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NAFTA Failed to Live Up to Promises

By Arnie Alpert and Gabriel Camacho

In the twenty years since the North American Free Trade Agreement (NAFTA) went into effect, millions of Mexicans have been pushed by NAFTA to make the dangerous journey across the border into the United States, many without legal authorization.  The U.S. government has responded by turning the border into a militarized zone, jailing hundreds of thousands of people, and deporting record numbers back across the border.

Militarization of the border began in 1994 with Operation Gatekeeper, which erected fencing, walls, and other barriers between San Diego, CA and Tijuana, Mexico, forcing migrants into dangerous desert terrain.

This was not supposed to happen.

According to NAFTA’s backers, the agreement was supposed to promote prosperity in both countries and actually reduce the pressure to migrate.

President Bill Clinton asserted NAFTA would give Mexicans “more disposable income to buy more American products and there will be less illegal immigration because more Mexicans will be able to support their children by staying home.”

Mexico’s former President, Carlos Salinas, offered a similar opinion:  NAFTA would enable Mexico to “export jobs, not people,” he said in a 1991 White House news conference alongside President George H. W. Bush.

William A. Ormes wrote in Foreign Affairs that NAFTA would “narrow the gap between U.S. and Mexican wage rates, reducing the incentive to immigrate.”

So what happened?  As a precondition for NAFTA, the U.S. demanded drops in Mexican price supports for small farmers.  The agreement itself reduced Mexican tariffs on American products.  These changes meant that millions of Mexico’s small farmers – many of them from indigenous communities – could not compete with the highly subsidized corn grown by U.S. agribusiness that flooded the local Mexican market.

Dislodged from the places where their families had lived for generations, many people did in fact seek employment in export-oriented factories and farms.  But there were too few jobs to go around, and those jobs that were created did not generate the “disposable income” President Clinton had promised.

A 2008 report on “NAFTA’s Promise and Reality” from the Carnegie Endowment for International Peace concluded that while half a million manufacturing jobs were created in Mexico from 1994 to 2002, nearly three times as many farm jobs were destroyed.

As for Mexican wages, they went down, not up, during the same period.  “Despite predictions to the contrary, Mexican wages have not converged with U.S. wages,” Carnegie observed.

Unable to earn a living at home or elsewhere in their own country, Mexicans did what people have done for ages; they packed their bags and headed for places where they thought they could find employment.

The experts shaping NAFTA knew that the deal would disrupt the Mexican agricultural sector.  That’s why Operation Gatekeeper was implemented the same year as NAFTA.  It’s impossible to integrate national economies without disrupting local ones – something that should give pause to those proposing new trade agreements today.  The realities of NAFTA should not be replicated.

As the American Friends Service Committee outlines in “A New Path Toward Humane Immigration Policy,” the U.S. should advance economic policies that reduce forced migration and emphasize sustainable development.  Instead of policies like NAFTA that elevate rights of transnational corporations above those of people, we need alternative forms of economic integration that are consistent with international human rights laws, cultural and labor rights, and environmental protections.

Modern-day free trade agreements are basically arrangements that take rights away from citizens and bestow expansive benefits to multi-national corporations.

Workers on both sides of the border have one thing in common:  they need the ability to organize for higher wages and decent working conditions.   Without the opportunity for workers to benefit from the rewards agreements like NAFTA generate for corporations, “free trade” becomes just another driver of the widening gap between the ultra-rich and everyone else.

With the Obama administration pushing hard to create a new arrangement linking the economies of eleven Pacific rim countries, and another that ties the U.S. economy to that of the European Union, it’s time for a new path.

Arnie Alpert is the American Friends Service Committee’s New Hampshire program director. Gabriel Camacho coordinates the AFSC’s Project Voice in Cambridge, Massachusetts. 

(This Op/Ed was written by NHLN regular contributor Arnie Alpert and also appeared in the NH Business Review)

The Courts could destroy even MORE of our rights while we wait for Congress to fix Taft-Hartly

1947 CIO rally at Madison Square Garden

1947 Rally at Madison Square Garden

As I promised in yesterday’s post, here are a few examples of how things are getting worse, the longer we wait for Congress to fix (or repeal) the Taft-Hartley Act.

More states have passed so-called “Right to Work” laws. Nevermind what they’re called, RTW laws restrict employers’ rights: they prohibit employers from voluntarily agreeing to “agency fee” clauses in their union contracts. Last year, Indiana and Michigan joined the list of states that restrict employers’ rights; and the American Legislative Exchange Council (ALEC) is clearly still trying to spread their “model legislation” nationwide.

The Supreme Court will soon decide two cases that could further limit employers’ rights in their dealings with employee unions. Read the New York Times article here.

  • The first case will decide whether employers have the right to agree to remain neutral during a union organizing drive. (Shouldn’t employers be able to allow their employees to make their own decisions about union representation? In many worksites, unions and employers work cooperatively because they share the same goals. Why should federal law require the employer-union relationship to be adversarial, rather than cooperative?)
  • The second case attempts to impose “Right to Work” on the whole country through a court decision — rather than leaving it up to each state to decide for itself whether to limit employers’ rights.  (What happened to that old Tenth Amendment/states’ rights principle?)
  • The second case also challenges whether a state government has the right to allow union representation of home-care workers who are paid by Medicaid.  (Again: are we about to see the federal court system restrict a state government’s exercise of reserved powers?)

