A Global Minimum Wage (vs. Bernie Sanders & Donald Trump)

every time I grow a new beard there are
more white hairs in it you tell me if it is a blessing or a curse that the video quality on this camera is not high enough so you and the audience cannot see just how many white hairs are in the spirit the concept of a global minimum wage is something so obvious so simple and so fundamental that would be supported by people on the far left conservatives and even people on the far right not only out of some kind of idealistic desire to make the world a better place but in fact out of brutal self-interest it's an idea whose time has not yet come but I think it's coming soon I think we can see the need to articulate this goal of a global minimum wage in the incoherent responses to the breakdown of the neoliberal paradigm that are reflected equally in Bernie Sanders and Donald Trump both Bernie Sanders and Donald Trump are populist with an anti neoliberal agenda both Bernie Sanders and Donald Trump vaguely say that they're gonna make America great again if you don't believe me Bernie Sanders book the 2016 book our revolution he's promising he's gonna make Detroit great again and this is getting at the same kind of mythology the lost days of yore when heavy manufacturing industry the car industry in Detroit was booming that's what Bernie Sanders is promising he's gonna bring America back to that's the greatness Bernie Sanders wants to revive ok both Bernie Sanders and Donald Trump have a somewhat incoherent discourse about making America great again and they both articulate this in tandem with a rhetoric blaming China and blaming Mexico for the deindustrialization of America the unmaking of America's former greatness now I'm not even saying they're wrong what I'm saying is they present this rhetoric which is merely the politics of complaining about a problem and what remains left unsaid is the promise of any possible solution right so you know okay mm-hmm the United States NAFTA okay Donald Trump came into power saying that NAFTA was a terrible agreement he never supported it even right now in 2019 Bernie Sanders is running for office he's running for president states repeatedly saying NAFTA was a terrible trade agreement and he never supported it I really I'm not getting you um NAFTA the bone of contention here is free trade between the United States and Mexico leading to Mexicans manufacturing everything Americans use not just cars but including cars cars and car parts okay um both Bernie Sanders and Donald Trump reject the neoliberal paradigm and they reject Bill Clinton's decision to grant China permanent normal trade relations PNTR PNTR was created just so that America could stop using the term most favored nation status there was a time when most favored nation status was only extended to countries the United States actually viewed favorably and as they were starting to extend this special trade status to despised and enemy nations like Communist China um someone had to come up with a go confusing new acronym anyway during the Bill Clinton presidency there were negotiations and a settlement and fatefully you know those decisions made during the the Bill Clinton era utterly transformed both the United States and China transform Europe to transform most of the world and resulted in the situation we have right now most of the computer equipment I'm using to record this YouTube video is made in China or partly made China and it's very likely that the computer and the computer screen and the other equipment your you're seeing mister it's very likely that it's made in China or that it's at least partly made in China so this transformed the world in various ways ah okay so here we are in the year 2019 2020 elections are coming out there's somewhat incoherence post neoliberal anti neoliberal political discourse emerging both on the left and on the right what they're gonna do how they gonna achieve this well you might or might not have noticed that when Donald Trump was renegotiating the trade agreement with Mexico one element of it proposed or achieved was to force Mexico to pay the laborers in the automotive industry more to pay a higher wage to the people making cars and car parts in Mexico and honestly I don't know how that story ends and there in principle you already have the first step towards a global minimum wage and you have a hint at why it would be in the interests of the wealthy and not just the poor to bring about this change okay if any of you are old enough to remember there was a time when the United States of America responded to the unwanted competition of Japanese car manufacturers Mitsubishi Toyota so on and so forth with panic and it's very strange because the discourse I remember believed to have read formal articles both as have read book chapters about it and part of my university education not just part of my child experience um it seemed like every possible explanation for the Japanese superiority of manufacturing cars was invoked except the inequality and wages Hey it's like you know of course the exchange rates were blamed like the exchange rate between Japanese yen and the US dollar there were a lot of vague idea that somehow the Japanese were tougher or meaner than Americans that you know Detroit was some kind of decadent place where unionization or moral lassitude resulted in the automotive industry fallen by and that the Japanese somehow just had a superior level of technology or level of social organization or were harder working or were they just wanted it more you gotta hand it to those dolphins they just wanted it more you know the American spirit was held up to the Japanese spirit and Americans asked themselves briefly why is it that you know Detroit can't compete with why is it that they produce cars more ships than us and of course a really important part of the answer is because wages were lower in Japan because the minimum wage was very low and you're bad because the actual amount being paid to automotive workers was lower in Japan and this hinted at what would we destroy the American automotive industry which was in Japan who was Mexico and now just lately even China if the wealthier countries say the poorer countries we will not let you export these manufactured items to us unless you pay your workers a fair wage this doesn't just benefit the poor in the downtrodden of the world it benefits industry within those wealthier countries it benefits the working-class everywhere it raises standards of living and it also creates an incentive for third-world countries to adopt higher levels of Technology higher levels of organization and so on - to not rely on just mass employment at the lowest possible level of manual labor right now that's also in the interest of Western countries because if poor countries are going to increase their level of technology for manufacturing its most likely they're gonna do it by buying or importing the