Global Labor Strategies

Globalization, Neoliberalism, and Climate Change

As the global economy hurtles toward Great Recession II, the earth hurtles toward climate catastrophe.  Both represent the results of a neoliberal deregulation that has left humanity no means to shape our economies to serve human needs -- not even the need for economic and environmental survival.

How global movements respond to these intertwined environmental and economic crises will be key to our common survival. The politics will surely be complicated.  A case in point is an article in today's New York Times about the United Steelworkers union's WTO complaint against China for providing "illegal clean energy subsidies" to domestic solar, wind and other green industries.

To promote international dialogue on these questions, we thought it might be useful to post a recent paper, entitled "Globalization, Neoliberalism and Climate Change", which was prepared by GLS at the invitation of Professor Liu Cheng of Shanghai Normal University for an international conference this April on "Global Economic Recession vs. Deregulation" jointly organized by the Peking University Law School and the Shanghai Normal University Faculty of Law and Politics and supported by the ILO Beijing Office.  The paper stresses the interest of workers around the world in cooperating to create an alternative to neoliberalism based on making the transition to a green economy.

Globalization, Neoliberalism, and Climate Change: Toward a New Regulatory Regime

For thirty years, global and national economies have been guided by policies of neoliberal deregulation, often known as the "Washington Consensus." Neoliberalism has been disastrous for workers in most countries, pitting workers against each other in a race to the bottom and making it all but impossible to protect working class interests. There is now a growing consensus that the Washington Consensus has been a failure.

There is also a growing global recognition that we are in the midst of an unprecedented climate crisis. Ready or not, that crisis is affecting every nation, every locality, and every worker. Its effects are already serious, and unless decisive global action is taken to counter it, they will soon be catastrophic. Neoliberal deregulation, by dismantling the means for public steering of society to meet social needs, has also made it nearly impossible to correct global climate crisis.

These twin realizations, the failure of neoliberalism and the climate crisis, will define the struggle for the interests of poor and working people for the next century. At the same time, the necessity to counter climate change may provide an opportunity to address the broader problems of neoliberal deregulation.

This article argues that it is only by rolling back neoliberalism that we can protect the rights of workers globally and solve the crisis of climate change. In Part 1 we provide a short history of globalization. In Part 2 we discuss the climate crisis and its effects on workers. In Part 3 describes proposals for a "global green new deal" to create full employment through climate protection. Part 4 argues that a new global and national regulatory regime is necessary both to counter both climate change and the race to the bottom. Part 5 discussions the role of organized labor nationally and globally in bringing about such a transformation.

"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.

Can Green Jobs Be Good Jobs?

[This article first appeared in the TheNation.com, available here.]

At the first Good Jobs, Green Jobs conference, held in Pittsburgh a year ago, advocates of green energy bemoaned their inability to get a modest renewable-energy tax credit through Congress over the opposition of the Bush administration. The idea of addressing the economic, energy and environmental crises through green jobs seemed a distant vision. So did the idea that a labor-environment coalition around green jobs could reach beyond the fringes of the two movements. But this year, things were different. Meeting in Washington, DC, February 4-6, speakers were reporting in from their BlackBerries on Congressional negotiations of the yet-to-be-approved stimulus package estimated by the Center for American Progress to include $80 billion for green jobs.

The Blue-Green Alliance, which sponsored this year's conference, grew out of a coalition formed in 2006 by the Sierra Club and the United Steelworkers Union. A year ago, the Steelworkers stood alone; today the alliance includes the Communications Workers of America (CWA), the Laborers International Union of America (LIUNA), the Service Employees International Union (SEIU) and the Teamsters (IBT), all of which have active programs on green jobs.

It's a challenging time for the labor movement. Union leaders appear genuinely thrilled about the election of President Obama; early in the conference Steelworkers' president Leo Girard proudly quoted Obama's statement, "I see labor as the solution," not the problem. The blind, neoliberal faith in markets and globalization has come crashing down along with the global financial system, vindicating the lonely labor voices who have long been calling for government guidance of the economy. But the Great Recession is decimating labor's thinning ranks, and unions face budget cuts and layoffs not only by employers but also within their organizations. Two major unions, SEIU and UNITE HERE, are engaged in very public internecine battles, while representatives of the Obama administration are trying to nudge the two national labor federations to reunite.

