Social insecurity is not a viable economic strategy

Ford Motor Company's new restructuring plan, calling for layoffs of 30,000 workers, once again reminds us of America's economic conundrum. Put simply, the United States confronts the "one-price law."

Whenever identical items sell for different prices, the one-price law tells us that people will buy in the low-priced market and sell in the high-priced one until prices converge at a single point for the two markets.

Since our workers receive relatively high wages compared with much of the rest of the world, this rule implies that America can preserve its wages only if it has better goods and better workers, or protects itself with market barriers such as tariffs.

If, in our zeal to maintain competitiveness, we rely primarily upon market forces, we will surely hasten economic decline for the two-thirds of our workers who have become the visible manifestation of the one-price rule in global labor markets.

Thomas Friedman's now famous argument that the world has grown flatter holds that almost all market barriers have disappeared, leaving in their stead a "flat world." According to Friedman, America's success depends upon major investments in science, engineering and education. His is a better-workers-and-products strategy.

Although he overstates the extent to which access to knowledge has been democratized, Friedman is nonetheless correct that the Western world's monopolization of leading-edge production technologies is slipping. This threatens even the middle classes, who had regarded themselves as exempt from the one-price rule. Ford's restructuring will hit many white-collar workers almost as severely as it does those who labor on the production lines.

Yet, following Friedman's advice that the nation invest in science — as important as this is — will not be sufficient. We have seen little evidence that technology alone improves the lot of the working class. Cellphones, video games and digital TV are poor substitutes for decent housing, civil neigh-borhoods, adequate health services and good food, all of which are difficult to obtain for substantial portions of the American population. It often seems as if new technologies are designed to lull those who have them into a sleep that prevents them from seeing they, too, can be swept into the economic maelstrom of the one-price law.

Education, as crucial as it is, is also not enough. Degrees alone will not create jobs for those displaced by technology, especially when the rest of the world is dramatically increasing its expenditures on schooling. America can't afford to ignore education and technology, but it can't afford to ignore its workers' immediate needs, either.

For the past 25 years, world leaders have been enamored of markets and flexibility. Their economic strategy has been to increase competitiveness through social insecurity.

This misguided strategy asks workers to accept increased risks for their old-age security at a time when the economic environment in which they labor has grown extremely shaky. Likewise, in the name of efficiency, it also discourages the enforcement of workplace regulations such as those that should have protected the West Virginia miners. To create flexibility, the U.S. and other countries continue to undermine labor laws protecting workers' rights to organize.

As union power has declined, the lobby for worker security has become ever less effective. America cannot afford to have labor's legitimate concerns brushed aside in the name of competitive strategies that have so far failed miserably.

We cannot afford to lose labor's voice because it alone will insist that trade and technology be used to generate funds that ease the social transitions of a dynamic market.

Strong labor movements in many European countries ensure that their nations' governments assume greater responsibility for jobless benefits, retraining and family leave. Even if this entails higher levels of unemployment, they pursue a "high road" strategy to support productive, long-term investments in families.

Dismantling the labor standards that protect our least-advantaged citizens is a strategy that surrenders the price of labor. Our goal instead must be to see the rest of the world rises to our standards.