Wednesday, July 23, 2003

International Minimum Wage

Crescat Sententia's Amy Lamboley has a post on one of Dick Gephardt's more curious notions, the International Minimum Wage, which upon further inspection seems to be more of a requirement that countries set their own minimum wages. Her basic criticism is that a livable wage in most of the world would still be so far below ours that it wouldn't make much difference. I suspect she's right. The main counterargument would probably be that there's more to the equation than just wages: If you decide to make your shirts in a Honduras sweatshop, you're saying what you can save on labor costs is more than what you're going to spend shipping your goods to the U.S. Working to close that gap might be a good thing. Gephardt himself is talking about a downward spiral as companies which stay in the U.S. worsen their working conditions to compete with the sweatshoppers, and I do think stopping that would be a good thing, though I'm not sure this will work.

What I actually think about globalization is what Clinton said about affirmative action: "Mend it, don't end it." I've usually called for doing this by regulating corporate behavior using existing American laws...why can't we say that a corporation chartered in the U.S. has to uphold some basic labor and environmental standards even when operating overseas? (I think I got that idea from a Green Party platform somewhere.) After all, they are representing us, and usually quite badly, except in cases where public pressure forces them to behave themselves, as with Unocal's pressing the Taliban to improve their human rights record (See Ahmed Rashid's Taliban). That would help the environment, achieve the same domestic labor agenda as the IMW, preserve the development benefits of putting capital into the hands of the developing world labor market, which they well spend in their domestic economies, still allow businesses originating in the developing world to afford to hire employees, and in the best of all possible worlds actually show the corporate face of the U.S. to be a force for good in the world.

I'm curious what those with more experience on these issues think.


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