In this context, the chance to grow membership through green jobs represents a rare opportunity, one that the labor movement is taking up with alacrity. "Global warming is a working families issue," said AFL-CIO president John Sweeney at a press conference to announce a $1 million Green Jobs Center at the National Labor College.

Part of labor's involvement reflects the concern that has grown among many constituencies as melting ice caps, burgeoning wildfires and devastating floods demonstrate the immediate threat of climate change. At Sweeney's press conference, Mark Ayres, head of the union's building trades department, endorsed green jobs as good policy and good for labor. "But there is a more important reason" to fight global warming, he said, showing the audience a photograph his granddaughters.

Briefing Paper: What’s Going On in the EU?

If it is difficult for even informed Europeans to fully understand what’s happening in the European Union—as many in Europe say it is—it is even more difficult for people in the rest of the world to follow events with any degree of understanding. For instance, the US press, when it bothers to report on EU events at all, usually does a very poor job, often parroting elite European opinion while paying little attention to the views of ordinary people. Yet what happens in the world’s biggest single market has profound implications for people around the world. And it is especially important that global justice activists everywhere have a basic grounding on key trends and issues.

With this comprehensive post by our European based colleague Bruno Ciccaglione we launch a new GLS project to promote transnational solidarity by making regional issues more understandable to a global audience. What better place to begin than by trying to untangle the web of issues and trends that make the European Union seem so opaque to outsiders, (and to many insiders as well)?

The June defeat in an Irish referendum of the Lisbon Treaty—designed to deepen and expand European Union institutions—has emboldened critics and spotlighted the growing uneasiness of Europeans with the direction of the EU.

The EU was always a project of European capital to expand markets and be more competitive globally.  However, it was initially felt that the idea could only be effectively sold to the European people if it included a vision of a "social and democratic Europe" that provided for the social and political rights and well-being of other social groups besides business.  EU institutions were opened to labor representation and labor organizations actively participated in them. 

Over several decades, European capital has moved to a much more aggressive neo-liberalism that has lost its willingness to treat labor as a "social partner" with its own agenda.  It is now trying to institutionalize what might be called an "anti-social Europe."  But as this post details, it has met stunning defeats in that effort.

These developments are important for the way labor everywhere deals with transborder economic forces.  For example, the European Court recently ruled that a Polish construction company doing work in Germany could pay its workers the Polish, rather than the German, minimum wage, because requiring the German minimum wage would keep foreign service providers from competing on the basis of lower wages.  Such a "logical" extension of neoliberalism, if universalized, would mean that Chinese companies could bid on construction jobs in the U.S. based on Chinese wages! (For a pdf file of this briefing paper, click on the menu on the left.)

GLS.

What are the European Constitutional Treaty and the Lisbon Treaty?

According to the leaders of key countries in Europe, and to the members of the European Commission, the EU institutions need to be modernised to function more effectively.  In the last few years, various attempts have been made to do this using the argument that it would increase and strengthen democracy, help the integration of the new member states, eventually help enlarge the Union, and in general create better conditions for its citizens. But the attempts seem to be again blocked, after the failure to introduce the European Constitutional Treaty (http://european-convention.eu.int/DraftTreaty.asp?lang=EN) in 2005 and the serious problems currently facing the Lisbon Treaty (LT) (http://europa.eu/lisbon_treaty/full_text/index_en.htm)  blocked by Ireland’s NO vote in a June referendum..

Proposed changes in the Lisbon Treaty aimed at changing the EU’s Institutions and the decision making process include:

• To give the EU a US-style President but without a direct election by the European citizens;
• To establish a “Foreign Minister” by  combining the positions of the existing foreign affairs supremo and the foreign affairs Commissioner;
• To reduce the number of members of the European Commission (currently each EU member state sends one person to the EU Commission);
• To redistribute the voting weights among the member states. This also includes the removal of national vetoes in several areas;
• To give new powers to the European Commission, the European Parliament and the European Court of Justice. For instance the EU Parliament would at last be part of the decision making process, although legislative initiatives would remain in the hands of the Commission. Currently the EU Parliament is heard only on proposals presented by the EU Commission;
• To create a European wide popular petition. One million EU Citizens could ask the EU Commission to deal with a matter they consider important.

