In the final episode of our Trade series, Nick and Goldy talk with Thea Lee, former Deputy Undersecretary for International Affairs at the U.S. Department of Labor, to challenge the core assumption behind decades of U.S. trade policy: That trade is about efficiency, not power.
Lee explains how past trade deals were written to protect capital while ignoring worker exploitation abroad—a model that suppressed wages overseas and undercut American workers at home. She also makes the case that worker-centered trade isn’t hypothetical anymore by pointing to the US–Mexico–Canada Agreement (USMCA), where labor rights were finally enforced with the same seriousness as intellectual property, resulting in real wage gains and democratic union elections in Mexico.
This conversation lays out the choice clearly: Trade can strengthen middle classes, democracy, and supply chain resilience, or it can deepen inequality and instability. This episode makes the argument for choosing the first option on purpose, not by accident.
Thea Lee is an economist and longtime advocate of pro-worker trade policy who most recently served as Deputy Undersecretary for International Affairs at the U.S. Department of Labor, where she focused on global labor protections, including enforcing labor rights under trade agreements and combating forced and child labor worldwide.
Todd Tucker is a political scientist, author and the Director of Industrial Policy and Trade at the Roosevelt Institute and Roosevelt Forward, where he leads work on how national and global institutions shape economic transformation. He’s author of Judge Knot: Politics and Development in International Investment Law.
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Further reading:
The New US Trade Agenda: Institutionalizing Middle-Out Economics in Foreign Commercial Policy
Judge Knot: Politics and Development in International Investment Law
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Nick Hanauer:
The rising inequality and growing political instability that we see today are the direct result of decades of bad economic theory.
Goldy:
The last five decades of trickle-down economics haven’t worked, but what’s the alternative?
Nick Hanauer:
Middle-out economics is the answer.
Goldy:
Because the middle class is the source of growth, not its consequence.
Nick Hanauer:
That’s right.
Speaker 3:
This is Pitchfork Economics with Nick Hanauer, a podcast about how to build the economy from the middle out. Welcome to the show.
Goldy:
One of our first guests on Pitchfork Economics, Nick, was the physicist Cesar Hidalgo, and he made this statement, I know you’ve repeated it in the past that, “The original sin of economics is that it starts with trade.”
Nick Hanauer:
Yeah.
Goldy:
When in fact, what we need to start with are the things that we trade, the things we make, and of course, we don’t make those things without workers. So it’s really hard to talk about international trade without considering the rights and conditions and wages of those workers making the things we’re importing and exporting. And yet, that’s all-
Nick Hanauer:
You say that, but we have ignored it.
Goldy:
That’s right. It’s often missing from the conversation. Weird.
Nick Hanauer:
Yeah, it’s so weird. Yeah. We talk a lot about protecting intellectual property. We talk a lot about protecting capital. We don’t talk a lot about protecting workers, but today we get to talk to one of the nation’s experts on international labor protections. Our old friend, Thea Lee, who has been kind of at the forefront of a lot of these conversations for a super long time.
She’s an economist and longtime advocate of pro-worker trade policy, served as the deputy undersecretary for international affairs at the US Department of Labor, and just been working on this stuff forever. And given how relevant trade is in the current moment, we thought it’d be fun to talk to her about what she thinks about what’s going on and what we might do as a country if the craziness ever passes to secure international labor rights a little bit better. And by doing that, helping American workers too.
Thea Lee:
I am Thea Lee. I am a retired economist, and at the moment I am doing whatever I feel like doing, but [inaudible 00:02:58].
Goldy:
Great.
Nick Hanauer:
That’s great. Well, do you feel like talking about the labor movement?
Thea Lee:
I always feel like talking about the labor movement.
Goldy:
Particularly for this episode, talking about labor and trade.
