Global Labor Strategies

Unions Need to Sever All Ties with Anti-Climate Bill Groups

Under escalating pressure from activists, Nike, the utility giant Pacific Gas & Electric Company, and others have publicly resigned from the US Chamber of Commerce over its opposition to climate protection policies. It's time for labor unions to follow suit by cutting all ties with groups opposing climate legislation like the Chamber-funded Energy Citizen's Alliance.

The AFL-CIO's newly elected president Richard Trumka recently told an audience at the "Jobs, Justice, and Climate" conference: "The AFL-CIO and all the unions in North America are strongly on board the global campaign to reduce carbon emissions and stabilize climate change. Working together with environmental organizations we hope to reverse practices that put our very survival at risk."

So why have some labor unions thrown their support behind the Energy Citizens Alliance, a nationwide front-group lobbying against climate mitigation legislation and funded by the likes of the Chamber of Commerce and American Petroleum Institute?

According to Energy Citizen's website, the group's objective is to force "Congress to reject climate change policies that could raise energy costs and eliminate American jobs." They opposed the Waxman-Markey climate bill and are now furiously lobbying against the Senate version, claiming it will have "negative effects for families, small businesses, farmers and truckers--but the fact remains that all Americans that drive or fly will feel the impact."

Besides the Chamber and API, the alliance's membership includes Laborers' Local 341, Building and Construction Trades Council of South Central Alaska, and the Pipefitters' United Association Local 375. The rest of the membership reads like a "who's who" of the most anti-union and anti-environmental lobbies in the country, including: the National Association of Manufactures, Grover Norquist's Americans for Tax Reform, and the American Conservative Union.

Even worse, at least one AFL-CIO state president has become a spokesman for the alliance. At a recent Energy Citizens rally in Alaska, organized to demand that "Senators Mark Begich and Lisa Murkowski to reject costly climate change policies", Vince Beltrami, president of the Alaska AFL-CIO, warned the crowd that one-third of Alaska's workers owe their jobs to the oil industry, and that climate legislation "will cost jobs in the long term." Energy Citizens is sponsoring 20 similar rallies around the country to aid efforts to defeat any and all climate legislation.

"Buy American?": Buyer Beware!

Economic nationalism is back and that is not a good sign for working people. “Buy American” or “Buy French” or “Buy [add your country here]” campaigns are often presented as a way to protect workers and undo the damage done to workers by 30 years of corporate-dominated globalization."  But such efforts are out of touch with today’s realities; they can backfire on the workers they claim to support and could even push the global economy deeper into the abyss.  Workers desperately need an alternative to the economic practices, frequently but misleadingly referred to as "free trade," that let corporations promote a worldwide "race to the bottom."  But economic nationalism provides only the illusion of such an alternative.

In the US, economic nationalism has recently emerged around the "Buy American" provision requiring that U.S.-made products, in particular steel, be used in projects funded by the recent $790 billion stimulus bill.  One of the most vocal corporate supporters of the legislation has been Dan DiMicco, CEO of Nukor, the largest steel producer in the US. He recently told CBS’s 60 Minutes that the goal of the stimulus package “is to stop the bleeding of jobs and to create jobs here in American, not overseas, not in China, not in Europe."

Some Americans who have seen DiMicco's TV interviews may feel reassured that an American businessman is finally willing to act in the interest of American, rather than moving American jobs abroad. What DiMicco forgot to mention is that Nukor has also been partnering with Chinese steel maker Shougang Corporation to build a new steel plant in Australia.

Corporate led globalization has produced a global economy in which goods, services, and capital are like a global ball of yarn which has become so tangled that it can only be untangled with great care. US corporations produce or buy goods in China employing Chinese workers; Chinese money finances the US debt keeping the US economy afloat; complex manufactured goods produced almost anywhere in the world are assembled from parts produced in the global supply chain; and we all now know how toxic financial instruments assembled from loans made to poor and working class Americans spread from the US to infect economies everywhere. If we start untangling the global ball of yarn without considering the consequences for people throughout the world we will accelerate and deepen the crises we find out selves in.