While some of these proposals could be welcomed, given the democratic deficit within the EU, the real goal of both the European Constitutional Treaty (ECT) blocked in 2005 by referendums in France and the Netherlands, and the Lisbon Treaty (LT) of 2007 blocked by the Irish referendum, was not merely the proposal of a different and more effective and democratic architecture of the EU: the two treaties intended to give institutional legitimacy to the current economic and social policies. These policies favour liberalization processes, the privatisation of public services, and the redesign of the European social model in order to make it more functional to the needs of global competition for European companies. The European Constitution Treaty (ECT) aimed at giving juridical legitimacy to these policies of the European Union at a “constitutional” level. The Lisbon Treaty (LT) was needed basically to “save” the ECT after the failure of its ratification process in 2005.

The ECT and the LT are not easily understandable documents. Moreover their contents sometimes seem bizarre, given the intention to simplify the functioning of the EU institutions, and they are not comparable with normal national constitutions. For instance, on the one hand in the ECT  the term "bank" was mentioned 176 times, "market" 88 times, "liberalization" or "liberal" 9 times, "competition" or "competitive" 29 times, and "capital" 23 times: all this was very unusual for a “constitution”. On the other hand the LT, which is largely based on the same concepts, is composed of more than 250 pages with a list of about 300 amendments to the Rome Treaty—which in 1957 founded the European Community—and around 60 amendments to the 1992 Maastricht Treaty. The Maastricht Treaty fixed economic rules to be followed by the national states and was largely written to prevent an active role by national states in the economy thus leaving a free hand to the markets. It also laid the technical basis for the Euro. Additionally there are also 12 Protocols in the Lisbon Treaty and several “statements”.

How Green Is Your Collar?

[this post by GLS staff oringinally appeared on The Nation.com March 26, 2008]http://www.thenation.com/doc/20080407/brecher_et_al

As cities and states from New York to California to Minnesota race to invent policies to address global warming, new mandates for investment in green energy will produce many billions of investment dollars. In the short run, the Bush Administration stands in the way, but major federal legislation this year or next is almost a foregone conclusion--and the carbon market it will establish will generate hundreds of billions of dollars a year and create thousands, even millions, of new jobs. But the realities of how Americans will work and what jobs they will have in a green future are only beginning to be addressed.

Nearly 1,000 trade unionists, environmentalists, green businesspeople, political leaders and allies came together recently in Pittsburgh to explore these issues at the first annual conference on " Good Jobs, Green Jobs," sponsored by the Blue-Green Alliance of the United Steelworkers Union and the Sierra Club.

It has taken labor a long time to address the threat of global warming--the AFL-CIO even lobbied against the Kyoto Protocol. It doesn't help when environmentalists don't stand up to insist on protecting workers from the pain that may accompany environmental protections. But all that may be changing. For example, the AFL-CIO Executive Council issued a statement March 4 on "greening the economy" that said, "It is time for our nation to take bold steps to meet the 21st century challenges related to climate change."

There are both risks and opportunities for labor in the shift to a green economy. For coal miners, for example, restrictions on greenhouse gas emissions might mean real job losses, and many environmentalists are deeply concerned by the insistence by some union leaders on continuing a coal-based economy. But for Midwestern steelworkers, the building of parts for wind turbines is already a source of thousands of jobs.

There is a growing consensus that greening will on aggregate produce more jobs, but they are likely to be spread across a wide range of occupations and industries. The Service Employees International Union (SEIU) and the Teamsters sent significant delegations to the conference but didn't call attention to jobs that are threatened or those likely to expand as a result of new climate change policies. Indeed, the conference focused more on the overall implications of those policies than on their consequences for particular unions. Marianne McMullen, SEIU communications director, told the conference that in years to come, "The environmental movement may be the only movement" as different groups come together to build a new economy.

