Who are the world’s top 100 global thinkers?

Foreign Policy (FP) magazine’s December issue publishes its list of the world’s top 100 global thinkers for 2010. It honors President Obama as No. 3 “for charting a course through criticism.”

I for one would not rate Mr. Obama quite that high in what FP calls “this very smart crowd.” He lacks the necessary policy understanding of the 21st century global economy, as seems clear from his wobbly course on global trade and investment issues.

Missing from the FP list is a bold thinker and quiet doer, John Ruggie, a professor whom a 2005 FP survey called one of the most influential academics in the field of international relations. Since 2005, his main occupation has been as UN Special Representative for Business and Human Rights. During three years of work, he developed a new “Framework” on the duty of the State to protect against human rights abuses, on the Corporate responsibility to respect human rights, and on the need to provide remedies for violations – all toward better managing 21st century business and human rights challenges.

As a self-styled “principled pragmatist,” Ruggie establishes a “foundational principle” that corporate responsibility includes respecting the ILO’s eight core conventions,” but doesn’t leave it there. That commitment, he adds, belongs in the corporation’s own human rights policy statement to show it is exercising human rights “due diligence” in-house but also in relationships with partners, suppliers, and other entities.

In 2008 the Human Rights Council unanimously approved that “Protect, Respect, and Remedy” Framework. But how apply its principles in a world of 192 UN member states, 80,000 multinational enterprises, 800,000 subsidiaries, and countless millions of national firms, most of which are small and medium-sized enterprises.

Ruggie has now posted a 27-page-long set of Guiding Principles for implementing the framework. To gather feedback, he has created a special website, http://www.srsgconsultation.org/, which remains open until January 31. After that, the document will undergo final editing and translating in time for the June meeting of the Human Rights Council.

Wide acceptance of the new paradigm would mean a historic change in the culture of globalization. Just reading a brief summary like this one will not convert skeptics. A careful reading of the Framework and key supporting documents, however. will be instructive even to those who already support what constitutes the beginning of a social movement.
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Goobye to EPI's ‘State of Working America’ in book form

The State of Working America, published by the Economic Policy Institute (EPI) in book form since 1988, is going all-electronic. The full Website will begin in early January 2011.

Like its predecessor publication, the new one will present comprehensive data from eight broad issue areas -- income, mobility, wages, jobs, wealth, poverty, health, and international comparisons – all designed to give readers a deep understanding of the effect of the economy on low- and middle-income American workers and their families.

The 2008-2009 edition, a book of 460 pages, is still available from EPI and still useful for its trenchant analysis.

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Root Canals and the Roots of Human Rights

What is the basis for human rights? I've been wondering. The question is especially timely now that, on December 10, we are celebrating the 62nd anniversary of the UN Universal Declaration of Human Rights. I had the chance to think about its roots one day this month during an hour-and-a-half session in a dentist's chair. I was there for two root canal procedures.

Between waiting for the Novocain to take hold, X-rays to be developed, and drillings to be refined, I jotted down some ideas in the Notes & Memo pages of my July Day-Timer booklet. Here's a transcription of my scribblings:

* God creates human beings in his own image and likeness, thus bestowing on humankind a unique kind of dignity.
* From early on in human history, humans violate that dignity.
* Laws, regulations, and rules of various types (ranging from the Ten Commandments to corporate codes of conduct) are written to counter the wrong-doings committed by humans.
* People gradually expand their recognition of the wrongs committed against human dignity (e.g., eventual recognition of the moral evil of slavery and compulsory racial segregation).
* Human ingenuity, however, is ever at work in devising new forms of evil (sweatshops, e.g., and causing people to be "disappeared," which is not listed in the Universal Declaration of Human Rights).
* Globalization adds a vast new dimension to human existence, one which expands opportunities both for violating human dignity and for respecting it.

In a real sense, everyone favors human rights, at least within a limited scope: for yourself and those close to you. Controversies flare up when you go beyond that: to your responsibilities for respecting the human rights of others, especially the weakest members of the human family.

Any fuzziness here I blame on the Novocain.

(Adapted from an article I published in the July 1998 issue of my website, Human Rights for Workers.)

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Labor report on labor in Hong Kong

Hong Kong took “a “significant step forward” in July by adopting its first minimum wage legislation, but the hourly rate of US$3.60, set in November, “is still insufficient to cover basic living costs.”

So says the International Trade Union Confederation (ITUC) in a report on core labor standards in Hong Kong that the ITUC, at its own initiative, prepared, for the World Trade Organization’s General Council review of trade policies. Hong Kong, a founding member of the World Trade Organization, lost its independent status when sovereignty was transferred to the People’s Republic of China in 1997.

Here is how the ITUC summarizes the current status of fundamental worker rights in the former British colony:

" Hong Kong law allows workers to join unions, but provides little protection for those who do. The government refuses to bargain collectively with its own employees or to create a legal framework for collective bargaining in the private sector. In practice, employers have wide latitude to dismiss striking workers."

Although about 21 percent of the city-region’s wage workers are unionized, less than one percent are covered by collective bargaining agreements, and these are not legally binding, according to the ITUC’s report.

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U.S. advised to reject 'free trade.' but not the policy

Ban the label “free trade” from public discourse – that’s the advice that Pollster Bill McInturff gave Wall Street Journal’s CEO council November 16.

Recent polls, including one conducted jointly by the Journal and NBC News in late September, show that people oppose free trade deals by a margin of two to one, according to McInturff, because of a “growing sense that other countries are taking advantage of us” in free trade deals.

He did not explain why changing the label would change the mercantilism of countries like China. But a language change in U.S. legislation -- from Most Favored Nations (MFN) to Permanent Normal Trade Relations (PNTR) -- did help pave the way for China to join the World Trade Organization (WTO) ten years ago.

Still, renaming “free trade” makes sense. It is easier to do if the policy behind a new label makes sense, and if it also makes sense to U.S. trading partners.

My own formulation of such a policy is this: that it is work and worker friendly. Present trade policy is investor and investment friendly, and unfriendly to work and workers. Just look at the results: our extreme troubled global economy.

America’s bipartisan OK to China’s entry into the WTO “looks especially imprudent” now, writes Richard A. McCormack, editor of “Manufacturing & Technology News.” The results have not turned out to be what was promised by President Clinton, the country’s most ardent booster of opening trade with the People’s Republic.

In the June 25 issue of his publication, McCormack quotes Clinton ar length. At a March 29, 2000, press conference, for example, he said: “This is a hundred-to-nothing deal for America when it comes to the economic consequences,” among other things by increasing U.S. jobs and reducing our trade deficit.

See http://www.manufacturingnews.com/news/10/0615/WTO.html for a sampling of promises not kept.

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“The Global Battle For Good Jobs: Is the U.S. Even Fighting?”

-- American companies are hiring, but mostly abroad, most of all in the People’s Republic of China.

-- With more than 5,000,000 unemployed Americans for any job vacancy, employers have the leverage to skip any wage increase, and sometimes to cut wages and benefits even while enjoying record profits.

-- The gap between the fortunes of business firms and workers is widening, to the continuing decline of the middle class.

-- Companies are buying back their own stock at unprecedented levels, in large part because this is the surest way to meet the targets that will trigger higher executive compensation.

Those are highlights of trends that Dean David L. Finegold of Rutgers has identified by assembling dozens of bits of information and connecting the dots. He published his insights in the first issue of his new blog under the title “The Global Battle for Good Jobs: Is the U.S. Even Fighting? on September 15.

Two months have not made his analysis out of date. Illustrative of his prescience is that in the latest fiscal year “Paychecks for CEOs Climb,” as announced by a front page headline of the November 15 Wall Street Journal.

Finegold, who heads Rutgers’School of Management and Labor Relations, emphasizes a fundamental element in the transformation of key sectors of the 21sr century economy. It is the contrast in the very mindset of the two competing giants in the global battle:

Rather, I draw attention to the less discussed factor that firms themselves are pursuing different objectives. While US executives are focused on maximizing short-term profitability and “shareholder value,” Chinese firms are seeking to grow long-term market share and expand the amount of high-end work being performed in China.

This is particularly true of the approximately 130 large state-owned enterprises (SOEs) that dominate strategic sectors of the economy. These are not the old SOEs that existed to provide employment, with little concern for product quality or global competitiveness. Instead, these SOEs have been reinvented to work in tandem with China’s foreign policy of economic nationalism to win share in global markets. As Financial Timesreporter Richard McGregor describes in a fascinating new book, The Party, while these firms operate predominantly according to market principles, the Communist Party retains ultimate control over key decisions through selection of key executives….

In sum, it is difficult to see how the crisis facing current and future U.S. workers will be reversed so long as both US and Chinese companies can optimize their own measures of success by moving jobs to China.

For details, read Finegold’s blog, which Rutgers houses at http://core-training.rutgers.edu/schools/smlr/content/global-battle-good-jobs-us-even-fighting




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On a treadmill at $10 a week: garment workers and Bangladesh

Bangladesh is the prime example of the durability of sweatshops in a booming industry. On November 1 workers in the country’s ready- made garment industry got a raise in their minimum wage to $43 a month. As in other Asian countries, the official minimum wage generally is the actual wage paid to most workers.