This is not an argument for perpetuating the kind of globalization that just means the right of corporations to roam the world doing anything they want without restraint by democratic governments and institutions.  That kind of globalization, fortunately, is currently collapsing. But it needs to be replaced, not by an economic war of all against all, but by democratic decision making that is as decentralized as it can be while still being effective.

The task for the world’s labor movements, global justice activists, progressive political forces, and NGO’s is to demand that a new order be based on mutual consultation and mutual gain and not on beggar-thy-neighbor policies. That means “re-localizing” a great deal of the global economy, but in ways that benefit, rather than harm, the interests and living standards of ordinary people and helps restore a more sustainable environment.

In this post we open a thread on ways to avoid both destructive economic nationalism and failed corporate globalization.  We start with a little known history -- the reactionary history of Buy America campaigns in the US, which are driven by the same impulses that pushed for Buy American provisions in the stimulus package.  This history, as revealed Dana Frank’s book Buy American: The Untold Story of Economic Nationalism (Beacon Press, 1999), teaches us that steel magnate Dan DiMicco represents a great American tradition: the very business leaders who have demanded that American workers Buy American have often secretly sought foreign assets and played workers around the world off against each other in a never ending race to the bottom.

The Boston Tea Party
Buy American campaigns are as American as the Boston Tea Party. On the night of December 16, 1773, between fifty and a hundred colonists, with faces blackened, climbed onboard three ships moored in Boston harbor to dump 90,000 pounds of tea into the ocean. The nation’s first Buy American protest was attended by an audience of 2,000 or 3,000, watching silently from the harbor docks.

Labor Charts a New Course on China

Trade unions and labor organizations around the world are seeking to establish a presence in China. Initially, that means beginning a dialogue with the All China Federation of Trade Unions (AFCTU)—China’s only legal union. Last year, following its split from the AFL-CIO, the US Change to Win federation, comprised of 7 US unions, broke new ground when it opened talks with the ACFTU.  And in December, the Brussels based International Trade Union Confederation (ITUC), the global union umbrella organization comprised of 309 affiliated organizations in 156 countries, voted to begin a “critical dialogue” with the ACFTU. (The AFL-CIO is the largest affiliate of the ITUC, while Change to Win  is not a member.)

This is not simply a story of bureaucratic relationships. Trade unions are an especially important non-governmental interlocutor on labor and worker rights issues in China—a country with few civil society organizations but a significant formal trade union sector. The lack of civil society organizations means that rights oriented NGO’s have many fewer dialog partners in China than do trade unions. 

Today, one in four workers in the global economy is Chinese. Many are employed by the same global corporations or their contractors that employ union members in other countries. This employment relationship potentially gives foreign unions more standing to advocate for the labor rights for co-workers employed in China by those companies and for Chinese workers generally.   

We’ve written extensively about why the new engagement is a good thing and suggested topics for discussion. Labor’s opening to China represents a significant move away from its Cold War era shunning doctrine, long considered outmoded by many labor activists. Under that doctrine, most trade unions have had little contact with the ACFTU because they do not consider it a legitimate trade union but an arm of the Party/State apparatus. Chinese law does not recognize crucial international labor rights such as the right of workers to establish independent unions, to bargain collectively, to strike, or to elect union officials of their own choosing. 

There have been some previous attempts to create a dialogue with the ACFTU, particularly in the 1980s when China adopted a market economy and opened up to foreign investment. While some individual unions and Global Labor Federations have maintained contact over the years through various joint projects, most unions severed formal relations following the suppression of the pro-democracy movement in 1989.

Meanwhile global corporations and investors flocked to China to take advantage of China’s low wage labor force and business friendly environment.  The consequences of labor’s absence from China were graphically illustrated last year during the debate over the Labor Contract Law which extended new rights to workers. Foreign corporations and their business associations in China actively lobbied the Chinese government to weaken some of the law’s key provisions. But global labor—with no organization or influence on the ground in China—could only comment from afar. Many realized that this asymmetry needed to be addressed.

