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.

Print Page Read more!

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.

Print Page Read more!

Ten Challenges for American Catholics Implicit In Pope's New Encyclical

Pope Benedict XVI’s new encyclical, “Love in Truth,” like all Papal encyclicals, is not country-specific in the issues that it raises. Nor is it addressed only to Catholics. Rather, the Pope’s analysis deals with the “challenges of today’s world.” Nevertheless, many of those challenges ought to be of special concern to American Catholics, both as office-holders and as ordinary citizens of the world’s leading power.

Here is my partial list of such challenges, 10 of them, selected from among those that fall within the province of this Weblog, Human Rights for Workers. The quotes, italics included, are directly from the Vatican text.

Globalization

“The processes of globalization, suitably understood and directed, open up the unprecedented possibility of large-scale redistribution of wealth on a world-wide scale; if badly directed, however, they can lead to an increase in poverty and inequality, and could even lead to a global crisis. It is necessary to correct its malfunctions, some of them serious, that cause new divisions between peoples and within peoples, and also to ensure that the redistribution of wealth does not come about through the redistribution or increase of poverty…”

Inequalities

“The world’s wealth is growing in absolute terms, but inequalities are on the increase. In rich countries, new sectors of society are succumbing to poverty and new forms of poverty are emerging. In poorer areas, some groups enjoy a sort of ‘superdevelopment’ of a wasteful and consumerist kind which forms an unacceptable contrast with the ongoing situations of dehumanizing deprivation.”

Unemployment

“Unemployment today provokes new forms of economic marginalization, and the current crisis can only make that situation worse. Being out of work or dependent on public or private assistance for a prolonged period undermines the freedom and creativity of the person and his family and social relationships, causing great psychological and spiritual suffering. 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 is man, the human person in his or her integrity.”

Role of government

“The integrated economy of the present day does not make the role of States redundant, but rather it commits governments to greater collaboration with one another. Both wisdom and prudence suggest not being too precipitous in declaring the demise of the State. In terms of the resolution of the present crisis, the State’s role seems destined to grow, as it regains many of its competences.”

Unions

“Through the combination of social and economic change, trade union organizations experience greater difficulty in carrying out their task in representing the interests of workers, partly because Governments, for reasons of economic utility, often limit the freedom or the negotiating capacity of labor unions. Hence traditional networks of solidarity have more and more obstacles to overcome. The repeated calls issued within the Chuch’s social doctrine…for the promotion of workers’ associations that can defend their rights must therefore be honored today even more than in the past.”


The Market and Ethics

“Efforts are needed – and it is essential to say this – not only to create ‘ethical’ sectors or segments of the economy or the world of finance, but to ensure that the whole economy – the whole of finance – is ethical, not merely by virtue of an external label, but by its respect for requirements intrinsic to its very nature.

Rights and Duties

“Many people today would claim that they owe nothing to anyone, except themselves. They are concerned only with their rights, and they often have great difficulty in taking responsibility for their own and other people’s integral development. Hence, it is important to call for a renewed reflection on how rights presuppose duties, if they are not lo become mere license.”

Intellectual property protection

“On the part of rich countries there is an excessive zeal for protecting knowledge through an unduly rigid assertion of the right to protect intellectual property, especially in the field of health care.”

Investor responsibility

“Both the regulation of the financial sector, so as to safeguard weaker parties and discourage scandalous speculation, and the experimentation with new forms of finance, designed to support development projects, are positive experiences that should be further explored and encouraged, highlighting the responsibility of the investor.”

The Environment

“The environment is God’s gift to everyone, and in our use of it we have a responsibility towards the poor, toward future generations, and toward humanity as a whole.”
* * *
To repeat: that’s my list of 10. There certainly are other challenges that demand attention, but 10 is a nice round number, and for a blog this posting is already overly long.

Print Page Read more!

Double standard on labor standards

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

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

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

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

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

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

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

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

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

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

Print Page Read more!

Workers punished in war against unions

Private employers in the United States are relying more than ever on coercive and punitive tactics against workers seeking their legal and moral right to union representation.

Punishments include firing, threatening to fire, threatening to close the worksite, reducing wages and benefits, close monitoring of personal activities, and various forms of harassment, which in combination create an atmosphere of fear.

Further, employers often frustrate unionization by delaying the secret ballot vote that the National Labor Relations Board (NLRB) conducts to decide on union representation. In the most egregious cases, those elections were stalled by three to five years.