Labor’s Opening to China

The announcement in December by the International Trade Union Confederation (ITUC) that it would begin a “dialog” with the All China Federation of Trade Unions (ACFTU) marks a sea change in global labor’s approach to China.  Equally significant is the endorsement of the talks by the AFL-CIO.  Until now, the ITUC, the AFL-CIO, and most national labor federations shunned official contacts with the ACFTU—China’s sole legal union—because they did not consider the party-state controlled organization a legitimate representative of China’s workers. 

But, according to Guy Ryder, the ITUC’s General Secretary,

“By starting a dialogue with the Chinese trade union, ITUC wants to have more influence on the ground in China….It should enable us also to discuss the role of China in the world.”

The action actually caps a gradual shift toward engagement with China by unions from around the world. Some European unions affiliated with the ITUC have been active in China for over a decade. The Change to Win federation in the US began talks with the ACFTU last year. Officials have exchanged visits and plans are underway to expand contacts in the coming months.

The policy shift by the ITUC, the AFL-CIO, and other global unions is long overdue. Three decades of rapid economic growth have transformed China from an economic backwater into the world’s workshop.  Workers, trade unions, communities, and countries throughout the world are confronting the challenges posed by China’s growing role in the world. Today, about 25% of all the workers employed in the global economy are Chinese.  The “China price” sets the global norm for wages and working standards up and down the value chain, from inexpensive garments to sophisticated electronics.  As a result the hard-won gains of workers in the global North are being rapidly undermined, while the aspirations of workers in the developing world are being dashed, as China becomes the wage setting country in industry after industry.

China’s export oriented development model has had a particular impact on trade unions everywhere. Multinational corporations—the very firms that employ millions of union members around the world—have flocked to China seeking to take advantage of its low wage workers and business friendly policies, reducing labor’s bargaining leverage and the number of union jobs. These firms have been central to China’s development. Roughly 66% of the increase in Chinese exports in the past 12 years can be attributed to foreign owned global companies and their joint ventures. (Stephen Roach, Business Times, Singapore, 8/8/06) These companies account for 60% of Chinese exports to the US. Despite all of the talk in the current presidential campaign, the “Chinese threat” is less about trade with China than it is about “trade” with US based companies like Wal-Mart, GE, or any of the other of the hundreds of Fortune 500 companies that have set up shop in China to cuts labor costs and avoid environmental regulations. Ways, however imperfect, must be found to reach out to Chinese workers to find mutually acceptable ways to halt a global race to the bottom, which in end, hurts all workers.

The Global Battle Over New Rights for Chinese Workers

Editor's Note: GLS has taken the lead in exposing the role of U.S. corporations in opposing the proposed Chinese labor contract law.  Here’s an update on the campaign of the “sweatshop lobby” – and the response by labor worldwide.

In a historically unprecedented visit, the influential Chinese scholar and labor law expert Liu Cheng arrived in Washington, D.C. this week to garner support from US legislators and labor leaders for a law that is pending not before the US Congress but before the National People’s Congress in China.  Liu Cheng has been a key advisor to the drafters on a new labor law reform bill currently working its way through the Chinese legislative process.

His visit is part of a behind-the-scenes battle that is raging worldwide over reforms in China’s labor law.  On the one side are Wal-Mart, Google, General Electric and other global corporations who have been aggressively lobbying to limit new rights for Chinese workers. On the other side are pro-worker rights forces in China, backed by labor, human rights, and political forces in the U.S. and around the world.

Liu Cheng’s visit to Washington was part of that international support campaign.  He warned in an interview that support for the new law within China is not enough “if there is no support from labor supporters outside China…Some National People’s Party Congress representatives are influenced by the employer lobby.  Although the principles of the amendments are secure, there may be concessions on the details, so we call for help.”

What’s It Got to do with the Price of Tortillas in Mexico?

Hundreds of thousands of people marched through downtown Mexico City the last day of January protesting the rise in the price of tortillas and other staple foods.   The march was filled with housewives beating pots and pans in the kind of “casarolazo” made famous by the resistance movements of Argentina.  Supported by unions, farmers, and leftist groups, the march was initiated by the National Union of Workers (UNT), a federation of labor organizations independent of Mexico’s political parties, according to an article by John Ross in UE's invaluable web publication Mexican Labor News and Analysis.   