When Global Labor and China's Union Talk

(Note: half of GLS's staff is travelling in China, the other half is busy on different assignments, so we will be posting only sporadically until early May.)

In our recently released report, Why China Matters: Labor Rights in the Era of Globalization and in a subsequent post, Labor’s Opening to China, we discuss new and on-going efforts by global labor organizations to open a dialogue with the All China Federation of Trade Unions, China’s only legal union. We argue in some detail that the talks are long overdue but that they pose problems for both sides.

Western unions want a presence on the ground in China where so many of the companies that employ their members have set up shop.  But they worry about giving their stamp of approval to a state/party affiliated union that may sign sweetheart agreements with global corporations. And indeed, at the local level, the ACFTU, by all accounts, often functions as a management dominated company union in the workplaces where it is present. 

The ACFTU wants global recognition and support in a world increasingly skeptical of Chinese institutions but they must also worry that Western unions often talk cooperation abroad and practice protectionism at home.  China bashing is still a standard part of the repertory of many unions despite the fact that it is US based and other foreign corporations—not the Chinese government—that drive much of China’s export oriented economy.

Both sets of concerns are legitimate.

It is a given that unions, like other organizations, have institutional, industrial , and national interests that they seek to promote and these interests shape their actions abroad to a significant extent.  But unions are also learning an important lesson of modern diplomacy:  it is essential to talk even with those with whom you may not agree.  Engagement need not be a sign of approval, but rather a search for common interests. It is in this spirit that non-Chinese labor organizations and the ACFTU should conduct their dialogues.

New GLS Report - Why China Matters: Labor Rights in the Age of Globalization

Nearly three years ago GLS undertook an informal listening project to hear what was on the minds of labor leaders, labor rights advocates, and NGO staff from around the world as they grappled with the challenges of globalization.

It is clear that globalization has produced a host of challenges for worker and social movements. But when we asked those we interviewed what specific issues they faced were most perplexing, at or near the top of nearly everyone’s list was what to do about China.

No wonder. China has become a focal point for much of the questioning and insecurity that globalization has produced. For the past two decades China has experienced explosive economic growth that has attracted jobs and capital from around the world. Today 25% of the global workforce is Chinese. No other industrializing country has ever attracted jobs at both the high and low ends of the production chain. From basic level assembly work to the upper tiers of industry and services, China is setting the global norm for working standards around the world.  Workers in rich countries and poor countries alike, in almost every nook and cranny of the global economy, feel the effect of China.

Crucial to addressing China’s global impact is the often ignored fact that the driving forces in China’s labor market are the global corporations that move to China to lower labor costs and use the threat of this mobility as a lever to drive down wages and working conditions for workers in other countries, and even within China itself. China has welcomed foreign firms with open arms. A partnership has developed based on a quid pro quo: the Chinese government provides a compliant low wage labor force in exchange for massive foreign investment.

Over the past 3 years, GLS has produced scores of articles and two major reports on labor law reform in China. We have paid particular attention to the critical role played by global corporations in China’s development.  This report builds on that work. Why China Matters: Labor Rights in the Age of Globalization provides background information needed to understand the issues involved and why the outcome of this battle matters so much to people everywhere.

Download the pdf version of the report here. Read below for a summary of the report.

Why China Matters: Labor Rights in the Age of Globalization

This report examines the forces at work inside and outside of China pushing for and against labor rights reforms.

Part one provides a survey of China’s new global economic power and its impact on the global economy.  A case study from Namibia shows how employers use China as leverage to suppress wages, working conditions, and labor rights in other countries.

Part two examines the development of the Chinese working class. We briefly look at the structure of the Chinese workforce in the period before the era of economic reform began in the 1980s. Then we look at how the largest migration in human history—the movement of 200 million people from China’s countryside to its cities—reshaped China’s working class and its labor markets.  Finally, we look at the reasons migrants leave the countryside and the conditions they face in the cities.

