Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘Trade’

Trade Deals Like TPP Encourage 'Business Decisions' Like This Heartbreaking One from Indianapolis

Friday, February 12th, 2016
Kenneth Quinnell

In this video, workers at the Carrier plant in Indianapolis react to the company announcing that it will ship 1,400 local jobs to Mexico in what they described as “strictly a business decision.” You can hear the heartbreak and outrage in the voices of the workers who must now scramble to figure out how to take care of their families. Carrier makes heating, air conditioning, ventilation and other systems. The layoffs are scheduled to begin in 2017.

Aside from corporate greed, the main reason that Carrier can get away with something like this is the major flaws that have been built into international trade deals like North American Free Trade Agreement and the Trans-Pacific Partnership. These kinds of deals make sure that these types of tragic moments happen more frequently.

First off, these deals provide companies that want to offshore to trading partners with extraordinary powers and legal rights they do not have under U.S. law–powers and rights that shift the balance of power further away from working people. Second, these deals put U.S. manufacturers in closer competition with foreign companies that pay low wages and don’t respect labor rights. This encourages U.S. companies to offshore in order to keep up with those foreign companies.

The third reason these deals encourage outsourcing is that they fail to level the playing field in terms of taxes. Such a deal could set a minimum level for corporate tax rates or create rules to prevent companies from gaming the tax system and pitting countries against each other. With those options left off the table, a race to the bottom is encouraged, where companies shift jobs to countries with lower tax rates, which, in turn, encourages higher-tax rate countries to lower taxes and the ripple effect those lower rates have on the economy and the government’s goods and services. A trade deal meant to create U.S. jobs would address this.

And lastly, of course, these trade deals eliminate tariffs in the trade zone, further encouraging companies to shift jobs to trade partners because corporations know they can ship goods back into the United States without paying tariffs, thus using the tariff cuts to increase U.S. imports instead of increasing U.S. exports.

This blog originally appeared in aflcio.org on February 11, 2016. Reprinted with permission.

Kenneth Quinnell is a long time blogger, campaign staffer, and political activist.  Prior to joining AFL-CIO in 2012, he worked as a labor reporter for the blog Crooks and Liars.  He was the past Communications Director for Darcy Burner and New Media Director for Kendrick Meek.  He has over ten years as a college instructor teaching political science and American history.

State of the Union: Don’t Let the TPP Sink Our Wages

Tuesday, January 12th, 2016

CD speaking at UCSD FairTrade RallyThe president will give his final State of the Union address tonight. Traditionally, this annual speech reviews the accomplishments of years past and sets out a “to-do” list for the year ahead. Although the White House has indicated that this year’s speech will be “nontraditional,” it has made clear the economy will be a major focus.

I hope the president will talk about the importance of the proposed overtime rule, which could raise wages for some 15 million of America’s working people. I also hope he talks about how the auto manufacturing industry has soared back to life since the so-called bailout, which saved 1.5 million jobs in its first year alone.

While the economy isn’t perfect, and most of us are still feeling the pinch of student loans, too-smallpaychecks, threats to retirement security and not enough voice in our workplaces, there are a lot of successes the president can look back on with pride in his speech.

On the other hand, there is also a new trade and economic deal on the horizon—the Trans-Pacific Partnership—that could poke a hole in the progress our economy has made since the president came in to office in 2009.

The thing that’s dangerous about the TPP, and the reason we should worry about it shrinking our paychecks, is not the idea of trade. Trade is good—but we shouldn’t confuse “trade” with so-called “trade agreements,” which set down rules not just for “trade,” but for food safety, Wall Street regulations, prescription medicines and investor rights. These are the kind of rules that should be made in public, in democratic fashion, not in a secretly negotiated agreement that can’t be amended. The TPP’s corporate giveaways are dangerous.

Existing trade rules (including those in the North American Free Trade Agreement and the U.S.–Korea trade deal) already cost the average U.S. worker $1,800 a year, according to the Economic Policy Institute, and preliminary studies on the TPP by Center for Economic and Policy Research and Tufts indicate that we can expect that figure to get worse.

Working people are deeply disappointed that the opportunities to put workers’ interests first and eliminate corporate entitlements in the TPP were largely ignored.  And more importantly, working people are disappointed because we know that all of these things mean fewer good jobs in our communities and fewer opportunities for our children.

The TPP is the latest example of the failed U.S. approach to trade that started with NAFTA, which drives down wages and creates special rights for corporations.  The TPP could have been different, but instead it is a collection of minor tweaks designed to get congressional votes rather than ensure workers’ wages rise.

The AFL-CIO wants trade agreements that grow our economy, create good jobs in America and give working people in all countries the chance to succeed when they work hard. Instead, passage of the TPP will mean lost jobs and lower wages.

Compared to eight years ago, the U.S. economy is afloat and heading toward improvement. The TPP will undermine that progress and give us rocky sailing ahead. There is simply no good argument for trading away our right to control our economy in exchange for more corporate power.

I hope the TPP doesn’t come up at all in the State of the Union speech. We’d be better off without it. But if it does—let’s be clear about what it really means for America’s working families.

Let’s raise our voices against this corporate giveaway and make it clear the TPP must go down to defeat!

This blog appeared on aflico.org on January 12, 2016.  Reprinted with permission.

Celeste Drake is a Trade & Globalization Policy Specialist at AFL-CIO.  Her experience with the labor movement was as a UFCW member while bagging groceries during college.  She also served as the Legislative Director for Representative Linda Sanches (D-CA).

Top 10 Unknown Things About TPP

Thursday, October 15th, 2015

Kenneth QuinnellWorking people are paying very close attention to the debate and negotiations surrounding the Trans-Pacific Partnership (TPP), the massive trade deal that proponents are saying is the “most progressive trade agreement ever.” Unfortunately, at this point, too many details of the agreement aren’t public. Trade can obviously be a good thing for the country, but only if it is done the right way. And with TPP, what we know at this point is enormously problematic. Here are the 10 biggest unknowns about the TPP:

1. How will the TPP raise American wages? While there certainly are some U.S. companies that will benefit from the TPP, how will the TPP restore the connection between increased productivity and increased wages? By encouraging and rewarding more outsourcing of jobs, it is likely to put downward pressure on U.S. wages, as prior free trade agreements (FTAs) have done.

2. How will the TPP ensure labor obligations actually are enforced? Will it require an administration to self-initiate a case when another party’s labor rights violations are well known? Will countries like Vietnam and Malaysia be in compliance with the labor standards on day one? Existing trade deals allow too much discretion to delay labor rights complaints or ignore them altogether. From what is publicly known about the TPP, these and other critical labor issues remain inadequately addressed.