Evcn when the NLRB does hold an election and even when the union “succeeds in making it through all the hoops that it takes to win the election,” employers can fight on by actively resisting the workers’ right to a collective bargaining contract. In fact, according to NLRB data for the 1999-2003 period, 52 percent of newly formed unions had no collective bargaining contract one year after a successful election, 37 percent none after two years.

Those are some highlights of scandalous employer behavior, legal, illegal, and quasi-legal, described in the study No Holds Barred: the Intensification of Employer Opposition to Organizing released May 20.

“Our labor law system is broken,” Cornell University professor Kate Bronfenbrenner. author of the five-year study, concludes toward the end of her 31-page report published by the American Rights at Work Foundation and the Economic Policy Institute.

A Three-Front War

Yes, the report documents that the system is broken. But it also offers the latest evidence that many individual employers and the key employer organizations in the United States are waging an aggressive war against unions and against a basic human right – the right of workers to form a union and to have it operate as a union.

So it should be no surprise that American organized business is also waging that war on two other fronts (neither mentioned in the new report):


-- It is fighting tooth and nail against the Employee Free Choice Act, which would go a long way toward fixing a broken system.

-- It is internationalizing that anti-union and anti-worker war by its relentless opposition to having free trade and investment agreements protect the rights and interests of workers and worker organizations in the way those agreements already protect the rights and interests of business people and business organizations.

In an interview published May 20 in the New York Times, Randall K. Johnson, a U.S. Chamber of Commerce vice president, questioned Dr. Bronfenbrenner’s objectivity, but did not address the substance of her report. As of 2 p.m. May 20, I could find no relevant statement on the Chamber’s Website.


Print Page Read more!

Myopia Still Hampers WTO

It is up to the United States “to make history” by leading the way to a revival of the stalled Doha Round of trade negotiations, says Pascal Lamy, director-general of the World Trade Organization.

In making that case in a Washington talk on April 24, Lamy emphasized that open trade needs to be “accompanied by the right domestic policies.” His list of those policies includes:

-- “better worker training, greater mobility in labor markets, more expansive social safety nets."
-- “investing in critical areas such as health care, education, and clean energy.”
-- “greater investment in physical, social, and government infrastructure, which helps increase the benefits of trade.”

“The presence of these domestic policies,” he explained, “provides a layer of comfort to workers who are then better prepared to face global competition since they know there are social safety nets that will catch them when they fall.”

In warning against protectionist measures, Lamy said: “It is not less trade that the United States needs, but more and better domestic policies,…policies which help translate trade into benefits for the people. This is where the task of reconciling the people with trade must start [emphasis added].”

While detailing the domestic policies that need to be changed for the sake of workers, he neglected to mention any WTO policies that might need change to take account the rights and interests of workers. These are controversial of course, but so are the domestic policies he advocates.

Ironically, at least in the United States, the business groups most eager to restart the Doha negotiations are also those most zealous in opposing the domestic policies that Lamy deems necessary to give “comfort” to working men and women.

In his talk, given at the Peterson Institute for International Economics, Lamy called upon U.S. business, academics, and political leaders to rally behind the WTO during what he called “the first global crisis in the history of mankind.” Yet, except for his ideas on needed domestic programs, he relied on the same free trade rationale that has been persuasive for 60 years but now is seriously questioned by influential economists and others in rich and poor countries alike.

Back in 1993, a Heritage Foundation memorandum analyzing the pre-WTO General Agreement on Tariffs and Trade (GATT) called it “the closest thing to a uniform commercial code for world trade.” The WTO is still devoted to devising and enforcing an improved global code for commerce, but the world needs more than that.

Lamy’s talk reflects some innovative WTO ideas on the internal policies of the United States and other countries. Especially in the present crisis, Pascal would be wise to start rethinking the WTO’s own policies.
* * *

I have long criticized the WTO for its unbalanced agenda. See, for example, “The WTO's Lop-Sided Agenda for the World,” in December 2001. For a more recent analysis, see the blog posting of April 20, immediately below this.

Print Page Read more!

More 'informal' Asian workers = more exploitation

Companies in Asia are relying more and more on labor in the “informal sector,” to the point that “informal workers” now comprise as much as two-thirds of the region’s labor force.

So says the Hong Kong-based Asia Monitor Resource Center (AMRC) in a new report, “Rights for Two-Thirds of Asia.” The 274-page publication tracks the labor law and practices prevailing in the “unregistered” activities in the industrial, agricultural, and services sectors of 14 Asian countries, and finds that increased number of informal workers, most of them female, means increased exploitation of the most vulnerable.

“Overall, the Race to the Bottom penalizes virtually everyone in the labor force, particularly those in the informal majority – in both the formal and informal economies,” writes Rene E. Ofreneo in the introductory chapter of what is the latest edition of the AMRC’s Asian Labor Law Review.

