By James B. Parks

	Planning ahead: The IUC is working on strategies to protect health care benefits in industries with large retiree groups, such as auto manufacturing.

The United States has lost 2.4 million manufacturing jobs since April 1998, accounting for 90 percent of the jobs lost in the past four years. In the past six months, every state has lost manufacturing jobs, according to the U.S. Bureau of Labor Statistics (BLS). As a share of total U.S. jobs, manufacturing declined since its peak of 40 percent just after World War II to 27 percent in 1981 and now stands at about 15 percent. The economic consulting firm Economy.com estimates 1.3 million manufacturing jobs have moved abroad since 1992, with most leaving in the past three years, primarily to Mexico and east Asia.

Union manufacturing workers have been especially hard hit. In 1984, union members held some 27 percent of all manufacturing jobs. By 2001, that ratio dropped to 15 percent, the BLS reports. Despite significant challenges, manufacturing unions and their members are using innovative strategies to ensure workers gain a voice at work. They are winning card-check agreements, shifting resources to organizing and reaching out to community allies to help workers join a union.

To restore U.S. industrial strength and retain the type of family-supporting jobs that were the foundation for this nation’s prosperity in the mid-20th century, the AFL-CIO and affiliated unions launched the Industrial Union Council (IUC) in May 2002. The IUC, made up of man­ufacturing unions, is meeting in its first legislative conference Feb. 4 in Washington, D.C. More than 3,000 delegates from industrial unions are developing strategies to revitalize manufacturing, focusing on key issues in trade, health care and labor law reform.

“Manufacturing drives the rest of the economy,” says AFL-CIO Secretary-Treasurer Richard Trumka, who chairs the IUC. “Manufacturing jobs built the middle class in this country and provided not only jobs for workers in factories, but created jobs in other industries such as construction, transportation and services. But through an insane set of trade and health care policies, our government is destroying our nation’s manufacturing base.”

In addition, America’s manufacturing base is essential for national security. In these uncertain times, says UAW President Ron Gettelfinger, “it’s just not responsible to compromise our ability to build ships, vehicles, airplanes, machine tools and other materials that might be vital for our nation’s defense.”

Building political strength

	“America seems to be willing to abandon the rules at home and say that if you can't compete with people who make starving wages, we'll just go someplace else.” —USWA President Leo Gerard

The IUC seeks to build on the political strength of individual industrial unions through joint strategies for creating and retaining manufacturing jobs. “Many politicians exploit the fact that far too many unions have been fighting for our issues one at a time,” says Steelworkers President Leo Gerard. “The best chance for our survival is for the industrial unions to get together.” The harsh reality is that all the manufacturing unions are being pummeled by the same economic and political forces, he says.

Collectively, industrial unions can wield sufficient political strength to make politicians take heed, says PACE International Union President Boyd Young. “We’re only going to get anything if we demand it,” he says.

Delegates are exchanging successful strategies for mobilizing members to lobby and hold elected leaders accountable—strategies such as the USWA’s Rapid Response network.

Through Rapid Response, the union identifies key activists across the country and links them electronically, mobilizing them to write letters, rally and lobby for issues that affect working families. Participants at the IUC legislative conference also are developing a package of legislative goals and the 3,500 delegates will carry the proposals to members of Congress during the conference as part of a long-term coordinated lobbying effort on Capitol Hill.

Trade policies cost jobs

One of the IUC’s major goals is changing trade policies that discourage a strong manufacturing base. The deepening U.S. trade deficit has devastated the manufacturing industry. From 1994 to 2000, the growth in the trade deficit cost 3 million actual and potential jobs, most of them in manufacturing, according to the U.S. Department of Commerce. The deficit reached a record high of $130 billion in the second quarter of 2002—about 5 percent of the nation’s gross domestic product.

	“If we are to grow as a labor movement we need to reform these [labor] laws.” —UNITE President Bruce Raynor

Running such a huge trade deficit means the United States is undercutting domestic manufacturing by importing products that are cheaper than those produced here. At the same time, U.S. manufacturers are unable to sell sufficient goods abroad to offset the losses from imports.