Before November 1 Bangladesh’s 3,400,000 garment workers, mostly women, were the worst paid garment workers in the world. After months of struggles for a living wage, they are still the worst paid garment workers in the world.

Meanwhile, the latest annual export earnings of the industry came to $12,600,000,000. The industry is also a vehicle for capital flight, chiefly through over-invoicing,

Garment factory owners in Bangladesh claimed they could not afford a wage increase larger than finally imposed. But a new report, quoting a Dhaka-based World Bank economist, said that labor costs “typically constitute one to three percent for garments produced in the developing world,” indicating that the new minimum could be absorbed without a price increase.

The plight of the country’s garment workers is described at length in that report, the work of the International Labor Rights Forum and Sweatfree Communities. So have dozens of reports over the past two decades by the AFL-CIO, the International Trade Union Congress, the International Labor Organizations, Human Rights Watch, human rights groups in Bangladesh itself, and various other groups.

But Bangladesh remains on a treadmill. The 2010 report of the UN Development Program ranks Bangladesh low on its human development index – 129th out of 169 countries.


I’ve written countless articles about Bangladesh over the years. One, from the May 4, 2005, issue of my Website, is titled “Greed Kills, and Greed Pays” at http://www.senser.com/05-05-04.htm.

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U.S. lagging behind – way behind – in child care funding

Most nations in the developed world do very much better than the United States in funding formal childcare for boys and girls under the age of three.

According to data gathered by the Economic Policy Institute, Denmark ranked highest in such expenditures, and the United States ranked 13th\, among 14 developed nations in comparisons computed using Purchasing Power Parity.

EPI released this information on November 10 as a “preview” from its forthcoming “State of Working America” Website, which will be published online in early January. Read more!

Tax evasion by multinationals in developing countries

Poor countries lose more money to tax evasion by multinational corporations than they get from official development aid. The Business & Human Rights Center cited that fact as one reason for launching a special Website section on business and tax avoidance.

In introducing the new section, the London-based center explained:

“NGOs are increasingly reporting on companies that avoid paying a fair share of taxes and royalties to developing countries, thus depriving governments of essential revenues that they need to deliver to their people on development, health, education, housing, access to water, and other human rights.”

Christian Aid, for example, noted that “the lives of 1,000 young children a day are being lost to disease and poverty in poor countries because of illegal trade-related tax evasion.”

Also tracked are positive initiatives taken by companies and company responses and non-responses to negative reports.
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A kind word for taxes

As a reporter on a small town newspaper many years ago, l met a farmer who believed strongly in self-reliance as the way to slash taxes. Each family, he insisted, should drill its own well for water, surface the road in front of its own property, and dispose of sewage in its own outhouse or septic tank instead of depending on government.

He was angry and frustrated because his ideas didn’t become public policy. The 21st century has many people of the same mind and with same emotions. Their cause is anti-tax, and their reaction is anger, because their ideas are not implemented.

At my youngest son’s graduation ceremonies in the vast Coliseum in Richmond, I got a taste of popular feeling against taxes. Each group of black-clad graduates of Virginia Commonwealth University got our warm acclaim even when we could hardly fathom their achievement. Then, amid the successful candidates from the School of Business, a lone male stood up to receive the degree of master of taxation.

Master of taxation! The words triggered a deep and prolonged booooo. Afterward, I recounted the incident in a column that appeared in the U.S. News & World Report under the heading “A Kind Word for Taxes.” I quoted the words of Supreme Court Justice Oliver Wendell Holmes: “Taxes are what we pay for civilized society.”

“A reversal of values is in order,” I added. ‘Those of us – individuals and corporations – who have benefited much from the freedom of our land ought to be proud to pay taxes. To wipe out or huge federal deficit, we need to address a deficit of another sort – one of wisdom, unselfishness, and, yes, sacrifice.”

Nowadays, when so many believe our taxes are much too high, we should at least be open to the facts. Charles R. Philips, in a Commonweal article (October 22 issue), points to one widely unrecognized fact: we’re not as heavily taxed as are citizens of most other industrial nations belonging to the Organization for Economic Cooperation and Development (OECD).

Counting all taxes – sales, income, property, whatever, imposed by all levels of government – as a percentage of GDP, the United States ranks 27th out 30 countries in the total taxes paid by its citizens. Only the people of South Korea, Turkey, and Mexico carried a heavier burden.
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Feeble signs of press concern about free trade policies

Could it be that the press is becoming aware of the perils posed by U.S. trade policies? Maybe, but don’t count on any follow-up.

“Six Reasons for U.S. to Abandon Free-Trade Myth” is the title of a column by Ian Fletcher published in the October 25 issue of Bloomberg Business Week. Fletcher, author of “Free Trade Doesn’t Work” and an adjunct fellow at the U.S. Business and Industry Council, advocates imposing U.S. compensatory tariffs on imports subsidized by currency manipulation, a move recently passed by the House of Representation.

The conservative business writer, Robert J. Samuelson, is especially troubled by our one-sided trade relations with China. The title of his September 27 op-ed column in the Washington Post summarizes his position; “Standing up to China: A trade war may be the lesser of two evils.” He charges that China “has never genuinely accepted the basic rules governing the world economy.”

Even the New York Times, that staunch defender of free trade, is sounding an alarm, as in an August 16 editorial, “Return of the Killer Trade Deficit.” It describes the “very dangerous habits” of China, as well as Germany, but limits itself to lecturing them to spend more at home and abroad. America should slow national spending and save more. The Times fears a trade war, as if China hasn’t been waging one for years.

So the press mood may be shifting, but not enough to help prevent the United States from committing economic suicide.

For some background, read my blog item of January 2, “Economic suicide is not an option.”

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Gloomy jobs picture for U.S.

They are not on the U.S. payrolls of American multinationals, but they are employed in other countries by subsidiaries and affiliates of U.S. multinationals operating in China and elsewhere abroad.

In 2008 that employment stood at 11,900,000 -- an increase of 729,000 in two years – according to the August report of the U.S. Commerce Department, which tracks such employment data.

Our de facto global labor force is likely to increase, meaning that more and more U.S. jobs will continue to go “off shore.” A preview of that trend is evident from the number of Americans who get federal assistance because off-shoring cost them their jobs.

As I learned from an article by Don Lee of the Los Angeles Times:

“For the six months that ended September 30, workers at about 1,200 offices and plants nationwide were approved for federal Adjustment Assistance. That’s about 20% more approvals than in the same six-month period last year, according to the U.S. Labor Department.”

In an analysis of a Bureau of Labor Statistics September report on U.S. employment and unemployment, the Economic Policy Institute wrote: “The labor market is now 1l,500,000 jobs below the level needed to restore the pre-recession unemployment rate (5.0% in December 2007)."

The September jobless rate was 9.6%. See
http://www.epi.org/publications/entry/september_jobs_picture
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Apple, iPad, China, and Me

I was just about to buy Apple’s latest electronic wonder, the iPad. It tempted me most of all because I could use it to replace some newspapers to which I subscribe. They are becoming fatter and fatter and thus heavier and heavier to carry from the curb every day and then back for the weekly pickup.

But I hesitated. Should I also order any accessory beyond the thin case to protect the $499 i-Pad? What else?

Meantime, I read the latest news about Foxconn, the multinational that manufactures gadgets for Apple and other multinationals that outsource their production to China. I wrote a blog item about the news, titled “Silicon sweatshops in China exposed by academics in China.” (See my blog of Tuesday, October 12.)

I tussled with myself.

Deal or no deal? No deal. And no great sacrifice either. I can get electronic versions of those newspapers through other, cleaner sources. I’ll have to write a letter to Apple and another to President Obama. My little protest won’t trouble Apple.

Since free trade in its present form limits our choices, I have compromised my principles many times before, and may do so again. But not this time.

With the mid-term elections looming, I’ve gotten appeals signed by the President telling me, “Robert, I need you.” I emailed back; “Mr. President, we need you.”
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Silicon sweatshops in China exposed by academics in China

The serious labor abuses that this spring led to 11 worker suicides at two Foxconn plants in Shenzhen, China, are continuing at other Foxconn electronic factories in China, according to a study by academics and students at universities in China.

Foxconn, based in Taiwan, is the world’s largest manufacturer of electronics. Its nearly 1,000,000 workers in China alone produce best-selling gadgets for the world’s top multinationals, including Apple, Sony, HP, and Nokia.

The 90-page report was first released October 11 to China’s media and a new commercial Website based in Boston, GlobalPost, http://www.global.post.com. Its correspondent, Kathleen E. McLaughlin, has been following the Foxconn story as part of an on-going Globalpost investigation of the complex supply chains that produce many of our most precious, high-tech gadgets.

The report makes a litany of charges, including treating people as interns and students and hiring them through third-part employment agencies, thus avoiding insurance and other benefits required under Chinese law. In several of the 12 Foxconn facilities visited in a two-month-long study, interns were found to constitute the majority of workers, and expected to work unlimited overtime, contrary to law.

“Under the labor and dormitory conditions, there is great physical, spiritual, and special repression,” the report charged. “A worker can easily be forced to the edge of collapse. Many workers use words like ‘cage’ and ‘prison’ to describe Foxconn.”

