Wednesday, May 07, 2008

A lose - lose proposition for people who work for a living. 

It has been the wet dream of the U.S. elite, big business, the U.S. Chamber of Commerce, and the National Association of Manufacturers for decades to destroy the U.S. trade union movement and radically decrease the wages paid to American workers.

In the late 1980s they were quite open about their desire to run the U.S. working class into the ground:

For the first time, American manufacturers are talking openly about a new and startling wage goal: They want to greatly narrow the gap between what they pay their factory workers and the earnings of workers in South Korea, Brazil and a handful of other third world countries.

That does not mean that businessmen want wages to plunge from the $13.09 an hour that is the average total compensation of the United States factory worker. ''Wages overseas will come up, but one way or another, the gap will have to close,'' said Robert E. Mercer, chairman of the Goodyear Tire and Rubber Company. Walter Joelson, chief economist at General Electric, added: ''Let's talk about the differences in living standards rather than wages. What in the Bible says we should have a better living standard than others? We have to give back a bit of it.'' [Note: Where in the Bible does it say that corporate executives should earn twenty gazzilion times more than regular workers? I guess economists at General Electric don't get paid to ask those types of questions though - O.W.]

However the case is put, a common view is emerging. ''Many manufacturers now feel that we are not going to be able to afford the wage difference,'' said Jerry Jasinowski, chief economist at the National Association of Manufacturers. Their concern is directed mostly at six countries whose modern, high-tech factories turn out products often competitive with ours. The six are South Korea, Brazil, Mexico, Hong Kong, Taiwan and Singapore - and each has an average factory wage of less than $3 an hour.

And of course, helped by "free trade" agreements which essentially serve to destroy unions and give corporations easy and secure access to highly exploitable labor (in addition to helping them to exploit U.S. workers more), the above has gone a long ways towards being converted into reality.

For example, for many decades the automobile industry has been viewed as the industrial backbone of any developed country and automobile workers the "aristocracy" of the industrial workforce which often made it to "middle class" status in countries like the United States. But as workers at huge auto parts manufacturers such as Delphi, Dana, and American Axel know, they are now facing huge wage cuts (40 to 50%) and no longer need consider themselves part of the middle class.

In fact, the war against the American worker has been so successful that the share of U.S. GDP going to wages is the lowest it has ever been since records were first kept in 1947 while corporate profits are now have a higher share of GDP than they have had since the 1960s.

In short, all these trade deals have screwed American workers. Truth be told though, we knew that all along.

But the paid apologists for "free trade" long ago came up with a sophisticated arguement that was supposed to make people feel better about U.S. workers getting the shaft.

"Free trade is what will lift the third world out of poverty" they say as they also added "why should we defend the interests of rich American workers at the expense of poor third world workers".

I.e, they make the argument that progressives should back free trade as it will help the "truly poor" as opposed to "greedy" and "overpaid" American workers.

Specifically with regard to NAFTA it was sold as something that would develop Mexico, improve the lot of Mexican workers, and stop mass migration of Mexicans to the United States. So even if U.S. workers didn't fare well at least SOME workers were going to be better off!

Sounds compelling doesn't it?

Thing is, it is also false. It turns out, for example, that workers in Mexico saw their wages go DOWN after the North American Free Trade Agreement was implemented. In fact, read this study by the Carnegie Endowment and you will see that in addition to wages going down, almost no new jobs have been created in Mexico, wages and productivity have been de-linked (ie, workers make more but get paid the same or less the difference going to corporate profits) and income inequality has increased significantly in Mexico (gee, same as the U.S.!)

In sum, workers in both Mexico and the U.S. have been made worse off since the implementation of NAFTA. But corporate profits and the income of the elite are way up in both countries.

How much you want to bet they don't bring those facts up the next time they try ram a free trade agreement through?


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