The price of GOP protectionism

Not content with bossing around Americans, even unto telling them which washing machines to buy, the administration’s protectionists have demanded that Mexico, as part of a renegotiated NAFTA, institute a $16 minimum wage for Mexican factory workers. So, a Republican administration purports to know more than Mexico’s labor market knows about the proper price of Mexican labor. But, then, the last know-it-all administration so aggressive about controlling wages and prices was Republican (Richard Nixon’s).

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All this dictating and renegotiating is supposed to protect American jobs from the menace of NAFTA, which, according to one of its ardent critics, destroyed 1 million U.S. jobs in its first 20 years (1994-2014). An academic study argues that trade with China destroyed 2.4 million jobs between 1999 and 2011. But Don Boudreaux of George Mason University’s Mercatus Center says this means it took NAFTA two decades to destroy as many jobs as are erased by the normal churning of the American job market on average every 18 days. And the “China shock” eliminated in 13 years as many jobs as are eliminated by the U.S. economy’s process of creative destruction, on average, every 41 days . So, if there are to be trade “wars” with China and Mexico, they will be launched to avenge job “casualties” that are far fewer than those routinely inflicted by the domestic processes that produce American prosperity.

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