By James Parks
The Industrial Union Council is making fair trade, health care, overtime and the freedom to form unions the centerpiece of a 2004 working families’ agenda.
Tim Crase has worked at the Whirlpool plant in Fort Smith, Ark., for 20 years making refrigerators, ice makers and trash compactors. But now he and the other 4,500 workers at the plant are wondering whether they’ll have a job a few months from now after the company announced it plans to move an unspecified number of jobs to Mexico next year.
“NAFTA [the North American Free Trade Agreement] is killing us, because it’s not fair trade. In Mexico, they don’t have the same environmental rules, the same pay. If everything were on a level playing field, you wouldn’t have companies moving away.”
Whirlpool is moving because its competitors already are in Mexico, and the company wants to stay competitive, Crase says. “We’re working harder than ever and cutting costs. We have one person doing the work that three people used to do, but that doesn’t seem to be enough,” says Crase, who is vice president of PACE International Union Local 5-0370.
Crase and some of his co-workers stepped up their lobbying and mobilization efforts to influence lawmakers from Arkansas and Oklahoma (Fort Smith is on the border between the two states) during the AFL-CIO Industrial Union Council (IUC) legislative conference Feb. 3. “Our government has to step up to the plate. They know what the problems are, but I don’t know if anyone has the courage to do what has to be done.”
2.8 million manufacturing jobs lost under Bush administration
The United States has lost 2.8 million manufacturing jobs since President George W. Bush took office in January 2001. In fact, manufacturing employment in the United States fell to 14.5 million in December 2003, its lowest level in 45 years, according to the U.S. Bureau of Labor Statistics (BLS). As a share of total U.S. jobs, manufacturing has declined since its peak of 40 percent just after World War II to 27 percent in 1981 and now stands at about 12 percent.
To restore U.S. industrial strength and retain the type of family-supporting jobs that created the nation’s middle class and formed the foundation for this nation’s prosperity in the mid-20th century, the AFL-CIO and affiliated unions launched the IUC in May 2002. The IUC, led by the presidents of manufacturing unions, met in its second legislative conference Feb. 3 in Washington, D.C. More than 3,000 delegates from the industrial unions lobbied members of Congress and developed strategies to revitalize manufacturing, focusing on trade, health care and workers’ freedom to form unions.
Union manufacturing workers have been hit especially hard. In 1983, union members held 28 percent of all manufacturing jobs, but by 2002 that ratio had dropped to 14 percent, the BLS reports.
The decline in manufacturing has led to a decline in the quality of life in many states. A survey by the nonprofit Economic Policy Institute (EPI) shows the number of low- paying service jobs is growing in 47 of the 50 states, while the number of better-paying industrial jobs, mostly in manufacturing, is shrinking. The study found the average annual pay in industries where jobs are declining, such as manufacturing and information technology, is $44,570, while jobs in expanding industries such as leisure and hospitality pay an average $35,410 a year. “It’s bad enough that we’ve lost so many jobs, but this shows that the jobs lost were good jobs,” says Michael Ettlinger, director of the Economic Analysis and Research Network.
Manufacturing jobs “are not only stepping stones for many workers from low-paying jobs to living-wage jobs, but also vital to the nation’s economy and national defense,” says Michael Sullivan, president of the Sheet Metal Workers, which recently joined the IUC.
Attaining the American dream depends on jobs, says James Powell, a UAW member from Trenton, Mich. “With a job, you can send your children to college, own a home and buy a piece of America. Manufacturing jobs are important for our country, our security and our standard of living, and we have to do whatever it takes to save manufacturing.”
Since its creation, the IUC has served as a vehicle for the industrial unions to combine their political strength to push for solutions to the manufacturing crisis.
“Political action is key to the survival of the manufacturing sector, because the politics-as-usual in this country have resulted in misguided trade policies that ship our jobs overseas, destroy our communities and put our national security at risk,” says PACE President Boyd Young.
The loss of manufacturing jobs is part of a larger decline of the nation’s middle class. After years of moving good manufacturing jobs abroad, multinational corporations obsessed with short-term profits now are shipping massive numbers of white-collar jobs overseas. U.S. employers will move as many as 14 million white-collar service jobs overseas in the next decade, according to a study by the Fisher Center for Real Estate and Urban Economics at the University of California.