3. How will the TPP fix our trade balance or create jobs when it contains no mechanism to control currency manipulation? Addressing currency manipulation is probably the single most effective way the United States can create jobs, as it allows U.S. products to compete on fair terms in the global marketplace. The promised TPP tariff benefits could be undermined overnight if trading partners devalue their currency. Despite urging from Congress, all reports indicate no effective currency disciplines are included in the TPP.

4. What mechanism will ensure a level playing field between foreign investors and America’s small businesses and their workers? Foreign investors will have access to a private justice system—investor-state dispute settlement (ISDS)—that allows them to bypass American courts and hold for ransom laws and regulations they think will interfere with their profits. This right creates an enormous influence that local businesses and workers simply won’t have.

5. Will the TPP ensure all parties adopt climate measures at least as strong as those the United States implements—or allow for offsetting fees at the border? If it fails to do this, then the TPP will exacerbate incentives to move production outside the United States to escape carbon reduction efforts.

6. How will the TPP adequately protect local and national control over public services? If important public services, including schools, libraries, the Post Office and water systems aren’t completely carved out of the TPP’s obligations, American taxpayers may be stuck having to pay a ransom to wrest back democratic control over expensive, low-quality, private contractors.

7. Will the TPP adequately protect against unfair competition by state-owned and state-subsidized companies? Such companies often operate at a loss simply to drive U.S. competitors out of business. They also may buy U.S. companies in order to take technology to their home country, leaving U.S. workers holding the bag. It’s not clear how small U.S. businesses will be able to use the TPP to fight back.

8. Will the TPP ensure the United States “writes the rules” of trade? For example, the reported weak rule of origin for automobiles ensures that China and other non-TPP countries will be able to benefit from the TPP without ever joining. That means China still can write its own rules. Americans need to know “who” is the “we” writing the rules, because it doesn’t appear to be working people.

9. How will the TPP “help Americans buy American”? The TPP will require many government purchasing decisions to treat bidders from the 11 TPP countries with exactly the same preferences as U.S. bidders. Won’t this actually reduce the likelihood that Americans can use their own tax money to create jobs here in the United States?

10. Will the TPP make medicines more expensive? Will the drug pricing provisions give foreign pharmaceutical companies more leverage to force Medicare to cover their products and pay higher prices for them?

This blog originally appeared in AFL-CIO on October 14, 2015. Reprinted with permission.

About the Author: Kenneth Quinnell is a long-time blogger, campaign staffer and political activist.  Before joining the AFL-CIO in 2012, he worked as labor reporter for the blog Crooks and Liars.  Previous experience includes Communications Director for the Darcy Burner for Congress Campaign and New Media Director for the Kendrick Meek for Senate Campaign, founding and serving as the primary author for the influential state blog Florida Progressive Coalition and more than 10 years as a college instructor teaching political science and American History.  His writings have also appeared on Daily Kos, Alternet, the Guardian Online, Media Matters for America, Think Progress, Campaign for America’s Future and elsewhere.

TPP Deal Rushed Through; Working Families Respond

Monday, October 5th, 2015

Kenneth QuinnellIn Atlanta this weekend, negotiators rushed through a deal for the Trans-Pacific Partnership (TPP) and working families were quick to respond, asking why the deal has to be rushed when there are many unanswered questions, and demanding that the details of the agreement be released as soon as possible so the people most affected by the deal—working people—know what to expect. Here are the responses from the AFL-CIO and other working family organizations.

Richard Trumka, AFL-CIO president:

We are disappointed that our negotiators rushed to conclude the TPP in Atlanta, given all the concerns that have been raised by American stakeholders and members of Congress. The Administration had a hard time reaching this deal for good reasons: it appears that many problematic concessions were made in order to finalize the deal. We ask the Administration to release the text immediately, and urge legislators to exercise great caution in evaluating the TPP. As we’ve said, rushing through a bad deal will not bring economic stability to working families, nor will it bring confidence that our priorities count as much as those of global corporations. We will evaluate the details carefully and work to defeat this corporate trade deal if it does not measure up.

Chris Shelton, president of the Communications Workers of America (CWA):

Negotiators from the 12 Trans-Pacific Partnership trade deal countries, meeting in Atlanta, have announced an agreement. Despite all the hype, and given what we’ve learned over the past many months and years of negotiations, it’s clear that this TPP remains a bad deal for working families and communities. The corporate lobbyists who make up the majority of U.S. trade advisers have been pushing hard for an agreement, mainly because they’ve known all along that what’s in the TPP represents a sweet deal for multinational corporations and the 1 percent.  For the rest of us—U.S. working families and communities, and workers in the other TPP countries—this agreement is bad news.

Despite broad promises from the Obama administration and U.S. Trade Representative Michael Froman that the deal would deliver for middle-class families, working people know that TPP would be a disaster. It would continue the offshoring of jobs and weakening of our communities that started under the North American Free Trade Agreement and hasn’t stopped. It would mean labor and environmental standards that look good on paper but fall flat when it comes to enforcement. It’s a corporate dream but a nightmare for those of us on Main Street.

We’re still very concerned about the Investor State Dispute Settlement (ISDS) process. The window dressing changes adopted in Atlanta don’t change the fact that corporations still have an extra-judicial process—ISDS 0151to enforce their rights. That’s not the case for labor and environmental standards. And we’re concerned that the protections given to pharmaceutical companies will mean that life-saving drugs won’t be affordable for millions. Before the TPP is put to a full vote in Congress, there must be adequate time for full review and discussion. Even on the quickest timetable, a vote that can’t happen until early 2016. Few members of Congress will want to vote in an election year on the mass giveaway of U.S. jobs that this TPP allows. CWA and our allies will be certain to hold accountable those members of Congress who support this giveaway to the 1 percent.

Marc Perrone, president of the United Food and Commercial Workers (UFCW):

The only good thing about a TPP agreement being reached is that the American people will finally be able to read every line of this deal. Given what we already know from leaked drafts, we should prepare for the worst, and expect even worse than that. This deal will most likely fail to address currency manipulation, offer big pharmaceutical corporations unacceptable protections that will limit access to life-saving medicine and threaten every hardworking American family with job losses and lower wages. How could this be good for America? Contrary to the rosy rhetoric and false promises, a long history of trade agreements proves that the TPP will have a devastating impact upon our families, our jobs and this nation. In the coming months, hardworking men and women who are a part of the UFCW family will be pushing every member of Congress—Republican and Democrat—to see the harmful effects of this deal through the eyes of everyday American families. Make no mistake, this fight is not over.