Nick Hanauer:
Absolutely. So you’ve done so many things, Thea. You’re a woman of many talents. Your career has spanned the labor movement, think tanks, Biden administration, et cetera. But you’ve had a big focus on international labor rights enforcement as a part of trade policy. So for our listeners, just create some context. What does that even mean and why do we care?
Thea Lee:
Sure. That’s my favorite question. I got involved in the trade debate back in the early 1990s in Washington when the North American Free Trade Agreement came in. And at that time, there really was this debate about, “We need these trade agreements so that companies can move jobs around. And what could possibly go wrong?” At that time, we created this multinational coalition and a multi-sectoral coalition to say, “Sure, let’s have trade. Let’s have trade policy, but let’s make sure that we don’t leave workers behind, and that this is actually a really important part of how we think about what’s good and what’s bad about trade policy.”
That sure we can get pineapples from other places or coffee that have different climates, but when we are moving production around to take advantage of workers whose basic human rights are not respected, then that can become problematic. It becomes problematic for domestic business and domestic workers who find themselves in competition with workers in other parts of the world, may be very far away, who might be beaten up or fired or thrown in jail or murdered for trying to organize a union or asking for a bathroom break or safety goggles. And so labor rights becomes a really crucial piece of the trade debate. What does trade policy need to address? What should it address? And that battle has been raging for about 30 years.
Nick Hanauer:
I think that trade is so complicated because there’s good parts and bad parts, but definitely I think that American workers having to compete with foreign workers who operate in regimes without any protections, it’s not actually different than environmental standards too. It’s very difficult to be an American manufacturer that isn’t allowed to dump effluent directly into rivers, competing directly with a manufacturer who is allowed to dump effluent directly into rivers. Obviously, it’s much cheaper in the latter case, so your prices are lower and so on and so forth. To what extent is it realistic to extend… In practice, how does this work? What do we do to try to level the playing field for workers in this respect?
Thea Lee:
Well, that’s a great question because countries are sovereign nations. They have their own preferences and priorities and rules. So really the challenge of globalization is finding that balance between saying, “Yes, we want to open our market to you, but we don’t want to do so if you’re going to have five-year-old kids chained to looms, and if you’re going to use slave labor and really be egregious.” So what we’ve come to in the labor rights world is actually pretty sensible, which is taking the internationally recognized labor rights that the International Labor Organization said, “These are basic human rights that every worker in the world deserves no matter whether they’re in a rich country or a poor country, in the formal sector, the informal sector,” and then connect those to our trade agreements.
So basically saying there is a floor. Not necessarily a ceiling. We don’t have to have identical wages, we don’t have to have identical safety and health protections. But the basic human rights that workers deserve, according to the ILO Declaration on Fundamental Principles and Rights at Work were: freedom of association, the right to form a union if you want to, right to collective bargaining, and then also prohibitions against child labor, forced labor, discrimination and employment, and then in the last two years, we’ve added a safe and healthy workplace.
So those are the core labor rights and that what we’ve done is try to embed those into our trade agreements and to make them enforceable. And then we’ve added one more thing to that, which is to say countries should also effectively enforce their own domestic labor laws. So those two things together are actually very powerful, and that is the battle of the last 30 years is to say that labor rights in trade agreements are just as important as the market access and the investment protections and the intellectual property rights.
Nick Hanauer:
Those things are routinely pretty well-protected, aren’t they?
Thea Lee:
Yeah. The corporate interests in trade agreements, that was-
Nick Hanauer:
Somehow they get a lot of attention. It’s amazing.
Thea Lee:
They get a lot of attention. And for a long time it was just considered that’s what trade agreements are for. They’re for corporations that want to move jobs around and they don’t want to face other forms of unfair competition. And so really it’s defining what is fair competition and what is unfair competition, and then being able to use the mechanisms of free trade agreements or the World Trade Organization to enforce it. But it’s been a big battle and there is not always consensus.
