Monday, June 06, 2005
On this day:

Federal Reserve May Eliminate Jobs in Alabama

Workers to suffer...babies to starve.

That's one way to read this story about an upcoming Fed decision over whether to close its cash processing operations in Birmingham. But, when you consider why the jobs may go away, it doesn't seem so bad.
Since 2003...the Fed has reduced the number of its check processing centers from 45 to 23 in response to a decrease in the number of paper checks being written.

Of course, we all know why this is happening. People are paying their bills electronically - it's more efficient and more convenient. But, someone who had been living in a cave for the past 10 years might fail to see the big picture and focus exclusively on the job losses, overlooking the fact that they pale in comparison to the overall economic benefits.

That kind of pessimism seems almost absurd in this case, because the "big picture" is so easy to see. But, a similar defeatist attitude is motivating some Alabama officials to oppose the Central American Free Trade Agreement. Alabama's Agriculture Commissioner Ron Sparks, a Democrat, warns of job losses and harmful effects on family farmers if the trade deal is passed.

When it comes to an issue like free trade, economic gains aren't always apparent. News of textile mills closing down or software jobs being outsourced makes a big impression. When a family member, co-worker, or neighbor loses his job due to foreign competition, it's easy to overlook the fact that goods and services are cheaper and new jobs have been created by businesses capitalizing on increasing trade. Even if these positives are obvious - as they are in today's economy - they aren't likely to be associated with "free trade" in the mind of the average Joe. So, the issue of free trade is easy to demagogue by pointing out that competition from abroad often results in job losses in certain industries, while ignoring the fact that it creates new markets and new jobs in other industries.

Ron Sparks and other opponents of CAFTA have taken this approach - focusing on the potential negatives while ignoring the certain benefits. They are wrong to do that. Lower prices will benefit every consumer in Alabama. Alabama's proximity to the CAFTA region makes the state a likely conduit for an increasing flow of goods. Our manufacturing and commercial enterprises - including agriculture - also stand to gain, since trade barriers are currently higher at the Central American end than at the U.S. end.

Maybe Sparks has fogotten that the largest (and most successful) free trade zone in the Americas is right here in the United States, where barriers to interstate trade are banned by the Constitution. No doubt, there are people in Michigan who would love to be able to put tariffs on automobiles made here in Alabama. And, some in Alabama at one time may have favored restrictions on Texas cotton. But, in ratifying the Constitution, the states agreed that trade between them would be unimpeded. That arrangement has served these United States well through the years, and the benefits will only increase as we open markets to global trading partners.