News Article

To Head Off Mass Migrations, Set a Global Minimum Wage

By Michael Ardon, International Herald Tribune opinion

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JERUSALEM: The fact that globalization is widening the gap between the rich North and the poor South, andis increasing poverty in many developing countries, is usedto discredit the very idea of globalization. This is confused thinking.

The term "globalization" is generally understood to mean the trend to enable a free flowof goods and capital by removing national and regional barriers. Such a definition is misleading, because it leaves out one of the most important elements of a truly competitive global economy the free flow of work forces.

Globalization, as practiced today, is based on fundamentally contradictory elements: a free flow of goods and capital, coupled with a ban on the free flow of work forces from country to country. Globalization based on maintaining restrictions on immigration is self-contradicting.

The basic paradox of the current ideology of globalization is that without the freedom of laborers to work anywhere, free competition and the rule of market forces in the global economy are mere fictions.

What is more, most of the negative results of globalization, as it is now practiced, originate from this restriction on the free flow of work forces.

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It is this restriction which maintains wages of less than a dollar a day in developing countries. It is this restriction which leads to the coexistence of very poor and very rich countries in the world of today. It is this restriction which nourishes feelings of hatred and revenge in poor countries toward the affluent North.

But of course the North cannot afford to lift all restrictions on immigration, in the world as it is today. That would result in migration to the rich countries by hundreds of millions of poor laborers. Such population movements could be seriously disruptive.

There is no rapid solution to the inherent contradiction between restricted immigration and globalization. The only long-term solution lies in bridging the gap between the per capita incomes in the rich and poor countries.

Only when this income gap is narrowed will a global free flow of labor be possible without massive migration.

People do not tend to leave their homelands for a differential increase in income. Language, cultural and social barriers, the high costs of migration and of finding alternative living quarters, all this tends to discourage people from leaving home unless they have to.

Given the choice between $20 a day at home and $40 a day in a distant developed country, most people will choose to stay at home. Not so, though, if the choice is between staying at home hungry on $1 a day and emigrating to a developed country where a minimum wage and social benefits are secured.

A reasonable gap in incomes between South and North that would minimize the drive to emigrate would have two positive results:

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A 20-fold increase in wages in the South would eliminate hunger and extreme poverty for billions of people, and would simultaneously eliminate the global dangers that result from these conditions.

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Foreign capital would continue to flow to the South, even if the ratio of labor costs between South and North were1-to-2 instead of 1-to-40.

But by what mechanism could such a substantial narrowing of the gap be achieved? One of the options is a comprehensive global minimum wage.

The minimum wage might initially be only slightly higher than the present low wages in some developing countries, so as not to disrupt their economies, but it would be increased annually. Ultimately it should reach 40 to 50 percent of the average minimum wage in the industrialized nations.

Compliance with such a minimum wage might be achieved by a ban on imports from countries that fail to adopt it.

In the aftermath of Sept. 11, the time has come to realize that a deluxe globalization for the rich, without globalization of the labor force, is not sustainable, and that until some equity is attained between poor and rich countries, no true globalization will be achieved.

Furthermore, if the gap between the two worlds is not narrowed, the poor countries will continue to breed forces that endanger the very existence of our civilization.

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The writer, a professor of chemistry at The Hebrew University in Jerusalem, contributed this comment to the International Herald Tribune.

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