Class War in America: the Book |
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Unmanaged
“Free” World Trade By
passing NAFTA and establishing the WTO, the Republican Congress and our
conservative President Bill Clinton ratcheted class warfare up another
notch. Despite their promises, unmanaged free world trade has been a
disaster for working Americans. “Free”
international trade means that
investors are free to pit workers of the world against each other by
putting their money into whatever country has the lowest standards for
protecting the environment, and for protecting worker incomes and job
conditions. When
investors close a manufacturing plant in the U.S., it hurts not only the
workers who lose their jobs; it hurts all workers. It’s not just 5% of
our workforce who suffer, it’s 100%. For two basic
reasons: 1. The
workers who actually lose their jobs in a plant shutdown enter the
competitive labor market and adversely affect the wages of others who
still have jobs. 2. Other
workers in the U.S. who still have jobs now know that their employer’s
threat to leave the country is real. If they cause trouble or join a
union, they may well be “downsized.” That
is why unmanaged world trade hurts workers even in jobs that can’t be
exported from the U.S.: trucking, retail, construction, the service
industry, etc. Since conservatives have put so many people out of work,
individual non-union workers have lost the power to negotiate for higher
wages. If workers collectively
try to form a union, they get fired. If they’re already in a union, the
union can’t press for higher wages because the corporation might close
down the plant and move elsewhere. So,
investors and corporate executives are screwing working Americans both
individually and collectively. Conservative
economists and politicians who profess surprise that wages haven’t kept
pace with inflation—while the economy and profits soar—have to be lying.
Their duplicity and their denial of reality were, in essence, reflected in
Business Week’s question when
it asked in a headline, “NAFTA: A New Union-Busting
Weapon?”: Since
the North American Free Trade Agreement took effect, U.S. employers have
routinely threatened during union elections to close plants and move
production to Mexico or elsewhere, says a new study commissioned under
NAFTA…. The report, based on union
elections from 1993 to 1995, indicated half of the employers threaten to
close plants when facing a union vote.… When employers lose, 7.5% go
ahead and close the plant—triple the level in the pre-NAFTA
1980s. “NAFTA created a climate
that has emboldened employers,” says Kate Bronfenbrenner, a researcher who
headed up the study for the U.S., Canadian and Mexican governments. She
agreed to release the report after the Labor Dept.
balked.1 Because
of articles like this, the real intent of unmanaged free trade is becoming obvious to everyone.
The daily news accounts can’t be covered up, even by conservative
journalists. Only an orthodox hypocrite could claim that corporate CEOs
didn’t intend to use “free trade” as a cover for being able to “routinely
threaten” their own workers. “If you unionize, we’ll abandon you and your
community and ‘move production to Mexico or
elsewhere.’” The
major intent of unmanaged free trade was never revealed to the American
public. Business Week further
reported that the U.S. Labor Department sat on the study out of fear the
report would fuel skepticism toward expanding NAFTA. No wonder. Think of
it: §
In
half of the union drives, working Americans were threatened with job
loss—the “job insecurity” that
Greenspan is so proud of. Also bear in mind that figure represents only
those situations that the researchers found out about. §
It
takes only a few employers, 7.5%,
to actually carry out their villainous threats to close down a
facility and make “insecure” the entire 100% of working
Americans. §
Given
this sledgehammer over the lives of working Americans, is there any
possible doubt about how our “emboldened CEOs” have been able to rape their own
employees—even in a booming economy? If
you don’t want to admit the validity of this study, consider that Barron’s lays bare all
pretenses—when communicating to fellow conservatives—about the strategy
and results of unmanaged free world trade. Under the head “Not To Worry:
Even If the Jobless Rate Shrinks a Lot, Labor Is in Weak Position to Boost
Inflation,” it bragged that
The
’Nineties, need we remind you, are a period of insecurity and cost
control, a time when workers feel lucky to have a job, let alone one that
pays well. And consider another reason
for believing that labor is in no position to impose “cost-push” inflation
on the economy: the rise of Global competition. Domestic
producers won’t permit labor to raise costs faster than productivity. If
this were allowed, plenty of foreign producers could outstrip U.S.
companies.
If American labor sought
inordinate increases, manufacturers could simply move production abroad
and employ foreign labor at a far cheaper
rate.2 The
legitimate benefits of free trade give Republicans and conservative
Democrats yet another opportunity to tell an obvious lie—under the guise
of a general truth. They sell American voters on the true advantages of
free trade, but then insist that it be unmanaged. Unmanaged trade isn’t
free—it is ruthlessly controlled by conservative politicians and
international corporations. This
means that employers can do whatever they want to employees—in this
country or elsewhere—without adhering to any moral standards as to their
treatment. What kind of morality allows corporations, through their paid
conservatives in Congress, to create a climate in which working Americans
feel “lucky just to have a job, let alone one that pays well”? In addition: §
The
rise of global competition
isn’t “another reason” working Americans are in this “period of
insecurity.” It’s the main
reason! §
Labor
costs—wages—haven’t kept up with productivity for 20 years. It hasn’t been
allowed, and because
conservative politi cians have sold out working Americans, they won’t
allow it in the future. §
In
the view of conservatives, any
increase in wages is an “inordinate” increase. For
insights into the kind of competition our “moral values” conservatives
have forced on working Americans, look at Indonesia. It is no longer
considered one of the worst abusers of workers, because it is in the
process of becoming a more humane country—very, very slowly.
