Econ 101

A basic economic explanation of why including labor rights in free trade trade agreements makes sense.

Abolish the Worst Forms of Child Labor
Countries that allow child labor are damaging their long-run growth prospects. If children are in the factories and fields then they are not getting an education. If they are not getting an education, then they will not be able to provide the human capital and skills necessary to advance their countries economies.

Abolish Forced (Slave) Labor
Countries that allow forced labor and slave labor are competing solely on wages. A focus on wage competition precludes a focus on technological assimilation and advancement. So a country allowing forced labor hurts itself in the long run becuase it never advances technologically.

End Employment Discrimination
Employment discrimination results in an inefficient sorting in the labor market. The workers best suited for the job may not get the job (b/c they may be discriminated against) and the job will then be performed with sub=par results (relative to a non-discriminitory policy).

Allow Freedom of Association
I mentioned this one in a previous post ... in summary: freedom of association leads to unions leads to more equal sharing of profits leads to greater purchasing power in the population leads to increased domestic demand leads to growth of domestic industries leads to insulation from financial shocks and crisis originating outside of the country.

I realize the world is a complicated place. But economic models are always simplified. Thus my conclusions above.

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