In a statement, “Foxconn Technology Group strongly and categorically rejects…alleging worker abuse, illegal practices and unsafe working conditions at our operations in China.” The company insisted that it follows all Chinese laws, including the one on hiring interns through vocational schools. It said that interns numbered 7.8 percent of its Chinese work force.

A question left unanswered: how was it possible for a group to conduct and publicize this study in Communist China?

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People now more ‘soured’ than ever on trade and off-shoring

Almost all managers and professionals believe that outsourcing of production and manufacturing work to foreign countries is a reason the U.S. economy is struggling and few are being hired. That’s a surprising finding of the latest Wall Street Journal/NBC news poll.

The exact percentage of managers and professionals who hold that view is 95%. The lowest figure is 75% for retired people.

Another surprising finding published in the October 4 Journal: 90% of Republicans and 80% of Democrats take the negative position on outsourcing and its stifling effect on the U.S. economy.

The Journal’s page one story, headlined “Americans Sour on Trade,” also dealt with another question: “Do you think free-trade agreements have helped or hurt the U.S.?”

Hurt the U.S., according to more than half (53%) of those surveyed, up from 46% three years ago and 32% in 1999, according to the Journal.

In analyzing the total results of the survey, the Journal added:

“Even Americans most likely to be winners from trade – upper income, well-educated professionals, whose jobs are less likely to go overseas and whose industries are often buoyed by demand from international markets – are increasingly skeptical.”

What if Congress were to pass legislation in response to the U.S. multi-billion dollar trade deficit with China now that public opinion is increasingly “sour”?

In the October 4 issue the Journal did not comment on that possibility, which it would normally denounce as triggering a “trade war.” But in the September 27 Washington Post column, economics writer Robert J. Samuelson deals with a possible trade war were the U.S. to adopt a policy of “Standing up to China,” as his article is titled. His answer, as expressed in its subtitle: “A trade war may be the lesser of two evils.”

The basic problem with China, Samuelson points out, is that it has never genuinely accepted the rules governing the world trading system, Its major victim is the United States, at a crippling cost in American jobs and to U.S.-based companies.

China benefits from a trading system subordinate to its needs, which Samuelson says includes ample export markets to support the jobs necessary to keep the Communist party in power.

“The collision,” he writes, “is between two concepts of the world order…The United States faces a dreadful choice: resist China’s ambitions and risk a trade war in which everyone loses; or do nothing and let China remake the trading system. The first would be dangerous; the second, potentially disastrous.”
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College for all: its disappointments

Is it wise for the vast majority of high school students to plan to attend college? No, say experts in the fall issue of American Eductor, a professional quarterly published by the American Federation of Teachers.

For one thing, fewer than half of high school seniors who seek a bachelor’s degree succeed in their goal.

“We must find a way of being honest with our youth without crushing their dreams,” say the experts in a long critique of what they call the “college-for-all movement.”

They charge the movement with “idealizing” the four-year bachelor of arts (BA) degree by promoting false assumptions, chiefly that a BA guarantees higher earnings and that higher earnings guarantee better jobs. Consequently, many students do not consider non-BA options, plentifully offered by community colleges and even regular colleges with certificates and applied associate (AA) degrees that can lead to well paying and satisfying careers.

“We all know that many people with jobs that require a BA (e.g., teachers social workers, etc.) are paid less than some people with jobs that require an AA (e.g., computer specialists, engineering technicians, mechanics, heating/air conditioning repairers, dental and medical assistants, insurance appraisers, and funeral directors,” write the authors of one article, James E. Rosenbaum, Jennifer L. Stephan, and Janet E. Rosenbaum.

“As a nation, “ writes Chris Myers Asch in another article, “we need young people to become skilled carpenters, electricians, lab technicians, nurse practitioners, and drill sergeants. By pushing college to the exclusion of other options, we indulge in what might be called the inadvertent bigotry of inappropriate expectations.”

For practical guidance to hundreds of different jobs, order the Bureau of Labor Statistics' “Occupational Outlook Handbook” at http://www.bls.OCO.
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Sssshhh! China is a Communist Country

The greatest innovation of China’s Communist Party is building a hybrid market economy, a pragmatic and profitable blend of capitalism and socialism that keeps the Party’s own dominant role “off the front stage of public life in China and out of sight of the rest of the world.” In his fascinating new book, “The Party: The Secret World of China’s Communist Rulers.” Richard McGregor describes how the Party achieved this remarkable success in organized duplicity.

As a journalist in the People’s Republic for more than a decade, he observes: “Foreigners in China can be forgiven for thinking they are not in a Communist state.” Yet a Communist state it is indeed.

“Like communism in its heyday elsewhere,” he writes, “the Party in China has eradicated or emasculated political rivals; eliminated the autonomy of the courts and press; restricted religion and civil society; denigrated rival versions of nationhood; centralized political power; established extensive networks of security police; and dispatched dissidents to labor camps.”

Nowadays, the Party has deliberately relaxed its hold on the daily lives of ordinary people, the better to keep “a lock hold on the state and three pillars of its survival strategy: control of personnel, propaganda, and the People’s Liberation Army.” Vladimir Lenin, who devised the prototype, would recognize it immediately in the People’s Republic, McGregor shows, because the necessary Leninist institutional and behavior patterns have endured, “generally masked or dressed up in other guises.”

Foreigners have helped. Before, during, and after his historic trip to China in 1972, Richard Nixon made sure that “Communist” did not embarrass him with his base at home. Mao Zedong was simply the Chairman, not the Chairman of the Chinese Communist Party. The State Department’s record of the trip, including the speeches, toasts, and press conferences did not mention the word “Communist” even once.

Although most Westerners are well informed about the growth of China’s economy, they know much less about the Party’s powerful role in that economy. At all major state enterprises, for example. Party meetings are held regularly before board meetings, which leave personnel matters in the hands of the Party.

One day in November 2004 the Central Organization Department announced without warning that the top executives of three big state-owned telecom companies had been reshuffled. McGregor makes this striking comparison: “It was the equivalent of the CEO of AT&T being moved without notice to head its domestic U.S. competitor, Verizon, to run Sprint, at a time when the three companies are locked in a bruising battle on pricing and industry standards….The deliberate element of surprise…serves the Party’s purposes perfectly, by reminding them who’s boss.”

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Viewing the trade deficit with China as a form of subversion

Entitled “Chinese Water Torture: Subversion Through Development,” the Heritage Foundation in 1992 published a lecture on how open trade would open up the Peoples Republic of China and bring the downfall of its Communist regime.

Because the Heritage paper was so certain about how “subversive” trade can be, I saved it. I found it only the other day.

The author, Andrew B. Brick, then Heritage’s Senior Policy Analyst for Chinese studies, first delivered the lecture at Florida State University on January 22, 1992, He described how his strategy would work – using outside influences such as trade to “open up a Communist society” would create “political grievances that undermine the extant regime.”

Eighteen-plus years seems like enough time to assess the consequence of Brick’s formula, especially because the United States followed it in a bipartisan way supported by people who had never read his lecture.

The biggest clue for an assessment is found in the U.S. Commerce Department data on U.S. merchandise trade. All last year the United States

-- Imported $296,373,900,000,000 in goods from China
-- Exported $ 69,496,700,000,000 in goods to China, a deficit of $226,877,300,000,000, compared to $18,309,000,000,000 the year when Brick was delivering his lecture.

The U.S. trade deficit since 2001, when China joined the World Trade Organization, has caused direct pain especially to American workers. Between 2001 and 2008, according to the Economic Policy Institute, the deficit with China caused a loss of 2,400,000 U.S. jobs.

Meanwhile, U.S. officials are putting pressure (i.e., getting down on their knees) for China to stop manipulating its currency in a way that bolsters China’s trade advantage and puts a dent in the U.S. GNP. Moreover, Washington has repeatedly declined to name China a currency manipulator out of fear that China would take retaliatory action.

So who is applying Chinese water torture against whom? Who is subverting whom?

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Obama ‘weak, cautious’ on trade

In an article titled “Obama’s Big Failure,” Susan Ariel Aaronson, associate research professor of George Washington University, criticizes the President’s trade policy as “cautious and vague.”

“Because they have not put forward an alternative model,” she writes in International Economy magazine, “by default, Obama Administration officials have accepted the Bush paradigm for trade liberalization.”

Dr. Aaronson identifies the chief mark of this “timidity” as going along with the Bush switch of trade negotiations from the multilateral forum to the bilateral and regional, which pursue “preferential” rather than free trade agreements. This reorientation “undermines both the effectiveness of the World Trade Organization and its fundamental principle of most favored nation (nondiscrimination among nations).”

“The result has been a mish-mash of global trade governance,” she points out, as the various preferential agreements include differences in some key rules. She strongly recommends returning the focus of trade policy to the WTO.

To gain public support for such a move (and trade generally, I would add), Dr. Aaronson urges policymakers to publicize the links between trade and employment., with the UN International Labor Organization having a role in this assessment.

Dr. Aaronson latest book is “Trade Imbalance: the Struggle to Weigh Human Rights in Trade Policy Making.”

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Blaming us, the victims, for our crippling trade deficit

“Economic growth slowed by trade gap” was a page one headline in the August 27 Washington Post. The article so irked me that I sounded off in a letter to the editor the same day. Here’s what I wrote.

