NetNews Usenet Archive 1992 #26/NN_1992_26.iso/spool/sci/econ/8504

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From: [e-mail] (Ward Larkin)
Subject: NAFTA:  a critical analysis ( 2 of 4 )
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      U.S. LABOUR AND NORTH AMERICAN ECONOMIC INTEGRATION:
                 TOWARD A CONSTRUCTIVE CRITIQUE

                    Stephen Fielding Diamond
              Email:  [e-mail]

Part 2 of 4


New Unionism

Some in the labour movement have expressed the hope that the
emergence of unions in the newly industrializing countries could
presage a return to trade union health on a world scale. Indeed,
the flip side of the deindustrialization of the United States and
Western Europe has been the industrialization of countries like
South Korea, Brazil, and Mexico (see Harris, 1987; Peet, 1987).
This has been accompanied by new organizing efforts and, in
certain cases, explosive strike waves for better wages and
working conditions. In some cases this new unionism has fed
deeper movements for democratic political change: The Brazilian
Workers' Party is one example, Poland's Solidarity movement is
another.
     Yet, the industrialization process in these countries is
built upon relatively high capital intensity, and international
capital has proved to be highly mobile. The commitment of
international capitalists to the development of forward and
backward linkages is weak. This does not appear to be a
development akin to that of earlier U.S. industrialization. The
long-term ties between Virginia's coal mines, Chicago's steel
mills and Detroit's automobile assembly lines, which fuelled the
U.S. CIO and its version of Fordism do not seem to be present in
these cases.
     Many researchers, including Grunwald (1990/91) have noted
the failure of the maquiladora program in northern Mexico to
generate linkages with the rest of the economy. Maquila firms
have remained peripheral to the Mexican economy and have
contributed little to Mexico's industrialization, technological
growth, or international competitiveness (see the chapter by
Kopinak in this volume). The global roller coaster even
contributes, on occasion, to the return of some manufacturing
jobs to the United States.  An overvalued cruzeiro and huge price
increases in raw materials and energy pushed Ford recently to
shift final assembly of truck kits back to Kentucky from Brazil
because it is now cheaper (Lamb, 1991).
     The South Korean example is also telling. Despite
historically low unemployment, union militancy has declined
dramatically there. There were more than thirty-seven hundred
labour disputes in 1987, but half that number in 1988. In the
first five months of 1990, there were only one-fifth as many
disputes as in the first five months of 1989. Why? Manufacturing
employment growth slowed steadily as the 1980s came to an end,
going into negative figures at the end of 1989. This reflected an
automation of production facilities (Bank of Korea 1990). Overall
wage and job gains there are attributable to the construction and
service sectors. This pattern appears, in a hothouse fashion, to
mimic the long-term structural changes in the economies of the
United States and Western Europe (Amsden, 1988; Vogel & Lindauer,
1989).


The End of the Statist Era

Finally, in this survey of the strategic context in which the
trade union movement finds itself, mention must be made of the
end of the era where state-centred accumulation seemed
inevitable. In one way or another, important segments of the
labour movement had staked themselves on the state-led efforts at
development found either in the Soviet bloc, within the state-
centred programs of social democracy, or within the post-World
War II national liberation movements. This perspective was
stronger in France and Italy than in Great Britain or the United
States, but the sudden collapse of bureaucratic and collectivist
politics in the East and the trend to privatization in the West
has put the left in disarray, unprepared for the aggressive
promarket social movements that have now emerged. One example of
this development came in Germany, where social democratic ties to
the old East German regime and its official labour movement
helped Helmut Kohl move to a strong victory in the post-
unification elections. Another example is found in the success of
Lech Walesa breaking from his roots in Solidarity to usher in
economic shock therapy. The failure of a new socially conscious
and democratic paradigm to emerge in the wake of the collapse of
the Eastern bloc has contributed to a certain level of
demoralization in labour generally.
     The reverse side of this coin is also significant. The close
links between official U.S. labour and the foreign policy of the
United States were built around a common program of anticommunism
(see Diamond, 1989). Now that that target has dissolved, the door
would appear to be open to new initiatives for an independent and
democratic foreign policy for U.S. labour. Trade union visitors
to Eastern Europe, for example, find a tremendous potential for
new union organizing, but find only token support for such
efforts by the U.S. labour movement. The open debate which could
chart a new independent foreign policy for U.S. labour has yet to
be scheduled.


