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Canadian Mounties to the Rescue of American Workers

Friday, September 8th, 2017

The Canadian Royal Mounties have offered to ride to the rescue of beleaguered American workers.

It doesn’t sound right. Americans perceive themselves to be the heroes. They are, after all, the country whose intervention won World War II, the country whose symbol, the Statue of Liberty, lifts her lamp to light the way, as the poem at the statue’s base says, for the yearning masses and wretched refuse, for the homeless and tempest-tossed.

America loves the underdog and champions the little guy. The United States is doing that, for example, by demanding in the negotiations to rewrite the North American Free Trade Agreement (NAFTA) that Mexico raise its miserable work standards and wages. Now, though, here comes Canada, the third party in the NAFTA triad, insisting that the United States fortify its workers’ collective bargaining rights. That’s the Mounties to the rescue of downtrodden U.S. workers.

This NAFTA demand from the Great White North arrives amid relentless attacks on labor rights in the United States, declining union membership and stagnant wages. To prevent Mexico’s poverty wages from sucking U.S. factories south of the border, the United States is insisting that Mexico eliminate company-controlled fake labor unions. Similarly, to prevent the United States and Mexico from luring Canadian companies away, Canada is stipulating that the United States eliminate laws that empower corporations and weaken workers.

The most infamous of these laws is referred to, bogusly, as right-to-work. Really, it’s right-to-bankrupt labor unions and right-to-cut workers’ pay. These laws forbid corporations and labor unions from negotiating collective bargaining agreements that require payments in lieu of dues from workers who choose not to join the union. These payments, which are typically less than full dues, cover the costs that unions incur to bargain contracts and pursue worker grievances.

Lawmakers that pass right-to-bankrupt legislation know that federal law requires labor unions to represent everyone in their unit at a workplace, even if those employees don’t join the union and don’t make any payments. These dues-shirkers still get the higher wages and better benefits guaranteed in the labor contract. And they still get the labor union to advocate for them, even hire lawyers for them, if they want to file grievances against the company.

The allure of getting something for nothing, a sham created by right-wing politicians who prostrate themselves to corporations, ultimately can bankrupt unions forced to serve freeloaders. Which is exactly what the right-wingers and corporations want. It’s much easier for corporations to ignore the feeble pleas of individual workers for better pay and safer working conditions than to negotiate with unions that wield the power of concerted action.

Canada is particularly sensitive about America’s right-to-bankrupt laws because they’ve now crept up to the border. Among the handful of states that in recent years joined the right-to-bankrupt gang are Wisconsin and Michigan, both at the doorstep of a highly industrial region in Ontario, Canada.

So now, the governors of Wisconsin and Michigan can whisper in the ears of CEOs, “Come south, and we’ll help you break the unions. Instead of paying union wages, you can take all that money as profit and get yourself even fatter pay packages and bonuses!”

Then those governors will make American workers pay for the move with shocking tax breaks for corporations, like the $3 billion Wisconsin Gov. Scott Walker promised electronics manufacturer Foxconn to locate a factory there. That’s $1 million in tax money for each of the 3,000 jobs that Foxconn said would be the minimum it would create with the $10 billion project.

Right-wing lawmakers like Walker and U.S. CEOs have been union busting for decades. And it’s been successful.  In the heyday of unions in the 1950s and 1960s, nearly 30 percent of all U.S. workers belonged. Wage rates rose as productivity did. And they climbed consistently. Then, one wage-earner could support a middle-class family.

That’s not true anymore. For decades now, as union membership waned, wages stagnated for the middle class and poor, and compensation for CEOs skyrocketed. And this occurred even while productivity rose. By January of 2016, the most recent date for which the statistics are available, union membership had declined to 10.7 percent. The number of workers in unions dropped by nearly a quarter million from the previous year.

This is despite the fact that union workers earn more and are more likely to have pensions and employer-paid health insurance. The median weekly earnings for non-union workers in 2016 was $802. For union members, it was $1,004.

It’s not that labor unions don’t work. It’s that right-wing U.S. politicians are working against them. They pass legislation and regulations that make it hard for unions to represent workers.

It’s very different for unions in Canada. For example, union membership in Canada is growing, not dwindling like in the United States. In Canada, 31.8 percent of workers were represented by union in 2015, up 0.3 percentage points from 2014. That is higher than the all-time peak in the United States.

