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.