“The outsourcing and Wal-Marting of America has created a corporate feeding frenzy, a frontal assault on workers, health care and wages. It is a downward spiral,” says AFL-CIO Secretary-Treasurer Richard Trumka, who chairs the IUC.
To combat this erosion of the nation’s middle class, IUC delegates planned strategies that will address the causes underlying the jobs crisis: flawed U.S. trade and currency policies, rising health care costs, attacks on workers’ overtime pay protections and employers’ war against workers’ right to join a union.
U.S. trade and monetary policies = job loss
The nation’s trade policies have devastated the country’s manufacturing base. The U.S. trade deficit grew to a record $529 billion last year, some $1.45 billion a day. Trade with China accounts for the largest single portion of the deficit—$120 billion in 2003. Between 1994 and 2000, the growth in the trade deficit cost 3 million actual and potential jobs, including 2 million in manufacturing, according to the U.S. Department of Commerce.
By running such a huge deficit, the United States undercuts domestic manufacturing because it imports products cheaper than those produced domestically. U.S. manufacturers then are unable to sell enough products abroad to offset the losses from imports.
U.S. manufacturers are losing markets to foreign competitors because of trade agreements such as NAFTA and the proposed Free Trade Agreement of the Americas (FTAA) and Central American Free Trade Agreement, that reflect the interests of large multinational companies and not domestic manufacturers and workers, union leaders say.
The FTAA would expand NAFTA’s legacy of job loss and lack of protections for workers and the environment to 34 countries in the hemisphere with a combined population of 800 million. Since NAFTA was launched 11 years ago, U.S. workers have lost 879,280 jobs and real wages have fallen in Mexico, according to the EPI. Manufacturing accounts for nearly 80 percent of U.S. jobs lost because of NAFTA. The lack of workers’ rights and environmental standards in free trade agreements encourages companies to go abroad seeking cheap labor.
Even as the United States lowers its trade barriers, other nations such as Japan and the European Union have imposed tariffs and restrictions on many U.S.-made products such as textiles and communications equipment.
The trade imbalance also is in part due to the monetary policies of nations, such as China, that keep their currencies at artificially low levels to ensure their products are cheaper than those made in the United States. When the dollar’s value is high, it makes U.S. products more expensive and foreign imports cheaper. In the past year, the dollar’s value has begun to drop compared with European and Canadian currencies after rising 33 percent between January 1999 and January 2003. As a result, the cost of U.S. exports to Europe and Canada have dropped and are closer in price to imports from those countries.
But that is not the situation when it comes to China and other Asian nations. While other countries adjust their currency values based on international financial conditions, China, which has seen tremendous economic growth in the past few years, has set the value of its currency at an artificially low rate to make its exports cheaper than U.S. products. China sets the value of its currency, the yuan, at 8 yuan to the dollar, no matter what the value of the dollar. So, even if the dollar drops in value or rises, it still will be worth 8 yuan in China.
The industrial unions and the Bush administration have demanded China adjust its currency upward to reflect its growing economy, but Chinese officials so far have refused.
The combination of low wages and wide access to U.S. markets allowed in free trade agreements has made it profitable for manufacturers to shift jobs and investments overseas, destroying U.S. jobs in the process, says AFSCME Secretary-Treasurer William Lucy, vice chairman of the AFL-CIO Executive Council’s Committee on International Affairs.
Industrial union leaders say that to revitalize the nation’s manufacturing, the government needs to seek fair trade policies that reduce the trade deficit, protect U.S. laws and require enforceable workers’ rights and environmental standards. The IUC is lobbying government officials to use U.S. trade laws to address unfair trade practices such as violations of workers’ rights and revisions to tax laws that encourage companies to leave the country. And the unions are demanding immediate action to press China and other nations to stop artificially propping up their currencies by tying their exchange rate to the dollar.
“The cost of our unfair trade policies can best be counted by how many workers have lost their jobs or had to lower their standard of living because their work moved overseas,” Lucy says. “We are destroying the communities of America, one by one, in the name of greed.”
32.5 million seniors will pay more under new Medicare drug plan
The manufacturing crisis has been compounded by the rising cost of health care, which is the most critical issue for unions at the bargaining table in 2004. Health care costs for employers rose by nearly 14 percent last year, and manufacturing companies, many of which have large numbers of retirees, are trying to shift the burden of paying premiums to workers and eliminate or reduce coverage.