And it’s because Canadian legislation encourages unionization to counterbalance powerful corporations. In some Canadian provinces, for example, corporations are prohibited from hiring replacements when workers strike; striking workers are permitted to picket the companies that sell to and buy from their employer; labor agreements must contain “successorship” rights requiring a corporation that buys the employer to recognize the union and abide by its labor agreement; and employers must submit to binding arbitration if they fail to come to a first labor agreement with a newly formed union within a specific amount of time.

The second round of negotiations to rewrite NAFTA ended in Mexico this week. The third is scheduled for later this month in Canada. That’s a good opportunity for the northernmost member of the NAFTA triad to showcase its labor laws and explain why they are crucial to defending worker rights and raising wages.

Getting language protecting workers’ union rights into NAFTA is not enough, however. The trade deal must also contain penalties for countries that fail to meet the standards. This could be, for example, border adjustment taxes on exports from recalcitrant countries.

Canada’s nearly 20,000 Royal Canadian Mounted Police only recently filed papers to unionize. That occurred after the Canadian Supreme Court overturned a 1960s era federal law that barred them from organizing.

Canada’s Supreme Court said the law violated the Mounties’ freedom of association, a right guaranteed to Americans in the U.S. Constitution. Now, Canada is riding to the rescue of U.S. and Mexican workers’ freedom of association by demanding the new NAFTA include specific protections for collective bargaining.

This blog was originally published at OurFuture.org on September 8, 2017. Reprinted with permission. 

About the Author: Leo Gerard, International President of the United Steelworkers (USW), took office in 2001 after the retirement of former president George Becker.

Wisconsin’s Foxconn Deal Enriches Billionaires With Taxpayer Cash

Tuesday, August 29th, 2017

Taiwanese billionaire Terry Gou every once in a while likes to think “outside the box.” Back in 2010, for instance, the giant electronics manufacturer that Gou runs — Foxconn — was facing what corporate flacks like to call a major “PR problem.” Working conditions inside Foxconn’s massive Chinese factories had become so incredibly stressful that workers were committing suicide in shockingly large numbers. They were leaping out factory windows to their deaths.

And what did Gou’s Foxconn do to try to calm the worldwide outrage? The conventional corporate move would have been to dial back the pressure on workers. Foxconn’s move under Gou? The company stretched safety nets in those places where workers would be most likely to leap.

Keeping the pressure on workers — no matter the consequences — has helped Foxconn’s Gou accumulate a personal fortune somewhere north of $6 billion. But Gou has also perfected another sure-fire strategy for piling up the big bucks. He gets taxpayers to give him money. Lots of it.

Gou has cut a wide assortment of subsidy deals over the years, with politicians from Indonesia to Pennsylvania. The deals all follow the same pattern. Foxconn promises to build “job-creating” factories. The political jurisdictions involved hand Foxconn lucrative “incentives” to do the building.

State lawmakers in Wisconsin have now just taken the first step toward approving Foxconn’s biggest subsidy deal yet. The state Assembly has given the green lightto what appears to be the biggest subsidy ever handed out to a foreign firm by a U.S. political entity.

Wisconsin taxpayers will, if this deal gains expected state Senate approval, hand Foxconn $1.35 billion for building a factory complex that will employ 3,000 workers. The total package of “incentives” for Foxconn could hit $3 billion — with $2.85 billion of that in taxpayer cash and another $150 million in various tax breaks — if Foxconn’s operation in Wisconsin ends up employing 13,000 workers.

How much per job would Wisconsin be shelling out? One likely scenario: about $500,000 per job. The worst-case scenario: as much as $1 million per job. And neither number here takes into account the Foxconn deal’s eventual environmental cost. Foxconn will be receiving, besides the taxpayer cash, an exemptionfrom regulations that protect Wisconsin’s wetlands.

So Foxconn gets mountains of cash and a free pass to pollute. What do the people of Wisconsin get? One of the largest “economic development” projects the United States has ever seen, Wisconsin governor Scott Walker crowed last month at a White House ceremony announcing the deal with Foxconn’s Terry Gou and President Donald Trump.

Foxconn’s Jobs

This “once-in-a-lifetime opportunity,” adds an aide to Walker, will bring thousands of “family-supporting jobs.” The new positions, business boosters for the Foxconn deal trumpet, will pay an average $53,000 per year.

But that $53,000 figure only applies to the first 3,000 jobs Foxconn is promising to create and averageshighly paid managerial positions in with job slots for assembly-line workers. Actual workers at the new Foxconn complex will likely take home much less than $53,000.

