Today’s post discusses the way that neoliberal policies embraced by the Democratic Party resulted in job loss in key states. Bear with me: there are facts and figures here that make the case. Tomorrow, I will continue to discuss these issues in the context of “domestic” job displacement. The third post will discuss a progressive human rights strategy on these issues, including recognition of important work already being done.
Donald Trump won Michigan, Indiana, Ohio, and Pennsylvania. Perhaps more accurately, the Clintons lost those states. This “loss” really began no later than the 1990s, as President Bill Clinton inherited and advanced a neoliberal agenda that cost hundreds of thousands of American jobs.
Our friend Susan George pithily commented: “You impose neoliberalism on people for 40 years and eventually you get Trump.” That sounds about right. (See David Harvey, A Brief History of Neoliberalism, Oxford, 2005; a good interview with Prof. Harvey is at mrzine.monthlyreview.org/2006/lilley190606.html.) In a future post I will tell the story of John Mage, Dave Scribner, and I working with the rank-and-file steel workers who saw their jobs and working conditions under threat in the 1970s.
But today, let me explore Susan George’s thought. I want to focus on NAFTA, the North American Free Trade Agreement, which fosters free movement of capital, people, and goods throughout Canada, Mexico, and the United States. NAFTA has encouraged United States companies to outsource manufacturing wage work projects to Mexico.
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Nearly 700,000 U.S. jobs have been lost due to NAFTA. A great proportion of those jobs are in the key Northern states where Hillary Clinton was defeated. Workers there heard Donald Trump’s promises and believed him. The New York Times carried a story about workers at the air conditioner plant in Indiana that Carrier Corporation is moving to Mexico. At least 1,400 workers in Indiana will lose their jobs. Donald Trump focused a lot of energy and words on the Carrier plant move, and many Carrier workers supported him based on that. The rather extravagant promises that Trump made will be difficult to keep, but many workers voted for them.
To understand the power of the rhetoric about “job loss,” let’s take a look at the dramatic changes in the global work force. The discussion below is largely drawn from John Bellamy Foster, Robert W. McChesney, and R. Jamil Jonna’s “The Global Reserve Army of Labor and the New Imperialism” (Monthly Review, November 2011). As of 2011, there were about 1.4 billion employed wage workers in the world. However, there were a further 2.4 billion people classified as “marginally employed.” That is, these were potential wage workers, available to be employed if jobs were being offered. They are subsisting outside the “official unemployment rolls.” Many of these were people who until fairly recently were not wage workers — for example, members of the rural peasantry. When we see these figures, we should think back to the dramatic events of the 1700s and 1800s, when millions of rural dwellers were kicked off, displaced from or enticed away to the cities to form the urban work force.
To that 2.4 billion, we might also add workers on the unemployment rolls and other people who would enter the work force if conditions permitted. Let’s focus on the 2.4 billion. They are predominantly in developing or less developed countries: what we might call the Third World. They are in China, Vietnam, Bangladesh, Mexico, Indonesia, and so on. If you need to round out the list, go through your closet and look at the “made in . . .” labels. Or look at the labels on a host of other products in your home.
Thus, there is a huge pool of workers who can be recruited to make useful products, who need work, and therefore can be expected to accept low pay and bad working conditions in order to get work. Moreover, these workers live in countries where wages, working conditions, workplace safety are minimally enforced, if at all. In these same countries, the right to organize trade unions may be seriously curtailed. It is therefore not surprising that from 1980 to 2008 the proportions of industrial employment from developed to developing countries showed a marked shift.
In 1980, about 50% of industrial employment was in the developed countries, By 2008, it was about 30%. You can do a little arithmetic and see how many jobs are represented in those numbers. I am at my desk with an iPhone close by. Apple’s profit margin on my phone is 64%. The Chinese workers who made most of its parts earn $1.38 per hour and toil under difficult working conditions. Dell Computers acquires 4,500 parts from 300 suppliers around the world. The car in your garage has parts from at least a few Third World countries. Yet if Apple paid a living wage to the workers who make our iPhones, its profits would not evaporate. One good estimate is that they would simply decline from 64% to about 50%.