Labour's Response

How has organized labour in the United States responded to the
announced negotiations with Mexico and Canada? They have begun a
battle to hold tenaciously to what little they have left (AFL-
CIO, 1990; Anderson, 1990;). Though there is very little serious
discussion within labour about the above-mentioned global
developments, every union member knows the telling impact they
are having on life in the United States. It is not just a matter
of protecting a textile plant here or an auto parts assembly
plant there. The globalization of the economy has begun to break
down the general fabric of U.S. society. Fewer and fewer people
in the United States are able to be productively integrated into
the economy. Visible signs of this process are seen in the rise
of an unproductive service sector, of long-term unemployment, of
a steelworkers' union trying to steal members from a union
representing supermarket employees, of street people living off
the recycling of aluminum cans.
     The less visible reality is also coming to light. A recent
Census Bureau study found that the median income of the most
affluent fifth of all U.S. households rose 14 percent from 1984
to 1988, after adjusting for inflation. But income remained
unchanged for the remaining four-fifths. The statistics comparing
white and non-white U.S. citizens are equally disturbing. The
median income of all households in 1988 was $35,750, but the
median for whites was $43,280, while that for blacks was $4,170,
and that for Hispanics was $5,520 (Pear, 1991). Robert Reich
(1991) has pointed to the increasing isolation of that top fifth
from the rest of U.S. society. He notes that we now live in a
country where there are more private security guards than
publicly financed police officers. More and more, the top fifth
lives in areas of the country insulated from the world around
them--belonging to private health clubs, sending their children
to private schools. How far away is the United States from the
the brick walls embedded with glass shards so common in the
developing world?
     In this setting, the so-called protectionism of the working
class is no more surprising than the constant attempt of the
middle class to live upstream from the foul air and decaying
streets of our inner cities. Given the historic goal of the trade
union movement to defend and improve the wages, hours, and
working conditions of its dues-paying members, their opposition
to so-called free trade is understandable. Unfortunately, it is
also destined to be ineffective.
     The protectionist response of labour is, in essence, as
narrowly drawn as the drive by management for cheaper labour
across the border. It pits unionized workers in one sector of the
economy against fellow unionized workers who may indeed gain jobs
and income by greater trade (Lustig, 1991; Reynolds, 1990;). It
can cause a rise in the price of those goods that might improve
in quality and decline in price when made with new technology or
new material resources, or when affected by new competition. The
result is a divide between organized labour and consumers. The
union movement, in turn, is viewed as a drag on productivity
rather than as a spur to new innovation in technology and
economic organization. Finally, protectionism divides this
nation's union movement from that of other nations, where
different levels of development naturally give rise to different
perspectives for trade unionism. Hence, the Mexican labour
movement, while apparently cautious about the imperial approach
of Salinas in negotiating a free trade agreement, looks forward
to future job gains from increased trade with the United States
and to less pressure on its members to migrate northward (see
Aguilar, 1990; C rdenas, 1991; Casta$eda, 1990).
     This is not to underestimate the potential damage a "pure"
free trade agreement could do to workers in all three countries.
As Robert Dunn (1990) points out, in the United States and
Canada, low-skilled workers will lose jobs unless trade policy is
broadly developed to include compensatory financing for genuine
retraining and job placement. Also, the horrific conditions under
which many Mexicans labour will not be altered simply by the
lowering of tariff barriers. In fact, these conditions are part
of the attraction of Mexican workers. Their low pay, relative to
the north, and unregulated social and workplace conditions mean
greater profits to investors (see Anderson, 1990; Kochan, n.d.;
Peters,1990). To date, however, organized labour has been willing
only to discuss this tragic side of the debate. Their
unwillingness to counter the free market position with more
viable, positive-sum policy alternatives increases labour's
political isolation. United States labour's anti~free trade
position is, in fact, relatively new. Its trajectory has followed
the structural shifts in the U.S. economy (see Mitchell, 1978).
     The anti~free trade view is disturbing from another angle,
as well. Alongside of its historic tradition of defending the
wages and working hours of its current membership, trade unionism
has also often taken advantage of an expanding and changing
economic structure to recruit new members. International trade
and financial integration would appear to offer labour a new
vista for organizational expansion, for a move to multinational
bargaining and for political moves to place labour at the table
of new international institutions. Attempts to do this will only
be hampered by a protectionist stance.

--
-- Ward Larkin
   [e-mail]