The trade deficit is driven by faulty economic and trade policies, IUC leaders say. The rules of the global economy established by the World Bank, the International Monetary Fund (IMF) and the World Trade Organization (WTO) have created competition for jobs between developed and developing nations, says UNITE President Bruce Raynor.

The IUC will ratchet up lobbying for a fair trade policy that makes enforceable workers’ rights the core of every trade agreement. “Right now, workers have no protection from corporations that scour the globe and abuse cheap labor,” Raynor says.

“UNITE has investigated apparel sweatshops in six countries and found workers are often beaten, paid poverty wages and brutalized for trying to organize unions. It’s appalling and we’ve got to put a stop to it. This is about raising standards for workers throughout the world.”

At the same time, current tax policies encourage U.S. companies to move production overseas. The nation’s foreign tax credit allows companies to deduct dollar-for-dollar from their U.S. taxes any tax paid to a foreign country. Companies are also not required to pay taxes on profits earned outside the United States if they reinvest the money in their foreign operations.

“These tax incentives, which were originally designed to promote U.S. investment and help to rebuild post-World War II Europe and Japan, now are being used to tear down our manufacturing base,” Trumka says. “The average American taxpayer would go to jail for not paying taxes, but our government rewards Big Business for avoiding all U.S. taxes.”

The failure to vigorously monitor other U.S. trade laws hurts manufacturing, particularly the steel industry. Last year, President George W. Bush promised to impose high tariffs to stem the flow of illegally dumped foreign steel into the country. The federal International Trade Commission (ITC) ­recommended the tariffs after finding that unlike the United States, several countries were subsidizing their domestic steel industry, which allows them to send under-priced steel to the U.S. market.

But Bush excluded hundreds of steel products from the tariffs. Many exclusions cover products American steelworkers make every day, Gerard says. Despite the administration’s promises, only 7 percent of im­ported steel is subject to tariffs. In large part due to the illegal dumping, more than 50,000 steelworkers have lost their jobs and 35 companies have declared bankruptcy since the steel crisis began in 1998.

“The mindset seems to be that price is the only thing that matters,” Gerard says. “There is a need for clean air, for a safe society, for a decent standard of living. America seems to be willing to abandon the rules at home and say that if you can’t compete with people who make starving wages, we’ll just go someplace else.”

	“The average American taxpayer would go to jail not paying taxes, but our government rewards Big Business for avoiding all U.S. taxes.” —AFL-CIO Secretary-Treasurer Richard Trumka

Health care: Top issue at the bargaining table

Health care is the major issue on the bargaining table for all unions, but especially manufacturing unions, with their large numbers of retirees. With health care costs rising between 10 and 13 percent annually, manufacturing companies are looking to shift the burden of paying premiums to workers and to reduce or eliminate coverage.

According to the U.S. Census Bureau, 1.4 million Americans lost their health insurance in 2001 because of layoffs and employers reducing benefits.

Rising health care costs adversely affect manufacturing in two ways. First, unionized companies usually pay health care benefits that nonunion and foreign manufacturers do not, putting them at a competitive disadvantage. In foreign countries, employers generally do not pay health care benefits either because the government provides them, as in Germany, or it is not customary for employers to provide them, as in low-wage countries such as Bangladesh.

Union workers are more likely to have health care benefits. In 1999, 73 percent of union workers in private industry had participated in medical care benefits, compared with only 51 percent of nonunion workers, according to the BLS.

Last year, U.S. insurers hit employers with group policy premium increases averaging 12.7 percent, the largest increase since 1990, according to the 2002 Employer Health Benefits Survey by Kaiser Family Foundation and the Health Research and Educational Trust, two nonprofit research groups.

Manufacturing companies also incur greater health care expenses than companies in other industries because manufacturing firms have substantial numbers of retirees on their pension payrolls, and employers are addressing the rising cost of health care by wiping out retiree health benefits in many companies.

The problem is particularly acute in the auto and steel industries, which include large retiree populations. Steel bankruptcies have left more than 100,000 steel retirees and their dependents without any health care coverage. A bipartisan coalition in Congress introduced legislation last year to pay the steel industry’s health care costs. But congressional Republican leaders held up the bill. In a ploy to get Fast Track trade promotion authority legislation passed in July 2002, the Bush administration included a tax credit program to help steel retirees buy health insurance from private insurers. But Steelworkers leaders say this type of program is unlikely to help retirees.