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, placing union companies and their workers at a competitive disadvantage. Union workers overall are more likely to receive health care benefits. In 1999, 73 percent of union workers in private industry received medical care benefits, compared with 51 percent of nonunion workers, BLS reports.
“Losing health care is the biggest concern of workers,” says Sylvia Ruiz, a member of Steelworkers Local 207 in Findley, Ohio. Her employer, Cooper Tire & Rubber, is building a plant in China, and she and her 900 co-workers are wondering if they will have jobs or health care benefits soon. “People who work deserve to be paid a living wage and to not have to worry about getting sick and not be able to afford treatment.”
Manufacturing companies also have greater health care expenses than companies in other industries because manufacturers pay benefits for large numbers of retirees, and the rising cost of health care is wiping out retiree benefits in many companies. Some 20 percent of large, private-sector U.S. employers likely will terminate health insurance benefits within the next three years for workers when they retire as medical costs continue to increase, according to a study by the Henry J. Kaiser Family Foundation, a nonprofit research group, and Hewitt Associates, a human resources consulting firm.
Many retirees likely will pay more for health care after the Medicare prescription drug plan President George W. Bush pushed through Congress and signed into law in 2003 becomes effective in 2006. The bill will force 32.5 million seniors to pay more for Medicare and gives employers incentives to drop retirees. It also prohibits Medicare from negotiating lower drug prices.
The industrial unions are pushing for two key measures to combat the health care debacle. First, they support fixing the Medicare prescription drug benefit law to discourage companies from dropping retirees’ coverage and are urging passage of a comprehensive plan that includes all seniors.
Second, the IUC is calling for incentives, such as financial subsidies to help pay for insurance, to encourage employers to continue offering health care benefits to active workers and retirees.
“Companies making billions force their employees to pay hundreds, even thousands, for health care each year,” says Machinists President Thomas Buffenbarger. “If these corporations hammered their insurance companies to cough up a comparable amount of cash, the howls of pain would be heard across Capitol Hill. Instead, they pick the pockets of the most vulnerable.”
Working overtime to keep overtime pay protections
Manufacturing and other corporate employers support the Bush administration’s drive to eliminate overtime pay protections, which millions of workers, union and nonunion, depend on to make ends meet.
The White House’s proposed changes to the Fair Labor Standards Act, due to go into effect this month, could take away overtime pay from some 8 million workers. Such a move undermines the 40-hour workweek and will result in more manufacturing workers working longer hours for less pay, according to an EPI study.
As a result, manufacturing workers will face unpredictable work schedules and reduced pay because of an increased demand for extra hours for which employers will not have to compensate workers, the study says.
Over the past year, industrial unions have mobilized their members to lobby Congress to protect overtime pay. PACE and the Steelworkers mobilized activists who signed up for their rapid-response activist networks to send letters, telegrams and faxes to Capitol Hill urging legislators to protect overtime pay. A rapid-response network enables members of local unions to educate their co-workers on fast-breaking issues and mobilize them to contact Congress and other policymakers through toll-free phone calls, e-mails and faxes.
The bottom line: A voice at work
When addressing the manufacturing crisis, workers must have a strong voice to influence trade policy and demand companies forgo short-term profits for long-term benefits. The only way to have that voice is to join a union. Yet through intimidation, threats and illegal firings, employers routinely deny workers their right to form unions. In 25 percent of organizing campaigns, private-sector employers illegally fire workers, according to studies by Cornell University scholar Kate Bronfenbrenner. Although it is illegal for em- ployers to target union supporters, the penalties imposed by the National Labor Relations Board often are ineffective and fail to deter employers from suppressing workers’ rights.
The industrial unions are backing the Employee Free Choice Act (S. 1925 and H.R. 3619), a historic bill introduced in December by Sen. Edward Kennedy (D-Mass.) and Rep. George Miller (D-Calif.), which would restore workers’ freedom to join unions without employer interference.
The proposed legislation would allow employees to freely choose whether to form unions by signing cards authorizing union representation, provide mediation and arbitration for first-contract disputes and establish stronger penalties for violation of employee rights when workers seek to form a union and during first contract negotiations.
“political action must extend beyond the election year and merely voting,” says PACE President Young. “Only through such ongoing political action can we change our trade laws to stop the race to the bottom and build an industrial policy in the United States to restore and preserve America’s manufacturing base.” @
