No issue brings out more sheer orneriness than trade. Next up: The Central American Free Trade Agreement (CAFTA).
On one side are opponents who say CAFTA will just magnify the "giant sucking sound" of disappearing American jobs. How can American workers compete against Central Americans eager to work for a small fraction of American wages?
These opponents say any trade deal has to have strong labor protections. Make sure Central Americans get the same wages as workers in the United States.
On the other side are free traders who say government should just get out of the way. We'll get more cheap goods from Central America. Then they'll have the money to buy more of our high-tech machines for their factories, and more of our entertainment and financial services. It's win-win.
The free traders say there's no way Central American countries can afford to pay workers there the same wages U.S. workers get. That would just be protectionism in disguise.
Who's right? Both sides have a bit of the truth. But then what should Congress do about CAFTA?
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.
Robert B. Reich is a Prospect co-founder.