Taft-HartleyAnd then there’s Boeing. Just my personal opinion, but… it sure seems to me like Boeing is setting up another chance to litigate all those legal theories it came up with in 2011, back before the Machinists asked the NLRB to drop its complaint about Dreamliner production. The basic question at issue: whether a company has the right to relocate jobs in retaliation for (legally protected) union activity. That 2011 complaint was part of “a very long line of cases that the NLRB has been pressing since the 1940s, when employers began moving work from unionized workplaces in the industrial Northeast to non-unionized workplaces in the Southeast and later the Southwest.” Just think what the impact on unions could be, if Boeing persuades the courts to agree with its legal theories. (Read more NHLN coverage of Boeing here.)

Why am I so concerned about these Court cases (and potential court cases) ?  Well… because the Supreme Court is now headed up by Bush appointee John Roberts.  Back in 2005, he was described as one of the “three possible nominees that big business would cheer” — in part because they thought Roberts might “influence the court to decide more cases deemed critical to business.”  Quoting one observer of that nomination process: “Roberts has spent his career as a mind-for-hire on behalf of the rightwing Republican agenda.”  Quoting another: “if Roberts feels free to overturn precedent… Of particular concern is a return to the Lochner era, a time when free-market capitalists read their ideology into the Constitution by striking down statutes aimed at protecting workers’ health and safety.”

I guess we’re about to find out whether those observers were as accurate in their predictions as President Harry Truman was, in his.

(If you didn’t read yesterday’s post, to read Truman’s prognostications from 1947, click here.)

————

Sen. Edward M.KennedyAnd, in a sad epitaph for Sen. Ted Kennedy… as far as I can tell, no-one has re-filed the Employee Free Choice Act since he died.

(Read yesterday’s post to learn more about the economic and social problems caused by Taft-Hartley, and one possible reason why Sen. Kennedy filed EFCA to fix them.)

Still Waiting for Congress to fix Taft-Hartley By Passing EFCA

Sen. Edward M. Kennedy

It has been a decade since Sen. Ted Kennedy first filed the Employee Free Choice Act.

He filed the bill on Friday, November 21, 2003 – almost exactly 40 years after the death of President John F. Kennedy.

A coincidence? Not likely. Here’s the back story:

The Employee Free Choice Act would restore union organizing rights that were taken away by the 1947 Taft-Hartley Act. John F. Kennedy was a member of the Congress that passed Taft-Hartley.

“The first thing I did in Congress was to become the junior Democrat on the labor committee. At the time we were considering the Taft-Hartley Bill. I was against it, and one day in Harrisburg, Pennsylvania, I debated the bill with a junior Republican on that committee who was for it . . . his name was Richard Nixon.” [from a 1960 recording of President Kennedy reflecting on his career]

Both Kennedy and Nixon believed that Nixon won that debate. And just weeks later, Congress passed the Taft-Hartley Act, overriding a veto by President Harry Truman.

President Truman was eerily accurate in his predictions of what the Taft-Hartley Act would do.

Photo from Kheel Center, Cornell University via Flikr/Creative Commons

Photo from Kheel Center, Cornell University via Flikr/Creative Commons

From his radio address to the country:

“The Taft-Hartley bill is a shocking piece of legislation. It is unfair to the working people of this country. It clearly abuses the right, which millions of our citizens now enjoy, to join together and bargain with their employers for fair wages and fair working conditions. …”

“I fear that this type of legislation would cause the people of our country to divide into opposing groups. If conflict is created, as this bill would create it—if the seeds of discord are sown, as this bill would sow them—our unity will suffer and our strength will be impaired.”

From his veto message to Congress:

“When one penetrates the complex, interwoven provisions of this omnibus bill, and understands the real meaning of its various parts, the result is startling. … the National Labor Relations Act would be converted from an instrument with the major purpose of protecting the right of workers to organize and bargain collectively into a maze of pitfalls and complex procedures. … The bill would deprive workers of vital protection which they now have under the law…. This bill is perhaps the most serious economic and social legislation of the past decade. Its effects–for good or ill–would be felt for decades to come.”

Fast-forward through those decades, and read the testimony of former National Relations Labor Board Hearing Officer Nancy Schiffer:

“At some point in my career… I could no longer tell workers that the [National Labor Relations] Act protects their right to form a union. … Over the years, the law has been perverted. It now acts as a sword which is used by employers to frustrate employee freedom of choice and deny them their right to collective bargaining. When workers want to form a union to bargain with their employer, the NLRB election process, which was originally established as their means to this end, now provides a virtually insurmountable series of practical, procedural, and legal obstacles.”

Read this report by researchers at the University of Illinois-Chicago:

“Each year in the United States, more than 23,000 workers are fired or penalized for union activity. Aided by a weak labor law system that fails to protect workers’ rights, employers manipulate the current process of establishing union representation in a manner that undemocratically gives them the power to significantly influence the outcome of union representation elections. … Union membership in the United States is not declining because workers no longer want or need unions. Instead, falling union density is directly related to employers’ near universal and systematic use of legal and illegal tactics to stymie workers’ union organizing.”

Read the report by Cornell University Professor Kate Bronfenbrenner:

“Our findings suggest that the aspirations for representation are being thwarted by a coercive and punitive climate for organizing that goes unrestrained due to a fundamentally flawed regulatory regime … many of the employer tactics that create a punitive and coercive atmosphere are, in fact, legal. Unless serious labor law reform with real penalties is enacted, only a fraction of the workers who seek representation under the National Labor Relations Act will be successful. If recent trends continue, then there will no longer be a functioning legal mechanism to effectively protect the right of private-sector workers to organize and collectively bargain.”