R. Thomas Buffenbarger, president of the Machinists (IAM):

As a labor union whose members build products that are exported all over the world, the IAM has always taken a strong interest in the development and growth of international trade. We know firsthand that trade done right will improve living standards and strengthen our economy to the benefit of all Americans. Unfortunately, the recently concluded Trans-Pacific Partnership (TPP) represents a new low in corporate dominance of our nation’s trade agenda. Despite the rhetoric, this deal represents a step backward in efforts to achieve effective labor standards and human rights. Negotiated in secret by and for multinational corporations that have no allegiance to any flag or country, the TPP will facilitate the export of American jobs to countries like Vietnam, Malaysia, Brunei and Mexico, which lack fundamental labor rights, some of which even engage in slave labor. Reports of a secret side agreement with Vietnam are especially offensive to anyone who takes internationally recognized labor standards seriously.

Earlier this year, Congress passed Fast Track legislation that laid out an ambitious set of negotiating goals that we, and others, warned were completely unenforceable. Reports indicate that we were correct in our assumption about the congressional negotiating goals; the U.S. Trade Representative simply ignored them. Although the agreement has not been made public yet, these reports indicate that, substandard labor standards remain weak and ineffective, currency manipulation has not been effectively addressed, rules of origin for autos are greatly weakened, access to affordable medicines is reduced, post Great Recession financial regulations were made less effective and secret non-governmental tribunals will interpret and enforce the agreement. As job and income growth continue to stagnate, Americans know that the economic system is rigged against them and the TPP is just the latest example. Congress must put the American people first and reject this deeply flawed trade agreement.

National Nurses United:

National Nurses United today urged Congress members to reject the Trans-Pacific Partnership final agreement, warning there remains inadequate guarantees to assure patients and consumers will not be harmed by pharmaceutical price gouging.

NNU, the nation’s largest organization of nurses, says it also opposes any trade agreement that permits transnational corporations to use extra-legal proceedings to overturn public laws and regulations, the Investor State Dispute Settlement corporate tribunals seen in prior trade deals.

The nurses said they are in full agreement with Sen. Bernie Sanders who said today, that “Wall Street and other big corporations have won again. It is time for the rest of us to stop letting multinational corporations rig the system to pad their profits at our expense.”

While full details of the final pact remain murky, “there is simply no basis for any concessions that give the pharmaceutical corporations a green light to continue pricing patients in the U.S. or other countries out of affordable medications,” said NNU Co-President Jean Ross, RN.

Recent outrage over the decision of one pharmaceutical CEO, Martin Shrkeli to jack up prices by 5,000 percent on Duraprim, an anti-infection drug critical for people with weakened immune systems, “symbolizes why we need to close down on the handouts to big pharma, not give them greater monopoly control over high prices,” Ross noted.

With profits for the five largest pharmaceutical corporations topping $56 billion last year alone, and increased reporting on how much of the “innovation” drug companies claim they need is actually financed with taxpayer subsidies, “no one should be assisting the price gouging that puts patients’ lives at risk,” Ross said.

Ross cited concerns voiced by economist Joseph Stiglitz and Adam Hirsh who warned last week about the U.S. insistence on TPP language that permits the drug companies to maintain “their monopolies on patented medicines, keep cheaper generics off the market, and block ‘biosimilar’ competitors from introducing new medicines.”

The nurses “will also protest any agreement that allows any corporation to sue a government for ‘lost’ profits due to laws or regulations that establish public protections,” Ross added. News reports today said that the final TPP agreement had excluded tobacco companies from ISDS, which have committed some of the most notorious abuses under the corporate tribunals. “Why just tobacco when you have had many other corporate giants exploiting the same disgraceful extra-legal proceedings, Ross said. “No corporation should ever have the right to override laws that protect public safety.”

Professional and Technical Engineers:

Negotiators from the United States, Canada and 10 other countries reached an agreement in principle on the Trans-Pacific Partnership (TPP), the ‘free trade agreement’ that has essentially been negotiated in secret over the last several years.

 Representing workers across North America, IFPTE has and will continue to oppose TPP, which has been dubbed “NAFTA on steroids.” Unless major changes were included by negotiators, the pact’s contents are designed to primarily benefit multinational corporations at the expense of workers, domestic manufacturers, and IFPTE members’ local and national economies and communities. The TPP is likely to further exacerbate the loss of well-paying jobs in both the Canadian and US manufacturing sectors, grant foreign corporations rights to contest local and national laws and regulations, and undermine financial regulations. TPP further perpetuates the global race to the bottom as TPP nations such as Malaysia, Vietnam, and Brunei have shown little to no commitment to international standards of human and workers’ rights. The trade agreements that TPP is modeled after have repeatedly failed to enforce language on labor and environmental standards.

IFPTE and its members will continue to urge legislators in Congress and Parliament to oppose ratification of TPP when it comes before their respective chambers.

Leo W. Gerard, president of the United Steelworkers (USW):

Since negotiations on the Trans Pacific Partnership (TPP) started, the cleared advisers of the USW have devoted substantial resources and time to working with the trade negotiators responsible for developing and advancing U.S. interests in the trade talks.  Because the USW is the largest industrial union in North America, we see the real-life effects of trade policy every day. That is why we are paying close attention to the provisions that have the potential to harm the majority of our membership.

From what we know, the draft TPP threatens the future of production and employment. It compromises the so-called 21st century standards that were supposed to form the foundation for this agreement. It will deal a critical blow to workers and their standard of living in the United States. Although the final text has not been made available and will contain some new bells and whistles; from what we have seen and know, at its core the hastily concluded TPP deal will simply continue today’s outdated, disastrous approach to trade. This TPP deal shouldn’t even be submitted to Congress and, if it is, it should be quickly rejected.

You only have to look at the consistently dismal job numbers in manufacturing to understand what every manufacturing worker already knows. We have been on the losing end of trade deals. Once again, it appears that misguided foreign policy and global corporate interests have trumped sound economics and the opportunity to get things right. Our negotiators are trying to beat the clock to close a deal so they can rush it through Congress before next year’s elections.

TPP is sold as a way for the United States to write the rules of trade before China does. In many areas, the agreement fails this objective and the language on rules of origin will put a smile on the faces of China’s leaders. China didn’t get to write the rules in their favor because our American negotiators did it for them. The rule of origin on autos governs how much of a vehicle’s content must be produced by the twelve TPP countries to get the preferential treatment the TPP will provide. In this quickly concluded deal on rules of origin, Chinese-produced auto parts could account for more than a majority of a car’s parts and still get sweetheart treatment. While China is not as yet a party to the twelve-nation TPP, the TPP is designed so that other countries can join.

In many other areas critical to workers, U.S. negotiators refused to take the advice that was provided to them time and time again by the representatives of working people. But while supporters tout the deal, those promises will fall on deaf ears. Workers across this country have had to fight to get our trade rules enforced in the face of inadequate enforcement and constant cheating by our trading partners.

