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- From: wlarkin@hounix.org (Ward Larkin)
- Subject: NAFTA: a critical analysis ( 1 of 4 )
- Message-ID: <1992Nov07.161512.5198@hounix.org>
- Organization: Houston UNIX Users Group (HOUNIX), Houston, TX
- Date: Sat, 07 Nov 1992 16:15:12 GMT
- Lines: 164
-
- U.S. LABOUR AND NORTH AMERICAN ECONOMIC INTEGRATION:
- TOWARD A CONSTRUCTIVE CRITIQUE
-
- Stephen Fielding Diamond
- Email: SFDYLAW@YaleVM.YCC.Yale.Edu
-
- Part 1 of 4
-
-
- With congressional approval of the Bush Administration's request
- for "fast-track" negotiating authority for a free trade agreement
- between the United States and Mexico in the spring of 1991, the
- U.S. labour movement suffered one of its most important recent
- political defeats. Labour was unable to hold on to some of its
- staunchest congressional allies. Democratic Congressman Richard
- Gephardt, for example, backed fast-track despite the
- protectionist industrial policy that lay at the heart of his
- presidential campaign in 1988. Thus, what AFL-CIO Secretary
- Treasurer Tom Donahue declared would be labour's "top priority"
- for the 1991 legislative calendar signalled, instead, the very
- low priority that trade unionism holds in U.S. political life. A
- fresh perspective is desperately needed by labour if it is to
- understand this defeat and move beyond it. This paper will first
- examine the context in which U.S. labour now finds itself.
- Labour's response to the North American Free Trade Agreement
- (NAFTA) is examined critically and an alternative approach is
- considered.
-
-
- The Strategic Context
-
- The Salinas and Bush announcements of negotiations toward NAFTA
- should be understood as one of the final building blocks of a
- decade-long process of reintegrating the Mexican economy into the
- world economy, and, more specifically, into the U.S.-dominated
- regional economy. The process began in the early 1980s, with the
- collapse of Mexico's ability to repay its external debt. Since
- then, Mexico has taken, or has had forced upon it, a series of
- steps resulting in greater financial and economic integration
- with the United States and international institutions (United
- States International Trade Commission, 1990).
- A primary concern for U.S. business is the growing pressure
- of worldwide competition from the European community and the
- Japanese-led East Asian bloc. These regions emerged in the 1980s
- and 1990s as home to the most productive economies in the world.
- They combine a relatively cheaper labour force (shifting to new
- pools of cheap labour as home-country wages rose) with the best
- technology available, establishing flexible and innovative human
- resource policies and supplier networks to dominate critical
- areas of growth. Their success is the ultimate example of the
- emphasis Fajnzylber (1990) has so correctly placed on added
- intellectual value in a modern economy, including the innovative
- relationships between the state and industry, the organization of
- supplier networks, and the just-in-time and continuous-
- improvement systems of production.
- This is a structure that presents formidable challenges to
- the U.S. economy. Where U.S. management once found the detailed
- job descriptions of individual workers in an assembly plant a
- critical basis of productivity, control, and stability, employers
- now do battle with trade unions that in turn find themselves,
- somewhat paradoxically, defending the old Taylorist regime
- (Piore, 1989). The opportunity to move production where new
- relationships can be established on a much lower wage scale and
- in a less regulated environment is understandably tempting.
- Mexico, then, appears as a natural target for U.S. manufacturers.
- Just as the conditions leading to NAFTA are really not new,
- neither are the conditions that have stimulated the response of
- labour, in particular U.S. labour, to the negotiations. Over the
- last two decades, the trade union movements of most of the
- advanced industrial economies have been facing a complete
- restructuring of the international division of labour (Kolko,
- 1988; Ross & Trachte, 1990). There are four areas of major change
- under way. First, with the end of "Fordism," there has been an
- ongoing crisis in the membership of trade unions in the advanced
- capitalist democracies; second, there is a growing rift between
- the trade unions of those countries and the political parties
- they have traditionally supported or, even, controlled; third,
- there has arisen a very particular kind of trade union activity
- in newly industrializing countries such as South Korea and
- Brazil; and fourth, there has been a dramatic end to the statist
- era--signalled most loudly by the collapse of the Soviet bloc
- regimes and the lack of a coherent response by the labour
- movement to that change.