Now, go back and consider President Truman’s most serious prediction from 66 years ago: that the Taft-Hartley Act “would cause the people of our country to divide into opposing groups. If conflict is created, as this bill would create it—if the seeds of discord are sown, as this bill would sow them—our unity will suffer and our strength will be impaired.”

President John F. Kennedy

Think about our national politics.  Isn’t our country divided enough? Isn’t it time to reverse the process started by the Taft-Hartley Act?

It’s been a decade since Sen. Kennedy first filed the Employee Free Choice Act.  Next week, we will mark a half-century since President John F. Kennedy died.

 

Isn’t it time to yank the roots of discord, start ending the conflict, and heal the division that was created by the Taft-Hartley Act?

————

To my long-time readers: apologies if this sounds familiar.  Once again, I have just updated last year’s post to reflect the passage of time; there was no reason to write a new post, because things haven’t changed.  So instead of trying to reword things I’ve already said, I’m just going to start using a new hashtag: #dejavu. (You can see all my repeats in one place!)

Actually, it’s not exactly true that “things haven’t changed.”  In this case they are changing — they’re getting worse.  But more on that, tomorrow.

Hedrick Smith Speaks to the Community about Who Stole the American Dream.

PaperbackCoverIf you are like me, you have probably never heard of Hedrick Smith before.  Those people a little older than me know his work very well.  Hedrick was a journalist and the former head of the Washington D.C. bureau for the New York Times.  He covered at least four Presidents as a reporter and is an accomplished author.  Hedrick even won a Pulitzer Prize for his work in Russia and Eastern Europe in 1974.

Hedrick’s newest book is called ‘Who Stole the American Dream?’ and it provides a very detailed description of what happened to the middle class in America.

  • What lead to the sub-prime mortgage crisis that nearly bankrupted America?
  • What happened to the labor unions and prosperity of the middle class?
  • Why is business now more powerful in Washington than the people our elected officials are supposed to be representing?

HSmith 2Hedrick addressed all these topics in his lecture to a group of about 50 people at the NH AFL-CIO office last week.

After saying that “being here reminds me of the heyday of the labor movement,”  Hedrick started his lecture by asking the question “How did we get to here?”  How did we get to a point in America where you are either just barely getting by or one of the ultra-wealthy?

Hedrick said “Some people ask me, aren’t you preaching to the choir?” when speaking to labor groups.  His response: “All the choir members need to sing from the same sheet music.”  We will not be able to fight back against these changes until we understand how we got here.  Hedrick described his book as an intellectual arsenal for the labor movement and other socially progressive organizations.

Rebuilding America with excess money from the DOD.

“Labor is a strong protector of the middle class,” Hedrick said. “The heyday of the middle class was a time when the labor movement was strong.”

Hedrick talked about how we need to rebuild our infrastructure and get Americans back to work, how we need to focus on what is happening here, and stop spending all of our tax dollars fighting in other countries.  “Why are we building bridges in Kandahar, and not in Kansas?” Hedrick asked.  He explained that too much of our federal budget is going to the Pentagon; Defense spending is higher now than it was in the Cold War – even though, during the Cold War everyone was afraid of an all-out nuclear war.

In his book, Hedrick details how much money we have spent on the current ‘wars’ that we are involved in: an estimated $3.5 to $4.5 trillion dollars have been spent, even though taxes have not been increased to pay for it.  Even now, as the conflicts in Iraq and Afghanistan are winding down, the “extra” money Congress spent on those war efforts is still in the federal budget.  That means Defense is enjoying grossly inflated appropriations – even though there are no actual ‘wars’ to fight.

Hedrick suggested that if we need to find the money to rebuild our roads and bridges, we should start by looking at the Pentagon budget.  He also proposed the idea of mandatory military service, if not for everyone then for everyone in Congress.  “We would go into a lot less wars if we had mandatory (military) service,” he said.  Hedrick also questioned Congress’ ability to make decisions about war if the representatives have never served themselves.

Stakeholder Capitalism vs. Shareholder Capitalism

HRSmith 4There are two very different perspectives about how a business should be run.  On one hand there is the view – best described by Henry Ford – that a company is there to produce something, and pay people a wage high enough that they could become your customers.  This is commonly referred to as ‘Stakeholder Capitalism’.

There is one rule for the industrialist and that is: Make the best quality of goods possible at the lowest cost possible, paying the highest wages possible.”
HENRY FORD

On the other hand, there is the current business philosophy that companies are only there to make their owners and shareholders money.  This is called ‘Shareholder Capitalism’.

This difference is a major focus in Hedrick’s new book.  He spent a majority of the time during last week’s discussion talking about the differences between these two views – and how ‘Shareholder Capitalism’ has led to the decline of the middle class.

Hedrick explained that ‘Stakeholder Capitalism’ drove the American economy after World War II.  From 1945-1970, the productivity of American workers went up by 96%.  At the same time, the average median income grew by 94%.  “Growth in productivity lead to shared prosperity,” Hedrick observed.  Everyone from the poor to the wealthy prospered during these years – in fact, those at the bottom of the wealth spectrum benefitted even more than those at the top.

Then, beginning in the 1970s, businesses moved into ‘Shareholder Capitalism’.  Productivity continued to rise by leaps and bounds, yet workers’ wages stayed flat.  The added revenue the company received from the higher productivity had to go somewhere – and it went right to the executives and shareholders. This is why the average CEO’s salary is now 380 times higher than the average worker’s salary.  [Read Citigroup’s report “Plutonomy: Buying Luxury, Explaining Global Imbalances” here.]