Even the best rules, which were not included in TPP, if unenforced, are essentially worthless. How trade rules are implemented, how we monitor imports, obtain market access for our exports and how we enforce our rules are all critical to any deal’s success. So far, there has been no progress or willingness of the Administration to even discuss specific steps that could be taken. TPP may be the final blow to manufacturing in America. Our producers and workers are under siege from other nations’ massive overproduction, foreign currency devaluation, our own lack of long-term infrastructure investment and the strong dollar.

Therefore, trade policy is not the only issue that determines what the economic prospects will be for working people. But, trade is the critical link to the world economy and global pressures are being felt in virtually every occupation and in every workplace.

Unions weren’t the only ones to express concern about TPP, Ford Motor Co. said the following via press release:

As a top U.S. exporter, Ford supports free trade agreements that result in real market openings and a level playing field for all to compete. Within the U.S. Congress, there is bipartisan consensus that currency manipulation needs to be meaningfully addressed. This summer, U.S. lawmakers took unprecedented action to set a clear negotiating objective for addressing currency manipulation in all future trade deals. The TPP fails to meet that test. To ensure the future competitiveness of American manufacturing, we recommend Congress not approve TPP in its current form, and ask the Administration to renegotiate TPP and incorporate strong and enforceable currency rules. This step is critical to achieving free trade in the 21st century.

This blog originally appeared in AFL-CIO on October 5, 2015. Reprinted with permission.

About the Author: Kenneth Quinnell is a long-time blogger, campaign staffer and political activist.  Before joining the AFL-CIO in 2012, he worked as labor reporter for the blog Crooks and Liars.  Previous experience includes Communications Director for the Darcy Burner for Congress Campaign and New Media Director for the Kendrick Meek for Senate Campaign, founding and serving as the primary author for the influential state blog Florida Progressive Coalition and more than 10 years as a college instructor teaching political science and American History.  His writings have also appeared on Daily Kos, Alternet, the Guardian Online, Media Matters for America, Think Progress, Campaign for America’s Future and elsewhere.

Labor Lost the Fight Over Fast Track. But the Fact That Unions Oppose the TPP at All Is a Big Deal.

Tuesday, July 7th, 2015

leon finkOrganized labor’s recent “victory” over President Obama’s Trans-Pacific Partnership free trade initiative, was short-lived, as “fast track” was passed by Congress shortly after it had been denied him earlier in the month. But labor’s strong opposition to the deal is worth examining a bit more closely, as the fight was more than an uncommon rift between the administration and one of the Democratic Party’s steadiest and most powerful constituency groups. Labor’s opposition to the TPP is a dramatic sign of the transformation of popular opinion on a vintage issue of American public policy since World War II.

That the TPP could so easily be linked by its critics to the job-killing, wage-reducing interests of the “one percent” reflects deep and changing understandings of how the global economy works (or rather all too often doesn’t) for ordinary Americans. On this issue, the AFL-CIO, rather than reflecting narrow, let alone petulant comeuppance, is speaking with the wizened voice of collective experience after two terms of relative presidential neglect.

No one was a bigger champion of free trade at the end of World War II than the AFL-CIO, along with New Deal Democrats to whom the labor federation attached its deepest political loyalties. From a critique of controlled trade and top-down economic manipulation most notoriously associated with Japanese zaibatsu and German cartels like the I.G. Farben chemical empire, American liberals stressed the importance of both the free flow of commerce and workers’ freedom to organize. Only unencumbered access to markets and raw materials, such a view suggested, could assure the continuing growth of the American as well as worldwide industrial order.

In fulsome support of the Marshall Plan and surrounding international capitalistic institutions like Bretton Woods, the World Bank, the International Monetary Fund and the General Agreement on Trade and Tariffs, the labor movement—having expelled its own Communist-linked affiliates by 1948—was often more anti-communist than the State Department itself during the Cold War years. In an era when strong unions claimed up to 80 percent of workforce representation in basic industries, it was not surprising that labor leaders would identify their own members’ welfare with that of the free-enterprise economy in which they were employed.  Indeed, Philip Kaiser, assistant secretary of labor for international affairs under President Truman, later recalled the suspicion that the American labor liberals originally faced in Europe among those who could not “[see] the difference between American competitive capitalism and their own national monopoly capitalism built on old feudal structures.”

More than mere freedom from government or employer control, open markets were linked to a period of economic growth and rising incomes that publicist Henry Luce anticipated as “the American Century” and that, in retrospect, also heralded a relatively egalitarian social structure. Thus for good reason—with the exception of garment and textile unions who first felt the sting of a new order of international wage competition—U.S. unions long endorsed “free-trade” unionism. Not until the NAFTA debates of 1993-1994, when the threat to American-sited factories from what maverick presidential candidate Ross Perot had popularized as the “giant sucking sound” of jobs leaving the U.S. and going to Mexico, did the labor federation first seriously reverse course, albeit ( in a standoff with another Democratic President, this time Bill Clinton) in a losing cause.

But changing attitudes came too late to effectively redirect social policy.  In an increasingly competitive world market, the link between corporate profit margins and worker welfare had become increasingly frayed. In the name of “social partnership” or “social dialogue,” America’s Cold War allies generally found ways to shield themselves from the worst of free-market competition and/or to blunt its impact for their own labor forces.

The European Common Market, for example, with stringent initial protections for European farmers and auto makers, was, according to historian Judith Stein, “really a customs union that violated [the core principles of] the GATT.” In addition, by various forms of “industrial policy,” or strategic subsidy of selected economic sectors and worker training, Japan and West Germany leaped ahead of the U.S. in key sectors of economic development, while even smaller states like Israel and Singapore blossomed thanks to outright state investment in the private sector or openly protectionist trade policy.

American workers realized little or none of such benefits, even when their preferred representatives presided over Congress and the White House. The unions watched, meanwhile, while their memberships dropped precipitously, from a high of 35 percent of the workforce in the mid-1950s to a paltry 11 percent today (including a mere 7 percent in the private sector). With the strike weapon now often a nearly suicidal non-option, American workers have watched their living standards decline, even as in the legislative realm, trade union rights, especially in the public sector, have become ever more restricted.

In an ever-more-expansive world economy, some Americans have prospered as never before, but the middle (where collective-bargaining contracts once reigned) has all but been wrung out of an hourglass economy. But for a few impotent side agreements to major free-trade treaties, workers have simply not been cut into the ‘deal’ of free trade.

All this is why American unions saying “Enough!” in the face of President Obama’s fast-track authority and attempt to pass the TPP and coming T-TIPP is such an important shift for American unions. The interesting question is not why they adopted the position they did, but what took them so long?

This blog was originally posted on In These Times on July 6, 2015. Reprinted with permission.

About the Author: The author’s name is Leon Fink. Leon Fink is Distinguished Professor of History at the University of Illinois at Chicago and editor of the journal Labor: Studies in Working-Class History of the Americas.

