As long as the United States has minimum wage laws, there's no way to stop offshoring under any plan to remove trade barriers--as Obama and hundreds of business leaders are trying to do. We have wage and hour laws in the United States to create and maintain a middle class, and to establish a basic standard of living. For good reasons, we don't want to be a sweatshop economy, to revert to the way things were in the early decades of the Industrial Revolution.
The problem with free trade is that it forces Americans to compete with factory workers in low-wage countries. Tariffs--taxes on imports--help rectify the imbalance: they are designed to neutralize the "comparative advantage" created by economies overseas that pay large sectors of their work force 40 cents an hour.
These tariffs would be targeted--they would not apply to countries with minimum wage laws, such as Canada, Germany, Australia, Britain, France, or Japan. Once these tariffs are in place, we Americans could--and should--once again build manufacturing plants in all sorts of fantastic new industries generated by private sector ingenuity and research.
Technology does replace people, in any robust economy. But in a protected domestic economy, those people would be hired for other work in the flourishing industries. When free trade policies with sweatshop economies in Asia, Indonesia, South America, and Africa send American workers home to collect unemployment checks, does it really matter whether the president and all those business leaders crow about "growth"?
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