Through the 1970s, CEOs knew that shared prosperity was good business. “The job of the CEO was to balance the needs of all the Stakeholders,” Hedrick explained.  That means balancing the wages of the workers with the cost to consumers, and the need to turn a profit for the shareholders.  This was the job of the CEO.  Some of those needs were very simple.  The workers needed money.

The middle class had been the major consumer in our economy.  Middle class Americans are spenders, not savers: they spend 90% or more of what they bring home.  For the majority, the only savings they accrue is paying off their mortgages.   If the middle class does not have money to spend (like our current situation) then the economy is very slow to recover from any economic downturn.

In 1948, the United Auto Workers (UAW) and the CEO of General Motors Charlie Wilson signed the first collective bargaining agreement that included a lifetime pension.  This means that after you put in your many years of service to GM they would pay you a salary for the rest of your life.  This trend continued in union and non-union companies for the next few decades.  GM became the model for industry and labor relations throughout the country.

By 1980, 84% of all companies with 100+ employees had a full pension for their retired workers; 70% of them had full healthcare coverage for retirees as well.

Hedrick ArnieAlpertNow that ‘retirement security’ has all but disappeared.  Only 30% of companies with 100+ employees offer a pension; and only 18% offer retiree healthcare.  Those numbers go down every year, as workers who retired with these ‘outdated’ pensions are passing away.

GM used to be the template for a successful industry, now Wal-Mart is the template,” said Hedrick.  Wal-Mart is the modern day success story in the world of ‘Shareholder Capitalism’: they have experienced massive growth and high stock returns.  Just disregard the fact that they do not offer healthcare to the majority of their employees, or pay wages that would keep their workers out of poverty.

In ‘Shareholder Capitalism’ the stakeholders (consumers, shareholders, and workers) are in conflict with each other.  The shareholders are the only people the CEO cares about: business is all about profits and stock prices.  This is also why corporations like Wal-Mart buy back their stock to continue to drive up stock prices.

The middle class is not getting their share of the pie,” said Hedrick.  “The system (economy) will not work until the middle class get more of the pie

The middle class used to drive the political bus

Hedrick discussed how the middle class used to drive our political system.  Especially from the 1960s through the 1980s the middle class effected the most change.

The middle class was made up of many different movements, including the civil rights movement, the environmental movement, and the women’s movement.   Hedrick noted that organized labor was right there in the middle of it: labor was there helping to safeguard the rights of all workers, regardless of color or gender, and ensuring that all were paid equally.

For many years, labor and these organizations pushed the political system.  Hedrick noted that the AFL-CIO nationally seems to be making a push to be more like the labor movement of the past.  Labor is working with outside groups to help workers who are not official union members.  Hedrick praised the union groups who are helping to push legislation in Congress and state Legislatures to raise the minimum wage.

Hedrick described one other thing that helped these organizations move the middle class ahead.  It’s something that has been completely lost in today’s political system: hope.

People in the middle class used to believe that when something was broken in Washington that together they could change it.  They effected a great deal of political change and helped move our country forward.   Many people do not feel they can make a difference anymore.  We need bring hope back. We need people to believe again.

The Shift In Political Power

All through the 1960s, the middle class prospered and dominated the political system.  Now that is completely the opposite.  Business and their paid lobbyists control Washington.  What happened to cause this major shift?

Hedrick asked, “How many of you have ever heard of the Powell Memorandum?”  Hedrick admitted that until he started writing Who Stole The American Dream he had never heard of it before either.  Even though Hedrick was a journalist in Washington, D.C. in 1974, he had never heard of it.  It was not given to the press or the public; instead, it was shared “under the table. ‘

Lewis Powell was conservative, a corporate lawyer, and eventually a Supreme Court Justice. The 1974 ‘Powell Memorandum’ drafted a plan for business and industry to counter middle class movements.  Powell said, “These movements and regulations are killing the free enterprise system.”  He argues that the business industry needed to organize (like many of the other movements of the time), that they needed to put people on Capitol Hill and use their collective will to influence the regulations and policy changes that are hurting business.

Does that sound familiar?”  Hedrick asked the AFL members.

Starting in the mid-1970s, business took this message to heart.  They created the ‘Business Round Table’, a group of businesses who pooled their resources to lobby Congress.  Now the BRT is the largest single lobbying group in the nation’s capital.  The US Chamber of Commerce went from 6,000 members in 1974 to over 600,000 members in 2010.

These changes shifted the power from the people and pushed it toward the business community.  These lobbyists started pushing more and more money into the political system and began to overpower the voices of the people.  They quickly got to work: pushing for lower taxes, lower regulations and what they called ‘business-friendly’ policies.

“They started by deregulating trucking and telecom,” said Hedrick.

In 1978, with a Democratic President and both Houses of Congress controlled by Democrats, the business lobby passed some of the most damaging laws for American workers.  For example, they changed the tax code and wrote in paragraph 401 sub-section K to allow executives to have a tax shelter for their earnings.  The 401(K) provisions quickly became the answer to lowering retirement costs and keeping more profits.  Some companies, such as ENRON, even forced their workers to use their 401(k)s to buy stock in the company – which would force stock prices up and up. But then if the company goes under, as ENRON did, the workers have completely lost their retirements as well as their jobs.

