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OpEdNews Op Eds    H3'ed 5/15/14

Hey Bill, Here are Some Things You Could've Done About Inequality That Don't Involve Jailing People

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By *Liberty Equality Fraternity and Trees


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At Pete Peterson's Fiscal Summit -- that big bipartisan wet kiss to the plutocratic class -- Bill Clinton was asked about how to address growing inequality. His response:
"I don't think there's much you can do about that unless you want to start jailing people."
That's an interesting take, Bill. It's fitting that someone responsible for the expansion of the police state would immediately think of jails as a solution to a problem.

Prosecuting the bankers responsible for the financial crisis would be great, but let's put that discussion on hold for a second. Rather, here are a few things you could have done -- or should I say, not done -- as president to address the issue.

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Bill, you signed the North Atlantic Free Trade Act (NAFTA) into law 20 years ago. You said it would accomplish many great things, even world peace. Yep, that's right: you promised world peace.

NAFTA has had an effect on inequality, Bill. It's made it worse.

Earlier this year, Public Citizen took a look at NAFTA's 20-year legacy. It isn't pretty.

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...Rather than creating the promised 170,000 jobs per year, NAFTA has contributed to an enormous new U.S. trade deficit with Mexico and Canada, which had already equated to an estimated net loss of one million U.S. jobs by 2004. This figure, calculated by the Economic Policy Institute, includes the net balance between jobs created and jobs lost. Much of the job erosion stems from the decisions of U.S. firms to embrace NAFTA's new foreign investor privileges and relocate production to Mexico to take advantage of its lower wages and weaker environmental standards. The NAFTA-spurred job loss has not abated during NAFTA's second decade, as the burgeoning post-NAFTA U.S. trade deficit with Canada and Mexico has not declined.

...More than 845,000 specific U.S. workers have been certified for Trade Adjustment Assistance (TAA) as having lost their jobs due to imports from Canada and Mexico or the relocation of factories to those countries. The TAA program is quite narrow, only covering a subset of the jobs lost at manufacturing facilities, and is difficult to qualify for. Thus, the NAFTA TAA numbers significantly undercount NAFTA job loss.

...NAFTA has contributed to downward pressure on U.S. wages and growing income inequality. According to the U.S. Bureau of Labor Statistics, two out of every three displaced manufacturing workers who were rehired in 2012 experienced a wage reduction, most of them taking a pay cut of greater than 20 percent. As increasing numbers of workers displaced from manufacturing jobs have joined the glut of workers competing for non-offshorable, low-skill jobs in sectors such as hospitality and food service, real wages have also fallen in these sectors under NAFTA. The resulting downward pressure on middle-class wages has fueled recent growth in income inequality.

...Despite a 188 percent rise in food imports from Canada and Mexico under NAFTA, the average nominal price of food in the United States has jumped 65 percent since the deal went into effect. This is the opposite of the outcome promised when NAFTA passage was debated. Then, some NAFTA proponents acknowledged that the deal would cause the loss of some U.S. jobs, but argued that U.S. workers would win overall by being able to purchase cheaper imported goods.

...The reductions in consumer goods prices that have materialized have not been sufficient to offset the losses to wages under NAFTA. U.S. workers without college degrees (63 percent of the workforce) have likely lost an amount equal to 12.2 percent of their wages under NAFTA-style trade even after accounting for the benefits of cheaper goods. This net loss, calculated by the Center for Economic and Policy Research, means a loss of more than $3,300 per year for a worker earning the median annual wage of $27,500.

...Soon after NAFTA's passage, the small pre-NAFTA U.S. trade surplus with Mexico turned into a massive new trade deficit and the pre-NAFTA U.S. trade deficit with Canada expanded greatly. The inflation-adjusted U.S. trade surplus with Mexico of $2.5 billion and the $29.1 billion deficit with Canada in the year before NAFTA have morphed into a combined NAFTA trade deficit of $181 billion. The rosy job-creation promises made at the time of the NAFTA votes were predicated on NAFTA improving the U.S. balance of trade. The reality has been the opposite.

...During the NAFTA debate, scores of U.S. corporations promised to create specific numbers of jobs if NAFTA passed. Public Citizen catalogued these pledges, the failure to meet them and even the record of the same firms' relocation of jobs to Mexico and Canada in a comprehensive report.

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...The average annual U.S. agricultural trade deficit with Mexico and Canada under NAFTA stands at $800 million, more than twice the pre-NAFTA level. U.S. food processors moved to Mexico to take advantage of low wages and food imports soared. U.S. beef imports from Mexico and Canada, for example, have risen 130 percent since NAFTA took effect, and today U.S. consumption of "NAFTA" beef tops $1.3 billion annually.

You could have avoided exacerbating the problem by not signing NAFTA. I'm not talking about creative or tried-and-true measures for reducing inequality. I'm just talking about not actively making it worse.

Bill, you gave yourself a nice pat on the back for ending "welfare as we know it" with the Personal Responsibility and Work Opportunity Act. How did block granting welfare and adding a work requirement turn out, Bill?

"Fifteen years after President Clinton joined with congressional Republicans and affixed his signature to a law that 'ended welfare as we know it' -- imposing a five-year time limit on federal cash assistance for poor families, while allowing states to set shorter limits -- the social safety net is failing to keep pace with the needs of struggling Americans, many experts say. Millions of single mothers are falling through the cracks, scrambling to support their families with neither paychecks nor government aid.

[...]

"Since the beginning of the recession in late 2007, the nation's unemployment rate has increased by 88 percent, while welfare caseloads have grown just 14 percent, according to the Urban Institute report.

"Experts say this disparity reflects the inadequacy of remaining welfare programs in the face of a veritable epidemic of joblessness. During a period of national distress, fewer and fewer people have been able to secure help to meet their basic needs, according to the report.

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