Ofreneo, a professor of industrial relations at the University of the Philippines, poses a question raised in a 2006 UNDP report: The fast-growing Asian-Pacific region has embraced free trade, but has free trade embraced free trade? “The answer by the [22] contributors to the 2008 Labor Law Review is a uniform No,” she points out.

The most remarkable part of that failure is this. The informal workers are no longer just street vendors, home workers, or farm helpers.

They are also women and men who once did regular jobs such as packaging, maintenance, and security for a company and who now do the same work in the same office or factory. The only difference is that they are now working under an imposed “contract” status with fewer benefits and no job security.

When I was in Bangkok a few years ago, I learned of a bank that unilaterally decided to switch a part of its work force into a “contract” status, partly to cut them off from its unionized employees and thereby deprive them of benefits under its collective bargaining contract.

Now “the irregularization mania [is] sweeping Asia,” according to the AMRC. In fact, “the regulars, or standard employees, are now outnumbered by the ‘irregular’ or ‘non-standard agency, temporary, casual, part-time, migrant, and subcontracted workers.”

Looking at the big picture, Ofreneo attacks the policies of the World Bank and of the United States and Europe, which long preached their gospel of a regularization-free labor market. The World Bank still does, through a widely circulated annual publication, “Doing Business,” which holds up a development model with minimal labor legislation.

“One undeniable root cause” of today’s global financial meltdown, in the AMRC’s view, “is precisely the irrational exuberant belief in the so-called growth creating potentials of free financial, goods, and labor markets sans regulations.”

“Rights for Two-Thirds of Asia,” priced at $25, was prepared in cooperation with the Committee for Asian Women and Homenet Southeast Asia.


Print Page Read more!

West Wing cast joins pro-union campaign

With business organizations pouring uncounted millions into their fight against the Employee Free Choice Act, three top members of the West Wing cast came to Washington recently to lend their support to that proposed bill.

The three West Wingers – Martin Sheen, Bradley Whitford, and Richard Shiff – recorded a video to help kick off labor’s “Faces of the Employee Free Choice” campaign.

“The Employee Free Choice Act,” Martin Sheen says in the video, ”means a stronger America for all of us.” Here what they all said.



What can you do?

Check the American Rights at Work organization to learn how you can help. Click here.

Print Page Read more!

New Labor Secretary Inherits a Mess

Under a Labor Department that has been mismanaged for years, uncounted numbers of workers – perhaps millions -- became victims of wage theft by employers. In testimony before a Congressional committee, the Government Accounting Office (GAO) yesterday described how sloppy enforcement of the law left low-wage workers particularly vulnerable to having employers steal their earnings.

Following up on scandals reported in the media, the GAO assigned a team of undercover agents to pose as workers or employers to test how the field offices of the department’s wage and hour division handled 10 types of complaints typically voiced across the country.

Here are three examples given of how department employees dealt with fictitious violations of minimum pay, child labor, and other issuest under their jurisdiction.

n A receptionist in Virginia paid less than the minimum wage: the department’s investigator accepted without question the employer’s refusal to pay back wages and counseled the office worker to file a private lawsuit.
n A meat packer in California using children to run heavy equipment: four months after receiving this anonymous tip, the wage and hour division office had still not conducted any investigative work, and never recorded the complaint in the department’s data base.
n A house painter in Texas who did not receive his final paycheck: the division employee accepted the employer’s word that he would pay, and closed the case as “agreed to pay” despite the painter’s claim that he got not a cent.

The department’s statistics on back wages collected, and the number of employees receiving their back pay, are overstated, according to the GAO, because “an unknown number” of complaints recorded as resolved did not in fact result in the worker’s receiving the back pay due

More than 100,000,000 workers are covered under federal labor laws enforced by the wage and hour division (WHD). The GAO’s overall assessment was that the WHD had “an ineffective system that [particularly] discourages wage theft complaints.

The new Secretary of Labor, Hilda L. Solis, who has been in office less than two weeks, vowed to take the GAO findings seriously. The understaffed WHD will be adding 250 new investigators.

Under Secretary Solis, the Department of Labor is set to return to the mission for which it was founded in 1913: “to foster, promote, and develop the welfare of working people.”


Print Page Read more!

Banned from Barbie's birthday celebrations

It will be hard to miss the fabulous 50th birthday celebrations of a fabulous doll, Barbie. Guess who will be forgotten during all that hoopla? The very people who make Barbie and have been making her for 50 years.

