Friday, October 30, 2009

How contamination gets ground into a global hamburger

The grilled hamburger that a 22-year-old Minnesotan, Stephanie Smith, ate on October 6, 2007, ravaged her nervous system and left her paralyzed from the waist down. She was among the 640 people sickened at that time by eating American Chef’s Selection Angus Beef Patties, which carried a virulent poison, E.coli.

Smith’s hamburger, made by Cargill Inc., a giant multinational, and bought at Sam’s Club, a division of Wal-Mart, had multiple origins. Ingredients came from slaughterhouses and processing plants in at least four states and a somewhat remote South American country, Uruguay.

Her burger was among those came from a grinder at the Cargill plant in Butler, Wis., on August 16, 2007. Its largest ingredient was beef trimmings, half fat, half meat, purchased from Greater Omaha Packing, supplemented by ingredients from two other U.S. plants, one in Texas and one in South Dakota.

The other supplier, a slaughterhouse in Uruguay, provided lean meat from grass-fed cattle, which helped maintain a certain minimum level of fat content in Cargill hamburgers – 26.6% in the lot from which Smith’s came, according to company records.

“In all,” a New York Times reporter wrote, “the ingredients for Ms. Smith’s burger cost Cargill about $1 a pound, or about 30 cents less than industry experts say it would cost for ground beef made from whole cuts of beef.” Cargill had $116,600,000,000 in revenue last year.
Like most large U.S. producers of ground beef, Cargill does not test ingredients for E.coli before grinding them into patties. One of the few giants that does so is Costco.

At what point did the contamination of the Smith burger occur?

The mix of ingredients from multiple places was such that none of the experts, federal, state, or Cargill, could tell.

The above information comes from an exhaustive report by Michael Moss published in the October 4 New York Times. The Times’ investigation revealed health safety flaws throughout the Cargill ground beef system. Federal records and other documentation showed that the inspection system of the whole ground beef industry is seriously flawed and that the U.S. Department of Agricultures had a “restrained approach” in carrying out its legal duty to enforce food safety.

The Times report throws light on how a multinational corporation fragments its production even under global economic integration. Cargill’s fragmentation creates a cross-border diffusion of responsibility whereby it is extremely difficult to identify specific sources of contamination and those who are responsible for it.

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Monday, October 26, 2009

Ideas on Making it in America

“Building the new economy – making it in America” is the theme of an all-day conference in Washington on Thursday, October 29. Top speakers include AFL-CIO President Richard Trumka and US Steel President John Surma.

Wish I could attend, but my bum legs usually keep from straying far from home. But I’ll be able to follow much of it on Facebook or Twitter.

The Alliance for American Manufacturing and the Institute for America’s Future are the co-sponsors. Related information can be found on their Websites.

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Thursday, October 22, 2009

U.S. Reviewing Urgent Question: Link investor rights with duties?

“We feel this is a critical moment to take a fresh approach to bilateral investment treaties and the investment chapters of trade agreements….We look forward to working with the administration to [establish] a whole new framework for the governance of international investment that protects the public interest in the United States and abroad.”
So says a “collective statement” by representatives of labor, environmental, and economic development groups in a report prepared at the administration’s request for its review of U.S. policy on cross-border investment.

Among the concerns raised in the statement was that current investment rules “provide sweeping protections for U.S. investment abroad, without commensurate investor obligations,” thereby facilitating and accelerating the movement of U.S. jobs, production capacity, and technology.

“Strong labor provisions and a record of effective enforcement of those provisions should be a precondition for any negotiations, [but] they are not enough,” the statement adds. “A whole new framework is needed to reverse the devastating impacts of offshoring on U.S. workers and communities.”

Any such reversal will require detailed revisions of a 2004 document called the “Model BIT,” which serves as the official guide for negotiating bilateral investment treaties and the investment chapters of regular free trade agreements.

The present model is tilted too far in favor of investor rights. Among the recommended changes to restore balance, all opposed by business groups, are these:
-- Favoring cress-border investors with no rights more extensive than those granted investors under the U.S. constitution.
-- Clarifying the meaning of “indirect expropriation” (against which the investor is protected) so as to ensure, for example, that a government will not be restrained from, and penalized for, improving health, safety, environmental, and other legitimate public welfare objectives.
-- Changing the present arbitration system of dispute settlement to one involving only governments (state-to-state), among other reasons because outside arbitrators are not qualified to determine the public interest at stake.
China's Mercantilism a Major Threat

Another important change would try to create “a level playing field” globally between private enterprises and those “state-owned” – meaning particularly those owned by the People’s Republic of China.