technology from countries that are already Western so it's going to result in poor countries moving up the value chain more rapidly and it would also result in places like Detroit being capable of producing cars at a competitive rate now if you say that's completely impossible you know you have a point maybe you know maybe your perspective is that manufacturing cars is only possible in countries that have a very very low minimum wage what country has the highest minimum wages in the world of course that's gonna have to be adjusting for cost of living adjusting for exchange rates you have to make a lot of just long story short what country has the highest minimum wage in the world it's Australia and guess what Australia actually does have a car manufacturing industry they actually do make and export some cars Australia is actually a really interesting case study if you want to see what happens the good and the bad of it when you have higher minimum wages nobody right now is really asking what the knock-on effects would be of Bernie Sanders increased the American minimum wage if it's carried out in isolation nobody wants to really think through the impact on Louisiana on second-string cities throughout the United States on rural areas if suddenly there's a $15 minimum wage in the poorer parts within the United States as well as a $15 minimum wage in big cities like Seattle and Los Angeles there are some really really serious dislocations some really serious disadvantages that are going to ensue that are worth thinking through now by the way I do support increasing the minimum wage in states I'm just warning you know there is no such thing as a free lunch in economics there's no policy that's a hundred percent advantageous and zero percent dis advantageous but the other thing that's gonna happen if you think about it internationally increasing the minimum wage in America is also increasing the gap that separates the cost of manufacturing in America from the cost of manufacturing in Mexico or the cost of manufacturing in China or any other poor country where things now are manufactured so precisely the evil that Bernie Sanders is ranting against endlessly both read his book and I've listened to a lot of his lectures now Bernie Sanders is always talking with the evils of neoliberalism and jobs moving overseas well guess what Bernie if you get your dream and you pass a $15 minimum wage in the United States you will accelerate and exacerbate the fleeing of manufacturing jobs out of the United States to countries that have lower wages including Mexico right next door now what would be the way to counteract that Donald Trump has had some really vague and self-contradictory like about that but what he allegedly I will do to just kind of bully companies into staying in the United States Bernie Sanders also has some very incoherent rhetoric which he's basically just blaming and angry at companies for moving jobs offshore I think he suggests changes to the tax code or something to disincentivize these things point number three on screen here is an example of how incoherent Bernie Sanders promises are on this issue he means well but what would actually happen if he followed this plan is that Americans would continue to import cheaply manufactured goods from Mexico that continue to import cheaply manufactured goods from China both of those countries would continue to pay their workers low wages the cost of American wages would go up because Bernie Sanders has his $15 an hour minimum wage he would punish American companies that move jobs offshore but he's not going to punish American companies that simply import manufactured goods from China and Mexico and also what if it's a French company that owns a factory in Vietnam what if it's a Canadian company that owns a factory in China what if it's a German company that owns a factory in Mexico all of those will continue expertise United States so all it's doing is excluding American companies uniquely from participating this part of neoliberal competition this would be a disaster it works as rhetoric to get yourself elected but you do not need a degree in economics to see that this is deeply on coherent the thing you can do is you can say to Mexico look if you want to be able to export your goods here to the United States of America you have to pay your workers $12 an hour something like this which for Mexico might be a huge increase and you could say the same to Japan and you could say the same to China and you could say the same to Vietnam and Malaysia to all these different countries your trading partners with you could say look if you are not paying your workers a decent salary why should we accept Manny goods from your country and in a sense you can make this sting a little more by saying you will accept raw materials but you'll create this incentive to say look if what you want to send us our finished products or manufactured goods then you have to meet our standards for what is a decent wage what is a decent minimum wage for your workers it's not a right to export goods in the United States it's a privilege and we're only gonna grant those those privileges to countries that treat their workers decently it's really extending the same principle whereby many countries in the past refused to trade with or accept goods from countries that had slavery it's just that instead of it being slavery you're objecting to its people being paid two dollars an hour or five dollars an hour instead of total dollars but the other thing is it's ultimately transparently completely self-serving it's the ultimate form of protectionism because it's also saying hey look if you want to manufacture cars that's great you can manufacture cars and you can export them the United States you can export them to Europe but if we're gonna compete to see who really makes the best car then all of us are gonna pay our workers $12 an hour or $15 an hour whatever we all have to pay our workers the same minimum wage because otherwise we're not really competing for who makes a better car we're just competing for who can pay their workers less global minimum wage is a policy that would be supported by the left it would be supported by conservatives on the right it would be supported by the vast majority of everyone because it's everyone's interest and it actually avoids the social dislocations and disadvantages to just having a minimum wage within one country which is what Bernie Sanders is right now proposing however at this moment it's a political idea that is being propelled 'add and supported by absolutely no-one and the best thing of all is this can be implemented with absolutely no violence with no need even for a United Nations resolution or international governing body to oversee it it can be implemented country by country just by signing a green trade agreements trade pacts we say look if you want to export to our country this is the standard you need to meet [Music]