The
Wall Street Journal
admitted in a headline that “Indonesia Is Striving To Prosper in Freedom,
But Is Still Repressive.” After it described a 24-year-old watch-factory
worker who was murdered because she thought she deserved more than a
dollar a day and was organizing a strike to get it, the Journal noted that
Average
annual incomes [in Indonesia] have spurted to $650 a person—twice what
they were a decade ago—as gross national product has expanded at an
average clip of 6.8%.3
What
a jewel corporate America has in Indonesia: §
Want
to get rid of a union threat? Then murder the organizers who are demanding
outrageous wage increases—more than a dollar a day. §
If
murder is too gross for you, the Journal also noted that, “bribes
and connections can help corporations clamp down on labor
activists.” §
Still,
despite its poor record in its treatment of workers, one must admit, wages
have gone up in Indonesia, just as our conservative politicians have
promised. They have spurted to $650 a year. And, damn, that’s twice as much as
they made ten years ago. At
that rate, they’ll catch up to working Americans’ wages in, say, another
two centuries. When
you review the above article (readers who insist on believing that the
Indonesians are still better off, despite deplorable working conditions,
should go to their library and read the entire article), remember—American
corporate executives
For
a better example of conservative hypocrisy when it comes to free trade,
look to this country. One of America’s most conservative groups betrayed
its feelings about foreigners who compete with them and who threaten to
lower their own standards of living. According to The Wall Street Journal, “Medical
Groups Propose Restrictions on Foreign Doctors to Stem
Oversupply”: The
U.S. is creating a doctor glut that should be fixed in part by making it
harder for foreign physicians to gain advanced training in this country,
according to a panel of medical experts.… “We’re on the threshold of a
gross oversupply of physicians,” said Jordan Cohen, president of the
Association of American Medical
Colleges.4 Doctors,
traditionally a very conservative group, overwhelmingly support the
principle of free world trade in the abstract. But not, of course, for
themselves: §
Interns
shouldn’t have to face a “doctor glut” when they graduate. After all,
their parents spent a bundle on their education and, unlike persons in
chicken-processing plants, they had to work hard to get their
degrees. §
It’s
especially bad if the glut is caused by “foreign physicians,” who are used
to a lower standard of living and would be glad to work in this country
for much less. §
And
what’s this about physician “oversupply”? Isn’t one of our biggest looming
problems the large number of aging baby boomers who will require medical
care? According to free market theory, shouldn’t we reduce costs by
allowing the market to glut itself with foreign doctors if that’s what
“the free market” wants to do? Count
on it: If the jobs of CEOs, bankers, economists, etc. could be done by
qualified foreigners who would work for one-tenth of the money—just like
our doctors—their cherished theory of unmanaged free trade would die in a
heartbeat. If
free trade is to function as intended, it must be managed so that
investment goes to those parts of the world that have the best economic advantages and that respect workers as human
beings with fundamental rights. In
other words, investments should be made in those parts of the world
that §
have
the best access to raw materials (despite the protestations of Republicans
and conservative Democrats, human beings are not “raw
material”), §
have
the best location in the distribution chain, §
have
developed the best technology, §
have
trained the best managers and workers, and finally, §
offer
the best product at the lowest price. The
free market should not reward those immoral competitors who would compete
purely on the basis of their willingness to treat their workers the most
brutally. As it’s now designed, that’s exactly what it’s been doing since
its inception, and it’s continuing today. Under the head, “In the Wake of
Nafta, A Family Firm Sees Business Go South,” The Wall Street Journal reported
that the exodus of industry from the U.S. was continuing unabated into
1999: Nafta
removed quotas limiting how much clothing could come into the U.S. from
Mexico. (The rest of the world, except for Canada, is still subject to
quotas.) The accord also has lowered tariff rates more than
50%. The result is that many
designers have been shifting the bulk of their sewing to Mexico, where
labor costs are about one-seventh of what they are in the
U.S…. “It’s obvious: You either go
to Mexico—or you die,” says Mr. Mehserjian’s brother Harry.5
All
these jobs going from the U.S. to Mexico should at least be good for
Mexicans, right? Well, it depends upon which end of the Mexican society
you look at. As of early 1999, workers don’t seem to have fared very well.
In a separate article, the Journal
asked the question, “Is the Mexican Model Worth the Pain?” and
answered it this way: Mexico
is coming off one of its best years in a decade. The economy grew at a
rate of 4.8% last year, adding 100,000 new manufacturing jobs. Production
of television sets, auto parts and clothing set
records…. Yet, according to a new
study by the United Nations Development Program, while just one of seven
Mexicans lived in dire poverty before the crisis [peso devaluation], two
years later the proportion was one in five. Adding those a rung up—workers
living in “moderate” poverty, with daily incomes of $3—almost two-thirds
of the citizenry is considered “poor” today. Fewer than half fit that
description before the crisis.6 Despite
articles like these, economists still claimed to be “puzzled” about why
wages were continuing to stagnate in 1999. In another of its periodic
denial-of-class-warfare attempts, the Journal again reported that the
“Job Market Stays Tight, Fed Finds; More Bonuses Paid, but Few Workers See
Big Raises in Wages”: …despite
labor shortages, companies overall still aren’t feeling pressure to raise
salaries significantly to attract and retain workers, a fact that
continues to perplex economists. “It is a puzzle, and I’m not sure that
any of us has satisfactory answers,” said Stephen D. Silfer, chief U.S.
economist with Lehman Brothers…. “Businesses are
behaving differently today than at any other time in my career,” said Mr.
Silfer. “This is making [economists] think about this new world and how
it’s operating.”7 Again,
what the hell is the “puzzle” about all this? Conservatives have totally
and deliberately destroyed American workers’ power to negotiate. No
contest. That’s it. Period. For god’s sake, they should quit being
hypocrites about being so “perplexed” at their extreme good
fortune. And
if most professional and highly skilled people in the U.S. are not all
that concerned about what’s happened to working-class Americans—and even
think that conservative economics might be a good thing—they had better watch
out. As we’ll see in the next chapter, they might be next to join in the
fun of unmanaged free trade. Now go to:
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