That change is urgent for several reasons cited in the statement. For example:

-- “China engages in trade based on mercantilist principles, and has a strategic industrial policy meant to create and expand industrial sectors with the intent of becoming dominant within China and globally. In fact, China has targeted ten sectors or ‘pillars,’ including steel, telecommunications, and aerospace. To achieve dominance, the Chinese government subsidizes home-grown industries (commonly SOEs, or state-owned enterprises), manipulates its currency for export advantage, and insulates its domestic enterprises from foreign competitors in a host of ways.”

-- “As investment flows into the United States continue to grow [by over 70 percent since 2004], it can be anticipated that the U.S. market [for foreign investment in the U.S.] will expand substantially. Consequently, BITs can no longer be viewed solely as a package of rights and obligations to protect outward investment by U.S. investors in less developed nations. BIT obligations apply with equal force to investments within the United States by foreign companies and governments, including SOEs.”

The collective statement quoted above is signed by nine persons, including Linda Andros of the United Steelworkers, Matthew Porterfield of Georgetown University’s Institute of Public Law. and Martin Wagner of Earthjustice.

Their statement is part of a long document that also reflects the views of business interests as formulated by other eight persons. That document in turn is part of a much longer report submitted to the Secretary of State on September 30.

I have highlighted, mostly be direct quotation, those parts of the analysis that most clearly state the major issues impacting workers and their organizations. However important, it is a daunting chore, except to those who want to know what’s at stake behind many thousands of sentences in legalese.

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Saturday, October 17, 2009

The next crucial human rights test for Obama: APEC summit meeting in Singapore

On his first Presidential trip to Asia, President Obama will stop in Singapore next month to address the 20th anniversary meeting of the Asia-Pacific Economic Cooperation (APEC) forum, which groups 21 countries on the Pacific rim.

APEC is a glaring example of an intergovernmental institution that by long tradition includes representatives of business but not of labor. (See "Only Businessmen Allowed Here: APEC.”) APEC thus symbolizes the Bush era paradigm that excludes workers, their rights, and their organizations from public policymaking.

Consistent with that paradigm, more than 800 of the world’s top business leaders will represent the “private sector” at the Nov. 13-15 APEC summit, and worker issues will not be on the agenda. Among the government leaders who will address the delegates, besides President Obama, will be the presidents of Russia, Indonesia, Australia, and Communist China.

“Engagement between the public and private sector is the highlight,” an APEC press release says. “Intreractive open dialogue and panel discussions will pave the way for the alignment of APEC policies and goals with global business.”

In other words, according to APEC, labor is not a part of the private sectior, and public sector policies should be aligned with global business.

Will Mr. Obama express any disagreement, or at least discomfort, with the monopoly that APEC, as an intergovernmental body, gives to one part of the private sector and to the views of that single part? Will he take the opportunity to distiniguish the Obama administration’s economic polices from those that the Bush administraion supported in APEC?

So far, there is no sign that he will.

“APEC is strategically important to the United States,” a State Department official told Congress on October 14, “because it is a primary venue for multilateral engagement with the Asia-Pacific on economic key interests.”

In that testimony, Kurt Tong, the acting senior official for APEC in the State Department’s Bureau of East Asian Affairs, made no significant distinction between current U.S. policies toward APEC and those the past. In his words on the “rubric of inclusive growth,” for example, Tong praises “flexible labor markets,” which is generally code for anti-worker policies such as opposing unions and minimum wages.

Business plays a direct, formal role in APEC through the APEC Business Advisory Council (ABAC), established in 1995. One of its foremost purposes, as its mission statement puts it, is to champion free and open trade and investment. “Our initiatives turn policy goals into concrete results,” ABAC adds.

Asian-Pacific unions and their parent labor international body, then named the International Confederation of Free Trade Unions, founded the Asia Pacific Labor Network in l995, hoping to match the power of business and to raise the profile of labor issues in APEC. Despite repeated efforts, they have failed.

They seemed to come close last year, when, a month before the November 2008 APEC summit in Peru, Peruvian President Alan Garcia, told a union delegation that he would support a role for labor and labor issues in APEC. Nothing happened.

The struggle is not over, however. The cause is just, and will not die.

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Tuesday, October 13, 2009

How to win a Nobel Prize in economics

Early October is a good time to root for your favorite economist to win a Nobel Prize. Mine this year was Thomas Paley, an economist with broad and long experience in think tanks, the labor movement, and governmental agencies. Unfortunately, he didn’t make it. Instead, two other American scholars were awakened by early morning phone calls from Stockholm October 12 notifying them they had won the 2009 Noble prize in economics.

The Swedish Royal Academy of Sciences cited both of them, Elinor Ostrom, a professor of political economy at Indiana University, and Oliver Williamson, an economist at the University of California at Berkley, for their “analysis of economic governance,” particularly for contributing to the understanding of how institutions act in situations not covered by detailed contracts or law.

“Whereas economic theory has comprehensively illuminated the virtues and limitations of markets, it has traditionally paid less attention to other institutional arrangements,” the Nobel press release explains. Attachments to the release describe how Ostrom and Williamson have contributed to filling that void – theoretical and actual -- in economic governance.

Thereby, the Nobel committee passed over economists who have done ground-breaking research to fill another gap – theoretical and actual: the gap in global economic governance, which today has gained an immediacy from the economic crisis gripping much of the world. Among the scholars who have focused on this area are Thomas Paley and Dani Rodrik, professor of international political economy at Harvard’s Kennedy School of Government.

My own decades-long personal exploration of the global economy, as described in my book, “Justice at Work: Globalization and the Human Rights for Workers,” and on this Weblog, has convinced me

-- that the global economy undervalues work, workers, and worker organizations and
-- that economists traditionally also undervalue work, workers, and worker organizations.
The economist who, in my limited view, departs most sharply from that tradition is Thomas Palley, author two books, dozens of articles in academic journals, and numerous policy papers. His most recent work is a timely policy paper for the New Century Foundation titled “America’s Exhausted Paradigm: Macroeconomic Causes of the Financial Crisis and Great Recession.” I summarized the main points of that paper in my August 25, 2009, posting on this Blog under the heading: “Rx: a new economic model that would value work and workers.”

Let me try summarizing that summary.

Palley’s key point, as I saw it, was that the “neo-liberal” policies adopted after 1980 under Ronald Reagan put workers in a box, figuratively and literally. The box’s anti-worker policy pressures come from four sides:
--globalization (chiefly free trade and unfettered movement of capital),
-- a retreat from full employment,
-- labor market flexibility (i.e., to fight unions, minimum wages, unemployment benefits, and other worker rights), and
-- “small government” (deregulation, privatization, and outsourcing, all to the disadvantage of workers).
In commending Professors Williamson and Ostrom, the Nobel panel noted that both scholars were “instrumental in establishing economic governance as a field of research.” Indeed, the selection itself adds to that legitimacy.

Were someone like Tom Palley similarly rewarded, the selection would also serve to stimulate research in global economic governance, where the role of workers and their organizations suffers from wholesale neglect.

“What Do Unions Do?” by two Harvard economists, Richard B. Freeman and James L. Medoff, published in 1984, was an economic assessment of American unionism of that era. It badly needs updating. More accurately, a new book is needed to reveal a new paradigm – how workers and their unions are involved in 21st century global economic governance.

One chapter, or more, could be devoted to an empirical study of the trade union movement in Malaysia and its historic campaigns for Malaysian workers and often against the Malaysian government and the foreign multinationals that profited from “labor market flexibility.” In defiance of the government, for example, the Malaysian Trades Union Confederation has long publicly supported adding requirements for enforceable labor standards to international trade agreements.

Many other countries have a wealth of labor material ready to be mined by researchers in the 21st century model of global economic governance. The research is worth doing for its own sake, and – who knows? – could even lead to a pre-dawn phone call from Stockholm.

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Thursday, October 08, 2009

A timely lesson for health care reform: subsidiariy and solidarity

Subsidiarity, a concept better known in Europe than in America, has become a specialized import for use in the U.S. health care controversy. “By some accounts, it is a magic word that transforms Catholic social teachings into anti-government libertarianism,” writes Stephen Schneck, a professor of political science at The Catholic University of America and director of its Life Cycle Institute.

That’s an error, Schneck says in his October 6 posting on the “Catholics in Alliance for the Common Good” blog. In a short course titled “Subsidiarity 101: A Lesson for the Health Care Debate,” he calls subsidiarity “that hallmark idea of Catholic social teaching: the preferential option for the poor.”

Schneck traces subsidiarity’s usage in the 19th and early 20th centuries, starting with the ideas of Bishop Wilhelm Emmanuel von Ketteler of Mainz, Germany. Ketteler “developed an understanding of subsidiarity as part of a Catholic ‘third way’ in political economy between dehumanizing extremes of socialism and capitalism.“

Then Pope Leo XIII, in Rerum Novarum, “elaborated von Kettler’s third way balance of government and private initiative. Policies should be pursued at the level or mix most effective for the common good.”

Benedict XVI has offered the most recent Papal formulation of subsidiarity. As Schneck explains:

“Caritas in Veritate (2009) emphasizes the duty of governments to provide for the social welfare of citizens when non-governmental means do not rise to the level of needs. (no 35) But, even more interestingly, this newest encyclical suggests that subsidiarity alone is insufficient to achieve the harmonious balance in the social order that Catholic social teaching demands. Subsidiarity, His Holiness claims, must be balanced by practices of solidarity a term which he links closely with the obligations of government." Quoting Benedict directly:

"The principle of subsidiarity must remain closely linked to the principle of solidarity and vice versa, since the former without the latter gives way to social privatism, while the latter without the former gives way to paternalist social assistance that is demeaning to those in need. (no. 58)"
Schneck concludes with this analysis of subsidiarity and health care:
“In truth, nothing in Catholic social teachings, including the idea of subsidiarity, requires that America’s health care crisis be addressed with a particular policy approach, whether by state, private enterprise, voluntary associations, or anything else. The Church has been quite happy with state-run plans—and the Vatican's own plan is quite similar to what one finds in Italy or other European countries. But, if a private or semi-private system worked to provide successful comprehensive coverage of all in society, then it would also satisfy the concerns of the social teachings. Of course, that's the rub.

“Tragically, the crisis of health care in America is testament to the failure of private sphere mechanisms to address such social needs. And, that failure surely invokes John Paul II’s argument that government must step up when critical social needs go unmet. Forty-five to fifty million Americans are now without adequate health care coverage, nearly one-third of those are children. This is what is behind the American bishops' longstanding insistence that as a society we are faced with a moral imperative regarding health care. Democrat, Republican, libertarian, or whatever, our Church reminds us Catholics that we cannot dodge that imperative.”

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Tuesday, October 06, 2009

World leaders still sticking to their dangerous old ways

Today’s economic crisis grows out of “an unbalanced globalization” that redistributed income away from work and workers to finance and financiers. So says a new report issued by the International Trade Union Confederation (ITUC) to mark the World Day for Decent Work on October 7.

The report, titled “Jobs – the Path to Recovery: How employment is central to ending the global crisis,” calls upon world leaders to adopt “a global charter for sustainable economic activities.” It also emphasizes the readiness of the labor movement, at both the national and international levels, to take on a role so far denied it – helping shape “this new model to tackle the crisis and to build a fairer world economy for future generations.”

At present, “the push for a return to ‘business as usual’ is taking hold,” Gus Ryder, ITUC general secretary, warns in the preface. His examples:

-- Wall Street is again paying itself gigantic bonuses after having been bailed out with taxpayers’ money.
-- Parts of the financial trading system are still operating in the shadow industry or are borrowing cheap from taxpayers, lending at high rates and raking in the difference.
-- Opportunities for huge profits remain, for the wealthy and the few.

Most of the 57-page report is a restatement of policies that the ICTU, as representative of 170,000,000 workers in 157 countries and territories, has advocated before. Will the leaders of the G20, the International Monetary Fund, the Organization for Economic Cooperation and Development, the World Bank, and the World Trade Organization pay attention this time?

Hopefully, they will end their policy of excluding global labor from the table of global decision-makers. But it will take more than hope. It will take pressure. Including the pressure of events.

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Friday, October 02, 2009

A crime wave: stealing worker pay

Mark your calendar: Thursday, November 19. It’s the National Day of Action to Stop Wage Theft, organized by Interfaith Worker Justice and its 22 affiliates throughout the country.

“Wage theft is a crime wave that nobody talks about,” says Kim Bobo, executive director of Interfaith Worker Justice and author of “Wage Theft in America.”

The theft takes various forms – failure to pay the legal minimum wage, failure to pay overtime at time and a half, failure to pay for anything at all for overtime hours, failure to allow a meal break, and even prohibiting injured workers from filing worker compensation claims.

The victims are concentrated in apparel manufacturing, discount retailing, child care, hotel staffing, and other low-wage industries. And the thieves are not all isolated rogue employers.

When three Hyatt Hotels in the Boston area fired 98 housekeepers this August, it was discovered that the company hired to do the work, the Atlanta-based Hospitality Staffing Solutions. has a record of wage- law complaints filed in Florida, Georgia, Massachusetts, and Pennsylvania. The firm’s president, Rick Holliday, president of the firm, with employees in 450 hotels around the country, blamed “administrative mistakes.”

A comprehensive study of wage-law violations conducted early this year in three large cities – Chicago, Los Angeles, and New York – concluded: “The framework of worker protections that was established over the last 75 years is not working.” The study, “Broken Laws, Unprotected Workers,” found that among the 4,387 workers interviewed, the amount lost because of wage law violations averaged $51 a week.

Of course, such practices plague workers outside the United States too. The latest publicized evidence of that comes from Father Christopher Hartley, who has lived and worked for 10 years among Haitian sugar cane workers in the Dominican Republic.

In a report dated August 31, Father Hartley describes how the exploitation of the plantation workers has continued despite years of documentation by the U.S. State Department, Amnesty International, and other human rights groups. “Not much has changed,” he writes, “except the manner in which the human rights violations occur.” For example, in some plantations the harvested cane now gets weighed at night without any witnesses. Weight fraud results in pay fraud.

Hartley has written to the Commission of the European Union (EU) to intervene under terms of the new Economic Partnership Agreement between the EU and the African-Caribbean-Pacific nations.

What can you do? For starters, you ought to get involved in the activities of Interfaith Worker Justice.

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