Happy Labor Day: Let's confront how the excesses of globalization without proper regulation hurt the American working class.
This Labor Day, it is worth imagining how different American workers’ lives might be if trade had been governed by rules designed for them, too.
For decades, Americans were told globalization was as inevitable as the weather. Goods would be produced wherever costs were lowest, capital would flow wherever returns were highest, and workers displaced by the process would find better opportunities in the new economy.
Some did. Millions did not.
Modern globalization arrived in stages. Containerized shipping dramatically reduced the cost of moving goods. Postwar tariff reductions opened national markets. The liberalization of finance allowed money and manufacturing to cross borders with unprecedented ease. NAFTA accelerated economic integration across North America in 1994, and China’s entry into the World Trade Organization in 2001 connected American consumers and corporations to an enormous, low-cost labor market.
Each development produced benefits. Imported goods became cheaper. American companies gained access to new customers and suppliers. Poor countries attracted investment, and hundreds of millions of people, particularly in Asia, escaped extreme poverty.
But this Labor Day, we should also confront globalization’s central failure: Its architects wrote enforceable international rules for corporations while leaving protections for workers and communities largely trapped behind national borders.
Tariffs were treated as international concerns. So were patents, contracts, intellectual property and investor rights. But wages, workplace safety, union rights, pollution and carbon emissions were generally treated as domestic matters. Nations could compete for factories by suppressing wages, tolerating dangerous conditions, weakening labor organizations and allowing companies to dump costs into the air and water.
That was not free trade in any meaningful sense. It was a global auction in which governments bid for investment by offering the cheapest workers and the fewest restrictions.
American workers were expected to compete with laborers earning a fraction of their wages under conditions that would have been illegal in the United States. American factories faced competitors that did not bear comparable environmental costs. American communities were told this arrangement represented efficiency, even when that “efficiency” depended upon shifting social and environmental costs somewhere out of sight.
We could have chosen differently.
Trade agreements could have required participating countries to meet rising minimum standards for pay, workplace safety, collective bargaining and environmental protection. Those standards would not have needed to make wages identical across vastly different economies. They could have required wages to rise alongside productivity and national income, preventing governments from building permanent economic strategies around exploitation.
Market access could have been made conditional upon measurable progress. Companies violating the rules could have faced targeted tariffs or lost preferential treatment. Trade agreements could have included automatic enforcement mechanisms instead of aspirational labor chapters that workers had little power to invoke.
Such policies would not have prevented every factory from leaving the United States. Developing countries still would have possessed legitimate cost advantages, and technological change still would have eliminated some jobs. But the exodus would have been slower, smaller and more responsible.
That difference might have transformed thousands of American towns.
Imagine if more of the wealth generated by globalization had been reinvested in communities such as Independence, Kansas, where I grew up. Imagine modern factories replacing those that closed, apprenticeships preparing young people for skilled work, and local banks financing new businesses instead of watching deposits and talent drain away. Imagine broader tax bases supporting schools, hospitals, streets and parks.
Families might not have needed two or three jobs to remain financially fragile. Young adults might have been able to build lives near their parents and grandparents instead of moving hundreds of miles away in search of opportunity. Workers without college degrees might have retained more bargaining power, better benefits and greater dignity.
Shorter supply chains also would have brought advantages that became painfully obvious during the pandemic: faster deliveries, lower transportation costs, more reliable access to medicines and critical components, and less dependence upon an increasingly hostile Chinese government.
Better-regulated globalization could have benefited workers abroad as well. Instead of inviting poor nations into a race to the bottom, the United States and its allies could have used access to wealthy consumer markets as leverage to improve labor conditions and environmental stewardship. Economic development still could have occurred, but its gains might have been shared more widely rather than captured by political elites, multinational corporations and a small class of extraordinarily wealthy investors.
The mistake was not trading with the world. America has always been a commercial nation, and retreating into complete economic isolation would make the country poorer and less influential.
The mistake was assuming that whatever maximized corporate efficiency would eventually maximize the well-being of American workers. It was believing that cheaper consumer goods could compensate for lost bargaining power, diminished communities and the disappearance of stable careers. It was constructing an international economy capable of disciplining governments that infringed upon investor rights but largely powerless when corporations exploited workers.
Labor Day should be more than a farewell to summer. It should remind us that prosperity does not distribute itself. Markets are indispensable engines of growth, but the rules governing them determine who receives the rewards and who absorbs the losses.
Globalization did not have to hollow out so much of working-class America. That outcome was not inevitable. It was the consequence of choices — and different choices can still be made.
(Contributing writer, Brooke Bell)