One person who noticed that omission is Marie-Claude Hessler, a retired lawyer in Paris who is a Mattel shareholder. On March 5 she wrote an open letter to Robert Eckert, chairman and CEO of Mattel. I quote it in full here.

Mr Chairman and Chief Executive Officer,

Barbie is turning 50 on March 9th.

Impossible to miss the event with so many parades, fashion shows, special events, broadcasts and articles. Nothing is too beautiful nor too luxurious to celebrate Barbie's birthday : the best fashion designers dressed Barbie for the New York fashion show, Louboutin made her shoes, a big Barbie shop is opening in one of Shanghai's most prestigious avenues, there are British pink chocolates and Monaco's stamps representing Barbie. In Paris alone, there will be special events at the Galeries Lafayette; a Barbie week in the exclusive fashionable shop Colette with a Lagerfeld exhibit and the sale of the collectibles created by Jeremy Scott and of other various Barbie's objects; the doll museum will show 500 Barbies. And there is an Angela Merkel Barbie... and a luxurious pink Barbie Fiat 500 will parade through Milan on March 9th...

A true success in public relations – even if it does not make the product any younger.

But who has been left out of the parties? Among the flood of words and images nothing at all about the tens of thousand people who manufacture Barbie, her numerous accessories and licensed products. Yet without them, no Barbie and no party.

Why have they been left out? Because they have nothing to celebrate.

For twelve years, I have been watching closely the working conditions in Mattel's own factories as well as in Mattel's subcontractors' and licensees' factories : Mattel's track report is poor. Despite the adoption of a code of conduct in 1997, despite multiple independent audits, working conditions remain unacceptable : low wages, daily working hours of 12 if not more, weeks on end without a day off, noisy factory floors, too hot or too cold depending on the season, terrible smell of solvents due to insufficient ventilation... To make it short, conditions unworthy of Mattel... and Barbie.

Mr Chairman and Chief Executive Officer, I am asking you: will everybody be included in the celebrations? What will you do for the workers who have been left out of Barbie's birthday parties?

Yours sincerely,

Marie-Claude Hessler
Mattel shareholder

Mattel is not alone in its forgetfulness. Far, far from it. The whole global system of trade and investment is guilty of it.

I expect that Mattel’s CEO will have an answer. When will the World Trade Organization come up with its answer?

A final thought: imagine how much fairer globalization would be if a few more shareholders were as conscientious and diligent as Marie-Claude Hessler.


Print Page Read more!

‘Card check’ for unionizing gets scholarly OK

A group of Catholic scholars “committed to Catholic social teaching concerning the human rights of workers to organize employee unions” is pressing for the adoption of the Employee Free Choice Act.

“Badly broken” is how the group calls “the present legal and moral framework” that is supposed to safeguard freedom of association for American workers. In a statement that invites others to sign, the Catholic Scholars for Worker Justice praises the Employee Free Choice act as “rooted in and supported by Catholic Social Teaching.”

The statement summarizes three features of the proposed legislation, which is being reintroduced in the Congress after being adopted in the House and getting bogged down in the Senate last year:

1. Recognizing the right of workers to form a union through filing signed cards (known as “card check”) that state their decision to form a union.
2. Mandating mediation and arbitration if a first contract cannot be negotiate within the fist 90 days.
3. Imposing stronger penalties on firms that violate worker rights.

“Workers can also choose a secret ballot election if that is their choice,” the statement ads.

A longer expression of support for worker rights is contained in a policy paper adopted when the Catholic Scholars group was founded in mid-2008.


Print Page Read more!

Shelve worker rights because of crisis? No!

“Right now everyone wants to maintain jobs, even if they are sweatshop jobs (China). I think it is exactly why many union people will tell you it is not the time to push on labor standards...The economic logic is against [your] perspective.”

That message was in an email criticizing something I wrote. The email reflects a tempting notion that may be spreading: forget the pro-worker agenda for the sake of the anti-recession agenda. But the temptation is based on a fallacy: that the two agendas are necessarily in conflict.

I started to write a strong rebuttal, but soon realized that there was no need to do so. Why should I, when much wiser heads have already rejected that position? They did so in a letter timed for President Barrack Obama’s official meeting on February 19 with Prime Minister Stephen Harper in Canada.

The letter, dated February 18 and addressed to the top leaders of the two countries, was signed by AFL-CIO President John Sweeney and President Kenneth Georgetti of the Canadian Congress of Labor (CLC), who together represent 12,200,000 union members.

Their five-page letter detailed the ways in which Canada and the United States need to work together on the economic crisis and on advancing worker rights. They discussed those two major areas under two headings: “1. Coordinated Response to Current Economic Crisis” and “2. NAFTA Renegotiation.”

