Re: "Washingtonians need Pacific free trade agreement" (editorial, 5-5).
You uncritically support the Trans-Pacific Partnership and discount the concerns of our citizens. The logic of free trade agreements is that it improves economic efficiency. Efficiency of what? We can measure the efficiency of electric motors and engines.
Economists reduce efficiencies to dollar costs. Thus, Asian labor is more “efficient” because wages are low. That is a measure of capital efficiency. Capital dollars invested in poor Asian countries earn a better return than here. Can you demonstrate any other economic efficiency?
Economists ignore what has been lost in the push for free trade. The productivity of American workers has increased by about 3 percent a year since the 1970s. Yet wages have been stagnant in real dollars. There has been no reward for increased productivity in 45 years. TPP would continue to limit wage growth in the U.S. and subject American wage growth to Asian competition.
Never miss a local story.
Let us imagine our communities if American workers were rewarded for their productivity. Wage growth that matches productivity growth is not inflationary. The minimum wage would be about $15. Social Security and Medicare would be flush with reserves. State budgets could support our school systems. Families could work fewer hours. Our streets and communities would be more prosperous and safe.
Seventy percent of the U.S. economy is driven by consumers. If our real wages had grown with our productivity, all of the world would benefit. TPP does nothing to improve the earnings of ordinary Americans.
(Berniker is a retired Pacific Lutheran University business professor.)