Goldy:
But historically, abusing workers and workers’ rights really has been the corporate interest in trade. We talk about the past 30 years where we’ve had all this wage arbitrage, where we’ve been moving jobs around in order to… I guess they would use the word efficiency, it’s more efficient to pay somebody less money. But there’s two types of products. Yes, there are those things where you can move jobs around and shift production overseas, but there’s also products which we can’t really produce here.
The great historical example is bananas, and that is an industry with this long history of abusing their workers and the local environment where the bananas were grown, and overthrowing governments. Just a brutal, brutal industry in order to deliver Americans their favorite fruit. Has there been any progress in terms of the way US and global corporations treat workers overseas?
Thea Lee:
Yes and no. Yes, there has. There’s certainly been a recognition that labor rights are a legitimate concern for trade policy, and certainly in the United States, we’ve in some ways won that intellectual battle after the last 30 years. We have really succeeded in saying any trade agreement the United States does, and we have bipartisan consensus, should include enforceable workers’ rights as well as some of these other things. On the other hand, it’s also true, as you mentioned, a lot of the reason that corporations move production overseas is to take advantage not just of cheap labor.
And I think you really have to make a distinction. And you use the word efficiency. Cheap labor is one thing. Sometimes labor is cheap because people are poor, because there’s lower standard of living and so on. And then other times labor is cheap because a government has taken a deliberate decision to repress wages. They have busted unions, they have beaten people up and thrown them in jail. They have deliberately kept the minimum wage low. And so to make a distinction between those two things and also between an advanced industrial nation is going to produce that there are going to be more capital-intensive production in a wealthy country, that’s natural. You’re not going to do the tiny little-
Goldy:
The millions of people putting screws into phones that the current administration sees as the ideal.
Thea Lee:
Right. Manufacturing has changed, and that’s a good thing. Manufacturing has become more productive. So there are a lot of things that can be done by robots, don’t need to be done by human beings, the repetitive, boring, uncomfortable, dangerous work. But I think when you say, “Are things getting better?” I think the problem is that we’ve created a global economy where corporations have divorced themselves from responsibility for working conditions throughout their supply chain.
And that is a problem because we are ultimately connected. We all live on the same earth. We are all human beings. And if workers need to suffer inhuman conditions, whether it’s on a fishing boat on the high seas, or it’s in a Jasmine farm in Egypt, or it’s in cocoa production in Ghana and Cote d’Ivoire, it’s our business. It’s our business because we are complicit. We buy the stuff. And a lot of American consumers would say they’re willing to pay a higher price for products that are not made in egregiously unsafe and inhumane working conditions.
And yet there’s not enough transparency, and companies have outsourced and subcontracted out a lot of that work. And so they’re trying not to take responsibility. Our job in the trade policy front, those of us who’ve been working on labor rights, is to reconnect multinational corporations and big brands to their entire supply chain because at the end of the day, they buy it, they put their name on it, hopefully they’re taking responsibility for quality control, and therefore they should also take responsibility for working conditions through the entirety of their supply chains.
Nick Hanauer:
Thea, obviously, trade is top of the news right now for good and bad reasons, and we’d love to know what your broader perspective is on American trade policy. Put aside the insanity of the current administration’s approach while simultaneously acknowledging, for example, that we have indeed let China take advantage of us in some very unconstructive ways. And so a certain amount of pushback, I think, is logical and valid in that case in particular. But how do you think about global trade with respect to workers here, workers overseas, consumers here, consumers overseas? As we internally talk about trade, what’s your broader view? How do you think about it?
Thea Lee:
Thanks, Nick. I love that question because the point isn’t that trade is good or bad. Trade is a reality. We live in a big world and there are a lot of things that are exciting about trade policy or investment policy. There’s dynamism, innovation. There is getting things from other countries that we don’t or can’t produce ourselves, learning from other countries and other people. And so what we need is a set of rules for trade policy for both trade and investment and immigration that are about centering our values, whether it is worker rights, environmental protections, consumer safety.