Senate Votes To Fast-Track Jobs Out, More Corporate Power In

Wednesday, June 24th, 2015

Isaiah J. PooleA majority in the Senate today took sides against working families and with Wall Street and the multinationals, voting 60-37 to grant the executive branch fast-track trade promotion authority for the Trans-Pacific Partnership and future trade deals.

“This is a day of celebration in the corporate suites to be sure,” said Sen. Sherrod Brown (D-Ohio) on the floor immediately after the vote, “because they have another corporate-sponsored trade agreement that will mean more money in some investors’ pockets, that will mean more plant closings in Ohio and Arizona and Delaware and Rhode Island and West Virginia and Maine and all over this country.”

Sen. Bernie Sanders (I-Vt.) responded by noting that the fast-track legislation “was supported by virtually every major corporation in the country” while it was opposed by “every union in this country working for the best interests of working families, by almost every environmental group and many religious groups.

“In my view, this trade agreement will continue the policies of NAFTA, CAFTA (the North American and Central American free trade agreements), permanent normal trade relations with China, agreements that have cost us millions of decent-paying jobs,” Sanders said.

The fast-track legislation, which was narrowly passed by the House last week and now goes to President Obama’s desk for his signature, was passed with the support of these Senate Democrats: Michael Bennet (D-Colo), Maria Cantwell (D-Wash.), Thomas R. Carper (D-Del.), Chris Coons (D-Del.), Dianne Feinstein (D-Calif.), Heidi Heitkamp (D-N.D.), Tim Kaine (D-Va.), Claire McCaskill (D-Mo.), Patty Murray (D-Wash.), Bill Nelson (D-Fla.), Jeanne Shaheen (D-N.H.), Mark Warner (D-Va.) and Ron Wyden (D-Ore.).

One of the Democrats who voted against fast-track gave an impassioned explanation of his vote afterward.

“I’ve said this –if I can’t explain it back home, I can’t vote for it,” said Sen. Joe Manchin (D-W.Va.) “This is one, Mr. President, I could not explain back home. I could not make the people feel comfortable this was going to improve the quality of life and opportunities for them and their families.”

Manchin explained that the Trans-Pacific Partnership would lower trade barriers with countries such as Vietnam, where workers make as little as 50 cents an hour and “are not going to be as tough as we are in human rights [and] on environmental quality.”

In this debate, there were Orwellian big lies on both sides of the aisle.

Wyden argued that the trade deal represented a different frame from the NAFTA deal of the 1990s. That is in no sense true: the template that makes worker needs subordinate to interests of corporate and financial interests is essentially the same, the process of having corporate lobbyists dominate the negotiations is the same, and the people serving as trade representative come from and represent the same set of interests (corporate lawyer Mickey Kantor was the trade representative who negotiated NAFTA; former Citigroup executive Michael Froman is the trade representative leading the TPP talks).

Sen. Orrin Hatch (R-Utah) and other Republicans argued that the fast-track deal gives the United States a voice in international trade. How can that be, when in fact fast-track authorizes a process that gives away congressional power? Fast track explicitly says that Congress can only vote up or down, with no amendments and limited debate, on a trade agreement negotiated by the executive branch. The reality is that the process assures passage of a trade deal that is still being negotiated in secret and which virtually no lawmakers have seen.

Democratic votes in favor of fast track were secured with a promise of a vote later this week on trade adjustment assistance, a palliative at best. While that will help some workers who will lose their jobs one the Trans-Pacific Partnership goes into force, it will not help workers who lose wages and bargaining power when corporations threaten to move overseas, and it doesn’t help the workers hit by the ripple effects of plant closings and outsourcing. Even the workers who do get the aid more often than not don’t get back the wages and job security they lost in the first place because of unfair trade.

Robert Borosage, codirector of the Campaign for America’s Future, said that today’s vote “is a vote to continue the ruinous trade policies of the last decades that have racked up 11 trillion in trade deficits, shuttered tens of thousands of factories, and had direct and dramatic effect on undermining the middle class, and lowering wages and security for working people. Those who voted for it voted for more of the same. And they did so to serve the interests of special interests, not the common good; of contributors, not voters.”

Our allies at National People’s Action released a statement after the vote that perhaps captures best how to respond to this vote. “Coming out of this vote,” said executive director George Goehl, “we double our resolve to build an independent political movement to replace Wall Street Democrats” – and we would add corporate and anti-worker Republicans – “with politicians who put everyday people before corporate profits.”

This blog was originally posted on Our Future on June 23, 2015. Reprinted with permission.

About the Author: The author’s name is Isaiah J. Poole. Isaiah J. Poole has been the editor of OurFuture.org since 2007. Previously he worked for 25 years in mainstream media, most recently at Congressional Quarterly, where he covered congressional leadership and tracked major bills through Congress. Most of his journalism experience has been in Washington as both a reporter and an editor on topics ranging from presidential politics to pop culture. His work has put him at the front lines of ideological battles between progressives and conservatives. He also served as a founding member of the Washington Association of Black Journalists and the National Lesbian and Gay Journalists Association.

Politicians Keep Promising Free Trade Agreements Can Protect Workers. We Should Stop Believing Them.

Thursday, June 4th, 2015

Leo GerardIt’s all the rage now for Republican presidential candidates to spurn the Royal Romney approach and, instead, to fawn over workers.

When former U.S. Sen. Rick Santorum announced his presidential bid last week, he did it from a factory floor and called for increasing the minimum wage. Former New York Gov. George Pataki, who also launched his candidacy last week, named as his political inspiration Teddy Roosevelt, a corporate trust-buster and working class hero. U.S. Sen. Rand Paul, who entered the race in April, said that to win elections, “You’ve got to get the people who work for the people who own businesses.”

That is true—if the businesses are in America. There’s not much point in American candidates soliciting votes from workers at factories that U.S. corporations closed here and moved overseas with the help of free trade agreements (FTAs). Decade after decade of free trade, presidents promised workers that the deals set the highest standards for labor. And decade after decade, the federal government failed at enforcement, placing Americans in competition with child laborers, underpaid and overburdened foreign workers and victims of human trafficking.

On trade, Sen. Paul got it right for working people. He opposed Fast Tracking approval of the 12-country Trans-Pacific Partnership (TPP) through Congress. He was on the losing side of that vote, though. So the Fast Track plan for Congress to relinquish its responsibility to review and amend trade agreements awaits action this week in the U.S. House of Representatives. House Republicans who believe in supporting American workers, not just pandering to them, should join Sen. Paul in voting no on Fast Track.

From Bill Clinton to Barack Obama, Republican and Democratic presidents have pledged to workers that some new free trade scheme would protect Americans from unfair and immoral foreign competition.