The renegotiation of the North American Free Trade Agreement (NAFTA) sparked by far the most interest. Media accounts suggested that Obama’s concerns center on moving the “side” (separate) agreements on labor and the environment into the main body of NAFTA. Whatever the administration’s closely held position may be, the AFL-CIO and CLC position is not limited to what the existing labor and environment agreements cover.

“Substantive amendments” are required in otherimportant areas, Sweeney and Georgetti state. For example, NAFTA’s investment section is flawed by, among other things providing investments “unwarranted and excessive protections.” Other “central concerns with NAFTA” cover its provisions on energy, trade in services, and agriculture.

All in all, “a very ambitious list,” as the two labor leaders conceded. But they certainly don’t believe that the economic crisis requires sacrificing the rights of workers, whether here at home or abroad.

UPDATE: Since writing the above, I learned that the office of the U.S. Trade Representative (USTR)has just released a long report on the President's trade policy, which I'll comment on as soon as I have a chance to read it and think about it. Meantime, check it out yourself at www.ustr.gov, and do by all means send me YOUR comments.


Print Page Read more!

A 'tipping point' for fair-trade policy?

In the North Carolina elections for the House of Representatives November 4, Democrat Larry Kissell, a civics teacher who had worked in textile factories for 27 years, defeated a five-term Republican incumbent, Robin Hayes, who had cast one of the two last-minute votes that passed the Central American Free Trade Agreement (CAFTA) in 2001.

That other decisive pro-CAFTA vote had come from Phil English, a veteran Republic congressman from Erie, Pa. He too lost his seat this month to a Democrat, Kathy Dahlkemper.

For Todd Tucker, research director of Public Citizen’s Global Trade Watch division, those two victories are part “of an unprecedented shift in the U.S. political landscape away from the disastrous trade and globalization policies of the past.” For the division’s director, Lori Wallach, the 2008 election was “a veritable tipping point for fair trade issues.”

In the House of Representatives, 33 new “fair traders” won, for a net gain of 26, meaning that in January 2009 the new House will have about 140-150 “hardcore free traders” from both parties, according to Global Trade Watch’s count. In the Senate, five new fair-trade supporters were victorious, notably North Carolina state Senator Kay Hagan, who ousted GOP Senator Elizabeth Dole. The outcome of several other Senate and House races may increase those numbers.

The latest details are reported in a Global Trade Watch report, “Fair Trade Gets an Upgrade.”

Those numbers, impressive as they are, aren’t the only indicators of whether U.S. trade policy will become worker-friendly. A major clue will come from President Obama’s choice for U.S. Trade Representative, the senior official with a great deal of leeway in interpreting and enforcing U.S. trade policy.


Print Page Read more!

No more false choices. . . .

. . . is the title of a perceptive op-ed article in today’s New York Times by two of Senator Obama’s economic advisors. They debunk three widely held “false choices” facing the economy, and then propose alternatives to the either/or categorization. One important polarizing dichotomy they target is “free trade versus protectionism.”

The article’s special significance is that it is written by Robert E. Rubin, a former U.S. treasury secretary who is currently a Citigroup executive, and Jared Bernstein, a senior economist at the Economic Policy Institute. The two express agreement on trade as follows:

“With respect to trade, the choice is not trade liberalization versus protectionism. Instead, as trade expands, we must recognize that protecting workers is not protectionism. We must better prepare our people to compete effectively and help those who are hurt by trade—not just displaced workers, but those who find their incomes lowered through global competition. This means investing more of the benefits of trade in offsetting these losses, through more effective safety nets, including universal health care and pension coverage.”

But the two economists then go on to disagree on a key issue:

“Beyond that, while we share a commitment to helping workers deal with our new global challenges, one of us (Mr. Bernstein) would advocate provisions in trade agreements that are intended to protect workers, both here and abroad, and the other [Mr. Rubin] would have considerable skepticism about the likely effectiveness of those provisions for our workers.”

In other words, since we are facing “new global challenges” in international trade, Bernstein advocates addressing them domestically and globally. Rubin, even while recognizing new global challenges, advocates addressing them only domestically, with better U.S. safety nets.

Two apparently different approaches. Can either work effectively?

The domestic approach, concentrating on U.S. measures alone, could work if U.S. legislation were globalized, truly globalized. That would mean adding a worker-friendly dimension to a wide set of U.S. laws. Tax laws, for example, would provide incentives for businesses to invest in the United States instead of abroad. Tariffs would be raised to cover more than the cost of building and maintaining our sea and airports, but also some of the cost of new safety nets. Corporate laws would be revised to make U.S.-based multinationals accountable for their treatment of workers in foreign countries, both those on their own payroll and those on the payrolls of contractors of the multinationals.