All of those things are legitimate. That’s what we have a domestic regulatory system for. But as we moved into a global economy and people just started acting as though there were no difficult decisions there, that this is obvious that free trade is good, it’s good for everybody all the time, and we just need to barrel ahead with a corporate agenda, we lost a lot of things. And there are consequences for climate change, there are consequences for the way workers are treated. There’s consequences for migration that if you have terrible jobs where workers are working long hours for terrible pay under unsafe conditions, some of them may try to come to another country for a better life.
So it really is about what are the rules for the trading system? And I think taking a different perspective where you say it isn’t just about what allows multinational corporations to make a lot of money, but it is about what we as a society value, I think we actually could move in a different direction. Right now we have a spaghetti bowl of trade agreements. We have free trade agreements, we have regional, we have unilateral measures. The one that doesn’t really work right now is the multilateral, the World Trade Organization, which is paralyzed and hasn’t done much.
But that is ideally where we would have a single set of rules, not a million different rules. And so a company for now has to think, “Well, am I selling to the EU or am I selling to Canada? Am I selling to Australia? Am I selling to the United States?” And have to come up with a whole different set of standards for each of those places. So I think that’s the ideal that we should move towards. And it isn’t about saying we shouldn’t trade because I think trade has the potential for tremendous dynamism and innovation, but it is about making sure that we are setting our priorities straight.
Goldy:
Can I go off on a… It’s not a tangent. I’d like to talk about money for a moment, about the dollar. I don’t know if it’s been a strong dollar policy, but we’ve had a strong dollar. Obviously, that advantages American consumers in that it’s cheaper to buy things from abroad. But I’m wondering how much the strong dollar has really disadvantaged American workers.
Thea Lee:
That’s a really good question, and I think it’s one where it’s a double-sided knife that having a strong dollar is not so good for domestic producers, so also companies that are located in the United States and domestic workers. And I think in the early 2000s, there was a lot of dispute around China was manipulating its currency to keep its currency weak and the dollar strong. That was very disadvantageous for American producers on American soil, not American companies that produced all over the world.
And so I think that was one of the things that was interesting, that the corporate community was divided. Multinational corporations were perfectly happy with a strong dollar because they’ve just moved stuff overseas. And those companies and workers who were trying to make a living on American soil found it very disadvantageous. But I think you also don’t want to see precipitous movements in the value of the currency because that is going to be very destabilizing.
Nick Hanauer:
Yeah. And sometimes a strong dollar is very, very handy, and sometimes it’s not.
Goldy:
Well, for you, Nick, because you own a lot of them.
Nick Hanauer:
Okay. Okay. But no matter whether you have a lot of dollars or a little dollars, a strong dollar can be helpful.
Thea Lee:
It also affects if you’re buying inputs, having a strong dollar is good. You’re buying inputs from other countries, and then it can be good. But you’re trying to sell your product Made in the United States, it’s actually a disadvantage. A strong dollar sounds good because strong sounds better than weak, but it is important to remember that it has the two aspects.
Nick Hanauer:
Yes. No, it’s two sides. Two sides. So what’s your favorite example of a success in this space? Where do you think we really went right?
Thea Lee:
Well, when we talk about worker rights in trade agreements, the strongest labor chapter of any trade agreement is in the US-Mexico-Canada Agreement, which is the renegotiated NAFTA, interestingly negotiated in the first Trump administration by US Trade Representative Bob Lighthizer, but with a lot of input from people like, at the time, Ohio Senator Sherrod Brown, and a lot of labor leaders like Rich Trumka and other union leaders. So that is a very strong labor chapter.
It encompasses protections for migrant workers as well as all the core labor rights. But it also involved the Mexican government agreeing to reform its labor laws and its labor system to make sure that workers really had an opportunity to join an independent democratic union and to be able to bargain collectively for the first time in really 60 years. So USMCA actually had a lot of successes. When I was at the Department of Labor heading ILAB, the International Labor Affairs Bureau, we did a ton of work in Mexico because Congress also had given ILAB about $180 million to do technical assistance in Mexico, working with the government, with business, with unions to ensure that this new labor law reform was really viable.