The Smithfield and Wackenhut RICO Suits: Forward into the Past

(second in a series)

In our last post we described how the RICO suits filed by Smithfield Packing and Wackenhut Corporation represent a sharp escalation in the long standing corporate assault on human and labor rights. Not content with stripping workers and their organizations of fundamental labor rights, big corporations are now going after basic constitutional rights. We argued that these suits threaten the civil rights not just of unions but of everyone.

There is a back story to these suits that stretches to the birth of the US labor movement over 200 years ago when conspiracy laws were first used to prevent workers from forming unions.

Unions as conspiracies

In 1806, members of the Federal Society of Journeyman Cordwainers—an association of Philadelphia shoemakers--— went on strike to demand higher wages.  In response, the Commonwealth of Pennsylvania went to court charging that the action by the 12 year old union was a “criminal conspiracy” since, according to prosecutors, the union used unlawful coercion to achieve its economic goals—for instance, union shoemakers refused to do business or associate with bosses or workers who did not abide by its wage rates and standards.  In a sign of the anti-labor legal bias that would inform much of US history, the prosecution was instigated and paid for by the employers. The government won. The union was broken and its leaders fined. 

In those bad old days, courts defined the effort of workers to organize  as a purely economic question. According to prevailing elite views, unions interfered with the  smooth functioning of the labor market, making them a restraint of trade.  The labor market was viewed like any other market with labor as a commodity like any other commodity.  For most of the 19th century and part of 20th century courts with few exceptions ruled that whenever workers banded together “in combinations” they were engaged in illegal conspiracies. Injunctions generally followed.

Smithfield Packing v. The Constitution

(first of a series)

A Federal court in Virginia ruled on January 29th that Smithfield Packing could proceed with a civil lawsuit filed under the Racketeer Influenced and Corrupt Organizations Act (RICO) against the United Food and Commercial Workers, Jobs With Justice, and others. At issue is a corporate campaign spearheaded by the union to support its organizing drive at Smithfield’s Tar Heel North Carolina pork processing plant. The action if successful could push the US labor movement into a legal black hole in which it could vanish.

The suit is one of two recently filed by corporations that threaten to turn the US labor rights clock back to the 19th century by dusting off the use of conspiracy laws to stop union activities. The suit attacks basic rights of free speech, free association, and criminalizes the legislative process by undermining the right to petition government. It affects not just unions but activists and advocacy organizations engaged in corporate campaigns no matter what the cause.

In what appears to be a new corporate legal offensive against organized labor, in November, the Wackenhut Corporation, a US subsidiary of the British based Group 4 Sericour, filed another RICO  suit, this one against SEIU for activities surrounding the union’s attempt to organize workers employed as security guards by the company. In this and subsequent posts we will mainly focus on the Smithfield Packing suit since the brief has been made public and is posted on-line.

Unsafe at Any Price: Building the New "People's Car"

On January 10th, 2008 Tata Motors of India unveiled its new low-cost Nano, touted by auto experts as a visionary "People's Car."  Expected to retail for as little as $2500, Tata hopes to market its new car to the millions of consumers throughout the developing world that are expected to hit the road in the next decades.

Tata remains out ahead of its competitors with plans to manufacture the Nano in South America, Africa and Southeast Asia, but other car companies such as the French-Japanese alliance Renault-Nissan and the Indian-Japanese joint venture Maruti-Suzuki are racing to figure out how to make their own ultra-cheap cars for the emerging middle classes of China, India and elsewhere. And it's no wonder. Car sales in India are growing by more than 20 percent a year, compared with 3 percent globally.  A recent survey by Invest India Market Solutions shows that as many as 12.8 million Indian households can be potential buyers for entry-level cars in the years to come, 1.6 million of them in 2008 alone. Sales are also booming in China: car ownership is up 300 percent over the last six years and the country's total number of cars is expected to top 140 million in little more than a decade.

Meanwhile, car sales in the developed countries are plummeting.  In 2007, U.S. car sales dropped to their lowest point in a decade, and analysts are expecting 2008 to mark the third straight year of shrinkage in domestic car sales. And according to Maryann Keller, an auto consultant, `It's not just the United States that's going down, it's western Europe. Everybody is aiming at Russia, China and India.''

