action.
This will help these nations build large and stable middle classes. What they have now are hour-glass economies divided between rich and very poor. But if wages in the bottom half rise, the middle will get larger. And large and stable middle classes will buy more of our exports and keep these nations peaceful.
Get it? Instead of a race to the bottom, trade becomes a race to the top for more people.
Oh, by the way: The minimum wage in the United States used to be about half the median here, at least until the late 1970s. Since then, it's dropped way behind. So with this new provision in CAFTA, the we would have to raise our minimum wage by several dollars an hour. That would help us build a bigger middle class right here at home. It's a win-win.
<< Home