Income inequality rising as a result of trade deals
The News editorial in support of fast-tracked trade deals has much rhetoric and little analysis. It states, “A populist moment in American politics makes it easy to play the issue of income inequality” and “expanded trade is the way of the future.” Average Americans have already lived that future, and increased inequality is a result, not an issue to play.
Since President Bill Clinton signed NAFTA, the share of income going to the top 20 percent of U.S. households increased by 4.1 percent, with 90 percent of the gains going to the top 5 percent, whose real average income has increased by 37 percent. Meanwhile, not only is the share of income falling for the bottom 80 percent, but real income for the average (median) household is the same as it was in 1990. As the U.S. balance of trade deficit increased (from $39 billion in 1992 to a peak of $800 billion in 2006), one fourth of U.S. manufacturing employment disappeared.
As Nobel Prize economist Joseph Stiglitz stated, these new agreements are not about trade, they are about furthering gains for corporations and circumventing regulations. We have been given a glimpse of what to expect from the investor-state dispute clause contained in these agreements, as the World Trade Organization recently ruled that the U.S. regulation requiring country-of-origin meat labels created a disadvantage for meat-packers in Canada and Mexico. A U.S. safety regulation has just been overturned by an international organization.