Gephardt’s Revolution Begins With a Global Minimum Wage

Every day, the borders that separate America from the rest of the world continue to dissolve.

The last few weeks’ headlines have been an extended testimonial to this interdependence. Our stake in the world economy was dramatized early last week when industry analysts reported that in 2003, foreign auto manufacturers captured a larger share of the American market than ever. The mad cow scare demonstrated that the health of the nation’s beef industry, not to mention the health of the beef-eating public, could depend not only on our own food safety regulations but also on the standards in Canada.

Likewise, the repeated cancellations of foreign flights to the United States over the last few weeks showed that our first line of defense against terrorism is now in other countries.

And President Bush’s new immigration reform initiative acknowledged that the United States could only control its borders by reaching an agreement with Mexico to regulate migration.

These disparate developments all sent the same message: No nation is an island anymore. America can safeguard neither its security nor its prosperity on its own. Decisions made abroad affect our lives more intimately than ever.

That’s the insight at the heart of one of the most ambitious and intriguing ideas emerging from the 2004 presidential campaign: a proposal from Democratic Rep. Dick Gephardt of Missouri to establish an international minimum wage.

After a quarter-century in the House of Representatives, Gephardt is battling for his political life as he struggles to overcome Howard Dean’s lead in next Monday’s Iowa caucuses. But whatever happens to Gephardt’s own ambitions, he has produced a path-breaking concept that deserves to be considered long after this presidential race is over.

The idea is simple. Gephardt says that as a condition of membership in the World Trade Organization, every nation should be required to adopt a minimum wage. The level would vary from country to country, depending on productivity and the level of development. But everywhere, he says, workers should be guaranteed a wage high enough “to allow someone to live like a human being.”

The International Labor Organization estimates that at least 85 countries have a minimum wage on the books. But in many places, it is honored more in the breach. Gephardt, who has always valued the practical over the prophetic, is preaching a revolution: the idea that any country seeking to participate in the global economy should be required to pursue a decent level of existence for its workers.

Gephardt’s call for an international minimum wage represents an important broadening of his perspective on trade. For most of his career, Gephardt has framed his opposition to lowering trade barriers primarily as a means of protecting American jobs.

That left him standing on narrow ground against free-traders who have persuasively argued that the expansion of trade, while disruptive in some communities, ultimately creates more jobs than it destroys and makes the nation more prosperous over time.

Gephardt still argues that raising wages abroad will benefit American workers, by creating more middle-class consumers for our exports, and reducing the incentive for U.S. manufacturers to relocate in search of cheaper labor.

But the idea of an international minimum wage has allowed Gephardt to connect the trade debate to a much larger cause, one as much moral as economic: the pursuit of dignity and security for more of the multitudes living in crushing poverty around the globe.

“We need to stop the human exploitation that is going on in this world,” he recently told a group of Iowa Democrats, his face reddening and his voice rising. “I’ve been in the villages.... The [manufacturing] plants are as good as anything in the United States. But the people live on the ground. They live in the cardboard boxes that bring the products back to the United States.... They live in worse conditions than most animals do in Iowa.”

Even some advocates for the world’s poor aren’t sure that Gephardt’s answer is the best solution. Jeffrey Sachs, director of the Earth Institute at Columbia University and a leading crusader for developing countries, is a surprising critic.

Sachs worries that even a variable minimum wage would drive jobs away from the poorest countries by requiring companies to pay workers more than their productivity and skills justify. “If we were to set minimum wages that had some bite to them, what it would do would be to really block those countries from getting the first foot on the ladder,” Sachs says.

A better alternative, Sachs argues, would be to increase foreign aid to improve health and education -- thus generating the productivity that could eventually justify higher wages -- while reducing tariffs and quotas that inhibit poor countries from selling agricultural or light manufacturing products like textiles to the U.S.

But Gephardt, correctly, doesn’t see such an agenda as incompatible with his own. As president, he says, “I would go to the WTO meeting myself” and present developing countries a grand bargain: more foreign aid and lower tariffs in return for a commitment to lift wages. “You’ve got to cut a deal,” he says, the diplomat as legislator.

Such a bargain could allow poor countries to raise their living standards by increasing their workers’ skills while expanding their access to the American market. But it would also end the competition to lure employers with the lowest possible wages and create more middle-class consumers who could one day buy products built or designed in America.

This approach would face enormous political hurdles, at home and around the world. But it establishes a direction that could ultimately benefit rich and poor countries.

“You can’t do this overnight,” Gephardt says. “It’s a vision. But it provides a goal of where the world needs to go, and that’s what has been lacking.”

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Ronald Brownstein’s column appears every Monday. See current and past columns on The Times’ website at latimes.com/brownstein.