Faith

Is It Really Charitable To Restrict U.S. Trade to High-Wage Countries?

(AP Photo/John Minchillo)

This week, Bernie Sanders suggested that America should only trade with countries where workers make similarly high wages. Not only is this suggestion ridiculous, it would actually end up hurting the very workers Sanders wants to help. Sanders supports such an idea because it would be “fair,” and it seems like it would encourage foreign countries to pay their workers better, but the actual results are fundamentally uncharitable, and Christians should not support such proposals.

The Vermont senator met with the New York Daily News editorial board last Sunday. Sanders differentiated himself from Republican frontrunner Donald Trump, explaining that, while he also disagrees with bad trade deals, the Vermont senator has specific proposals about what would make trade deals better.

In other words, I do believe in trade. But it has to be based on principles that are fair. So if you are in Vietnam, where the minimum wage is 65¢ an hour, or you’re in Malaysia, where many of the workers are indentured servants because their passports are taken away when they come into this country and are working in slave-like conditions, no, I’m not going to have American workers “competing” against you under those conditions. So you have to have standards. And what fair trade means to say that it is fair. It is roughly equivalent to the wages and environmental standards in the United States. [Emphasis added]

This sounds nice at first. If America stopped trading with countries where workers make pennies on the dollar, wouldn’t leaders in those countries push to raise wages? The problem is, those workers do not have the same education and do not produce the same value as American workers. Cutting off trade with those countries wouldn’t make those workers richer, it would put them out of a job.

Even Jordan Weissman, of the liberal Slate, described Sanders’s proposal as “absolutely chilling to the developing world.” This trade policy would effectively write off trade with any country “that is not already rich and prosperous–which is simply inhumane.”

Anne Bradley, vice president of economic initiatives at the Institute for Faith, Work & Economics, a Christian non-profit organization, agreed. Bradley acknowledged that Sanders’s “suggestion is made with the best of intentions: that we desire to increase the well-being of low-skilled workers,” but restricting trade this way will only make things harder for the very people Sanders intends to help.

“Rather than lift the wages of low-skilled workers in developing countries, it will encourage companies to look for labor elsewhere, and thus those low-skilled workers will remain unemployed and stuck with low wages,” Bradley explained. “If we want to raise the wages of workers, we need to give them opportunities to work.”

More trade, not less, would give workers more options and job opportunities. Even a low-wage job can provide skills and experience to help someone take the next step. As Bradley wrote, “When we are afforded the opportunity to use our skills, we can improve upon those skills and that is the single best way to raise wages, and it is proven to work.”

It may seem odd to say that more trade, and thus competition, with American workers will actually help workers in foreign countries, but this is what the economic data shows. “Our charitable policy suggestions must actually do good, rather than harm,” Bradley concluded.

Next Page: What about wage slavery?

Just because Sanders’s suggestion is dead wrong does not mean there aren’t good reasons to restrict trade to some countries. In general, free markets require free trade. But when workers are forced to work, and have no options, that is not free trade, but a mild (and sometimes blatant) form of slavery.

This lack of freedom might be a great reason to question trading with a country. Immense corruption may also justify trade restrictions, if it seems that the government alone would profit from such deals, leaving businesses and the workers they employ a mere pittance of the value they create. Some have argued this is a major reason we should not trade with Cuba.

In general, however, the most charitable thing we can do for the developing world is promote free trade and purchase goods that workers in those countries make. They may be working for pennies on the dollar, but at least they have jobs and are creating value in their own way. Empowering people in other countries to make their own products and earn their own way is more helpful in the long run than sending money, or attempting to strong-arm foreign governments into enacting a minimum wage.

I believe that Bernie Sanders does legitimately care about people in poor countries, but he is wrong about the way to go about it. The larger government that (even his mild form of) socialism brings, and the greater bureaucracy and centralization, will only hamper opportunities for the least fortunate among us, both here and abroad. If we want people to get ahead, we need less government, not more. This is what true Christian charity looks like, not patronizing the poor with assistance, but helping people use their God-given potential.