Checking in on the Minimum Wage in the TPP

A few weeks ago, I wrote about the possibility of the Trans Pacific Partnership (TPP) saying something about the minimum wage, which the White House had been suggesting it would.  I was a bit skeptical that the TPP would really do anything on this issue, and subsequently, I spoke to a U.S. government official who seemed to indicate that the whole thing was overblown, and nothing much would happen with the minimum wage in TPP.

But now I see that Victoria Guida of Politico has been speaking to higher ranking U.S. government officials, who said the following:

The Trans-Pacific Partnership pact, which the White House is negotiating with 11 countries, would require members to set and enforce laws on minimum wages, maximum work hours and occupational safety and health standards — things no other U.S. trade agreement has done.

Labor Secretary Tom Perez, too, is practiced at explaining why the TPP should matter to its critics, calling the labor provisions of NAFTA and the Central American Free Trade Agreement “woefully insufficient.” Labor obligations, he acknowledges, must be in the main text — as they have been in the most recent free-trade agreements — and coupled with sanctions if countries don’t comply.

The worker protections in the deals with Peru, South Korea, Colombia and Panama stemmed from the “May 10 agreement” that House Democrats reached with the George W. Bush administration in 2007, which covered freedom of association, collective bargaining rights, the elimination of forced or compulsory labor, child labor and employment discrimination. The TPP would go further with its minimum wage, hours and workplace safety standards, Perez said.

What exactly does it mean that the minimum wage would be included in the TPP?  My current understanding is that it means that all TPP parties must have a minimum wage (and I’m told that all but one currently do), but that it does not matter what the minimum wage is.  In theory, then, you could set your minimum wage at 1 cent per hour, to make it meaningless.

For those of us who see economic harm in minimum wage laws, what are the implications?  Is this all just for show, and nothing to worry about?  Do other TPP benefits outweigh these costs?  Is this the beginning of much worse things to come in trade agreements?  Definitely something to keep our eye on in the final TPP text.

Topics: