Tuesday, June 30, 2009

Employee Free Choice Act 'supported by Catholic social teaching'

“The present legal and moral framework that is intended to assist workers to form unions is badly broken,” a group of Catholic scholars declare in a public statement. Consequently, they are lending their support to the proposed Employee Free Choice Act for its being “rooted in and supported by Catholic Social Teaching.”

The statement, signed by more than 140 members of the Catholic Scholars for Worker Justice, was published in the June 28 issue of the National Catholic Reporter and will appear in America magazine in July.

“An a priori presumption for unions” is embedded in Catholic social teaching, according to the statement. “Catholic teaching states that the right to organize belongs to workers alone and cannot be abridged or annulled by civil or ecclesiastical authorities. The method or venue that workers choose to form a union is also their choice: workers may say yea or nay, stand or sit, sign statements or cards, or hold a secret ballot election.”

Provisions of the Employee Free Choice Act “strongly reflect the Catholic position that the decision to form or join unions is always the workers’ choice,” the group says, and lists the bill’s chief provisions, all of which business groups vigorously oppose.

The full text of the statement and its signers can be found here

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Wednesday, June 24, 2009

Double standard on labor standards

You are an employer under pressure from corporate stockholders to increase the returns on their investment. You decide the way to do so is to slash your present and future labor costs by firing your current workers en masse and recruiting a set of new ones, people among the unemployed so anxious for a job that they accept anything you impose: sub-minimum pay, no vacations, a seven-day workweek, no sick pay, and other drastically lower labor standards associated with a sweatshop.

As an American employer, you would not be able to implement so radical a decision. It would be illegal. It would be bad public relations. It would also, in the eyes of most people, be immoral. You couldn’t get away with it.

But what if instead of hiring other workers in America, you hire workers overseas – foreign men, women, and children willing to work in the real sweatshops of the kind that dot the Asian industrial landscape.

In both cases you impose harm on Americans, and you undermine the progressive U.S. labor market practices built up over decades. Oddly, however, you would be judged harshly in one case and not the other. That’s because we draw a sharp line between the two radical moves, even though the effect in the United States is exactly the same.

Why does an illegitimate and unacceptable radical change in one case become legitimate and acceptable in the other? Simply because one radical change is consummated across borders under the protection of international trade laws that are deemed superior and not be interfered with.

The above paragraphs reformulate a crucial policy inconsistency conveyed by Dani Rodrik, professor of international political economy, in his June 16 talk at the London School of Economics. In outlining the possible future of capitalism (see my June 21 posting) he briefly discussed labor standards as an important globalization issue that needs to be much better understood.

“And yet,” he added, “we have no good way of even talking about this.”

Why is the labor standards issue so little talked about in Washington power circles these days?

Mostly, I think, because the agenda-setting power circle has made up its collective mind on this issue. The unspoken assumption is that today’s trade rules, despite some flaws, are sufficiently legitimate and really have nothing to do with the grave harm imposed on American workers.

Rodrik’s 90-minute talk, as recorded on video, is a good short overview of why the flaws are threats to globalization itself. His video presentation on “Capitalism.3.0” can be found on the London School’s Website. The quickest way to access it is through Rodrik’s June 18 posting on his Weblog at http://rodrik.typepad.com/

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Sunday, June 21, 2009

Envisioning a Reborn Capitalism

The present global economic crisis has shaken capitalism down to its roots. What will, or should, replace it? Dani Rodrik, professor of political economy at Harvard’s school of government, dealt with that question on June 16 in a public lecture at the London School of Economics.

Rodrik warned against making two opposite mistakes in reacting to the crisis: returning to the protectionism of the 1930s (unlikely, unless the U.S. succumbs to even deeper recession) or making “an ambitious effort to take economic globalization to the next level.”

But neither approach would address what Rodrik rightly considers the fundamental problem of the world economy: “the imbalance between the reach of markets (global) and the scope of their governance (mostly national).”

For a Moderate, Moderated Globalization

The scenario that Rodrik advocates is “an intermediate level of globalization.” Its key element: allowing countries to retain much greater domestic “policy space” when domestic requirements conflict with the requirements of international integration. (In other words, a serious need of a country’s own citizenry should trump WTO rules.)

Rodrik’s intermediate level of globalization would not be “a retreat from globalization per se” but a retreat from the gung-ho globalization of the post-1990 years. Unfettered financial globalization and free capital mobility would lose their power as driving forces under his vision of Capitalism 3.0, the assigned title of his London talk.

A major reality that Rodrik recognizes is that “democratic governance and political communities are organized within nation states, and are likely to remain so in the immediate future.” So it is still up to nation-states to act in concert toward Capitalism 3.0 under "guidelines" such as the following:

There is no “one way” of globalization: institutional designs that underpin market economies will differ according to domestic preferences and needs.

Non-democratic countries may be subject to more restrictive global trade/investment rules “since it cannot be presumed that their choices reflect the needs of their citizenry.”

“Like-minded” nations would be able to “deep integrate” (pursue a high degree of free trade and other mutual economic arrangements).

Where deep integration is not feasible or desirable, the countries would rely on “traffic rules” to manage the interface among the various national institutional arrangements.
It is in his “traffic rules” that Rodrik offers some details on putting the “guidelines,” or general principles, into specific rules. What might such traffic rules look like? In the Power Point presentation of his talk, he offers two sets of traffic rules – “illustrations,” not blueprints.

-- Regarding WTO trade rules, for example, he proposes a special “development box” for developing countries to exempt them from some currently prohibited practices that don’t fit their situation.

-- Among the traffic rules for finance, he proposes recognition of the right of governments to interfere in cross-border financial flows that undermine a country’s own regulations.

A video of Rodrik's presentation can be accessed through the June 18 posting on his Weblog at http://rodrik.typepad.com.

Rodrik’s latest book is "One Economics, Many Recipes: Globalization, Institutions, and Economic Growth." His writings appear regularly in the world press through an international press service called Project Syndicate.

The Vatican is expected to release a new document (called an encyclical) by Pope Benedict XVI late in June. Once scheduled to be released in September last year, the encyclical’s publication was delayed to take into account the economic crisis. Judging by previews given orally and in writings by the Pope, its analysis of globalization will be remarkably similar to Rodrik’s.

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Thursday, June 18, 2009

‘Globalization and Us’ in Blueprint

“Globalization and Us,” the concluding chapter of my book, Justice at Work, is featured in the current issue of Blueprint for Social Justice, published by the Twomey Center for Peace Through Justice at Loyola University in New Orleans.

The chapter
includes 15 propositions that form a proposed paradigm for dealing with globalization issues confronting us. Blueprint highlights one of the 15 in large type:

“The heart of the [globalization] reform movement should be to make the Universal Declaration of Human Rights more universal in international business, with close attention to the rights of workers, particularly women workers, who are more vulnerable to exploitation than are men.”
An article of mine, “Human Rights: Ten Objections Answered,” appeared in the December 1993 Blueprint. I wrote it to respond to major criticisms of human rights, especially worker rights. At the time I was working at the AFL-CIO’s Asian-American Free Labor Institute, which is now part of the federation’s Solidarity Center.

Loyola’s Twomey Center is named after the late Rev. Louis J. Twomey, S.J., a battle-scarred Southern champion of human rights for all.

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Tuesday, June 16, 2009

Save Capitalism? Well, that depends…

...That depends on the kind of capitalism. Some kinds aren't worth saving.

Not the kind that, as a result of the current financial crises, is inflicting more than $2,000,000,000,000 in total losses on the United States and the world.

Not the kind that values the manipulation of money over the production of goods and services.

Not the kind that treats labor as a commodity, a thing like shipload of coal or garbage.

Not the kind that furiously opposes legislation such as the proposed Employee Free Choice Act, which would help give workers and their organizations a right now enjoyed by business people and their organizations.

Not the kind that uses free trade and investment agreements to grant global rights and privileges to business and business organizations without any commensurate responsibilities.

Not the kind that uses its money and muscle to acquire and exploit vast tracts of land in distant lands no matter the harm done to indigenous peoples.

Not the kind that generates unprecedented luxuries for the few while millions and millions live in misery.

“Greed Is Good (to a point)” is the title of an essay by Fareed Zakaria in the current Newsweek. That’s catchy but grossly misleading. It’s like writing an essay on teen-age pregnancy and titling it “Lust Is Good (to a point).”

But Zakaria wisely recognizes that “the fundamental crisis we face is of globalization itself.” He goes on to explain:

“Technology has created worldwide supply chains, companies, and customers. But our politics [i.e., policymaking] remains resolutely national. The tension is at the heart of the many crashes of this era – a mismatch between interconnected economies that are producing global problems but no matching political process that can effect global solutions.”

For the ful text of Zakaria’s essay, see News Week on line at

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Friday, June 12, 2009

20,000,000 girls under 12 work fulltime

About 100,000,000 girls in the world go to work instead of to school, according to estimates of the UN International Labor Organization. More than half of these, or 53,000,000, work in hazardous jobs in agriculture, manufacturing, mining, domestic services, and commercial sex, and 20,000,000 of these girls are under 12.

To remind people of this stain on the 21st century, unions and human rights organizations throughout the world observed June 12 as World Day Against Child Labor, with special emphasis on the goal of Give Girls a Chance.

This year marks the 10th anniversary of the ILO convention 182, which is dedicated to eliminate the worst forms of child labor.
What can you do? The International Labor Rights Forum suggests pressuring Hershey, Mars, and Nestle to stop using child labor. For specifics, see the ILRF Website at http://www.ilrf.org/."

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Thursday, June 11, 2009

Protesting Very Foreign Investments

Led by an indigenous organization, tens of thousands of Peruvian Indians have for many months been engaging in non-violent protests against gas and oil exploitation of their ancestral lands. Then on June 5, when government forces in helicopters and on foot clashed with protesters blocking a road in an Amazonian province, at least 11 police officers and 30 Indians were killed and many more were wounded.

The specific aim of the protest is to cancel government legislation enacted in implementing the investment provisions of the Peru-U.S. free trade agreement, signed by President Bush in December 2007.

President Alan Garcia says the legislation will spur development. Indian opponents say it opens up communal lands and water resources to exploitation by foreign investors. Last month the nine Roman Catholic bishops in the Amazon issued a declaration calling the Indians’ complaints legitimate.

They condemned the “cruel and inhuman effort to make decisions about the possessions of riverine and Amazonian communities because they lack the legal means to defend their just demands, even in their own country.”

Thirsting for Distant Lands

The conflict in Peru comes amid an international surge in foreign investment not just by multinational corporations but also by governments and various others entities, including hedge funds and commodity traders.

“A Thirst for Distant Lands: Foreign investment in agricultural land and water,” a report released in May by the International Institute for Sustainable Development, notes that the Gulf States, China, Japan, and South Korea are also acquiring vast plots of land abroad to produce food, animal feed, and energy crops for home consumption.

As in Peru, these foreign acquisitions are generally legal, as legal is traditionally understood, that is, in accord with domestic law, even when adopted under foreign government pressure in negotiations for free trade/investment agreements. But that justification overlooks two modern realities: that rich countries promoting those agreements also advertise human rights, freedom, and democracy, and that those advertisements now instruct far-away people whose rights are violated.

More and more, then, there comes into play a factor that John Ruggie, UN special representative on human rights and business, calls a “social license.” Human rights violations can become so egregious, so intolerable that, no matter the legal license, victimized people get themselves organized to protest and to shout loud and clear Stop! No More!

That has happened in Peru.

One more challenge testing the Obama administration’s policy on foreign trade and investment.

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Saturday, June 06, 2009

Balance investor rights with responsibilities

It’s time to replace a foreign trade/investment model that has not worked, as Thea Mai Lee, AFL-CIO policy director, has repeatedly emphasized in Congressional testimony and talks at conferences dealing with the current economic crisis.

In Congressional testimony on May 14, she singled out a critical but often ignored element that belongs in a new trade/investment model: a “balanced” treatment of foreign investment.

“While we understand and support the importance of protecting the rights of investors,” she said, “we believe that existing investment provisions in U.S. investment and trade agreements are imbalanced in two crucial aspects:

“First, they significantly enhance the rights of investors vis-à-vis governments, but they fail to establish commensurate responsibilities for investors, particularly with respect to workers’ rights and the environment.

“Second, they give substantive rights and procedural advantages to foreign investors that are not available to domestic investors. This raises the possibility that investment tribunals can be used to circumvent the democratic process and to achieve regulatory outcomes in a secretive and inaccessible forum. Certainly the experience with the investment chapter of the North American Free Trade Agreement (NAFTA) and current BITs [bilateral investment treaties] reinforces these concerns.”
As now written, she said, the pro-investor language “facilitates and accelerates the offshoring of American jobs – precisely because for the most part there has been no commensurate set of investor obligations.”

Lee is co-chairing a subcommittee of the State Department’s advisory committee on international economic policy to review and critique the draft model BIT.

The United States has 40 BITs in force and 10 Free Trade Agreements with provisions protecting investment, plus a separate multilateral agreement under the World Trade Organization for the same purpose.

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Friday, June 05, 2009

Black poverty and globalization

Why is it that so many millions of blacks in Detroit, Philadelphia, Los Angeles, and other American cities are mired in poverty? Don’t put blame exclusively on past and present policies designed to discriminate against blacks. There are also other reasons, much neglected and very durable: policies that, on their face, are non-racial but actually do contribute indirectly and yet effectively to the plight of urban blacks in the United States.

That summarizes the main message that William Julius Wilson, Harvard’s distinguished professor of sociology, projects in his new book, More Than Race: Being Black and Poor in the Inner City. He himself calls it the most important point of the book.

Here is one example of the seemingly race-neutral government policies (i.e., not motivated to control or exclude persons by race) that he cites: “Mortgage-interest tax exemptions and mortgages for veterans jointly facilitated the out-migration of working- and middle-class families from inner-city neighborhoods, leaving blacks isolated in central cities.”

In a class all by itself is globalization. Wilson prefers terms like “complex global economic transformations” and tracks the profound negative impacts on urban blacks.

One impact is the creation of greatly increased demand for workers at the two poles of the labor market. Wilson describes the unintended racial consequences in documented detail.

At the bottom end of the pay and skill scales, the increased demand for workers should have been a boon for inner-city blacks, who generally rank low in job skills. However, the urban manufacturing industries that once provided equal job opportunities by the millions have largely moved abroad, thanks to the combination of U.S. free trade and investment policies and the foreign attractions of low wages and weak labor protection laws weakly enforced.

Meanwhile, at the top end of the expanded labor market, thanks to a decline in racial discrimination, many better educated blacks landed well paying suburban jobs, as managers and professionals, for example. They and their kin joined the general exodus of American urbanites into the suburbs.

The black poor who were left behind thereby became more concentrated in poor communities, and more isolated from the rest of America. For the army of unemployed and underemployed black men, this was a double whammy. Black women, who have traditionally had jobs in the service industries, were more fortunate. Most service industries can’t escape to other countries.

Wilson, who is black, used to believe that public policy should be color blind-. He felt that race-neutral agendas would be the most realistic way to win the necessary broad political support for improving the lot of the poor, blacks included.

He has changed his mind. He now sees that the special situation of urban blacks justifies a special approach and that it is urgent to educate the public accordingly. More Than Just Race (meaning More Than Just Overt Racism) is part of that education.

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Wednesday, June 03, 2009

Coming: a new U.S. ‘framework’ for trade

President Obama will soon be outlining a new “framework” for international trade. Ambassador Ron Kirk, the President’s trade representative, confirmed that on June 2 in remarks to the U.S.-China Business Council in Washington.

Recognizing that trade “has the potential to lift up workers in America and around the world,” Obama holds that future trade agreements need to have strong, enforceable labor and environmental standards, Kirk said.

Hanging over U.S.-China relations is the fact that China alone accounts for about half of the U.S. trade deficit with the whole world. In the first quarter of this year, the United States imported $64,810,000,000 in goods from China, while exporting only $14,426,000,000.

Ambassador Kirk did not cite these figures, but spoke of “the extraordinary opportunities for job creation here in the United States if we shrink our trade imbalance with China, and if China further opens its market to U.S. goods and services.”

Complicating those two if’s is that about a quarter of the U.S. imports from China is in “intra-firm” trade, that is, cross-border transactions between different branches of the same firm.

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