by Amrietha Nellan
With the “Fight for $15” movement shaping the debate over minimum wage in the U.S., it is easy to forget that in many parts of the world, workers do not have a right to a minimum wage at all. In developing countries where workers do not have alternative means to establish their compensation, such as through collective bargaining, a minimum wage sets the most basic level of protection. The Trans-Pacific Partnership (TPP) addresses this issue and improves labor conditions, becoming the first trade agreement in history to commit member states to adopt and maintain laws on acceptable working conditions, including a minimum wage.
Because of the TPP’s standards, Brunei will implement its first ever minimum wage law, while others like Vietnam, are obligated to ensure their minimum wage is applied to all categories of workers. Some critics argue that the general requirement for a minimum wage without a methodology will not make a difference, because countries could set a very low wage. Currently in Vietnam, the hourly wage can be as little as $0.59, leaving many struggling to cover their basic cost of living which requires around $0.83 an hour for an individual. However, the TPP can lead the way in improving labor conditions because it establishes enforceable labor rights and gives workers a network of allies creating a pathway for the continued expansion of those rights.
As we forecast the impact of the TPP’s tough, new labor standards in developing countries, let’s consider the lessons from U.S. labor history. Franklin Delano Roosevelt established the minimum wage through the Fair Labor Standards Act in 1938. It was set for $0.25 cents an hour, (which translates to $4.19 an hour today, well below the federal poverty line, much like the developing TPP countries). This initial minimum wage applied only to production workers in manufacturing, capturing around 20% of the workforce. The Fair Labor Standards Act also set maximum work hours and restrictions on child labor, but lacked many key protections we enjoy today. We did not get the right to equal pay for women until 1963, racial and age non-discrimination until 1964 and 1967, respectively; workplace safety and health standards until 1970; expansion of the minimum wage until 1975; and protection for workers with disabilities until 1990. More than 75 years after the first $0.25 minimum wage, we still have areas to improve as exemplified by the “Fight for 15” movement for a living wage.
We continue to fight for greater labor rights today, aspiring to fully implement the values enshrined in our labor legislation. But it’s clear that establishing the right to a minimum wage, along with laws to promote effective organizing, set the stage for further advancement of U.S. labor. This is precisely what the TPP aims to promote through its labor chapter. By requiring a minimum wage, maximum working hours, and occupational safety and health standards it guarantees workers a basic set of rights. And by prohibiting restrictions on union organizing, it empowers workers in TPP countries to effectively champion their own labor freedom. But unlike the U.S. experience, they won’t have to go it alone. All of these provisions are enforceable and results in the loss of trade benefits if countries do not abide by their commitments through the dispute settlement mechanism in the TPP. Workers seeking to realize their rights will have an ally in the U.S.
The TPP recognizes that each of its members are at different phases in their economic and legal development, but it establishes fundamental protections for the betterment of all workers. Our own experience in the U.S. supports the path taken by the TPP by illustrating how implementation of a minimum wage can help lead to a robust set of labor protections. Ultimately, the TPP’s labor chapter is an opportunity to promote dignity and fairness for millions of workers. It advances the belief that all people who work should be valued and respected. The chapter’s commitment to economic justice for working people exemplifies why the TPP is the most progressive, forward-looking trade deal of our time.