The business lobby also changed the bankruptcy law to allow the current management to continue to control the company through the bankruptcy process.  Previously, a neutral third party was brought in to divide the company assets and ensure that workers’ pensions were protected; but now, companies can file for bankruptcy and sell off all assets, leaving the workers stranded.  In his book, Hedrick uses the United Airlines bankruptcy as an example of how this policy hurts working families.  We can also see the effects of this change in the aftermaths of the Hostess and Patriot Coal bankruptcies.

The ‘Powell Memorandum’ created a political monster.  Now we have the ‘Gang of Six’, a Washington based lobbying group that “represents 40,000 member companies from beer distributors to furniture suppliers, is the dean of a bloc of a half dozen U.S. trade groups. The groups represent companies that employ more than 22 million people and generate at least $5.2 trillion in goods and services, or almost half of U.S. gross domestic product. If the Gang of Six were a country, it would constitute the world’s second-biggest economy, eclipsing Japan’s $4.7 trillion GDP.”

This ultra-powerful lobbying group is lead by Dirk Van Dongen, the “most powerful man you never heard of,” said Hedrick.  This is the guy that Carl Rove had lunch with the day after President G.W. Bush was inaugurated – that is how powerful Van Dongen is.

Making Change

What can we do about this?  How can we stop this cycle and get back to an age of prosperity again?

Many of Hedrick’s ideas have to do with fixing our broken political system. “We need to get the big money out of politics,” said Hedrick.  “We need to fix the gerrymandering” of our Congressional districts.  We need to have open disclosure on all campaign contributions.  “This may mean we need to go back to publicly funded campaigns again,” said Hedrick.   We need the Federal Election Commission to do a better job of regulating the elections and enforcing the current election rules.  Hedrick continued, “The FEC could pass a rule that would enforce open disclosure tomorrow if they wanted to.”

Hedrick talked about ‘Open Primaries’ as a way of countering gerrymandering.   There would be no such thing as safe districts any longer. Regardless of political party, all candidates would be on the same primary ballot – then the top two candidates in the primary would run against each other in the general election.    Hedrick said that in some ‘Open Primaries’ have resulted in two general-election candidates from the same party.  He also noted that places that had ‘Open Primaries’ saw a 20% increase in voter turnout – because people once again believe that their vote will make a difference.

Hedrick also suggested making changes to the corporate tax structure, particularly reducing taxes for corporations that bring jobs here to the United States and raising taxes on those that send jobs away and keep profits overseas.  “Last year corporations held $1.7 trillion in corporate profits overseas,” said Hedrick. “Now they want to bring it back, so they are pushing Congress for another ‘tax holiday’.”  A tax holiday would allow these corporations to bring their money back from overseas without any penalty.  Many of them would immediately buy up shares of their own corporations, forcing stock prices up, and increasing their returns.  The people (the government) get nothing out of this.

Summary

Income inequality, the fall of the middle class, and the rise of business profits are all related.  Our world is very interconnected and what seemed like minor policy changes 30 years ago have turned out to be some of the most damaging.   We need to take back our political system and get back to making Congress work for the people, not the corporations.

Hedrick Smith laid out a number of these ideas in his hour-long lecture – but there is so much more in his new book.  I recommend that everyone go out a get a copy of ‘Who Stole the American Dream’.

Do Free-Trade Agreements Create Jobs?

Written by Dave Johnson (Senior Fellow at Our Future)
Originally posted on OurFuture.Org

global deal free trade

The corporate push to get Congress to approve the Trans-Pacific Partnership (TPP) trade agreement is about to begin. Again and again we have been promised that these trade agreements “create jobs” and grow the economy. So do they?

“Free-Trade” Claims

Proponents of current corporate-negotiated trade agreements claim that the agreements increase jobs and boost economies. For example Time today has a column, Voters Won’t Like It, but We Have to Bring Back Free Trade, by Michael Schuman. Schuman claims that these agreements are “beneficial for economies overall — boosting exports, enhancing efficiency and reducing prices for consumers.”

Is this what actually happens? Let’s look at what has happened as a result of past agreements.

NAFTA

Negotiated by the George HW Bush administration and pushed by President Clinton, the North American Free Trade Agreement (NAFTA) went into effect January 1, 1994.

Ross Perot famously said we would hear a “giant sucking sound” as NAFTA took jobs from the US and he was right. According to the Economic Policy Institute (EPI) briefing paper Heading South: U.S.-Mexico trade and job displacement after NAFTA, “As of 2010, U.S. trade deficits with Mexico totaling $97.2 billion had displaced 682,900 U.S. jobs.” (That is net jobs, taking into account jobs gained.)

The EPI study did not look into NAFTA’s effect on US wages (but a 2001 EPI study found wage decreases). Clearly, however, NAFTA enabled companies to close American factories and move production to low-wage factories, putting downward pressure on everyone’swages.

Public Citizen’s document, NAFTA’s Broken Promises 1994-2013: Outcomes of the North American Free Trade Agreement points out that over one million Mexican campesino farmers were driven out of business (and likely driven north to the US) by subsidized US corn from our giant industrialized farms.

China

China became a member of the World Trade Organization (WTO) in 2001. Americans were promised this would expand market opportunities for U.S. companies, thereby increasing jobs and American prosperity. How has this worked out?

In August, 2012 EPI estimated that the US lost 2.7 million jobs as a result of the U.S.-China trade deficit between 2001 and 2011, 2.1 million of them in manufacturing. Aside from job losses wages US wages fell due to the competition with cheap Chinese labor costing a typical household with two wage-earners around $2,500 per year.

Last month our country’s humongous trade deficit with China was $30.1 billion. That translates to a yearly deficit of more than $360 billion drained straight out of our economy.