-
-
- The End of Fordism
-
- U.S. labour is at its lowest level of membership density since
- the 1920s. This is not simply the result of aggressive
- antiunionism by employers, which is a fact of U.S. industrial
- life from the beginning of modern trade unionism. Rather, the
- decline in membership must be seen as part of a general
- structural change in the economy. As early as 1961, labour
- economist Lloyd Ulman noted the deeply rooted slowing of union
- growth in unorganized plants or firms. Steady growth in wages in
- the centrally organized sectors of the economy, fuelled in part
- by Vietnam-era inflation, and new union membership in public
- employment and the service sector enabled the labour movement to
- defer discussion of the problem. But with the victory of Ronald
- Reagan in 1980 and his defeat of the Air Traffic Controllers
- Union, it finally hit home that the House of Labour was resting
- on a crumbling foundation.
- A recent study found that "collective bargaining has yielded
- much smaller compensation packages in the last few years than
- previously"; moreover, in the 1980s compensation gains for
- unionized labour averaged below those for unorganized workers
- (Griffin, McKammon & Botsko, n.d.). To argue blithely that
- this is a cyclical process ignores the technological shift
- occurring in the new global workplace. Manufacturing jobs can and
- do "return" to the United States but, in doing so, they have been
- fundamentally transformed. A recent Commerce Department study
- found that manufacturing now represents an increasing proportion
- of the gross national product--the apparent reversal of a long-
- term decline--but only after "a wrenching contraction in payrolls
- and plants," as the number of jobs in that sector dropped from 21
- million to 19 million over the last decade (Nasar, 1991). Such a
- setting alters in a basic way the premise of continued expansion
- on which the modern collective bargaining system was built
- (Kochan, Katz, & McKersie, 1986; Piore and Sabel 1984;).
- The decline of labour is a general trend in the advanced
- industrial economies. The Griffin study found that "more than
- three-fourths of the eighteen largest, politically stable
- capitalist democracies experienced sustained declines or
- stagnation in union density in the late 1970s or early 1980s"
- (Griffin et. al, n.d.). Only the sharpness of the conflict
- varied, in proportion to the relative strength of labour in the
- previous period.
- Organized labour narrowed its horizon in the fifties and
- sixties, often sacrificing organization, militancy, and internal
- democracy, in return for a strong dues base in what appeared to
- be the secure commanding heights of the U.S., Canadian, and
- European economies. But the era of the social contract, of
- Fordism and corporatism, has come to an end. The stability and
- predictability of an earlier era have left much of labour unable
- to comprehend the nature of the changes that are taking place.
-
-
- A New Political Era
-
- Both a reflection and a cause of labour's structural weakness is
- the growing rift between trade unions and politics. In the United
- States, alone among the industrial economies, labour failed to
- move to political independence, relying instead on a seat at the
- table in the quadrennial smoke-filled rooms of the Democratic
- party. By the late 1970s, labour was no longer seen as
- representing a broad view of social justice in U.S. life, a
- movement that had fought for free public education, affordable
- health care, social security, the minimum wage, and the end of
- child labour, but as just one among many "special interest"
- groups.
- A similar development has been under way in Europe, where
- tensions between trade unions and labour or socialist parties
- have heightened. Neil Kinnock and Francois Mitterand, for
- example, have made their ability to control labour a cornerstone
- of their appeal to the general electorate. This development
- merges with the technocratic vision that has long had a home in
- mainstream social democracy. The labour movement, in falling back
- on the narrower terrain of disputes over wages, hours, and
- working conditions, has lost a forum for debate and argument
- about the wider social consequences of economic change (Martin,
- 1988).
- --
- -- Ward Larkin
- wlarkin@hounix.org
-