Yes, our nation’s huge trade deficits are continuing to take their toll. I’m delighted that, at long last, the Washington Post is awakened to a grim reality of economic life.

But you repeat an old mistake. Although you put the blame on several factors, the only one you mention is “overconsumption.” You think, for example, that we, the consumers, are the villains for our trade deficit with China. Really.

Have you ever tried to buy anything made in the U.S.A.? If so, you see how we have been deprived of choice – by a trading system credited, wrongly, for increasing consumer choice.

The continuing total merchandise trade deficit – nearly $50,000,000,000 for June alone -- is basically a mechanism to redistribute the wealth and income of the American middle class to further enrich the upper 10 percent of Americans and Asians. Your story failed to mention that the deficit with China was $26,200,000,000 for June alone.

What is really an overlooked “factor” in this tragedy? Take a look at corporations based in the U.S., American and foreign, and examine the volume of their intra-firm trade – that is, trade between two arms of the same company, also called related-party trade. As the Census Bureau reported on May 12, last year related-party trade accounted for $740,500,000,000 in U.S. goods imports – nearly 48 percent.

* * *
As I expected, the free-trade-obsessed Post did not print my letter.

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New GM CEO praises unions

On his second day in his new job, Daniel Akerson, CEO of General Motors, sent a Labor Day message to GM’s 80,000 employees in the United States and Canada. After wishing them a happy holiday weekend, he wrote:

“I also ask that we pause for a moment of reflection on what this day means as we celebrate on what this day means as we celebrate labor’s contribution labor’s many contributions here and around the world.

“Of course, labor’s role in building up this nation and others is well recognized and rightly so. And coming from a union family, I know on a very personal level the good things that unions can do.

“I met recently with UAW President Bob King and Vice President-GM Department Joe Ashton at Solidarity House [UAW headquarters], and we agreed that, while we will not always see eye to eye on everything, GM will succeed to the extent that management and labor work together. I believe very deeply in that.”

(Akerson's note was an internal communication. The text was published later in Automotive News.)

GM and the UAW are scheduled to negotiate a contract that expires in September next year. King has said the UAW expect to win back some of the concessions it made as part of the GM governmental bailout last year.

Akerson, who holds a master’s degree in economics from the London School of Economics, has spent much of his career as an executive in communications multinationals. In July 2009, he was named to the GM board of directives as a representative of the U.S. Treasury, which owns a majority stake in GM.

In an address last month, newly elected UAW president King outlined the major changes the union is making to become a “21st century UAW.” See HRFW’s “A union’s ‘make-over’ for 21st century globalization" of August 11.

In what is probably a unique combination outside the building trades, Akerson comes from a union family, and King is the son of a former Ford management official.
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European Corporate Hypocrisy in the United States

Some leading European corporations that embrace worker rights at home violate those rights aggressively in their U.S. operations, Human Rights Watch charged in a report issued September 2.

The failure to “walk their talk” is documented in the 128-page report titled “A Strange Case: Violations of Workers’ Freedom of Association in the United States by European Multinational Corporations.”

Among the violations cited in the report are:

-- forcing workers into ‘captive audience’ meetings to hear anti-union harangues while prohibiting pro-union voices.
-- threatening dire consequences if workers form unions.
-- threatening to permanent replace workers who exercise the right to strike.
-- spying on union organizers.
-- even firing workers who support organizing efforts at companies.

Companies cited include Germany-based Deutsche Telekom's T-Mobile USA and Deutsche Post's DHL, UK-based Tesco's Fresh & Easy Neighborhood Markets and G4S Wackenhut security, France-based Sodexo food services and Saint-Gobain industrial equipment, Norway-based Kongsberg Automotive, and the Dutch firm Gamma Holding.

Violations found in these companies “call into question the efficacy of corporate social responsibility mechanisms, “ the report states, and makes a series of recommendations to all parties involved: European multinationals operating in the U.S., the U.S. government, the European Commission, European governments, and the OECD.
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Bishop calls for a ‘new social contract,’ one that honors work and workers

“A new social contract, which begins by honoring work and workers, must be forged that ultimately focuses on the common good of the entire human family,“ Bishop William F. Murphy of Rockville Centre says in a Labor Day statement issued in his role as chairman of a committee of the U.S. Conference of Catholic Bishops.

“This Labor Day,” he writes, “we must seek to protect the life and dignity of each worker in a renewed and robust economy. Workers need to have a real voice and effective protections in economic life.”

Bishop Murphy emphasizes the role of civil society, which he calls “perhaps the most undervalued and overlooked” compared to the state and the market. He asks, “Could a reawakening and new development of the roles of intermediary institutions, including voluntary associations and unions, be a force to call the market to a greater understanding of the centrality of the worker?”

The statement, titled “A New ‘Social Contract’ for Today’s ‘New Things’.”draws heavily on Pope Benedict’s teaching in his encyclical, Charity in Truth. On a central point, Murphy quotes these words of the Pope: “I would like to remind everyone, especially governments engaged in boosting the world’s economic and social assets, that the primary capital to be safeguarded and valued is man, the human person in his or her integrity.” (Emphasis in the original.)

Bishop Murphy, as chair of the Catholic conference’s committee on domestic justice and human development, has taken the lead in describing the need for a “new social contract.” What’s next?
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A union’s ‘make-over’ for 21st century globaliztion

One of America’s largest unions, the United Auto Workers (UAW), is undergoing a complete make-over, according to its newly elected president, Bob King.

The make-over is from a 20th century union to one geared to the 21st century, King said in a lengthy address on August 2 to ta conference of the Center for Automotive Research. As he sees it, a 21st century UAW is becoming “fundamentally and radically different.” Among the differences he mentioned were these:

• Embraces as its own the mission of producing the highest quality, best-value product for its customers, vs. joining with companies in “the mindset that it was the company’s job to worry about profits and the union’s job to worry about getting the workers their fair share.”

• Makes consumer safety, energy efficiency, and environmental protect a priority, vs. “failing to champion forcefully or effectively enough the goals of preserving our environment for future generations through green manufacturing.”

• Welcomes the openness, collaboration, and creative problem-solving that it has forged with Chrysler, GM, and Ford, vs. the mutual distrust that produced lengthy and complicated contracts “with work rules and narrow job classifications that hindered flexibility, hindered the full use of the talents of our members and promoted a litigious and time-consuming grievance culture.”

• Knows that the only true path to job security is by producing the best quality, safest, and most durable product, vs. relying on ways, such as job banks, that “in the end did not achieve the results that we were seeking”

King stressed that the 20th century UAW “grew in an era of national rather than global economics, in which “employers did not face the intense pressure of global competition,” whereas the global marketplace now makes flexibility, innovation, lean manufacturing, and continuous cost-improvement paramount.

Michigan Governor Jennifer M. Granholm praised this transformation in her August 10 posting titled “Not Your Father’s UAW” on Huffington Post.. “Instead of being blamed for chasing investment away from industrial states, the UAW may be the place to turn to ensure a company’s success,” she wrote.

More to come: the UAW is developing a set of guidelines called the UAW Principles for Fair Elections, which it will present to the managements of Japanese-owned and other non-union auto and vehicle-parts factories.
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We wuz robbed!

A study of how corporate America treated its workers during the 2007-2009 recession concludes that the workers could justifiably say “We wuz robbed!”

In the study, published in July, its two authors charge that the latest recession is really a Great Recession for Workers because corporations pocketed unprecedented profits while slashing employment, working hours, and hourly pay.

“I’ve never seen anything like this before,” Andrew Sum, director of the Center for Labor Market Studies at Northeastern University in Boston, told New York Times columnist Bob Herbert. Sum has published research on labor market trends for at least 20 years.

His latest study, conducted with senior research associate Joseph McLaughlin, is titled “How the U.S. Economic Output Recession of 2007-2009 Led to the Great Recession in Labor Markets.”

“The economic recovery in the U.S. over the past 15 months has seen the most lopsided gains in corporate profits relative to real wages and salaries in our history,” the study says.

Also especially noteworthy: “The greatest deterioration in the U.S. unemployment rate took place among men, largely as a result of the great depression in blue-collar jobs.” The U.S. jobless rate, 10.3 percent in 2009, was the highest of ten leading industrial countries.

Herbert, in his column titled “A Sin and a Shame,” commented:

“It doesn’t have to be this way. Germany and Japan, because of a combination of government and corporate policies, suffered far less worker dislocation than the U.S. Until we begin to value our workers, and understand the crucial importance of employment to a thriving economy, we will continue to see our standards of living decline.”

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‘Making it in America’

-- 63 percent of voters feel that working people who make things are being forgotten while Wall Street and banks get bailouts.
-- 57 percent believe that manufacturing is more central to our economic strength than high-tech, knowledge, or financial service sectors.
-- 78 percent favor “a national manufacturing strategy to make sure that economic, tax, labor, and trade policy in the country work together to help support manufacturing in the United States.”

Those and other results of a recent poll of likely voters are fortifying Democratic leaders' plans to give priority to a pro-manufacturing jobs agenda in Congress prior to the November mid-term elections. The poll and sessions with six focus groups confirm that the electorate is indeed deeply unhappy but unified in the conviction that Congress should take action on a pro-manufacturing agenda.