Rubin is right to be skeptical about labor provisions added to trade agreements, if he has in mind the provisions in existing agreements and the limited provisions adopted so far (as in the Peruvian free trade agreement). But Bernstein seems to favor a broader approach, one that would “protect workers, both here and abroad.”

To be serious about meeting the new global challenges facing workers here and abroad, it is pitifully inadequate to improve only the labor chapter of a trade agreement. The whole trade agreement, every single chapter of it, must be analyzed from a brand new perspective, one sharply different from the prevailing paradigm among negotiators.

At present, all trade agreements, including overall accords on the scope of trade agreements, are dominated by negotiators who have this objective uppermost in mind: How can we protect the rights and interests of business and business organizations in the global economy? The resulting document, whether bilateral, regional, plurilateral, or multilaternal in reach, is then judged by that one-sided standard.

That standard needs to be balanced by another: How can we also protect the rights and interests of workers and their organizations in the global economy? To its great shame, the World Trade Organization, like its predecessor bureaucracy, has steadfastly refused to put that question on its agenda. Worse, the WTO’s bosses, the political leaders of the world’s nations, are complicit in that shameful taboo.

Let me propose an addition to the list of economics false choices. The issue of what approach to take under the new global challenges is not global versus national. The most effective approach is to work at both.


Print Page Read more!

Who Cares About Bangladesh?

I’ve been neglecting my Blog because I am working on a long-delayed project: writing the last chapter of a book. But in my email I just got a press release about Bangladesh, which has a special place in my heart because long ago I researched the plight of women workers in the garment industry there. The email told me that in Bangladesh it’s still the same old story of human exploitation.

Every time I think that the campaign against sweatshops is succeeding, I learn about a story like this one. The government of Bangladesh, with the help of an American law firm, continues to crack down on the rights of workers. I’ve stopped keeping track of how many times the International Labor Organization seeks to shame Bangladesh for its repressive activities, without any success.

The workers in the country’s booming Export Processing Zones have recently taken the initiative to form a union through which they hoped to protect their rights. But the government has again intervened to crush the worker initiative.

This latest chapter in a story that goes back 20 years is told in the press release just issued by head of the International Textile Garment, and Leather Workers Federation, Neil Kearney.

In his testimony before the ILO Committee on the Application of Standards in Geneva on June 6, Kearney described the workers’ plight and said: “Garment workers in Bangladesh, mainly women, cannot be allowed to drop further into serfdom.”

Accordingly, the committee censured Bangladesh, as it has many times before. Once again, Bangladesh provides evidence that U.S. trade legislation needs to be strengthened to protect the rights of hundreds of thousands of women workers in Bangladesh, who are essentially part of our labor force.

Who cares?

Print Page Read more!

This UN Work Seems Back on Track

“We’ve had a train-wreck. Please get the train back on track.” That’s what a representative from a developing country told Professor John Ruggie of Harvard when he took over his job as Special Representative of the UN Secretary General for Business and Human Rights three years ago.

Now everything is back on track. At least it appeared to be on June 3 when Ruggie presented a report of his work to UN Human Rights Council in Geneva.

Back in 2005 two big stakeholders in globalization – the major international business organizations and leading human rights organizations – were sharply divided over what, if anything, the UN should do about ending human rights violations by multinational corporations. Now they seem to be on track together in supporting a proposal that Ruggie laid out in oral and written reports still under discussion by the Human Rights Council.

Ruggie has proposed an extension of his mandate in order to move “the discussion from the level of general principles to greater operational detail.”

I don’t yet have the Council decision, but in the meantime the full report and a massive amount of other material – much more than you’ll want to read – can be found on the Business and Human Rights website:
http://www.business-humanrights.org/Documents/RuggieHRC2008

I have doggedly covered this human rights controversy from its very beginning. A certain amount of doggedliness was needed to pursue a story almost completely ignored by the media. “Global Norms Put Heat on Business,” published on January 6, 2004, was the first of my 12 reports on my Human Rights for Workers website. Then, before this brief articlet, I had four detailed ones on this weblog. (See the "categories" list at the right and check the "John Ruggie" label.)