As a result of slumping sales, struggling Western car companies are, according to the New York Times, "looking to see where the cost-obsessed ethos of the developing world can help their bottom line."  On the same day Tata unveiled its new Nano, Ford Motors announced plans to more than double its investment in India--raising its total stake to $875 million--to make the country a regional hub for small-car manufacturing, compete for the fast-growing local low-cost market, and to build a new engine manufacturing plant.

Such plans have are keeping some in the environmental community awake at night. Transportation has the fastest growing carbon emissions of any economic sector and automobiles are largely to blame with more than 600 million passenger vehicles now cruising the world's roads.  The prospect of millions of new cars spells an exponential rise in carbon emissions as well as other kinds of pollutants. The top U.N. climate scientist and chair of the U.N. Intergovernmental Panel on Climate Change Rajendra Pachauri, recently told the Washington Post that he is already "having nightmares" about precisely this scenario.

Beyond China's New Labor Contract Law

China’s new labor code went into effect on January 1. It could have important consequences for workers in China and in the rest of the world.

The Financial Times on January 2 reports that,

Employers in China fear that a new labour contract law that took effect on Tuesday will intensify growing pressures on manufacturing costs by enhancing the bargaining power of workers.

We estimate that, added together, labour costs [in mainland China] will be close to 40 per cent higher for this year [2008],” said Willy Lin, Hong Kong-based managing director of Milo’s Knitwear (International) Group.

Mr Lin says the new labour contract law, which will make it harder to dismiss workers, could increase costs by about 8 per cent this year, with the rest of the increase caused by higher minimum wages, social security payments and the renminbi’s steady appreciation against the US dollar.

The new law was designed to address some of the rampant abuses in Chinese industry including long hours, dangerous working conditions, and employers that cheat workers out of wages or delay payments.  But like all laws everywhere, the new law will be worth little if it is not interpreted broadly and enforced strictly. If the past is any guide, this could be a problem. China has been notoriously lax in enforcing labor laws. Absent vigorous enforcement, the new law could lead to workers being squeezed even harder in an effort to keep labor costs down. 

A Call to Action

China’s new Labor Contract Law will become effective on January 1, 2008. At that time companies will be required to provide a written contract to each employee and to provide a handbook of company policies and procedures developed in consultation with worker representatives.

The new law gives new rights to employees and imposes new responsibilities on employers. There is evidence that some companies are taking evasive action to avoid complying with both the letter and the spirit of the law. This has provoked a great deal of controversy in China.

Last year, as the new law was being drafted, foreign corporations and their business associations took strong exception to some of its provisions. As a result changes were made in later drafts to address corporate concerns. Following passage, foreign corporations and their business associations pledged to support the law and abide by its provisions.

Given the public controversy in China over corporate compliance with the new law, it is time for trade unions, worker rights advocates, and political figures around the world to insist that foreign companies and their suppliers prove compliance with the new law and respect for their employees’ rights under the new law. They should demand that foreign corporations take the following 3 steps to prove compliance:

1. Make public the templates of the contracts that they are offering to their employees.
2. Make public copies of company policies and procedures handbooks with a description of how they were written.
3. Make public any instructions that they have issued to their suppliers and the measures that they plan to take to insure compliance by their suppliers.

Foreign companies and their business associations regularly insist that they are law abiding and committed to promoting strong labor rights and legal standards in China. By making key documents public they can demonstrate that commitment, on paper at least.

The time to act is now in the run-up to the Labor Contract Law’s implementation date on January 1, 2008. How the new labor law is implemented in China should be of concern to everyone who supports labor rights and adherence to the rule of law. Trade unions around the world should demand compliance and transparency from the companies that employ their members, from companies which they hope to organize, and from companies in the industries in which they are active. Non-Governmental Organziations working on labor and human rights issues should demand compliance from the companies and industries that they target. And governments in countries around the world should take steps to insure that multinational companies headquartered in their jurisdictions comply fully with both the letter and spirit of China’s Labor Contract Law.