In reaction, the Wall Street Journal belittled the government’s ability to choose “winners and losers,” apparently wanting a monopoly for Wall Street itself.

From another perspective, President Reagan’s budget director, David Stockman, published a New York Times article on July 31 on the four “destructive changes” responsible for the economic crisis. On one of them “the hollowing out” of the American economy, he wrote:

“Having lived beyond our means for decades by borrowing heavily from abroad, we have steadily sent jobs and production offshore. In the past decade, the number of high-value jobs in goods production and in service categories like trade, transportation, information technology and the professions has shrunk by 12 percent, to 68 million from 77 million. The only reason we have not experienced a severe reduction in non-farm payrolls since 2000 is that there has been a gain in low-paying, often part-time positions in places like bars, hotels and nursing homes.

“It is not surprising, then, that during the last bubble (from 2002 to 2006) the top 1 percent of Americans — paid mainly from the Wall Street casino — received two-thirds of the gain in national income, while the bottom 90 percent — mainly dependent on Main Street’s shrinking economy — got only 12 percent. This growing wealth gap is not the market’s fault. It’s the decaying fruit of bad economic policy.”

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Blog continues, email lists do not

Over the years I have added 481 persons to my Yahoo mailing list. Among these are people who have a special interest in this blog, whom I grouped into four categories of people. I would send out an “alert” email when I published a new issue.

Suddenly the other day, all the names listed under those categories mysteriously disappeared. The categories are still there, but no names. So far no help from Yahoo on correcting the malfunction.

I will continue to write and post articles for Human Rights for Workers even as I work on reconstructing my Blog mailing lists under Yahoo or perhaps some other system. Hint: bookmarks are useful.
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Campaigning against Korea FTA

South Korea is emerging as the test of whether trade policy under President Obama will be much different from that established by previous administrations, Democratic and Republican.

At issue is the Free Trade Agreement that President George Bush signed with South Korea three years ago. President Obama says he will send it to Congress for approval after negotiating changes with the Seoul government.

A coalition of unions, environmental, family farm, and other civil society organizations is circulating the text of a letter to Obama urging him to seize the opportunity to adopt “new trade rules that create American jobs.” Among the specific changes needed to gain support of a new FTA are removal of these existing objectionable features:
-- the explicit ban on reference to the core conventions of the UN International Labor Organization, which are “the fundamental platform of international labor rights.”
-- the “extreme foreign investor rights and their private investor-state enforcement that you rightly criticized during your campaign” for posing special threats to attack U.S. environmental, financial, health, and other policies in foreign tribunals.
-- the trade barriers harming numerous U.S. industries such as the auto and beef sectors, which undermine the goal of creating two million new American jobs through export expansion.

Instead of approving another trade pact patterned after the North American Free Trade Agreement (NAFTA), the letter encourages the President to correct the most problematic features of the Korean FTA by using this U.S. proposed law as a guide: the Trade Reform, Accountability, Development, and Employment (TRADE) Act now pending in Congress.

For information about the Korea FTA check http://www.citizenstrade.org/ and http://wwww.aflcio.org.

More than 100 local, state, and national organizations have signed on to the letter expressing opposition to the 2007 deal. To add your organization’s name to the letter, contact agussert@citizenstrade.org.
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‘Doubling exports’ would be a big loser as a U.S. jobs policy

The Obama administration’s commitment to doubling U.S. exports in five years is woefully inadequate: it aims to create 2,000,000 American jobs when 22,000,000 are needed. That’s the criticism of by a former CEO, Leo Hindery, writing a guest editorial in the current issue of Manufacturing & Technology News.

A major problem with this export-reliant pledge, says Hindrey, is President Obama’s plan to ratify three free trade agreements negotiated by President Bush – with South Korea, Panama, and Colombia. All “are very poorly negotiated and will cause even more American jobs to be lost overseas.”

He singles out the South Korea FTA as “simply awful,” so much so that, if approved without major changes, “the Obama administration will be giving a major unwarranted victory to America’s multinational corporations and Korean workers at the expense of America’s workers.”

Korean negotiators bested the United States in 2007 and later negotiations, according to Hindery, “especially in automobiles, where the FTA would lock in Hyundai Motor Corp.’s dominance of the South Korean market while locking out American manufactured vehicles, and in beef, where the U.S. would largely be excluded from exporting all but young carcasses.”

In Hindery’s view, President Obama must undertake a series of initiatives in addition to radically amending the three pending FTAs:

-- Decide that job creation is the number-one object of his administration’s economic policy, with domestic manufacturing as the top priority.

-- Line up his entire administration behind that policy. At present, some top officials voice positions that are “complete BS.”

-- Especially level the trade playing field between U.S. and China.

-- Emphasize the primary (not secondary) role of “big business” in creating the bulk of the millions of new jobs, and stop fixating on the ability of small business to do so.

Hindery is the former CEO of Tele-Communications Inc. (TCI) and chairs the U.S. Economy/Smart Globalization Initiative of the New America Foundation.
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A Must-Read for President Obama: families face more insecurity

Economic insecurity appears more the rule than the exception for American families, and that trend has worsened in the last few years. So says a new study, “Economic Security Index,” just published by the Rockefeller Foundation.

Other highlights of the study, covering the period of 1985-2007, include:

-- The majority of Americans had no safety net of savings.
-- Economic insecurity has risen across all demographic groups in America, with African-Americans faring the worst of all.
-- About 28,000,000 Americans were economically insecure in 1985. They numbered 46,000,000 in 2007.
-- The rising prevalence of two-earner families does not appear to have provided a big income cushion to families, because of rising prices, especially for health care.
-- Projections to 2009 suggest that in the last few years the level of economic security experienced by Americans was greater than any other time over the past quarter century.

The July report is part of an effort to develop a coherent measure of economic insecurity, called the Economic Security Index (ESI), based on the joint occurrence of three major risks to economic well-being: 1) a major loss in income; 2) large out-of-pocket medical expenses; and 3) inadequate savings to buffer the first two risks.

The ESI, as defined in the 24-page July report, will be updated on a regular basis to include new data and specific risks not covered. It is designed to provide hard data to policymakers.

I learned of this study from a New York Times op-ed column by Bob Herbert. Though technically “opinion,” the July 17 column has more facts than you’ll find in news reported by some parts of the media. Read more!

Vietnam’s dissidents –are they absent from the American mind?

In my small voice as a blogger, I’ve been guilty of the same failing as the louder media -- I’ve been ignoring how Vietnam’s Communist Party/state apparatus has cracked down on the small but persistent pro-democracy movement in the country.

In its summer issue, Dissent magazine, published in New Yoirk, breaks the silence with an article titled “Vietnamese Dissidents: Absent from the Western Mind.” Dustin Roasa, a free lance writer based in Cambodia, describes the most recent chapter in the history of Vietnamese dissidents, which began on April 8, 2006, when a group of activists posted on-line a “Manifesto 2006 on Freedom and Democracy.”

More than 2,000 Vietnamese – lawyers, Buddhist monks, Catholic priests, ex-Party members, writers, and intellectuals from all parts of the country – signed the document. They became known as Bloc 8406, after the date it was posted.

In a visit to Vietnam in the winter of 2007, Roasa talked with several Bloc 8406 members and found their mood pessimistic. The movement was under siege and losing members to prison. It was not gaining the attention of the foreign media.

“The dissidents I know hope for foreign involvement in their cause,” Doasa writes . The hope was that media interest would pressure the Party to listen to dissidents like Nguyen Dan Que, who after 20 years in prison is under house arrest in Saigon and has refused offers of exile to the United States.

In the summer of 2008, the government quietly gave a multibillion-dollar land concession in the Central Highlands to a bauxite mining company in China, which brought in thousands of “guest workers” from China. General Vo Nguyen Gap, 98, criticized the concession. So did some bloggers. “Few issues unite Vietnamese than suspicion of their large neighbor to the North,” Doasa points out.

A new wave of repression followed. At least 60 pro-democracy activists have been arrested since last October. One was a 41-year-old lawyer and graduate of Tulane, Le Cong Dinh, who gained fame for representing the Socialist Republic of Vietnam in a trade dispute with the United State (over catfish dumping) and winning it. He also took on the job of defending dissidents in court, and began blogging about the bauxite mine and other government concessions to the People’s Republic of China.

On January 30, 2010, Le Cong Dinh was sentenced to five years in prison on a charge of conducting propaganda against the state.

Roasa writes: “As more Vietnamese become aware of the pro-democracy movement through the China issue, and as the crackdown against the dissidents continue to internsify, international support for the pro-democracy cause in Vietnam is crucial now more than ever.” He concludes:

“Imagine...if Solzhenitsyn’s accounts of the gulag had fallen on deaf ears. Or if Charter 77 had never been read beyond the borders of Czechoslovia. There are Solzhenitsyns and Havels in Vietnam right now. Will anyone listen?”

On July 22 U.S. Secretary of State Hillary Rodham Clinton stopped in Hanoi to celebrate the 15th anniversary of U.S.-Vietnam relations. In a relatively brief talk, she said: “And the United States will continue to urge Vietnam to strengthen its commitment to human rights, and give its people say over the direction of their own lives. But this is not a relationship fixed upon our differences.”