Clinton claimed the North American Free Trade Agreement (NAFTA) was the first deal ever containing teeth to enforce labor standards. George W. Bush’s U.S. Trade Representative (USTR) contended the Central American Free Trade Agreement (CAFTA) had the strongest labor provisions ever negotiated. Obama administration officials assured Americans that the Peru, Colombia and Panama agreements, and now the TPP, have the greatest worker protections of all time.

They all swore the standards would be strictly enforced. But none of it was true. The deals did not protect American workers. And they didn’t protect foreign workers either.

Now American workers overwhelmingly oppose the free trade brand of globalization. They’ve seen its terrible results for them. They’ve suffered as corporations closed American factories, destroyed American jobs and communities, and shipped that work overseas.

Americans have found themselves competing with children coerced to work in foreign factories, trafficked and forced labor, and foreign workers so mistreated that they jump to their deaths from factory buildings. American consumers find themselves buying products made in unsafe buildings that collapse or burn, killing thousands of foreign workers.

The USTR, who is supposed to enforce the labor provisions of trade agreements, along with the U.S. Department of Labor (DOL) and Department of State, has failed. That’s according to two reviews by the U.S. Government Accountability Office (GAO). After a damning GAO report in 2009, the USTR promised action. A second GAO analysis in 2014 reported little change.

Here’s the bottom line from that report: “Since 2009, USTR and DOL, with State’s assistance, have taken steps intended to strengthen monitoring and enforcement of FTA partners’ compliance with FTA labor provisions, but their monitoring and enforcement remains limited.”

In other words, no matter what those agreements say about labor, it’s not being enforced.

For example, five years after Guatemala entered CAFTA, the International Trade Union Confederation (ITUC) named Guatemala the most dangerous country in the world for trade unionists. That’s because of the large number of union activists murdered, tortured, kidnapped and threatened there.

This was a startling development because Colombia had a lock on the inglorious title of most dangerous for years. Colombia dropped from first place even while murders of trade unionists continued there.

Since Colombia finalized a free trade agreement with the U.S. in 2011, two dozen Colombians trying to improve the lives and wages of workers through collective bargaining have been murdered every year. And these murders are committed with impunity. There are virtually never arrests or convictions for killing trade unionists in Colombia. Colombia’s trade deal with the U.S. and its “enforcement” by the USTR, DOL and the State Department have done nothing to change that.

And as in Guatemala, trade union activists in Colombia continue to be threatened, tortured and kidnapped. The free trade agreement is no shield for them. For example, a paramilitary group threatened the daughters of Martha Cecilia Suarez, the president of the Santander public servants association.

In 2013, the paramilitary group Comando Urbano de los Rastrojos sent her two dolls marked with her daughters’ names. They were covered in red paint, one missing a leg, the other an arm.

The 14 free trade agreements that the United States has signed with 20 countries contain provisions allowing groups or individuals to file complaints about such violations of the labor standards. The 2014 evaluation by the GAO suggests that only a tiny number of complaints have been filed because the Labor Department has failed to inform stakeholders of this process and few within the foreign countries know about it.

The GAO also found that the Labor Department has failed to meet its own deadlines for investigating and resolving the complaints it has accepted. Serious allegations, including human trafficking and child labor, remain unsettled for years.

In addition to the critical 2014 GAO report, U.S. Sen. Elizabeth Warren detailed the failure of the United States to implement FTA labor provisions in a report issued by her office late last month titled Broken Promises. It says, “the United States repeatedly fails to enforce or adopts unenforceable labor standards in free trade agreements.”

Admittedly, this is a titanic challenge. What the United States is trying to do is tell other countries, often ones far less wealthy, how their businesses should treat workers. The United States hardly would take kindly to Guatemala telling it that the U.S. minimum wage is so low that it amounts to forced labor.

But president after president has promised American workers that the United States will compel foreign nations to meet high labor standards established in FTAs.

They haven’t accomplished that. They probably can’t. They should stop saying it. And American workers and politicians should stop buying it. The United States can sign trade agreements with countries after they stop murdering trade unionists and countenancing child labor. Entering agreements with countries that permit these grotesque practices demeans American workers and consumers.

This blog was originally posted on In These Times on June 2, 2015. Reprinted with permission.

About the Author: The author’s name is Leo Gerard. Leo W. Gerard is the president of the United Steelworkers International union, part of the AFL-CIO. Gerard, the second Canadian to lead the union, started working at Inco’s nickel smelter in Sudbury, Ontario at age 18. For more information about Gerard, visit usw.org.

How Our Trade Policies Kill Jobs

Monday, March 9th, 2015

Dave JohnsonTrade is great. We all trade. A lot of us trade labor for money that buys other things. A farmer trades corn for money that buys other things, and so on. No one is “against trade.”

But is anything called “trade” always good for all involved? Imagine you’re a farmer and you make a deal to trade corn and wheat to get money for a new tractor. So the farmer orders a new tractor, but the “trade partner” never buys any corn or wheat. After a while the “trade partner” shows up with a big bill, saying the farmer owes money for the tractor. And then the farmer finds out that the “trade partner” plans to use the proceeds from the sale of the tractor to grow their own corn.

In modern terms, we would say that the farmer was “running a trade deficit.” How much damage do you think that “trade deficit” is doing to that farmer, and the farmer’s ability to make a living in the future? How long do you think that farmer would let that “trade agreement” continue?

Ongoing U.S. Trade Deficits

The U.S. is currently running a net trade deficit of over $500 billion dollars each year with our “trade partners.” We have been running trade deficit every year since the late 1970s. We buy from them, but they don’t reciprocate and buy from us, so the trade is out of balance – way out of balance.

These other countries use the proceeds from our purchases to set up their own industries so they don’t have to buy from us in the future. We let this happen so as our industries move away we will have no choice but to import. In many cases our own so-called “American” corporations are voluntarily “deindustrializing” and sending the factories and equipment to “trading partners” elsewhere.

The Damage

When a country runs a trade deficit it means that the “demand” for goods and services created by that country’s economy is being exported, and people are being hired in other countries instead of that country. It means that the growth of that country’s economy and number of jobs available is lower than it would be. Last week’s Wall Street Journal report, “U.S. Trade Gap Narrows in January,” for example, called our trade deficit “a drag on overall growth.” They quantified how much, reporting that, “Net exports—the difference between exports and imports—subtracted 1.15 percentage point from fourth-quarter gross domestic product.”

In “Stop Currency Manipulation and Create Millions of Jobs,” Robert Scott at the Economic Policy Institute (EPI) writes, “Rising trade deficits are to blame for most of the 5.7 million U.S. manufacturing jobs (nearly a third of manufacturing employment) lost since April 1998.”