We also had a really strong dispute settlement mechanism called the Rapid Response Mechanism. We call it swift, surgical and effective because it allowed you to act quickly, which was one of the problems that we had noticed with previous labor chapters that they could drag on, sometimes as long as nine years before being resolved. This one had a lot of very short timeframes built into it. And what it meant was that workers, for example, the General Motors workers in the Silao plant, which is maybe 6,000 workers, one of the very first cases brought under the rapid response mechanism, were able to choose a new union, kick out the protection union they’d had for decades, and negotiate a new collective bargain contract.
They got a 9.5% raise. Workers who had been unfairly fired for union organizing were reinstated. And so we actually saw really concrete tangible benefits throughout a lot of Mexico, particularly in the auto sector under the USMCA labor chapter. So to me, that was a good example of a labor chapter that we negotiated with a trading partner and then really implemented full-throatedly and got good results.
Nick Hanauer:
Interesting. Have we thrown that completely out the window now?
Thea Lee:
No, it’s still there except a lot of the people who worked on it who are on my team have been instructed to resign at the Department of Labor by the Secretary of Labor. And all the programs, the technical assistance programs that were supporting the USMCA have been terminated even though some of them were almost midway through and they were being very effective and very popular and delivering good results. So it’s still there and it is a Trump administration initiative. So we are still hopeful that we will be able to continue to implement and execute the Labor chapter of the USMCA.
Nick Hanauer:
Amazing. So embarrassing. So just to clarify, these trade agreements don’t affect wages directly, right? When we negotiate a trade agreement, the trade agreement does not say you have to pay a minimum of this much to these people? We’ve never done that?
Thea Lee:
No. We don’t do that. We talk about the core rights. So we say if workers can actually organize a union without being fired or beaten up or whatever, then they should be able to bargain for their fair share of the wealth they create. So it’s more about ensuring that countries are living up to their obligations as members of the ILO, the International Labor Organization. They’re already committed to doing that, but this gives an extra economic incentive, an economic consequence for countries that don’t live up to their international obligations. And it includes forced labor and child labor as well as safe and healthy workplaces. And so that can be very effective. It’s a tool.
It’s a tool for dealing with… Countries sometimes have different priorities and they say, “Oh, we’re just not going to put the resources into enforcing our labor laws.” But if we have a trade agreement with that country that commits them to respecting the international labor rights and enforcing their own labor laws, that becomes an avenue for discussion. It’s something that we can work on together. And sometimes the labor department would have resources that would say, “We’re going to help you do a better job enforcing your labor laws because we’re all in this together.”
Nick Hanauer:
Yeah. What countries have the most egregious practices today?
Thea Lee:
Well, you’d say some of the international scofflaws of North Korea, Burma. And within China, I think both-
Nick Hanauer:
Did we buy anything from North Korea?
Thea Lee:
We’re not supposed to, but things do come in. And Burma, unfortunately, there still are big American companies that are sourcing from Burma, even though it is a military junta with truly egregious labor conditions. The other big area that is problematic is Xinjiang in China and also the workers, the Uyghur workers.
Nick Hanauer:
What’s Xinjiang?
Thea Lee:
Xinjiang is the Muslim area of China where the Chinese government has undertaken a policy of… The US government has called it genocide, of trying to repress the Uyghur culture, language, religious practices, and they have used forced labor practices as a way of furthering that goal. And some of those workers now, it was in the New York Times this morning, have been transferred to other parts of the country, and they are also probably producing, I think it said, McDonald’s chicken nuggets and other products that are entering the global trade. But those workers don’t really have the right to speak up or form a union or leave if they choose to do so.
Nick Hanauer:
Interesting.