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Hong Kong for shared prosperity

The minimum wage law that Hong Kong adopted on July 17 won’t give anyone a pay increase until next year, but it’s already a clear defeat for what Milton Friedman once described as the world’s greatest experiment in laissez-faire capitalism.

Lee Cheuk-Yan, head of the Hong Kong Federation of Trade Unions (HKFTU) and a member of the city-state’s legislative council, conceded that the law has short-comings, but said: “This means goodbye to unfettered capitalism.”

Under Hong Kong’s status as a special region of the People’s Republic of China, its non-elected chief executive, Donald Tsang, has much discretion on how the new law is implemented. A commission, appointed by Tsang, will come up with figure setting the wage floor, which a HKFTU campaign has demanded to be HK$33 (US$4) an hour. The minimum to be approved is reportedly closer to US$3 an hour. No ceiling on hours is involved.

For these and other initiatives, the Wall Street Journal accused Mr. Tsang of “misguided populism.” In truth, his initiatives could be small steps toward shared prosperity. Read more!

Soaring job losses, trade deficit: is it time to increase tariffs on China’s imports?

The U.S.-China economic relationship is so greatly unbalanced in China’s favor that the United States needs to initiate a system of tariffs against China’s export machine. So says Steven Pearlstein, business columnist of the Washington Posr.

“Getting this economic relationship back into balance,” Pearlstein writes in his June 30 column, “is the single biggest challenge to the global economy, not just because of its direct effects on China and the United States, but the indirect effects it has on the rest of the world.“

China received a free pass into the World Trade Organization without having in place the fundamentals of a market system, Pearlstein points out. “Its business sector continues to de dominated by state-owned companies financed by state-owned banks within the context of what remains largely a state-planned economy.”

The result, as Pearlstein describes it, is a business sector difficult if not impossible for foreigners to penetrate, and “those outsiders who manage to break through invariably find that they have few protections from a system that is larded with corruption and largely unconstrained by the rule of law.”

Administration after administration in the United States has refused to challenge China’s mercantilism, in the hope that as the relationship deepened China would “make the inevitable transition to democratic capitalism.” But China’s view of business remains thoroughly mercantilist, and “to try to convince [it] otherwise is folly.”

Pearlstein contends it is urgent that the United States take the lead toward a solution by establishing a tariff regime that will increase the cost of imports not just from China, but also from ”other counties that keep their currencies artificially low, restrict the flow of capital or maintain significant barriers to imports of goods and services.”

How would such system work? Would it comply with WTO rules? Pearlstein declined to get into such details. “That’s why God created trade lawyers.”

Nor does he counter the arguments made against increasing tariffs. That would take a book. As it happens, the U.S. Business & Industry Council has just published a volume that buttresses Pearlstein’s position: “Free Trade Doesn’t Work: Why America Needs a Tariff.” Its author, Ian Fletcher, makes a strong case for “a flat tax on all imported good and services.”

Controversies over tariffs go back to the beginning of the nation. In a classic volume, “Opening America’s Market: U.S. Foreign Trade Policy since 1776,” Alfred. E Eckes Jr. describes how, at crucial times, “U.S. officials unilaterally opened the American market without gaining commensurate advantages in foreign markets for the products of American workers and American factories.”

Hence a merchandise trade deficit that this year in a single month, April, totaled $52,500,000,000, reaching $19,300,000,000 for China alone. According to a report earlier this year by the Economic Policy Institute, the growing overall trade deficit with China eliminated or displaced an estimated 2,400,000 U.S. jobs between 2001 and 2008.

A new EPI report illustrates how China’s export-driven policies work. Its paper and paper products industry is now the largest in the world, thanks to WTO-illegal government subsidies of more than $32,100,000,000 since 2002. Paper imports to the United States are now rising faster than those from any other country. According to industry sources, an estimated 400,000 jobs are at risk, even though the U.S. industry is highly competitive.


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Inequality: how it may foment instability of many varieties

To heal the grievous rift exposed during recent violent demonstrations in Bangkok, Thailand must address the country’s social inequality, according to a leading Thai, Finance Minister Korn Chatikavanij.

In an interview with Tim Johnston of the Financial Times of London, Korn said: “There have been far too much focus through various governments…on short-term relief measures as opposed to measures that genuinely address the issue of equal access to opportunity in the long term.”

Although governmental efforts to create jobs through fiscal stimulus are important, “they cannot be expected to create job opportunities of the kind that people aspire to in the long term,” Korn said, adding that a widespread view among the people is that access to opportunities and resources is “not fair and transparent.”

Apparently Johnson shares that view. In an opinion column published June 28, he wrote:

“While the protesters’ main demand was the resignation of the government, that discontent was rooted in the belief that the country’s traditional aristocratic and bureaucratic elites have used their power to usurp political and economic rights by manipulating parliament and the courts.”

That discontent is not limited to Thailand. Nor are its roots.

Another columnist, Paul Krugman, a Nobel prizewinner in economics, is also exploring the societal repercussions of inequality. He does so in a paper, “Inequality and crises: coincidence or causation?” that he presented in Luxembourg to the Luxembourg Income Study, an on-going project that collects and analyzes income and expenditure data of nearly 40 countries.

As of this writing, Krugman has made available only a series of statistical data slides and a few related notes of his presentation. In his opening note, he explains:

“Pre-2008: When I would talk to lay audiences about inequality, I would mention that we were reaching levels not seen since 1929, and that would inevitably lead to questions about whether we would soon have another Depression. No, I’d say – there really isn’t a clear reason why high inequality should lead to macroeconomic crisis.

“And then…” Data captured in a series of charts follow, as well as this note, among others:

“Sharp rightward shift in politics in U.S. and to lesser extent UK circa 1980. Reflected in polarization, and also in policies, including financial deregulation. Also, strong correlation between political shifts and inequality.”

Among the economists he quotes is Robert Frank, author of “Falling Behind: How Rising Inequality Harms the Middle Class.” He puts Frank among those with “Modern Ideas (on the basic issue): over-consumption (and over-indebtedness), not under-consumption,” as in this quote:

“The wealthy are spending more now simply because they have more money. But their spending has led others to spend more as well, including middle-income families. If the real incomes of middle-class families have grown only slightly, how have they financed this additional consumption? In part by working longer hours, but mainly by saving less and borrowing more.”

In his final slide, he draws two-way causal lines between politics and inequality, but he qualifies the link between inequality and fragility with a question mark.

Meanwhile, in his June 27 New York Times column, Krugman wrote: “We are now, I fear, in the early stages of a third depression….The cost – to the world economy and, above all, to the millions of lives blighted by the absence of jobs – will…be immense.”
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Very rich becoming even richer

The sizes of income gaps between the very rich and everyone else in the United States have more than tripled in the last three decades. The result is that income concentration at the very top of the income scale is greater than at any time since 1928.

So says the Center on Budget and Policy Priorities (CBPP) in a report based on new data issued by the Congressional Budget Office (CBO) combined with prior research.

The authors, Arloc Sherman and Chad Stone, point out that the recession that began in December 2007 likely shank the gap between rich and poor households, but that a similar development during the 2001 recession turned out to be just a speed bump. Incomes at the top later more than made up lost ground.

The new CBO data show how middle-income Americans were affected by trends in after-tax income during the 1979 – 2007 period:

-- The share going to the top 1 percent hit its highest level (17.1 percent) while the share going to the middle one-fifth of Americans shrank to its lowest level (14.1 percent).

-- Average after-tax incomes for the top 1 percent rose by 281 percent after adjusting for inflation – an increase of $973,100 per household – compared to increases of 25 percent ($11,200 per household) for the middle fifth.

The CBO data, according to the CBPP report. are the most comprehensive data available on incomes and taxes for different income groups, capturing trends at the very top of the scale that the Census data miss. For example, Census income data do not include capital gains or earnings above $1,000,000. If someone makes $10,000,000 a year, the Census reports these earnings as $1,000,000.
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Apple's i-Pad made under military discipline: Taiwanese petition

The cluster of ten suicides at the Taiwan-owned factory in Shenzhen, China, “is a bitter accusation made with 10 young lives against the inhumane, exploitative labor regime.” The responsibility for the tragedy, and for making amends, lies with four parties:

-- the owners of the factory, Hon Hai Precision Industry and its subsidiary, Foxconn Technology Inc.., which operates the Shenzhen plant.
-- the government of China, “which favors employers and fails to assure basic labor rights in China.”
-- multinational corporations, such as Apple Computer Inc., which outsoure products, such as iPad, to companies like Foxconn that “minimize their costs by transferring the price pressure onto their workers in forms of low pay, military discipline, and ruthless working conditions.”
-- the government of Taiwan, which is “an accessory to the wrongdoings of international conglomerates.”

So says a petition originated by a group of Taiwanese academicians and now signed by more than 200 colleagues, plus labor and environmental activists. Previously, in my blog posted yesterday, I referred to it as a letter, not a petition. This morning, an anonymous email sent me an English translation of the petition, http://sites.google.com/site/laborgogo2010eng/.

Its additional details and insights include:

1. “The concentration camp-styled controlling system, the means of supervision over employees, and repeated labor for more than a dozen hours a day on production lines are main reasons for physical and mental exhaustion and alienation of the workers.”

2. “The wage in Foxonn is relatively high compared to the other OEM [original equipment manufacturer] factories in Shenzhen….Pay raise is not the answer.”