John Olen writes at Economy in Crisis in, “Lack of Jobs is Due to Our Trade Deficit“:

Trade policy that encourages businesses to relocate production of goods to other nations without penalizing them for selling those goods back to this nation has resulted in millions of lost jobs. White House estimates show that for every $1 billion in goods exported, the economy creates 5,000 jobs. Unfortunately, that street goes both ways — data from the Economic Policy Institute shows that for every $1 billion in goods imported, the economy loses 9,000 jobs.

In “The Trade Deficit: The Biggest Obstacle to Full Employment,” Dean Baker explains that fixing “…the persistent trade deficit, through which the United States exports labor demand, would help a great deal in moving the job market toward full employment.” (Full employment results in wage growth as employers bid for employees.)

This massive loss of jobs, of course, has an effect on wages. This chart, from the post, “Does Trade Deficit Drive Inequality?” shows the correlation between the trade deficit and the way people’s wages stopped rising along with productivity in the late 1970s – the same time as the trade deficits started putting downward pressure on wages. In other words, regular, working people stopped sharing the benefits of improvements in our economy.

 

future_chart

The ongoing trade deficit has hamstrung our economic recovery and continues to threaten to derail it. The Washington Post’s Wonkblog recently explained that danger, using this long headline: “The one thing that could cut the economic recovery short: If you want a picture of the recovery’s future, imagine a trade deficit stamping on the economy’s face—forever.”

… Whenever one part of the economy takes off, like consumer spending has now, another falls off, like net exports. The difference now, though, is that, for the first time, you can see the potential for the recovery to break out of this cycle, and finally take two steps forward. … But there’s only so far these things can grow—people can’t keep spending more unless they save less—which is why we can’t afford for the trade deficit to be a persistent drag on GDP.

Since The 1970s!

How long have we – the United States – been letting that continue? We have been running trade deficits every single year since the late 1970s, when the neoliberal “free market” and “free trade” ideology came to dominate our thinking. This didn’t just happen. It had the help of billions of corporate and billionaire dollars invested in conservative “think tanks” and other PR and marketing efforts to convince the public that privatization and “trickle down” and tax cuts and letting corporations handle things instead of We-the-People government was the best way to do things.

Since the late 1970s American corporations have been closing factories here and replacing with them factories elsewhere. We have been moving entire industries out of the country, and not bothering to compete for new, strategic industries of the future.

Why Does This Continue? Protecting Investments Over People.

Why would a country run trade deficits year after year? Because the trade deficit benefits a few people. In ““Free Trade” Was Never Really About Trade” Stan Sorscher explains, (emphasis added, for emphasis)

Our free trade policy encourages production to leave the country. We’ve lost millions of manufacturing jobs. More than 60,000 manufacturing plants were closed between 2000 and 2010 as production moved overseas. These costs are real.

[…] Free trade agreements are bad for millions of people because they are not really about trade. More importantly, they limit the political process so investors are relieved of responsibility for protecting the environment OR recognizing labor rights or human rights, OR dealing with public health OR worrying about prudent financial regulation.

Sorscher says here that protecting investments over people results in “downward pressure” on everyone except the investors. It means lower environmental protection costs for corporations. It means lower costs for protecting health and safety and rights. It means higher unemployment, which means downward pressure on wages. Lower wages and other such costs are great if you are an employer, but of course are bad for the rest of us.

Mike Collins writes at Forbes, in “America’s Trade Deficit – The Job Killer“:

Trade deficits must be financed. A country simply cannot have a trade deficit unless private or government investors are willing to finance it. This is not simply an accounting convention – it is real debt.

[…] But why isn’t the government, Wall Street, multinational corporations, and many pundits and bloggers worried about the growing trade deficit? Why is the trade deficit largely ignored while everyone is more concerned about the federal deficit? Wall Street, the Multi-national corporations and the Obama Administration have adopted a policy of appeasement where foreign mercantilism seems to be irrelevant and attempts at balancing trade are ignored. It is as if the trade deficit is an open-ended charge account that is simply an accounting summary that will never have to be paid back.

He is not quite saying that Wall Street and our government are financing our trade deficit in order to keep jobs scarce and therefore wages low – just that this is the net result of policies, decisions.

If People Understood The Trade Deficit

This continues because we – the United States as a country – do not have national industrial/economic policies that recognize the U.S. as a country with national economic interests. Instead, our leadership and opinion elite have been convinced by the ongoing conservative campaign that government should not “interfere” and that acting as a country to protect our national economic interests – known as “protectionism” – is bad. Meanwhile other countries are doing exactly that, and their economies and industries benefit from it.

This ongoing trade deficit has transferred trillions of dollars out of our economy. It has cost us millions of jobs, tens of thousands of factories and entire industries. As it continues it is costing us our ability to make a living as a country – except for our financial sector.

This has made a very few people unimaginably wealthy, but it has made the rest of us, and the country, poorer.

If people understood the trade deficit and the harm it does to approximately 99.9 percent of us, they would demand that our politicians do something to fix it. And if that happened, great things would happen for working people and our economy.

This blog originally appeared in Ourfuture.org on March 9, 2015. Reprinted with permission.

About the Author: Dave Johnson has more than 20 years of technology industry experience. His earlier career included technical positions, including video game design at Atari and Imagic. He was a pioneer in design and development of productivity and educational applications of personal computers. More recently he helped co-found a company developing desktop systems to validate carbon trading in the US.

TPP: Four Potential Partners Don’t Comply with International Labor Rights

Monday, February 23rd, 2015

charlie fanningA new AFL-CIO report released today finds that four nations that would be major players under the Trans-Pacific Partnership (TPP) are out of compliance with international labor standards and, therefore, with the commitments they would undertake under the TPP. The report—The Trans-Pacific Partnership: Four Countries That Don’t Comply with U.S. Trade Laws—finds that workers in Mexico, Malaysia, Vietnam and Brunei face ongoing and systematic abuse and violations of workers’ rights with the complicity or direct involvement of the governments.

The Obama administration is pressing Congress to grant it Fast Track trade authority for the TPP, the largest Free Trade Agreement (FTA) in history. Meanwhile, the AFL-CIO is pressuring lawmakers to hold potential trading partners to comply with U.S. trade laws and international labor standards.

Under Fast Track, the public, lawmakers and others would have no input in a trade deal that would grant countries with troubling human and labor rights records greater trading privileges without having to first undertake fundamental reforms.

The highest labor standards the United States has embedded in FTAs require parties at a minimum to adopt and implement laws that protect the rights enshrined in the International Labor Organization’s (ILO’s) Declaration on Fundamental Principles and Rights at Work.

The report points out that previous FTAs have forced countries to compete on the basis of lowering labor costs and attracting business by ignoring, or in some cases actively interfering with, the fundamental labor rights.

