Workers Rights in the Era of Globalization


Editor's note: Excerpted from a speech delivered by Trumka at the Council on Foreign Relations, March 17, 2011.

In Washington, the globalization debate – like everything else – is partisan and polarized. You are either a free-trader or a protectionist, and the two "camps" don't speak the same language.

Instead of having the same old debate again today, I want to try a new angle.  Rather than asking: "Is globalization good or bad?"  Let's ask instead – "What would it take for the United States to engage in the global economy in a way that is good for working people, the middle class, and democracy – both here in the United States and around the world?"

We are living at a time when young people all over the world are demanding good jobs, a voice at work and a voice in the decisions that impact their economies.  It is no accident that newly triumphant young protestors in Egypt sent pizza to young union activists in Madison, Wisconsin last month, just as U.S. union members had protested outside the Egyptian embassy days earlier.

Workers and young people look at each other across the world and see the same goals, the same values, the same digital culture and the same tactics of non-violent protest.

These global cries for democracy challenge governments and international institutions to refound our global economic and political order on a more democratic, transparent – and equitable – basis.

There are two distinct issues here.  First, what must we do at home to ensure that our international economic policy will create good jobs in sufficient numbers to offer hope and a viable future to our young people? Second, what kind of globalization should we pursue to create a better future for all of the world's young people?

Here in the United States, we need a single, stream-lined, coherent national economic strategy that is about good jobs first, if we are going to rebuild our core national identity as a middle-class society in our time and in our children's time.

The road to a successful global strategy for the United States will require deeply rethinking our trade policy – and how it interacts with the other relevant policy levers, including currency, taxes, immigration, government procurement, education, infrastructure, energy, and technology.  

For a generation, we have made the mistake of orienting our international economic policies around the profitability of U.S. corporations abroad, rather than the quantity and quality of jobs at home or sustainable and democratic development around the world.

The results are in:  Large U.S.-based multinational corporations have thrived as global enterprises, but the United States is suffering from massive job loss and unsustainable trade deficits—masked by one ultimately ruinous bubble after another.  The sad truth is that for decades our trade and economic policies have not served the interests of the United States as a world power by delivering the good jobs or competitive edge that we must have.  And around the world, inequality and strife are expanding, even as trade and investment flows grow, and trade agreements multiply.

Let's step back and look at the weak spots in the U.S. economy today. We can probably agree on several key problems: rising inequality, unsustainable debt, lackluster job growth, crumbling physical infrastructure and under-investment in skills and education.

These problems have multiple causes, but each has been exacerbated by our wrong-headed approach to globalization—and their cumulative impact now threatens our ability to compete globally as a high-wage society.

Start with the fact that we have failed as a country to invest in schools, bridges, high-speed Internet and highways, while our competitors have surged ahead.

In most countries, the business community is allied with labor in calling on government to make these investments to ensure its own success.  The AFL-CIO has worked with the Chamber of Commerce to revive such an alliance here in the United States.  But there is no question in my mind that large U.S. corporations are less focused on U.S. infrastructure and education than they were a generation ago. As Ralph Gomory, former President of the Sloan Foundation, has argued, their competitiveness as firms is simply no longer tied up with our competitiveness as a nation.

It's too easy for business to campaign for lower taxes and less government spending if most of its production and workforce are located somewhere else. Some other government will foot the bill for high-speed rail, engineering degrees and universal broadband, while we tie ourselves in knots arguing about the deficit and taxes.  This may be a highly profitable short-term corporate strategy, but it is ruinous for our country and for our children.

We need our allies in business to stand shoulder to shoulder with us to demand that we refocus on America's fundamental needs.

Let's look at the rapid growth in income inequality, which threatens our identity as a middle-class society. Fully 56 percent of all income gains in the last 20 years have gone to the richest one percent of Americans. There is a growing consensus among academic economists that trade liberalization and the offshoring of jobs have contributed heavily to that trend.

Worldwide, trade and capital mobility have undermined the bargaining power of workers and made all workers vulnerable to competition from countries without democratic protections or basic human rights.

In Sunday's Washington Post, Steve Pearlstein summarized new research by Nobel laureate Michael Spence. Spence found that most U.S. job growth over the last couple of decades came in the non-tradable sectors of the economy – mainly government and health care. Meanwhile, most of the output and income growth came in the manufacturing or tradable sector.  These trends, in Pearlstein's words, are "a recipe for increasing inequality and social and political polarization."

The result is that the U.S. economy can't seem to get itself out of its deep slump – partly because consumers – who are workers – are deep in debt, don't have good jobs and have seen their real wages stagnate for a couple of decades now.  But global corporations are booking record profits.  Is this really a surprise?