	“It's a national disgrace that more than 40 million Americans have no health insurance, and it just doesn't make sense to continue to force those employers who do provide health benefits to operate at a competitive disadvantage.” —UAW President Ron Gettelfinger

The solution, says Gettelfinger, lies not in tax credits, but in a major national commitment of federal money to provide universal health care. “The rising cost of U.S. health care puts U.S. manufacturers at a serious competitive disadvantage compared with our major industrial trading partners,” Gettelfinger says. “Canada, Japan and Western Europe all have universal health care systems that deliver superior outcomes at a lower cost than our patchwork, employer-based system.

“It’s a national disgrace that more than 40 million Americans have no health insurance, and it just doesn’t make sense to continue to force those employers who do provide health benefits to operate at a competitive disadvantage,” he says. “So it’s long past time for the U.S. to adopt a universal health care system, which can distribute risk, control costs and deliver the quality care that all Americans deserve.”

The union movement and senior activist groups such as the Alliance for Retired Americans are pushing for the nation to establish a real Medicare prescription drug benefit to guarantee current and future retirees are able to afford the medicines they need. The Alliance supports a plan like the one proposed last year by congressional Democrats, which covers the medications seniors need and controls the cost of premiums and co-pays. The Bush administration and congressional Republicans, on the other hand, have proposed privatizing prescription drug benefits and forcing seniors to pay all costs between $2,000 and $3,600 out of their own pockets.

Passing legislation to pick up the cost of steel retiree benefits also would help companies retain good benefits and compete on the global market, Gerard says.

Strengthening labor laws

Recognizing that building a stronger ­manufacturing sector can be achieved only if workers are free to organize and bargain collectively, participants at the IUC conference are making the need for stronger labor laws a key part of their agenda.

Although Congress and the White House are controlled by anti-union Republicans, Raynor says, labor law reform is a top item on the IUC action agenda.

Labor laws should be strengthened to prevent employer interference in workers’ freedom to choose a union, which in turn will promote growth and stability in unionized manufacturing jobs, Raynor adds.

	“You get punished more for a parking ticket than for violating labor laws.” —PACE President Boyd Young

“The labor laws in this country are a travesty,” he says. “They allow corporations to get away with the wholesale abuse of American citizens who try to organize unions. If we are to grow as a labor movement, we need to reform these laws.”

After winning a voice at work, workers need protections that enable them to bargain collectively, including higher penalties for employer interference in workers’ efforts to win collective bargaining rights, Young says. “Union bargaining has resulted in improved health care benefits and competitive productivity, yet you get punished more for a parking ticket than for violating labor laws.”

If tougher laws were in place now, says Mike Pardue, he and his co-workers at Peterbilt’s heavy truck factory in Madison, Tenn., would still be on the job—and not locked out.

Pardue, president of UAW Local 1832, is one of more than 1,400 workers locked out in September at Peterbilt. In the midst of contract negotiations, the company issued layoff notices for some 500 employees. Under the federal Worker Adjustment, Retraining and Notification (WARN) Act, employers are required to give workers 60 days notice and pay them during those 60 days.

Rather than pay them, Peterbilt locked out the workers and moved much of their work to a nonunion plant in Texas.

The union is suing PACCAR Inc., Peterbilt’s parent, for $3.5 million, the amount the laid-off workers are entitled to in wages.

	From America@work, February 2003.

While the workers were being locked out, Peterbilt executives received more than $8 million in pay and stock bonuses, according to a proxy filing with the Securities and Exchange Commission. “Those bonuses came off the sweat of American workers’ brow,” Pardue says. “With the current laws, there is not much that working people can do. We need to do something to make sure the people who keep America going have a voice in how things are run.” (For detailed information on CEO pay and other data on corporate greed, visit Executive PayWatch.)

For workers such as those at Peterbilt and Sparrows Point, the reality is that the American economy is not working for them, ­Gerard says. “It is immoral for American workers to have to compete with workers who are paid pennies and have no health and safety protections.”

“The industrial unions have to come together and forge a common economic vision and fight on principle,” he says. “We are the voice of all workers, not just union members. We can’t just raise our voices at election time; we must raise them all the time.”