3. “The representative of the [government] labor union of Foxconn, ironically, is the assistant of chairman Terry Guo” of Hon Hai.

All Taiwan-funded enterprises abroad, including Foxonn/Hon Hai, must end “military discipline in the factory as well as in the dormitory, the petition says. It also asks all others involved to initiate reforms. Among them: “a reform in the existing labor union system toward the guarantee of shop-floor worker representaton.”

Consumers are asked to boycott Apple’s new iPhone 4G “until the working conditions of its manufacturing factories are genuinely improved.”

The petition identifies two sociologists, Thung-Hong Lin of Academia Sinica and You-ren Yang of Tunghai University, as its “promoters.”
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Taiwan profs shame Taiwanese corporation for suicides in China

A Taiwan-owned multinational’s behavior in China has sparked unexpected controversy in Taiwan, thanks in part to the protests of 150 Taiwanese academicians.

The controversy, headline news on TV last Sunday, June 13, and front page headlines in most newspapers on Monday, pits the academicians and other critics against the mighty Foxconn Technology Inc., key assembler of Apple i-Phones, whose Shenzen plant suffered a series of worker suicides this year.

After a suicide in April. two young sociologists drafted a letter calling attention to the intense pressures faced by the Foxconn workers to work illegally excessive overtime, and asked the company to stop blaming the latest victims as copycats. Widely circulated in the academic community, the letter gradually gained the signatures of 150 professors of sociology, psychology, public health, gender studies, and law, among others.

The day after the letter was publicized at a press conference, the universities of the academic signers were flooded with phone calls and emails: the academics knew nothing about work and were overpaid fat cats that Taiwan can do without.

More important, the prime minister, Wul Den-Yih, called the academics unfair and politically motivated. Public sentiment generally had a nationalist reaction, as though any criticism of Foxconn and Terry Guo, president of its parent company, were an attack on Taiwan.

Nor did the 150 academics gain popularity with one of their key demands, as described by Hsin-Hsing Chen, associate professor of the Graduate Institute for Social Transformation Studies: that “the public pension funds divest themselves of any Foxconn stocks until the company shows substantial improvement in its compliance with China’s labor laws.”

This week, China Times, one of the biggest newspapers in Taiwan, chimed in with a different note for the media. It editorially criticized Guo’s attitude toward the 150 professors, and had the following analysis of a widely publicized pay raise that Foxconn granted at the Shenzhen plant:

“Just as Foxconn announced the enormous pay raise in his [Guo’s] Shenzhen plants, they also announced massive relocation of production out of Shenzhen into the low-wage inland provinces. They can do that because their products like iPods are less bulky and the transportation costs are low. But other foreign-owned manufacturers in the high-wage coastal areas in China with bulkier products such as food or cars cannot do that. Guo is scheming against his competitors while trying to win his PR campaign.”

Meantime, some other foreign-invested plants in China, faced with strikes or a labor shortage, were boosting wages. These management concessions may test whether money alone will satisfy the workers, or whether their discontent runs much deeper. Might the workers even be seeking some form of social transformation?

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UN quizzes nations on CSR policies

“Has your national government… adopted a corporate social responsibility (CSR) policy or policies?”

That was the first of 16 questions in a survey that the UN sent last year to all 192 UN member countries. A report on the survey, prepared for John Ruggie, the UN Special Representative for business and human rights, was issued early this month under the title “Survey of State Corporate Social Responsibility Policies: Summary of Key Trends.”

During the five months after the survey’s distribution in April last year, only 29 States responded, and of these, only 10 indicated that they had, or were drafting, some form of national CSR policy. Two others said they had no intention to adopt such a policy.

It was a “low overall response rate,” the report conceded. Yet there was enough substance in the 10 responses to produce a 10-page report summarizing key trends, which do not necessarily reflect practices around the world.

Without divulging whether they had responded to the survey, the report notes that six States – Canada, China, Denmark, India, the Netherlands, and Norway – have recently adopted some specific form of CSR policy. Here are a few CSR details on three of them.

Canada, a world leader in mining at home and abroad, in 2009 released a strategy paper for the country’s international extractive sector. A CSR Counselor for that sector, reporting directly to the Minister of International Trade, monitors the practices of Canadian companies operating outside Canada and advises stakeholders on corporate performance.

China issued guidance in 2008 for its state-owned enterprises recommending a system of CSR reporting and protecting labor rights. The government has similar guidelines in the works for foreign-invested firms.

Norway last year adopted a White Paper on the government’s expectation that Norwegian companies operating abroad will respect human rights.

More than half of the report describes the many ways that the 10 nations (unnamed) responded to the survey’s specific questions. Examples:

Does the CSR policy:
-- cover the subsidiaries of corporations? Five do.
-- provide guidance on how companies integrate CSR into their operations? Six do.
-- refer to any binding legal operations on companies? Three do.

The survey provides only a partial snapshot of how the UN’s framework on business and human rights has penetrated the culture of its Member States. Second, it serves as a reminder to States of the specific CSR duties that the Human Rights Council’s 47 member States embraced two years ago. (For background on that event, see “Multinationals, Human Rights, and UN” at
http://humanrightsforworkers.blogspot.com/2008/04/multinationals-human-rights-and-un.html.)
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Spread of precarious work undermines human rights, especially for women

You’re an employer who finds a formula to cut wages, pay no benefits at all, and prevent your work force from trying to unionize. Under the formula, you change the status of a half of your workers from stable employment to a radically different arrangement, such as independent contractor.

The workers have no change in job content or in workplace. The only changes are in smaller paychecks and in the loss of sick leave, vacations, pensions, and paid overtime, among other benefits, including the basic one, job security. From stable employment they fall into the general category called precarious work.

Precarious work, in a frightening variety of exploitative forms, has become so prevalent in the global economy that two global unions last month submitted reports to John Ruggie, the UN Special Representative for Business and Human Rights, alerting him to the trend. Both global unions – the International Metalworkers Federation (IMF) and the Food, Agricultural, Hotel, and Restaurant Workers International (IUF) – emphasize that precarious work is systematically undermining human rights.

The IMF report singles out a country where precarious employment is rampant and victimizes women especially:

“In Korea, 70 per cent of women workers are precariously employed, earning only 43 per cent of the salaries of regular male workers. In one of the factories cited in the [ILO complaint] against the Korean government, only 5 per cent of the workers are permanent employees and they are all male. Nearly all the precarious workers are women, earning 47 per cent less than their male colleagues.”

The IUF report points out that, apart from the World Bank’s promotion of labor market “flexibility,” there are numerous misleading ways to package precarious work. In South Africa, it is called “black economic empowerment” by Coca-Cola’s bottler, which turned its delivery drivers into “independent owner-operators,“ whose earnings were reduced down to as much as a fifth of what they formerly were. In Pakistan it is called “fighting child labor” for an industrial giant that has a payroll dominated by workers in a precarious status.

Both the IMF and the IUF called upon Ruggie, as part of his program to integrate human rights into corporate practice, to study how the trend toward precarious work undermines human rights, particularly the human rights of workers.

In his June 3 remarks to the International Labor Conference in Geneva, Ruggie said that in carrying out his mandate, he looks to the ILO for guidance, with precarious work as one issue and citing the contribution made by the IMF and IUF submissions.
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Toward protecting girls and boys laboring on U.S. farms

-- The United States has failed to meet its obligations to implement International Labor Organization (ILO) convention against the worst forms of child labor.

-- It is a “matter of urgency” that the U.S. do so by updating its law and regulations on child labor.

That the central message of a report issued this month by the International Labor Rights Forum (ILRF), a Washington, D.C.-based advocacy group.

Last November the U.S. government restated its “strong commitment’ to the convention, # 182, ratified and signed in 1999, but, according to the ILRF, the evidence of non-compliance has four dimensions.

1. Regulations listing particularly hazardous jobs have not been updated in 30 years.
2. Current labor law exempts various categories of children from protection against employment in hazardous agricultural jobs.
3. Current law does not prevent children from working long hours in agriculture.
4. Laws that do give child agricultural laborers some protection are not well enforced.

ILRF’s recommendation as a “first step” toward compliance with the convention is directed toward Congress: swift passage of the Children’s Act for Responsible Employment (CARE), which would raise the standards protecting children in agriculture. For more information, click http://www.opencongress.org/bill/111-h3564/show/.
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Towards a ‘win-win’ situation on globalization and human rights

Corporations generally are in a “lose-lose situation” regarding human rights. They “are not adequately monetizing and aggregating the costs of conflicts with communities in which they operate, typically involving environmental and human rights concerns.” The result: harm to human rights and to the company itself.

That‘s a key finding discussed in a report to the UN Human Rights Council on June 1 by Professor John Ruggie, special representative for the UN Secretary General for business and human rights.

From his own studies and those of other experts, Ruggie has found that the harm to the corporation included revenue losses due to delays and disruptions; higher costs of financing, insurance, and security; and possible project cancellation.

Governments, through judicial and non-judicial mechanisms, “should form the foundation of a system of remedy for corporate-related system human rights abuse,” Ruggie writes, but these mechanisms all “remain underdeveloped – and too many judicial systems are inaccessible to those who need them most.”