By not requiring fundamental changes of these countries first, the TPP gives away leverage that could be used to protect workers and raise standards. If workers do not have the legal freedoms to act collectively, they will not be able to exert the power needed to raise wages, increase worker protections or gain the social policies necessary for the creation of a middle class and broadly shared prosperity.

Tell Congress to stop Fast Track on the TPP because we should not turn a blind eye to countries that abuse workers.

Here are just some of the ways the four nations violate these core labor standards:

 Mexico is currently facing a human and labor rights crisis. The recent disappearance of 43 students, now declared dead, from the teachers’ college in Ayotzinapa, Guerrero, by local police and criminal gangs is a horrific example of violence, corruption and dissolution of the rule of law. Corruption, abuse and impunity are also root causes of the near absence of genuine industrial relations in Mexico, which artificially depresses wages and limits economic growth. Many workers are covered by collective agreements (“protection contracts”) they have never seen or ratified through a vote. When workers attempt to organize independent unions, employer-dominated unions respond with threats and intimidation. Further, child labor, forced labor and inhumane working conditions exist on farms that export fresh produce into the United States, which is then sold at major retailers, including Walmart and Safeway.

 Malaysia has grave problems with forced labor and human trafficking, especially in the electronics, garment and palm oil sector, which also contains child labor. Malaysia currently has the lowest possible ranking—tier 3—in the U.S. State Department’s annual Trafficking in Persons report, meaning the government “does not fully comply with the minimum standards and is not making significant efforts to do so.” Because of this pervasive exploitation, virtually everyone who regularly uses electronics in the United States has come in contact with forced labor. Some of the most recognizable electronics brands source components from Malaysia, where about 28% of electronics workers toil in conditions of forced labor.

Vietnam has an authoritarian government that tightly controls political rights, freedom of speech and other civil liberties. The government maintains a prohibition on independent human rights organizations and other civil society groups and restricts union activity outside the official unions affiliated with the Communist Party of Vietnam’s Vietnam General Confederation of Labor (VGCL), which actually controls the union registration process. Vietnam also has significant problems with forced labor and child labor in the production of bricks and garments,  Many of the clothes produced in Vietnam contain textiles from small workshops subcontracted to larger factories. These workshops frequently use child labor, including forced labor involving the trafficking of children from rural areas into cities.

Brunei is ruled by a repressive regime and offers few human rights protections. Last year, the sultan of Brunei, whose family has ruled Brunei for more than six centuries, imposed a strict penal code based on Sharia law. The Islamic criminal law includes punishments such as flogging, dismemberment and death by stoning for crimes such as adultery, alcohol consumption and homosexuality. Under emergency measures in place for 65 years, freedom of speech is severely limited and the country’s legislature has a limited role. Further, the government prohibits strikes, and the law makes no explicit provision for the right to collective bargaining.

This article originally appeared in aflcio.org on February 23, 2015. Reprinted with permission.

About the author: Charlie Fanning is the Global Advocacy and Research Coordinator at AFL CIO

Five Causes of Wage Stagnation in the United States

Tuesday, January 13th, 2015

Kenneth QuinnellA series of recent reports from the Economic Policy Institute (EPI) make clear the case for why wages have stagnated in the United States.

Before digging into the details, it’s important to note a few things. First off, wage stagnation is not a small problem, it’s something that affects 90% of all workers. As one of the authors of these reports, Lawrence Mishel, says: “Since the late 1970s, wages for the bottom 70 percent of earners have been essentially stagnant, and between 2009 and 2013, real wages fell for the entire bottom 90 percent of the wage distribution.” Second, while the Great Recession made things worse, the problem goes back 35 years. And third, and most importantly, wage stagnation is a matter of choice, not necessity.

Here are five real reasons why wages have stagnated in the United States.

1.  The abandonment of full employment: For a variety of reasons, policy makers largely have focused on keeping inflation rates low, even if that meant high unemployment. A large pool of unemployed workers means companies are under less pressure to offer good wages or benefits in order to attract workers. Since the Great Recession, austerity measures at all levels of government have made this problem worse. EPI says excessive unemployment “has been a key cause of wage inequality, since research shows that high rates of unemployment dampen wage growth more for workers at the bottom of the wage ladder than at the middle, and more at the middle than at the top.”

2. Declining union density: As extreme pro-business interests have pushed policies that lower union membership, the wages of low- and middle-wage workers have stagnated. Higher unionization leads to higher wages, and the decrease in unionization has led to the opposite effect. The decline in the density of workers covered by collective bargaining agreements not only has weakened the ability of unionized workers to fight for their own wages and benefits, but also their ability to set higher standards for nonunion workers. EPI notes: “The decline of unions can explain about a third of the entire growth of wage inequality among men and around a fifth of the growth among women from 1973 to 2007.” Read much more about the connection between the decline of collective bargaining and wage stagnation.

3. Changes in labor market policies and business practices: EPI argues: “A range of changes in what we call labor market policies and business practices have weakened wage growth in recent decades.” Among the numerous changes they describe include: the lowering of the inflation-adjusted value of the federal minimum wage, the decrease in overtime eligibility for workers, increasing wage theft (particularly affecting immigrant workers), misclassification of workers as independent contractors, and declining budgets and staff for government agencies that enforce labor standards.

4. Deregulation of the finance industry and the unleashing of CEOs: The deregulation of finance has contributed to lower wages in several ways, including the shifting of compensation toward the upper end of the spectrum, the use of the financial sector’s political power to favor low inflation over low unemployment as a policy goal, and the deregulation of international capital flows, which has kept policy makers from addressing imbalances, such as the U.S. trade deficit. EPI adds: “Falling top tax rates, preferential tax treatment of stock options and bonuses, failures in corporate governance, and the deregulation of finance all combined to increase the incentive and the ability of well-placed economic actors to claim larger incomes over the past generation.”

5. Globalization policies: Decades spent in pursuit of policies that prioritized corporate interests over worker interests led to lowering of wages for middle- and lower-income workers in the United States. EPI concludes: “International trade has been a clear factor suppressing wages in the middle of the wage structure while providing a mild boost to the top, particularly since 1995.”

This blog originally appeared on aflcio.org on January 15, 2015. Reprinted with permission.

Author’s name is Kenneth Quinnell.  He is a long-time blogger, campaign staffer and political activist.  Before joining the AFL-CIO in 2012, he worked as labor reporter for the blog Crooks and Liars.  Previous experience includes Communications Director for the Darcy Burner for Congress Campaign and New Media Director for the Kendrick Meek for Senate Campaign, founding and serving as the primary author for the influential state blog Florida Progressive Coalition and more than 10 years as a college instructor teaching political science and American History.  His writings have also appeared on Daily Kos, Alternet, the Guardian Online, Media Matters for America, Think Progress, Campaign for America’s Future and elsewhere.

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