The economist Matthew Slaughter writes in today’s Wall Street Journal that ’High Trade’ Jobs Pay Higher Wages. He points out that the 22.9 million Americans who work for U.S. headquartered multinational companies made an average of $73,338 in 2011 compared with the overall average wage of about $55,000 that year. “Workers in multinational firms earn more, as global engagement fosters innovation and productivity growth.”
“There is a growing concern about stagnant or falling incomes, yet most of the measures proposed to deal with the issue – raising the minimum wage and reinstating unemployment benefits – purport to help workers by offsetting market forces. Less attention is given to harnessing market forces.”
This can be done by “liberalizing U.S. trade, investment, immigration and tax policies.” In other words, we need more trade agreements like NAFTA, which has been so successful in increasing trade in North America. We need more high skilled workers, both domestic and foreign. We need lower corporate tax rates to encourage multinational corporations to bring their trillions of dollars in overseas profits back home.
We should always strive for a more equal society with less income inequality. But the best single way to do this is to create more opportunity by growing the economy, i.e. by harnessing market forces.