How much less? Community groups skeptical about Foxconn want any deal with the company to include a wage floor. They’re seeking stipulations that guarantee workers at least $15 an hour. The Republican statehouse majority in Wisconsin has so far quashed every attempt to set a decent wage minimum.

You can’t support much of a family, critics of the Foxconn deal are contending, on less than $15 an hour. And you can’t spur economic development that creates good jobs, add watchdogs opposed to the Foxconn deal, by handing corporations giant giveaways.

Throwing money at businesses, as former Kansas City mayor Mark Funkhouser notes, has been a “bad idea” ever since cities started “offering bonuses and pecuniary inducements to manufacturers” in the late 19th century.

These inducements have ratcheted up considerably over recent years, even before taking the new Foxconn deal into account. Between 1990 and 2015, a new Upjohn Institute study shows, average “incentive” packages for businesses tripled in value.

The results of this vast upsurge in subsidies?  The U.S. political jurisdictions that did all this subsidizing, the Upjohn researchers found, would have experienced the same economic results without the incentives, observes former mayor Funkhouser, “94 percent of the time.”

What Does Create Good Jobs?

What does spur the economic development that creates good jobs? The city of Richmond in Virginia is moving in one hopeful direction. Richmond has begun an Office of Community Wealth Building that aims to enrich local residents instead of billionaire CEOs. The city is focusing on everything from improving regional transportation systems to fostering locally based social enterprises. The Democracy Collaborative, a national organization, has fashioned a network of localities involved in similar “community wealth building” all across the United States.

These operations could certainly use some encouragement from the federal level. But President Trump has proposed a budget, notes Greg LeRoy of Good Jobs First, that eliminates “successful federal programs that benefit small- and medium-sized manufacturers.” The contradictions between Trump’s budget cuts for these programs and his White House cheerleading for the enormous Foxconn subsidy deal, adds LeRoy, “boggle the mind.”

Foxconn’s Terry Gou would likely see none of these contradictions. That the few should benefit at the expense of the many makes perfect sense to him, as the billionaire makes plain in one of the Gou quotation posters Foxconn has plastered on the walls of its Chinese factories.

“Growth,” proclaims this particular Gou quotation poster, “thy name is suffering.”

This blog was originally published at OurFuture.org on August 28, 2017. Reprinted with permission.

About the Author: A veteran labor journalist, Sam Pizzigati has written widely on economic inequality, in articles, books, and online, for both popular and scholarly readers.

Notoriously Abusive Chinese Company Foxconn Looking To Open Plants In The U.S.

Friday, November 9th, 2012

During the last stages of the campaign, Mitt Romney falsely tried to claim that American manufacturers like Chrysler were moving production to China. As it turns out, at least one company is planning the opposite move: Foxconn Electronics, the notoriously exploitative Apple Inc. manufacturer, is reportedly testing the waters to open new plants in US cities. Foxconn attracted scrutiny earlier this year when its abusive labor practices in Chinese and Taiwanese factories were exposed in a series of New York Times articles.

According to Chinese newspaper DigiTimes, Foxconn is conducting evaluations in Detroit, Los Angeles, and other cities to possibly open plants focused on LCD television production. The company is also discussing a partnership with Massachusetts Institute of Technology that would bring American engineers to China and Taiwan to learn Chinese and study product design processes.

Foxconn became a household name in the US after a mostly exaggerated and false This American Life segment detailed its mistreatment of workers. Despite the mythology presented in the episode, certain core facts were verified. Foxconn workers live in overcrowded company dorms, working shifts of 12 or more hours, and risk serious injury in appallingly dangerous working conditions. As many as 137 employees fell ill after being forced to clean iPads with toxic chemicals, and 17 Foxconn workers committed suicide in the past five years. The company has also been accused of forcing student interns to assemble iPhones.

Under pressure, Foxconn raised wages for employees and reduced hours, but its still far from meeting basic labor standards. After the company admitted it was struggling to meet demand for the iPhone 5, rumors of a strike over “overly strict demands” emerged.

While the company’s US factories would need to comply with American labor regulations, Foxconn continues to ignore Apple’s health and safety standards abroad with little consequence.

This article was originally posted on Think Progress on November 8, 2012. Reprinted with permission. 

About the Author: Aviva Shen is a Reporter/Blogger for ThinkProgress. Before joining CAP, Aviva interned and wrote for Smithsonian Magazine, Salon, and New York Magazine. She also worked for the Slate Political Gabfest, a weekly politics podcast from Slate Magazine. Previously, she was part of the new media team in Ohio for the 2008 Obama campaign. Aviva received a B.A. from Barnard College.

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