Ruggie, whose day job is professor at the John F. Kennedy School of Government, has another year to go on a UN mandate that began in 2005. In the next 12 months, he and the team he assembled will put the finishing touches on a UN Framework for business and human rights -- essentially a paradigm to integrate human rights and globalization. As he recognizes in this report, however, “the international community is still in the early stags of adapting the human rights regime to provide more effective protection to individual and communities against corporate-related harm.” Print Page Read more!

China's press is open to labor problems, especially those of foreign firms

Why is China’s Party/government currently allowing so much press coverage of all the labor troubles of foreign business'?

That question nagged at me often in the past few days as I followed the spate of suicides at Foxcomm, mass producer of iPads and other electronic gadgets for export. (See previous article.) Finally, I emailed my query to a friend of mine, Anita Chan, author, editor, and professor at the China Research Center in Sydney.

My email reached Dr. Chan in Guangzhou, China, where she is researching China's auto industry. Here is her reply:

About these media reports on China's labor troubles in foreign factories, I do not see this as particular new. It is just the development of a trend in news reporting that goes back to the 1990s. The press in China has always been much freer in reporting on the dark side of labor issues than the American press on its own problems. You have to recognize the fact that many newspapers today are not "the mouthpiece of the state". Many young reporters go into factories under cover to report on labor conditions.

You may not want to accept it, but the management styles of non-PRC Asian companies (like Taiwanease-owned Foxconn) can be worse than the Chinese's own management style. Indeed, there are more serious violations in such factories that supply the global production chain than exist in Chinese state enterprises or big domestic enterprises. The massive layoffs in the late 1990s were a different matter. Besides layoffs is a different issue from low wages, long work hours, and an abusive shop floor culture. As a result one should not be surprised that there are more reports on the problems of such factories' than on local factories.

Among the workers themselves, if you read the blogs, there are also very strong anti-foreign feelings with nationalistic overtones. This is unfortunate because nationalism overshadows class awareness. Chinese workers, the Chinese reporters, and the Chinese authorities share a very similar nationalistic outlook.

Also in the case of Foxconn, workers are seen as victims. Nothing wrong about exposing them being victims as long as they do not rise up in protest against the government and demand to have an independent trade union, which in reality these Foxconn workers are not asking for anyway.

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Dying young: making gadgets for Apple, Motorola, HP, Dell, Nokia

Suicide can be viewed as the tip of an iceberg, an indicator of the quality of life and of broader problems, according to the OECD Factbook. By that standard, a huge factory in southern China may be the epicenter of broader human problems yet to be exposed.

In the five months before May 25, nine workers – all between 18 and 25 – committed suicide at the Shenzen plant of a Taiwan-owned multinational, Foxconn Technology Inc., a leading supplier of electronic goods with leading brand names.

But even before this May, Foxconn was the scene of repeated tragedy. On June 18, 2007, a 19-year old Hunan worker, was found hung to death in the toilet of her dormitory room. On January 16, 2009, a 25-year old worker jumped to his death from a 14th floor window. On July 16, 2009, a 25-year-old office worker, accused of losing one of 16 prototypes of Apple’s fourth generation iPhone, jumped to death from the 12th floor of his apartment building.

That list of Foxconn’s death toll is from “Dying Young: Suicide & China’s booming economy,” published May 25 by a Hong Kong-based NGO, Students and Scholars against Corporate Misbehavior (SACOM), founded in 2005. From conversations outside Foxconn’s walls, the group found that most of the interviewed workers described the stress of work with examples like these:

-- They were not allowed to talk with others on the same production line, and so did not get to know their colleagues
-- Isolation from each other often extends even to those in the same dormitory, partly because of excessive overtime.
-- Even with overtime exceeding 100 hours a month, they could not afford to buy the products they make.

On the morning of May 25, representatives of SACOM and other NGOs staged a protest outside Foxconn’s headquarters in Hong Kong to express concerns over the suicides and to demand reforms, including payment of a living wage and permitting establishment of genuine worker organizations the factory.

Terry Guo, founder and chairman of Hon Hai, Foxconn’s parent company, rushed to Shenzen for a press conference on May 25. He urged the media not to misrepresent the situation at the factory.

“We are definitely not a sweatshop,” he insisted.

Maybe not in some legal definitions of the term. But it is a sweatshop in the sense experienced by Mr. Guo’s workers (and many millions of other working women and men around the world): a workplace that sweats the utmost out of its workers while giving them the very least in return, monetarily and otherwise. (GlobalPost has called them “silicon sweatshops.”)

SACOM’s Website documents that fact for Foxconn at http://sacom.hk/archives/640. An abbreviated version of “Dying Young” is available there, and contains the link to the full report, which runs 11 pages, including endnotes.

Foxconn is a member of the Electronic Industry Citizenship Coalition (EICC), whose members pledge to uphold high labor and social standards.

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My flawed Apple from China

I ordered an Apple iPod one day last week. It arrived in a neat package three and a half days later. It bore no mark of its geographic origin but Apple’s tracking chart told me it came from Shenzhen, China.

Shenzhen, a booming province near Hong Kong, is the home of a huge factory owned by a Taiwanese multinational, Foxconn Electronics Inc. Its workers, estimated to number 300,000, turn out products for the world’s leading phone and computer companies. Apple is among them.

About the time I was ordering the iPod, a 24-year-old worker surnamed Chu plunged to her death in a fall from a Foxconn dormitory. According to wire service reports, Chu became the seventh worker in the Foxconn Shenzhen plant to die in similar falls within a year. All apparently suicides, all driven by the extreme pressures of six- and seven-day workweeks.

As I get acquainted with my new acquisition, a refurbished Touch iPod, I marvel at its technology, but with a gnawing feeling of guilt for acquiring it.

Its cost, $149, made only a very tiny contribution to the $6,000,000,000 or so in merchandise that China is exporting to the United States every week. But how badly do I really need it? And how hard did the likes of Ms. Chu work to have a stock of refurbished iPods on hand so that I could have one in three and a half days? Read more!

‘The fight against child labor must be rekindled’

The concern about child labor has waned over the last six or seven years, and “must be rekindled.” That’s the judgment of Kailash Satyarti of India, chair of the Global March against Child Labor, which he founded in 1998.

Satyarti expressed his views in an interview published on-line by the International Trade Union Confederation (ITUC). Here are excerprts from his answers to questions by Samuel Grumlau.

The Global March site in 2006 estimated the number of child workers in India at 65,000,000. Does that figure still apply?

I think it has fallen. I do not trust the government statistics claiming that there are “only” 10,000,000 to 12,000,000 Indian children not attending school. The truth is that no one has clear statistics, but the number has fallen, perhaps by 15 to 20%. This is largely thanks to a rapid change in mentality among the Indian population. The middle classes now see child labor in a negative light. There is a sense of guilt, for example, if someone uses a child domestic. There are, of course, people who exploit children in the worst forms of child labor, included in the middle classes, but there has been a significant change.

There is also a growing demand for quality education. Even the poorest of the poor have started to realize the value of education. In the past, they thought that education only served career interests, but now they realize that it also contributes to their development, their personal fulfillment.

One factor contributing to this change is the remarkable development of the information and communication technologies sector over the last 10 to 15 years in India. Even the poorest villagers have a mobile phone, as does their relative working as a rickshaw puller in a faraway city. They can keep in almost daily contact whereas before, correspondence by mail would take weeks. A person working in Mumbai or Delhi can therefore keep in touch with his family, tell them what he sees, the changes in India and in the cities. Little by little, they come to realize that if their children were educated, they would have a better chance at prosperity and personal growth.

There have also been major political changes, with the rise to power of the Dalits, the lowest caste. Many members of the lower castes are ministers, and no party can afford to ignore the problems facing these castes. This rise has created new aspirations, a desire among the members of these castes to have the same lifestyle as other Indians, and education is the key to reaching this goal. As a result, more and more poor people, Dalits, are sending their children to the schools in the villages, including their daughters, who used to be the most discriminated against.

Is the impact of taking children out of work as strong and as rapid as expected on adult employment or pay?

Adults do benefit in terms of employment in the long run. The carpet industry offers a good example. Fifteen years back, at least a million children in South Asia were employed full time in this sector: at least 300 to 350,000 in India, at least 250 to 300,000 in Nepal, and almost 400,000 in Pakistan. Now, all the research on the subject sets the figure at below 300,000 in the three countries. So, 700,000 children have been taken out of this sector.

It is the result of the raids led by [non-governmental] organizations to free children, the existence of the RugMark label, the growing demand for education among the Indian population, and the government's efforts in favor of schooling, and so forth.

The World Cup is starting on 11 June in South Africa. Is the Global March holding a campaign on this subject, as it did previously?

Yes. One of the big problems is the employment of children in the manufacture of hundreds of products used during this event: clothing, souvenirs, nets, drinks, etc. We demand guarantees against the use of child labor in these sectors. All lot of attention was given during previous World Cups to the manufacture of the footballs used during the matches, and FIFA made a number of commitments, but that is not enough: although child labor may not be used in the production of the footballs used during big games, there are still children making the footballs sold thanks to all the fervor stirred up by events such as the World Cup.

(Read the new eight-page “Union View” report on the trade union fight against child labor at http://www.ituc-csi.org/child-labour-enough.html.)
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