Three of them turned out to be the first media analysis of the report that the Council is now discussing. You’ll find them listed last (under Robert Senser, Human Rights for Workers) in the chronologically arranged “responses, commentary & related articles” at
http://www.business-humanrights.org/Documents/RuggieHRC2008

I have doggedly covered this human rights controversy from its very beginning. A certain amount of doggedliness was needed to pursue a continuing story almost completely ignored by the media. “Global Norms Put Heat on Business,” published on January 6, 2004, was the first of my 12 reports on my Human Rights for Workers website. Then, before this brief article, I had four detailed ones on this weblog.

Three of them turned out to be the first media analysis of the report that the Council is now discussing. You’ll find them listed last in the chronologically arranged “responses, commentary & related articles” at
http://www.business-humanrights.org/Documents/RuggieHRC2008

Print Page Read more!

Populist Ideas from Harvard’s Summers

“Populism,” or pre-election pandering to the ungrounded fears of workers. That’s the dismissive accusation leveled against trade policy reforms proposed by the two Democratic candidates for the U.S. presidency, Senators Clinton and Obama. Now a distinguished American economist has come forward to give their populism a good name.

Lawrence Summers, former U.S. Secretary of the Treasury, does so in a two-part article in the Financial Times, which is not a populist organ. Without mentioning the debate or the debaters, Summers explains why U.S. workers have a legitimate basis to oppose current U.S. trade policy. He urges revising it “to focus on the issues in which the largest number of Americans have the greatest stake.”

As a mainstream economist, Summers expresses his continued support for global economic integration – but not its present form. He emphasizes that economic integration will stagnate unless the workers of the United States and other countries grow convinced that it benefits them, and not just its “business champions.” So he argues strongly for the need to develop “a strategy to promote healthy globalization.”

His strategy has two components:

-- Domestic: “strengthening efforts to reduce inequality and insecurity.”
-- International: “focus on the interests of working people in all countries, in addition to the current emphasis on the priorities of global corporations.”


Summers, 53, now a professor at Harvard, which he headed for five years as president until two years ago, draws on a parallel in American history for the current need to focus international economic diplomacy more on preventing harmful competition between countries:

“There is a reason why progressives in the early part of the 20th century sought to have the federal government take over many kinds of regulatory responsibility. They were concerned that competition for business across states, and their ease of being able to move, would lead to a race to the bottom.

“Financial regulation is only one example of where the mantra of needing to be ‘internationally competitive’ has been invoked too often as a reason to cut back on regulation. There has not been enough serious consideration of the alternative – global cooperation to raise standards.”

Here Summers adds: “While labor standards arguments have at times been invoked as a cover for protectionism, and this must be avoided, it is entirely appropriate that U.S. policymakers seek to ensure that greater global integration does not become an excuse for eroding labor rights.”

In his two-part article (one published on April 28, the other on May 4), Summers acknowledges that two U.S. policymakers detected the present predicament years ago: former U.S. Secretary of Labor Robert Reich and economist Paul Samuelson.

Summers’ ideas add to the doubts that a growing number of economists have about U.S. trade policy. That policy is deeply entrenched, however, and might well continue more or less as is (even by inserting a supposedly improved labor chapter into NAFTA). Hopefully, however, the next occupant of the White House will be wise and strong enough to initiate a broad strategy to promote healthy globalization.



Print Page Read more!

Multinationals, Human Rights, and UN - II

(Reporting on the Ruggie Report – II)

“Unfeasible, unnecessary, and counter-productive.” That’s how the U.S. Council for International Business denounced a 2003 document titled the “Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights,” or Norms. The opposition of the U.S. government, too, was vigorous, so much so that Amnesty International publicly called upon U.S. Secretary of State Condoleezza Rice to put an end to U.S.’s “undermining” the Norms.

The document that provoked so much controversy, pro and con, was the handiwork of the UN Subcommission for the Promotion and Protection of Human Rights, made up of 26 independent human rights experts. A U.S. academic, David Weissbrodt, professor of law at the University of Minnesota, was the expert most responsible for researching and drafting the Norms.

Polarization, human rights organizations vs business, doomed the Norms, but not the basic idea behind it. Three years ago (in April 2005) UN Secretary-General Kofi Annan appointed Professor John Ruggie of Harvard to carry on what is essentially the same project. His mandate includes “identifying and clarifying standards of corporate responsibility with regard to human rights.”

Where to find those standards? Weissbrodt culled them from three dozen UN treaties and other international instruments, including ILO conventions and recommendations. Ruggie started by looking elsewhere. He commissioned a study of 320 cases of alleged corporate-related human rights abuse reported on the website of the Business and Human Rights Centre during a 33-month period that ended in December 2007. He then had each case coded for the rights the alleged abuses impacted from among those listed in seven key UN human rights documents, including the four core worker rights conventions of the ILO.