Korea

In spite of the obvious problems with these trade agreements, the US approved an agreement with Korea that took effect March 15, 2012.

EPI reported in July, 2013 that the US-Korea free trade agreement had already cost the US 40,000 jobs and increased our trade deficit by $5.8 billion. According to EPI,

The tendency to distort trade model results was evident in the Obama administration’s insistence that increasing exports under KORUS would support 70,000 U.S. jobs. The administration neglected to consider jobs lost from the increasing imports and a growing bilateral trade deficit. In the year after KORUS took effect, the U.S. trade deficit with South Korea increased by $5.8 billion, costing more than 40,000 U.S. jobs. Most of the 40,000 jobs lost were good jobs in manufacturing.

So How Did They Work Out?

Again and again these trade agreements resulted in loss of jobs, particularly in higher-wage sectors of our economy like manufacturing, and big increases in the trade deficit. Yes, exports increased adding jobs in some sectors but imports increased more, costing more jobs than those gained. And the sectors that lost jobs tended to be higher-wage, like manufacturing.

While honest and fair trade is a good thing, these trade agreements are written to promote the interests of the giant and powerful multinational corporations over the interests of working people, smaller competing corporations, citizens groups, democracy and the environment. These “free-trade” deals increase unemployment, drive down wages and harm the environment while dramatically increasing the wealth and power of the 1%.

Again, fair trade is great. But trade deals written of by and for a few giant, multinational corporations are good for those corporations and the billionaires behind them — and onlythose corporations and the billionaires behind them.

The Worst Effect: Widespread Job Fear

When our government just lets companies close a factory here and move production to a country where people have few rights and can’t do anything to make their situation better, what do you think that will do to wages and rights here? When your boss can threaten to lay you off and move your job out of the country, what are you going to say? Are you going to complain about the job and demand a raise?

Job fear is rampant in today’s economy, so everything is sold as a promise to create jobs. Heck if eating bugs will “create jobs” I’ll try it. And you can be sure that the fried bug industry lobbyists are going to promise just that.

So these giant-corporate-promoting trade deals are sold with the promise that they will “create jobs” even though we see again and again that the opposite occurs. Ironically, the job fear so many of us experience is the result of these trade agreements that enabled corporations to close factories here, ship the equipment out of the country, make the same stuff there and bring it back here to sell in the same stores to the same customers. (For some reason that is called “trade.”)

These Agreements Reign In Our Democracy

Now the giant corporations are working on the Trans-Pacific Partnership (TPP). Only a small part of this agreement covers “trade.” Much of it is about “investor rights.” This means that countries that enter into the agreement will not be able to do things that limit the profits of corporations. This includes trying to enforce environmental regulations, trying to get low-cost medicine to sick people, etc. It won’t matter if we call ourselves a sovereign country and a democracy — we will not be allowed to pass the laws that we want to if they interfere with the “rights” of the owners of the giant corporations.

These trade agreements are negotiated by giant multinational corporations along with government officials who understand they will get lucrative jobs with those corporations. They benefit only the 1% and the billionaires behind these corporations. They have not helped our economy and have not increased jobs. In fact they have led to massive trade deficits that are draining our economy, massive job loss and wage loss, and job fear for those still working.

We must insist that trade from now on agreements be negotiated with all of the stakeholders at the table in a process that guarantees their interests have equal weight with the interests of the giant corporations. Representatives of environmental organizations, human rights groups, labor groups, consumer groups and all other stakeholders must be included in these negotiations.

We must also insist that existing agreements be renegotiated so that We the People benefit, instead of just the billionaires behind the giant corporations.

The Info-Graphic That Shows What Is Really Happening To Adjunct Faculty Members

For many years now we have been telling our children that they need to get a college degree.  For some this is a large university.  For many others this is a small community college like the Nashua Community College.

Earlier this year we talked about the Community College System of NH (CCSNH) and their refusal to sign a contract with the adjunct professors at their schools.  We also talked about how the executive staff of the CCSNH were getting outlandish pay raises while the adjuncts got shafted.

Below is a new info-graphic highlighting some of the other problems facing adjunct professors at colleges across the country.  The biggest problem is pay.  Full tenured professors are making in excess of $120,000 while adjunct professors are lucky to be making $20,000 a year.

This is wrong and something should be done about it.  We need to invest in our schools and colleges to lower the cost for students and increase the pay for faculty.  These are the people who are teaching our children and they are making a little more than a grocery store stock boy.

Un-Hired Ed: The Growing Adjunct Crisis
Source: Online-PhD-Programs.org

Equality Is Still An Issue For African-Americans 50 Years After The March On Washington

Fifty years after the March on Washington, where the Rev. Martin Luther King Jr. told the nation about his dream of racial justice, are we ready to sing, in the words of the old Negro spiritual he quoted, “Free at last, free at last, thank God almighty we’re free at last”?

After all, Jim Crow segregation has been vanquished. The 1964 prediction – in capital letters no less – by the publisher of the Union Leader that passage of the Civil Rights Act would “PRACTICALLY MEAN THE END OF THE TOURIST BUSINESS IN THE WHITE MOUNTAINS, LAKES REGION AND BEACHES” proved to be unfounded.

Signs at New Hampshire’s grand hotels that once read “No Negroes, Jews, or Dogs” are long gone. “Whites only” signs are found only in museums. Not only that, civil rights protections in employment, housing and public accommodations have been extended to people with disabilities and, in many states, to lesbians and gays. We’ve clearly made historic progress.