Goldy:
Are you hopeful? This seems like, on many fronts, dark times right now. Are you hopeful in terms of international trade and our impact on workers around the world?
Thea Lee:
Well, Goldy, thanks for that question. I think if you’d asked me a year ago, I would’ve said yes, because I felt like what we were starting to do with the Biden administration, we were really building towards something. We were also working with a lot of trade partners like the European Union, Canada, Mexico, South Africa, Brazil, trying to coordinate around things like banning the import of goods made with forced labor and finding a lot of consensus, and also finding a lot of big companies that don’t want to be complicit in this. And I actually sympathize a lot with the big companies because if they find themselves in a competitive environment where all of their competitors are violating labor rights, as Nick said, it’s very hard for them to be the one good guy.
Nick Hanauer:
Yeah, it’s impossible.
Thea Lee:
They’re not in it for altruism. They’re in it to make money. And so it’s our job in the government to create a market that does not reward exploitation and egregious violation of labor rights and human rights. And so I feel like we have more understanding than we’ve ever had before. There was actually certainly a lot of people in the Republican Party and in the business community who were all on board to say, “We shouldn’t be importing goods made with forced labor. We should not be rewarding these egregious practices, and it’s good to use our trade policy to do that.”
So I feel like there’s still room for progress, but where the chaos of the Trump tariff policies is a distraction right now, I think people are not focused on a coherent scheme of labor rights enforcement and protection. And it will take us a little while to get back to that. And all the players, organizations like the International Labor Organization, the Solidarity Center that have been out there protecting workers’ rights globally, they’re being defunded. They’re under some pressures right now.
Speaker 7:
For some further insight into what American trade policy looked like during the Biden administration, Pitchfork Economics producer Freddy Doss spoke with Todd Tucker.
Todd Tucker:
I’m Todd Tucker. I direct the industrial policy and trade work for the Roosevelt Institute and Roosevelt Forward. We’re a think tank that works on economic policy. I recently put out a report called the New US Trade Agenda Institutionalizing Middle-Out Economics and Foreign Commercial Policy. And this was a product of a study group, a study commission that we put together to look at how trade policy had or had not changed during the Biden administration years, what worked and what didn’t, and some recommendations for the future.
Biden comes into office and tries to go in a different direction, and he basically says, “We have a different theory of economic growth and we want trade policy to be servicing that theory of economic growth.” So the theory of economic growth is that we’re going to use public investment to drive decarbonization, produce the things that matter for the country. We’re going to empower workers so that they are able to ensure that not only are they going to be promised to share in the gains from economic policy, but they will be guaranteed to by virtue of being more powerful. And also that we’re going to promote competition so that it’s not just big companies, big firms and the richest Americans that are determining how economic growth goes, but it’s actually driven by the majority of workers and small businesses and others in the economy.
So that’s the new theory of growth and the idea as executed by folks like Ambassador Katherine Tai, who was the US trade policy point person for Biden. The idea was we’re going to have trade agreements and trade policy that are really in service of those public investment worker empowerment and pro-competition rules rather than the other way around where basically we’re just doing trade for its own sake.
Freddy Doss:
The report also emphasizes producing what matters. How should we structure future trade negotiations to focus on production challenges in specific sectors or to promote sustainable economic development?
Todd Tucker:
So we’ve seen in recent years that governments, especially the US government under Biden, but also generally around the world, there’s been this turn to something called industrial policy, which is using the full suite of government tools, whether that’s subsidies, whether that’s tariffs, whether that’s research and development support to prioritize certain economic activities over others. So instead of the neoliberal model, which is letting companies decide what and where to produce, we’re instead saying, “No, it’s actually really important that every economy produces clean energy products, and this is what those clean energy products are, this is what they’re not. And we’re going to use federal policy to promote one thing over another.”
