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22 March 2016


Readjust Labor for Effects of Free Trade

Businesses ought not to be punished for moving production to low labor-cost countries, because they suffer from it for political reasons.  Business should be incentivized to change production methods in order to take advantage of the higher education and skills of U.S. labor.

Government intervention in the market is needed to minimize the external costs of readjusting the labor force to the new requirements of lower-cost labor competition caused by free trade.  Incentives must be provided to influence businesses to respond to the political demands of displaced workers.  The market itself is unable to supply such incentives in time.  Readjustment required by free trade agreements has been estimated to take as long as ten years.

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