Now back to NAFTA, and to the workers who lost their jobs and who decided to flip the middle finger to the Clintons. A disclaimer: there is nothing wrong with free trade. The free movement of people and goods should be a part of any intelligent international policy. But “free trade” has been a slogan applied to the machinations of industrial capital to drive down wages and erode working conditions. NAFTA represents a neoliberal perversion of free trade. Capital and industrial production move freely. Standards for wages and working conditions do not move freely.
NAFTA has a toothless “side agreement” on labor rights. Here is an excerpt from an official U.S. government report on that agreement:
The North American Free Trade Agreement (NAFTA), between the United States, Mexico, and Canada was the first trade agreement ever linked to worker rights provisions in a major way. Its companion “side agreement,” the North American Agreement on Labor Cooperation (NAALC, which rhymes with “talc”) went into effect with NAFTA on January 1, 1994. The NAALC agreement is “broad” in that NAFTA signatories agree to enforce their own labor laws and standards while promoting 11 worker rights principles over the long run. However, under NAALC, sanctions as an enforcement tool are applicable to only three of the 11 labor principles (pertaining to minimum wages, child labor, and occupational safety and health), and are not applicable to three basic rights: the right to organize, bargain collectively, and strike.
The full text of that report is at <fpc.state.gov/documents/organization/6211.pdf>.
Got it? If a Mexican government, in pursuit of its own objectives, has its “own labor laws and standards,” and those provide much less protection than U.S. laws, NAFTA poses no impediment. Then there are the 11 aspirational “principles,” vaguely stated and in any case mostly not to be enforced.
As you can see, the non-enforcement relates to the most precious and historically effective weapons of workers — the rights to organize, bargain, and strike. It is fair to say that the most dramatic chapters of working-class history are those in which workers sought recognition of their right to collective action. The right to strike was not recognized in American law until the Norris-LaGuardia Act of 1932. Recognition in France had come with the Loi Olivier in 1864. Prior to that legislation, worker collective action was not only discouraged but in many cases was prosecuted as a crime.
Thus, NAFTA trivialized the most important worker rights and provided no protection for exercise of those rights — including in Mexico, where social movements most evidently needed protection from their public and private sector opponents.
NAFTA is not only a single episode; it represents a paradigm of the transnational assault on worker rights. The Clinton mantra was free trade and an open world. The goal and purpose was otherwise. We should not have been surprised. In 1962, I was in London covering the debate on whether the UK would join what was then “the Common Market.” Labour Party leader Hugh Gaitskell spoke eloquently against entry. (Some of my 1962 reporting on these events can be obtained from pacificaradioarchives.org, by searching “Tigar” and then finding the “Labor and the Common Market” recording and the program “Which Way for British Labor?”)
The argument of economist Joan Robinson and of such Labour Left stalwarts as Konni Zilliacus was that the Common Market (later to become the EU) included a plan to increase the army of available labor from low-wage areas and thereby to exert downward pressure on wages and working conditions. This strategy was enhanced by allowing Member States to bring along “Overseas Associated Territories” to continue the flow of cheap raw materials.
In practice, the EU has indeed restricted Member States social welfare and worker rights autonomy.
However, the theme remains the same. Don’t mourn — organize! As I mentioned, I will work on some more the bad news in the next post and then move on to some forward-looking ideas.
Michael E. Tigar is Emeritus Professor of Law at Duke University and Emeritus Professor of Law at Washington College of Law. He has been a lawyer working on social change issues for many years. His books include Law and the Rise of Capitalism (Monthly Review Press, second edition, 2000), Fighting Injustice (ABA Press, 2002), and Thinking About Terrorism: The Threat to Civil Liberties in Times of National Emergency (ABA Press, 2007).