And so what we saw during the Biden years was an industrial policy that it’s very different than Trump’s tariffs, where Trump’s just putting tariffs on everything, whereas what Biden was doing was putting on specific products that were deemed strategic. So things like clean energy products, things like semiconductors, these are all the inputs that the rest of the economy relies on. So this is what a smart industrial policy looks like. Typically, is not saying we need to make every single thing in America or every single thing in any given country.
Clearly, there’s advantages to trade, clearly there’s advantages to division of labor. There’s a lot of products that the federal government never really needs to worry about, like where do we get tables or napkins from. Able to have access to those inputs domestically is really important because you never know when there’s going to be a natural disaster halfway around the world or a war, God forbid, or some type of other conflict that means you can’t get the thing that you need.
Freddy Doss:
It seems like something that both Democrats and Republicans can get behind because it doesn’t seem ideological. There’s not really an ideological bend to this.
Todd Tucker:
There certainly should not be an ideological bend to doing pro-worker industrial policy, pro-worker trade policy. And I think that we saw that there was a lot of Republicans that supported the CHIPS and Science Act that supported the bipartisan infrastructure law. Actually, I shouldn’t say a lot. There were some that supported it. It was somewhat bipartisan. And then I think what we especially saw is that after these big bills were passed, there was a lot of Republican support for them. So unfortunately, what we’ve seen is that they want to cut taxes for the rich more than they want to preserve clean energy industrial jobs in their own districts. So that’s unfortunate.
I think Biden was trying to put some policy in place that would appeal to Republicans as well. It was the best shot we could have taken and we took it. But I think in the end, it just turns out that cutting taxes for the rich are just so much more important to the modern day Republican Party than almost anything else. It trumps everything. So that’s unfortunate. But no, in theory, there should be a bipartisan project. This should be something that is about the future of America, and future of production in America as a whole shouldn’t be a red or blue issue. That should just be a red, white, and blue issue.
Nick Hanauer:
Well, a couple of final questions. You’ve answered the first to a certain extent. If you were in charge and could do anything you wanted, constraints off, what practices would you employ? Would you limit your approach to the thing that you described, which are these treaties that establish minimum rights or would you go farther?
Thea Lee:
If I were queen of the world, I would like to see a multilateral system because part of the trouble that we have also is even if the United States, in an ideal world, had really strong labor rights protections and trade agreements, if our trading partners don’t have similar protections, then you’re just going to be shuffling the cards around and it’s going to take a long time before you can really impress upon. And there’s really two audiences here. There’s governments and there’s companies.
And the real goal is to say to both governments and companies, there’s no future for you in repressing labor rights. These are internationally recognized human rights every worker deserves. Your job as a government is to have an enforcement scheme in place and to make sure your laws are in line and to say to companies, don’t go to countries that violate labor rights. Go to the countries that are trying to do a good job, that are really making an effort. But I think the other thing is that each country has to do what we do domestically. The trade policy is one piece of it. We also have to make sure that we have a coherent forward-looking economic strategy, an industrial policy that is investing at home.
For the United States, it’s not realistic to think that we’re going to bring home manufacturing jobs if we’re not investing heavily in infrastructure, in technology, in training, in skills, and in social safety nets and in support systems, apprenticeships, registered apprenticeships for workers. Those are all the kinds of things we need to do. It’s no magic wand, but there is a clear path forward. And I think if we center workers’ rights, there’s a synergy. There’s a positive story, which is when you protect workers’ rights globally, you strengthen democracy, you strengthen the middle class, you strengthen buying power so that the vision of the kind of global economy we live in is not one that we have now which is like, “You build, we buy.”
That’s not sustainable. But if we have a more reciprocal trade relationship where countries that we deal with, workers are working in factories, they’re able to send their kids to good schools, they’re able to join the middle class, they also can buy the stuff that they’re making, that’s a much healthier kind of global economy, and that’s attainable, but we need to work together.
Nick Hanauer:
And one final question, why do you do this work?
