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November 2003 • Vol 3, No. 10 •

AFL-CIO Says, ‘Jobs First!’

By Charles Walker

AFL-CIO chief John J. Sweeney has a great idea. He recently said, “Trade, tax, and health care policies need to put jobs first.” That’s an idea that most workers, a majority of the population, are likely to agree with. And come to think of it, it would make a catchy slogan. “Jobs First!” Implicitly means jobs before profits. It’s not a new idea, but still it’s an important idea that Sweeney advocated in an opinion piece for USA Today (Oct. 1). “Until we achieve this goal, workers here and abroad will continue to fall behind,” he concluded.

Sweeney laid most of the blame for workers’ misery on multinational corporations that “write our trade rules,” which “just [aren’t] working for American workers.” In the U.S., he said, “poverty is up, incomes are down, and we are loosing more jobs than at any time since the Great Depression, especially in the manufacturing sector.” Nor are the trade rules “working for developing countries, which are seeing poverty and inequality grow even as trade and investment increase.”

Sweeney cited a recent poll that indicated “that a majority of Americans do not support unregulated free trade; 54 percent say the United States needs to focus on keeping American jobs for American workers, while only 35 percent say companies must operate in worldwide markets … U.S. policy needs to address growing public concerns, not ignore them.”

It’s clear that Sweeney would like higher tariffs to keep cheaper imports from competing with U.S. products. He urged President Bush to “keep his 2002 steel safeguards [tariffs] in place so the domestic industry can continue to recover and adjust.” But Sweeney is seeking more than higher tariffs. He says the Democratic Party’s presidential contenders have committed themselves to reforming the terms of trade to workers’ advantage. “The Democratic presidential candidates,” Sweeney claims, “have all vowed to reshape globalization so that it really works for working people…”

The New York Times (Sept. 30) seems to agree that the Democratic candidates are speaking in favor of changes in trade policies, but said they were “pandering” to the electorate. “Most of the candidates,” said the Times editorial, “are selling decidedly protectionist messages, as if seeking to become the Ross Perot of the 2004 race, not the Bill Clinton.” Parenthetically, the Times indicates it is not happy with the steel tariffs, nor the U.S. agricultural subsidies that allow U.S. agribusiness to “hurt the poor around the world.”

The free trade versus domestic protectionism argument is probably about as old as international trade itself. Typically, industries that depend on a domestic market, favor keeping foreign competitors out, while the others look to foreign markets for sales and profits. The first group is called protectionist and favors taxes (tariffs) and other barriers forcing higher prices on imported goods sold to U.S. consumers. The second group favors low or no tariffs, so that it can gain a “level footing” with its competitors in foreign markets.

History has shown that protectionist and free trade advocates are not necessarily wedded to their respective positions. Let protectionists see an advantage in a foreign market, they soon change their tune. And it’s the same with free traders; when a successful foreign rival penetrates their home market they become protectionist. It was only a few decades after the end of WWII that the steel and auto industries sought tariff protection. Until then, those corporations were in the free trade camp. Although arguments for and against differing basic trade policies are often as arcane as academics can make them, boiled down they are nothing more than rationalizations for naked commercial self-interest.

Virtually all trade policies, free trade and protectionist, are based on capitalist trade. Workers have their own interests that are not served by either free trade or protectionism. Autoworkers, for example, understand that their job security is threatened not only by imports, but also by home-grown rivals, as the demise of Studebaker, Nash, Packard, Kaiser and others bear out.

While the AFL-CIO officialdom can’t ignore the obvious economic pain its members endure from capitalist trade, at the same time it ignores the fact that it is capitalist trade itself and not merely “unregulated trade” that harms its members; as well as all workers, including those in the developing countries. The AFL-CIO’s misleading campaign for “Fair Trade,” is nothing more than protectionism—thinly disguised.

Moreover, its demands for a level playing field and for worker and environmental protections in trade agreements cannot be fully met, without the crippling of trade between the nations of the industrialized north and the deliberately underdeveloped nations of the southern hemisphere. That’s because worker health and safety and environmental protections would raise production costs, making the final cost of their goods less attractive to consumers and consequently to investors. (The crippling of world trade was a major hallmark of the Great Depression, 1929-1939.)

In the U.S. free trade and protectionism are two different responses by corporations to competition in the mostly, but not only, international competition. Since the early 1970s competition has grown increasingly fiercer and economists noted signs of a slowdown, a stagnation in the world’s economy. Since then U.S. workers, unionized or not, have experienced a significant drop in living standards and erosion of real wages, as corporations successfully shifted the brunt of the burden of competition to their workforces. While there were expansions following recessions, the expansions did not reverse the effects of the increasing worldwide stagnation.

There’s no mystery as to why the postwar expansion slowed down. The expansion was largely based on the growth of capital investments and cheap natural resources based on cheap colonial labor. That growth continued until previous capital investments had grown to the point where further capital investments meant more productive capacity than the world’s markets could absorb. A case in point is the recent announcements that U.S. automakers plan to shut down more plants, eliminating more of the mostly higher paid manufacturing jobs.

Competition is inherent in capitalism, and so is the stagnation that stems from excess productive capacity, itself a result of competition. The daily problem for U.S. workers today is how to overcome the effects of economic stagnation on their jobs, their living standards and the security of their families. Lining up behind one section or another of corporate America in hopes that so-called free trade or protectionism will reverse the decline is futile at best, and a delusion, at worst. Yet that’s exactly the course that Sweeney and the AFL-CIO’s officialdom are advocating, when they urge workers to line up behind Democratic Party candidates and their corporate backers, in the expectation that a Democrat, once in the Oval Office, will reshape trade so that “it really works for working people.”

The AFL-CIO’s trade policies fly in the face of the determination of corporate America to survive the competitive morass and the worldwide stagnation that is the inevitable result of capitalist competition. Therefore, the labor federation’s political policies can’t possibly lift the weight of the worldwide stagnation from workers’ lives. On the other hand, organized workers determined to put jobs first, and produce for human use, not profit, can win the security so essential to a civilized life.





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