So let's build a new U.S. global strategy, one founded on rebuilding our competitive position in the full range of high-end economic activity.  We can start by improving the woeful state of our infrastructure and investing in our educational system.  And we need to use our tax dollars to support and strengthen domestic job creation, get serious about addressing currency manipulation, invest in renewable energy technology and production and eliminate loopholes in our tax system that reward offshoring.  

The key is to change the incentives facing U.S. corporations, to encourage more domestic investment in cutting-edge manufacturing jobs– instead of gearing all of our trade, investment, and tax policies toward pushing jobs to other shores.

If we want an economic future that is better than our past, we need to use a jobs lens to look honestly at the specific rules in our own trade laws and trade agreements, the partners we choose and their values.  This is a large subject, so I will just mention three areas that we have gotten fundamentally wrong, and are about to get wrong again.

First, there is the foundational issue of human rights.  Trade agreements, whether they are global like the WTO or more limited like NAFTA, integrate economies and societies.  Trade agreements with countries that do not respect workers' rights make the United States a party to the abuse of those rights and turn U.S. workers into secondary targets.

This is why we fundamentally object to a free trade agreement with Colombia, where 51 trade unionists were murdered with impunity last year.  Just as the business community would object to a trade agreement with a country where investment and intellectual property protections were blatantly disrespected, we believe it is premature to sign a trade deal with Colombia when the government is unable or unwilling to enforce the rule of law and protect the security, dignity and safety of workers trying to exercise their right to organize for a better life.   

Second, with respect to the Korea trade agreement, while we appreciate President Obama's efforts to address concerns in the auto provisions, on balance we believe this agreement will put at risk too many good manufacturing jobs. It's a last-generation trade agreement, not a next-generation one.

Third, we need new investment provisions in our trade agreements. We keep negotiating new "investment chapters," which are loosely based on the NAFTA model, which was based on our Bilateral Investment Treaties. But nobody has answered the question that Congress and other critics keep asking – "Why do foreign investors have the right to sue our government over regulations they don't like, when our own domestic companies DON'T have that right? Why are investors the only parties that can bypass government-to-government dispute resolution?"

If these concerns sound familiar to you, you are right.  Obama raised them in the 2008 election campaign when he called for a new trade model.

Today President Obama has an opportunity to put his stamp on a major trade agreement--the Trans-Pacific Partnership.  Here is a chance to make good on the President's commitment to craft a new trade policy for the twenty-first century that makes sense for working people and not just for multinational corporations.

The AFL-CIO is ready to work with the President and his team to make the TPP a new model for America's trade policy.  But this will require new thinking on investment, services and government procurement, and the will to move forward on the labor and environment front -- by strengthening commitments, streamlining dispute settlement, building new institutions and improving enforcement.

Ultimately, we must change both the details of our trade policy and embed that policy in a coherent national economic strategy -- if we are going to close our current account deficit and quit borrowing hundreds of billions of dollars from the rest of the world every year.

The key steps to a successful high-wage economic strategy in a globalized world are not a mystery.  Just look at Germany, Japan, Denmark, and Sweden – these countries all run a trade surplus, have high wages and heavily unionized manufacturing sectors, and invest multiples of what we do in lifelong skills development, education, and infrastructure.  And they all have lower unemployment rates than the United States.

High wages, strong unions, and well-trained workers are not the problem in a globalized economy – they are the solution.  

We live in a world today where hundreds of millions of people lack the very basics of life.  Just as the New Deal brought basic security to all Americans, a Global New Deal could see to it that everyone on this earth has the minimum necessities of a decent life.

And imagine the dividends on this investment, not just in terms of economic growth and demand for U.S. exports, but in terms of global security and stability.  I was heartened to hear President Sarkozy speak at the World Economic Forum about his commitment to a global development agenda and the need for a global financial transaction tax to help fund these investments.

We must understand that we cannot have either an end to the jobs crisis in the United States or solutions to poverty worldwide if the United States and the world community go down the path of competitive fiscal austerity and tax cuts for the wealthy.

Yet here in Washington, in Brussels, and in London that is exactly where policy makers are going.  Next month, the AFL-CIO will host a meeting of all the world's labor movements to release a report on global economic strategy that is focused on jobs and development.  Policymakers should be listening—because all around the world, people are in motion demanding investment in good jobs, as well as democratic accountability.

Democracy and workers' rights are not a means to some greater good—they are part of the fabric of the good life itself.  Silencing workers—no matter for what purpose—undoes our common future.  And when workers reclaim their voice, we reclaim our common global democratic future—a future where all of us can prosper.

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