Mexico’s “tortilla crisis” provides an all-too-vivid illustration of the way globalization, neoliberalism, and trade agreements like NAFTA actually affect the lives or ordinary people around the globe.

Fair Globalization

In the days following November’s elections, New York Times columnist Thomas Friedman—an apologist for some of the worst aspects of corporate globalization and someone with whom we rarely agree—wrote this from China:

“Now that we've had an election that clarified which country is most important in shaping U.S. politics in 2006 -- Iraq -- I've come to visit the country that's most likely to shape U.S. politics in 2008: China.

“The civil war in the Republican Party, which you are about to see, will be all about Iraq -- whom to blame and how to withdraw before the issue wipes out more Republican candidates in 2008. But the coming civil war among the Democrats will be all about China.”

Although Friedman may be overly optimistic that US involvement in Iraq will be over and done with by 2008, he is right that China will be a central issue in the next election and that it could divide the Democratic Party.

Indeed, China has become the focal point of all of the insecurities that people feel about globalization. That insecurity played a major role in November’s election. Democrats’ running on economic populist platforms were able to sidestep dicey and divisive social issues and score significant gains among all sectors of a population increasingly worried its economic future.
In the dumbed-down world of public discourse and punditry there are two sides to the globalization debate: “free trade” and “protectionism.” This division, according to Friedman and others, is likely to split the Democratic Party, and we might add, organized labor, the Democrats’ key financial backer.

Just do it?

The global corporations that dominate the global economy are organized to minimize risk and avoid blame. They create complex supplier chains, strategic alliances, and networked production schemes that put distance between them and the production process; they employ contract labor to avoid long term commitments to workers; and they influence public discourse and public policy by financing think tanks, supporting business associations and lobbyists, and contributing to political campaigns.

If the products or services they sell are produced under sweatshop conditions, well, it’s not their fault, they don’t own the factories. If the business associations, the think tanks, and the political factions that they finance promote destructive social policies, well, it’s not their fault, these are membership organizations and they can’t be aware of everything that’s done in their name. Sometimes this gets them in trouble.

Case in point: Nike. Nike-- with hundreds of contractors in China producing for the domestic and export market-- has spent a great deal of energy in recent years sprucing up its operations and its image. By most accounts the company has been successful in improving working conditions in its supplier firms. So when both our report, Behind the Great Wall and a New York Times article, documented opposition by US based corporations to Chinese labor reforms and named Nike as a company that lobbied against the reforms “through the American Chamber of Commerce”, Nike bristled at being singled out. They claimed privately to a colleague that since they knew nothing about the proposed law they could not be accused of opposing it. We believe them. After all, this is exactly how companies avoid blame: they finance business associations to lobby for them. This gives them an arms length relationship to the grubby world of politics. Unfortunately, it doesn’t cut it for a company that claims to adhere to socially responsible business practices. (Click here for some interesting comment on this from sportswriter Henry Abbott.)

It may well be that it is unrealistic to think all of the members of business and lobbying organizations like the American Chamber of Commerce will agree or even be informed on every issue, but companies like Nike should be informed on important issues and speak out when they disagree with the organization’s positions. Silence is consent.

If Nike did not oppose the new law, they said nothing publicly to disassociate themselves from AmCham’s letter of complaint. Until now. Recently, Nike officials have finally gone public with their support for expanded Chinese labor rights. We’ll sort of.

According to reporter Helen Jung of the Daily Oregonian:

Nike does not oppose the proposed legislation (although it is a member of the business group), said spokesman Alan Marks. "We absolutely support the direction of strengthening legal protections for workers" including "stronger worker dialogue" to improve factory conditions, he said. However, Nike is not planning to take a public stand on the law, leaving it to its contract factories to offer their thoughts on the changes if they want.”

So here we go again. On the one hand, Nike says it does not oppose the proposed legislation—thus breaking ranks with AmCham. On the other hand, Nike says it will not make any public statements, beyond what company officials have already said, in support of the proposed law. Instead, they will leave that up to their suppliers. It seems Nike not only  outsources the production of its products, it also outsources its social responsibility.