John Deere workers need to be careful to stay competitive.

The striking workers at John Deere just rejected the second contract proposal offered by the company. The workers need to be careful to not put John Deere in the position of being not competitive in world markets.

About 40% of John Deere’s revenues come from outside the U.S.  If the company is not competitive internationally it will see a dramatic decline in revenues, profits… and jobs.  Many people today push us to “buy American”.   That sounds good and patriotic, but if other countries do the same we will all be poorer.

International free trade, just like free trade among the states in the U.S., has two sides:  In the long run, it makes everyone better off, but in the short run disrupts the lives of many.  The best policy is to have a safety net that helps those who lose their jobs transition to new jobs, while allowing free trade to help improve the income and wealth of people around the world.