But before we declare this a “post-racial” era and start singing “We Have Overcome,” let’s take a closer look. Empirical data shows that black Americans still carry an undue burden of inequities in wealth, employment and the criminal justice system.

The occasion for the 1963 march was the centennial of the Emancipation Proclamation, which ended slavery in the occupied South. “One hundred years later,” King said, “the Negro lives on a lonely island of poverty in the midst of a vast ocean of material prosperity. One hundred years later, the Negro is still languishing in the corners of American society and finds himself an exile in his own land.”

On the 150th anniversary of emancipation, the statistics are still pretty stark.

For example, as unemployment rates fluctuate, the black unemployment rate is consistently twice the white rate. That’s one of the factors behind a February 2013 Brandeis University report that the wealth gap between white and black families tripled from 1984 to 2009.

“Our analysis found little evidence to support common perceptions about what underlies the ability to build wealth, including the notion that personal attributes and behavioral choices are key pieces of the equation.”

“Instead,” wrote the authors, from the Institute on Assets and Social Policy, “the evidence points to policy and the configuration of both opportunities and barriers in workplaces, schools, and communities that reinforce deeply entrenched racial dynamics in how wealth is accumulated and that continue to permeate the most important spheres of everyday life.”

For another way to look at the same numbers, take a look at the 2013 State of the Dream report from United for a Fair Economy. They say that in 2010, the most recent year for which they had statistics, “white families held on average more than six times as much net wealth as Black families and nearly six times as much as Latino families.” Moreover, families of color were harder hit in the wealth department by the recent recession than their white counterparts.

Take another issue: incarceration rates. According to an analysis by The Sentencing Project, 38 percent of people in state or federal prisons in 2011 were black, 35 percent were white, and 2 percent were Hispanic. One in every 13 black males ages 30 to 34 was in prison in 2011, as were 1 in 36 Hispanic males, compared to 1 in 90 white males in the same age group.

Black males have a 32 percent chance of serving time in prison at some point in their lives; Hispanic males have a 17 percent chance; white males have a 6 percent chance. The rate of black incarceration is so high, and the legal consequences for felons so severe, that scholars such as Michelle Alexander have labeled the phenomenon as “the new Jim Crow.”

We may in fact have risen from the “dark and desolate valley of segregation,” but we are still miles away from “the sunlit path of racial justice” described on that day in 1963.

So as we recall King’s soaring rhetoric five decades ago, let us renew our own commitment that we will never turn back until justice roars down like waters and righteousness like a mighty stream.

***
Also posted in the Concord Monitor

Fix Our Roads, Fix Our Economy

Portsmouth_Memorial_Bridge_01In tuesdays State of the Union address President Obama talked about the need to fix thousands of roads and bridges in the United States.  Our infrastructure is crumbling and here in New Hampshire we know all too well how bad the infrastructure is.  It was a little over a year ago when the Memorial Bridge literally fell down.

Even after that Granite Staters did not see an increase in spending for repairs.  Now a new report comes out showing just how bad New Hampshire is when it comes to investing in infrastructure and it is costing you money.

“A new national report found that every year the state is falling $74 million behind keeping up with its aging road and bridge infrastructure, costing the average motorist $323 in motor vehicle repairs.”  (Telegrapgh)

Transportation is fundamental to our states economy.  People need good roads and bridges to get to work and to move the products they make at work.  For thousands of people keeping up the roads is their work.

These building and construction trades have been hit hardest since the recession.  Add to the continual slow down of large scale construction projects, the state has tightened the budget so much that many of the usual road and bridge repairs are just not getting done, leaving these workers out of a job.

Other findings from the report are:

Poor Condition Roads: Currently, 37 percent of state-maintained roads are classified this way and without further investment that number will raise to 43 percent by 2016, the report said.

Rough Road Cost: Higher operating costs total $323 million to drive on N.H. roads with the highest repair bills facing ($503) facing those in southern New Hampshire, according to the report.

Deteriorating Bridges: The report found almost a third of state bridges, 31 percent, show some wear or don’t meet current design standards. Without further funding, that number will rise 16 percent by 2016.

Rural Fatalities: State highway crashes ending in death here are below the national average but the fatality rate on rural, non-Interstate roads is 3.5 times greater than the rest of the state.

I know that we cannot fix all of these problems at once but we need to start getting ahead of the problem.  We need to start investing in our infrastructure to build a better state.  By investing you are helping to create new jobs.  This in turn helps the state economy.  When workers have jobs they are not collecting from the government and in turn are paying taxes to the government.  It is a complete role reversal.

Not one legislator in Concord or Washington can say they did not campaign on creating new jobs.  Why have we not started yet?  We already have the list of roads and bridges that need to be repaired.  Put people back to work, and build a better state at the same time.

The Fight Over A New NH Minimum Wage Is About To Begin

The NH House session has officially begun. This is where the fun begins.  One of the bills that I caught wind of at the end of last year is a proposed Minimum Wage change for New Hampshire.

HB 127

I. Adds a state minimum hourly wage.
II. Requires the commissioner of the department of labor to calculate the minimum wage in a manner that reflects the cost of living.
III. Requires a majority vote of the general court to approve such adjustment.

After deeper investigation the proposal by Rep Sullivan moves the NH Minimum Wage law up from the Federal Minimum to $8.00 per hour. Tipped employees would receive no less than 45% of the state minimum per hour.  

The proposal sets a bi-annual review of the minimum wage with increases set by the Consumer Price Index.

