Even as he calls income inequality the “defining challenge of our time,” President Barack Obama is pursuing new trade agreements that some of his political allies say will only make the problem worse.
Obama says expanded trade will generate high-paying jobs for an economy that’s still more than 1 million paychecks short of its pre-recession peak. His critics in the labor movement and some economists say previous deals, such as the North American Free Trade Agreement, destroyed millions of factory jobs.
“It has absolutely been a contributor to the rise in inequality,” said economist Josh Bivens of the Economic Policy Institute, a Washington research group partially funded by labor groups. “We would have a different country, with less inequality, had we not seen the developments in the global economy that we’ve had over the last 15 to 20 years.”
The concern that Obama is fanning over the income gap could boomerang on his plans. Five fellow Democrats on the Senate Finance Committee this month said they won’t vote for giving the president “fast track” authority to speed trade deals through Congress, citing in part the risk to jobs.
Senate Majority Leader Harry Reid yesterday said he also opposes the legislation. “Everyone would be well-advised just to not push this right now,” he told reporters in Washington.