Thea Lee:
I love this work and I think it makes a difference. And I think when I look back over my career over 30 years, we’ve actually won a lot of our debates. We now have to implement them. But my dad came to this country from China when he was a little boy, and his ancestors, my great-great-grandfather and grandfather and great-grandfather, all came to the United States to work, but went back to China, back and forth to have families and so on.
So I think about trade and immigration, and my mom’s family came from Eastern Europe, also fleeing repression earlier. But I think about what’s great about the United States of America, which is that we do welcome people from all over the world, but also that the trading system can be a source of energy and dynamism and international connection if we do it right and if we get the rules. So that’s what I’m working towards.
Nick Hanauer:
I love it. Well, thank you so much for being with us, and thank you for your work.
Thea Lee:
Thank you, Nick. Thank you, Goldy. It’s always a pleasure.
Goldy:
So I think Thea makes a really important connection here, which again, is not talked about much when we talk about international trade, and that is that connection between workers’ rights and building a middle class, and how these developing countries cannot build a strong and robust middle class unless these workers have rights and are well-paid, and they cannot build a strong and robust democracy unless they have a strong and robust middle class.
And how important that is to us here in the United States to workers here to have these middle classes developing overseas, both because it does level the playing field. You don’t have all that wage arbitrage anymore when you have a strong middle class amongst our trading partners. And because it also creates a larger export market for the goods that American workers are creating because they cannot only afford to consume the products they are creating domestically, they can afford to consume products created internationally. Hey, that sounds like one of those virtuous cycles that we talk about in middle-out economics.
Nick Hanauer:
Exactly. And bonus, if those workers in other places are not miserable to the point of desperation, you’ll have much less of an immigration challenge too, given that this is a major concern of the current administration. Obviously, those people are not fleeing those countries because things are awesome and they’re treated well. They’re fleeing those countries because they’re treated terribly, and all of this stuff fits together in a thoughtful way if you’re a thoughtful person and approaching things a tiny bit strategically.
Goldy:
Right. Look, it’s pretty obvious, the advantages to having developed nations, and we can see it right here when we talk about our borders. You don’t see Canadians flooding across the border, sneaking across the border to work in the construction industry and to pick our fruits and vegetables and to work in our meatpacking plants and in the back of restaurants and domestic work and all that. Yeah, maybe the sketch comedy industry. But apart from that, you don’t see a lot of comedians.
Nick Hanauer:
The sketch comedy industry has been overrun by those damn Canadians.
Goldy:
That’s right. You don’t see them flooding across the border to take our jobs, except in the sketch comedy industry.
Nick Hanauer:
At SNL. Yeah.
Goldy:
Right. And imagine if Mexico was as developed economically and politically as Canada. You’d have the same sort of border issues.
Nick Hanauer:
Americans fleeing the United States to go work in Canada.
Goldy:
Well, I think that’s why they really want to shut down the border. It’s going to be like East Berlin. They’re going to build a wall to keep us in. But when you have that type of reciprocity, yeah, Canadians do cross the border obviously all the time, and then they go back because…
Nick Hanauer:
Because Canada is nicer.
Goldy:
Right. But you see that with Mexican migrant workers. The fact is, historically, they always cross the border because there are seasonal jobs and then they go home. You’d have a lot more of that going home if we didn’t make it so hard to cross the border. But if you build a large and robust middle class and you have these job opportunities in Mexico, we’ll get to the situation where we’re trying to incentivize people to cross the borders, to put roofs on our houses and pick our produce and work in those meatpacking plants. And those will become better jobs.
Nick Hanauer:
Yeah, absolutely.
Goldy:
Higher paying with better conditions. So it’s a win-win for everybody if we have trade policies that actually work out well for the people in other countries as well as for workers in this country.
Nick Hanauer:
Yeah. It just won’t work out quite as well for the shareholders of big companies.
Goldy:
Oh, no. Oh, no.
Nick Hanauer:
Yeah, they’re taking advantage of these-
Goldy:
Pity the poor shareholders.
Freddy:
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