First I would like to say that I am happy to see that Rep Sullivan is already pushing for a higher minimum wage.  However, does this law go far enough?  Is $8.00 per hour really what we want to set the NH minimum wage at?

Right now, New Hampshire is the bottom of the barrel in minimum wage laws.  Massachusetts is already at $8.00 p/h. Vermont is at $8.60.  This is good, but I think we should push for more.

There is already a national push to move minimum wage to $10.00 an hour over the next two years.  The proposal was put in last session and failed to gain traction.

Minimum wage was supposed to be a living wage, not a wage you can barely exist on.  Most people who earn minimum wage have to work two jobs just to pay the bills.  This was not what the minimum wage laws were set for.

I think this bill is a good start and I expect to hear a lot of criticism from the ‘job creators’ on the right.  The fact is that other than restaurants and bars many small businesses are already paying higher than minimum wage so this increase will not effect them.  The biggest abuser of minimum wage laws are corporations like Wal-Mart and McDonalds for example. They are the ones who are holding wages down to maximize their profits.

65 Years Later: Time to Start Healing the Divide

Sen. Edward M. Kennedy

It has been nine years since Sen. Ted Kennedy first filed the Employee Free Choice Act.

He filed the bill on Friday, November 21, 2003 – almost exactly 40 years after the death of President John F. Kennedy.

A coincidence?  Not likely.  Here’s the back story:

The Employee Free Choice Act would restore union organizing rights that had been effectively stripped by the 1947 Taft-Hartley Act.  John F. Kennedy was a member of the Congress that passed Taft-Hartley.

“The first thing I did in Congress was to become the junior Democrat on the labor committee. At the time we were considering the Taft-Hartley Bill. I was against it, and one day in Harrisburg, Pennsylvania, I debated the bill with a junior Republican on that committee who was for it . . . his name was Richard Nixon.” [from a 1960 recording of President Kennedy reflecting on his career]

Both Kennedy and Nixon believed that Nixon won that debate.  Weeks later, Congress passed the Taft-Hartley Act, overriding a veto by President Harry Truman.

President Truman was eerily accurate in his predictions of what the Taft-Hartley Act would do.

Photo from Kheel Center, Cornell University via Flikr/Creative Commons

Photo from Kheel Center, Cornell University via Flikr/Creative Commons

From his radio address to the country:

“The Taft-Hartley bill is a shocking piece of legislation.  It is unfair to the working people of this country. It clearly abuses the right, which millions of our citizens now enjoy, to join together and bargain with their employers for fair wages and fair working conditions. …”

“I fear that this type of legislation would cause the people of our country to divide into opposing groups. If conflict is created, as this bill would create it—if the seeds of discord are sown, as this bill would sow them—our unity will suffer and our strength will be impaired.”

From his veto message to Congress:

“When one penetrates the complex, interwoven provisions of this omnibus bill, and understands the real meaning of its various parts, the result is startling. … the National Labor Relations Act would be converted from an instrument with the major purpose of protecting the right of workers to organize and bargain collectively into a maze of pitfalls and complex procedures. … The bill would deprive workers of vital protection which they now have under the law…. This bill is perhaps the most serious economic and social legislation of the past decade. Its effects–for good or ill–would be felt for decades to come.”

Fast-forward through those decades, and read the testimony of former National Relations Labor Board Hearing Officer Nancy Schiffer:

“At some point in my career… I could no longer tell workers that the [National Labor Relations] Act protects their right to form a union. … Over the years, the law has been perverted.  It now acts as a sword which is used by employers to frustrate employee freedom of choice and deny them their right to collective bargaining. When workers want to form a union to bargain with their employer, the NLRB election process, which was originally established as their means to this end, now provides a virtually insurmountable series of practical, procedural, and legal obstacles.”

Read this report by researchers at the University of Illinois-Chicago:

“Each year in the United States, more than 23,000 workers are fired or penalized for union activity. Aided by a weak labor law system that fails to protect workers’ rights, employers manipulate the current process of establishing union representation in a manner that undemocratically gives them the power to significantly influence the outcome of union representation elections. … Union membership in the United States is not declining because workers no longer want or need unions. Instead, falling union density is directly related to employers’ near universal and systematic use of legal and illegal tactics to stymie workers’ union organizing.”

Read the report by Cornell University Professor Kate Bronfenbrenner:

“Our findings suggest that the aspirations for representation are being thwarted by a coercive and punitive climate for organizing that goes unrestrained due to a fundamentally flawed regulatory regime … many of the employer tactics that create a punitive and coercive atmosphere are, in fact, legal. Unless serious labor law reform with real penalties is enacted, only a fraction of the workers who seek representation under the National Labor Relations Act will be successful. If recent trends continue, then there will no longer be a functioning legal mechanism to effectively protect the right of private-sector workers to organize and collectively bargain.”

Now, go back and consider President Truman’s most serious prediction from 65 years ago: that the Taft-Hartley Act “would cause the people of our country to divide into opposing groups. If conflict is created, as this bill would create it—if the seeds of discord are sown, as this bill would sow them—our unity will suffer and our strength will be impaired.”

President John F. Kennedy 

Think about this past election.  Isn’t our country divided enough?  Isn’t it time to reverse the process started by the Taft-Hartley Act?

It’s been nine years since Sen. Kennedy first filed the Employee Free Choice Act.

A year from now, we will mark a half-century since President John F. Kennedy died.

 

Isn’t it time to yank the roots of discord, start ending the conflict, and heal the division that was created by the Taft-Hartley Act?

 

 

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