It is incredible that the paper can't even discuss the issue. In his discussion of the effect of trade on workers in Ohio, David Leonhardt never even mentions what is indisputably true, recent trade agreements have been designed to shift income from the 70 percent of the workforce without college degrees to the 30 percent of the workforce with degrees, and especially to the small minority with advance degrees. As Leonhardt correctly notes, NAFTA did little to reduce tariff barriers to imports from Mexico. These were already low. What NAFTA was about was removing all the non-tariff barriers that prevented U.S. firms from locating manufacturing operations in Mexico and exporting their output back to the United States. By putting U.S. manufacturing workers in direct competition with low-paid workers in Mexico, NAFTA lowered their wages. If Leonhardt and the NYT were interested in free trade, we could ask hospitals what barriers prevent them from hiring Mexican doctors who would be happy to work for one-half of the wages of their U.S. counterparts. We could do the same for law firms, universities, and even newspapers. We could standardize education and professional standards so that Mexican kids could grow up and work as doctors in Los Angeles or lawyers in New York, just as easily as kids born in Chicago or Boston. This would lead to huge gains to the U.S. economy and greater equality in the United States instead of greater inequality. But, we didn't this. Instead we cut the number of foreign medical residents entering the country in half and changed our licensing procedures to make it harder for foreign doctors to enter the country. Furthermore, it would be illegal for a Wal-Mart University or a Wal-Mart hospital to explicitly bring hire foreign professors or doctors because they are willing to work for much lower wages than their U.S. born (or greencard holding) counterparts. Under the law, these institutions must first try to hire U.S. citizens before they can seek out foreign professionals. If we had the same laws for manufactured goods, Wal-Mart would have to claim that they had tried to find U.S. made shoes or toys (and failed) before they could import these goods from China. Anyone could recognize that this would be protectionist in the case of manufactured goods, why is it so hard to understand that it is protectionist when applied to highly paid professional services. Surely the best newspaper in the country should be able to find a reporter who can figure this out.
--Dean Baker