Ruggie’s empirical study identified 12 labor rights and 17 non-labor rights. That means “there are few if any internationally recognized rights [that] business cannot impact – or be perceived to impact – in some manner.” Ruggie’s conclusion: there are no limits to the rights that companies “should take into account.” On this basis, he judges that the Norms would be inadequate, even for protecting a corporation’s own interests, since they identify only “a limited set of rights for which [a corporation] may bear responsibility.”

As a result, in the report that will be considered at the June session of the Human Rights Council, Ruggie lays a heavy human rights burden on corporations. Part of it is the moral and legal responsibility of exercising "due diligence."

“To discharge the responsibility to respect [human rights] requires due diligence,” Ruggie emphasizes. One of his specific recommendations is that companies should look for guidance in the Universal Declaration of Human Rights and the core worker rights conventions of the ILO. “The principles they embody comprise the benchmarks against which other social actors judge the human rights impacts of companies.”

Drawing on his recent research and consultations, Ruggie sets down four elements of a company’s basic due diligence process:

Written policies: To give the aspirational language meaning, more detailed guidance in specific functional areas is necessary.

Impact assessments: Many problems arise because companies fail to consider the potential human rights implications before new activities are launched. After getting launched, activities should reviewed on an on-going basis.

Integration: Isolating human rights considerations in a company is a mistake that can lead to inconsistent or contradictory actions by product developers, lobbyists, sales teams, or procurement officials. Leadership from the top is essential to embed respect for human rights throughout a company.

Tracking performance: Monitoring and auditing processes are needed to get updates of human rights performance. Confidential channels, such as hotlines, can provide useful feedback.

How will organized business react to Ruggie’s ambitious new framework? No explosion so far. Nobody should be surprised by this report, though. In his speeches, interviews, and previous reports, Ruggie has been clear about where he was heading. His style throughout the past three years has been a model of openness as he went about

-- convening 14 multi-stakeholder consultations on five continents.
-- initiating more than two dozen research projects, some with the assistance of global law firms and other legal experts, nongovernmental organizations (NGOs), international institutions, and committed individuals.
-- generating more than 1,000 pages of documentation as the foundation of his framework.
-- receiving about 20 formal “submissions” (comments) from governments and other stakeholders..
-- presenting two extensive reports on his mandate to the Commission on Human Rights and its successor, the Human Rights Council [in 2006 and 2007], prior to this one]

Print Page Read more!

Life After Corporate Codes of Conduct?

Even with factory monitoring, corporate codes of conduct can’t be relied on as the tool to eliminate sweatshops, and must be replaced by a new way to achieve that purpose. That’s the conviction of two pioneers in the anti-sweatshop movement:

-- Neil Kearney, head since 1988 of the global labor federation that now represents 10,000,000 garment and shoe workers in 110 countries, and

-- the United Students against Sweatshops (USAS), whose affiliates in more than 200 universities, colleges, and high schools just celebrated their national organization’s 10^th anniversary.

Kearney, who has visited sweatshops in more than 140 countries, assesses the current working conditions in his industry as worse than they were a decade ago. In a talk to a recent European Union conference on corporate social responsibility, Kearney painted what he called “all in all, a pretty depressing picture.” The specifics he cited, according to a press release of his organization, the International Textile, Garment, and Leather Workers’ Federation (ITGLWF):

“While some reduction in child labor had occurred and health and safety had improved, wages in the sector had fallen by 25 percent in real terms over the past decade, and working hours had increased with a 60-hour work week now widely accepted as the norm…Employment was less secure, and abusive treatment of workers was more common.

“On key compliance issues like freedom of association and collective bargaining no progress had been achieved. Indeed, in some cases social auditors are promoting employer-dominated worker committees as alternatives to genuine trade unions.”

Meantime, USAS and the implementing arm it founded, the Worker Rights Consortium, have also been disappointed about achieving their anti-sweatshop goals. Factory violations of codes of conduct persisted. More serious, some key factories adhering to the code closed down in recent years. In the highly competitive global marketplace, they were not rewarded with enough business to keep them afloat.

Increasingly, therefore, especially over the past year or two, both the global garment union and USAS/WRC became convinced that code-dependent systems are too fragile. Instead of just tightening up the language and enforcement of the codes, they concluded that a new approach was needed. Both are preparing for a life beyond corporate codes of conduct. Each is working on a successor system adapted to its own environment.

But could the international labor market of the garment and shoe industries be such a jungle that it can never be civilized? Kearney and his ITGLWF are well into the process of finding out.

Global Cooperation Born of a Tragedy in Bangladesh

It started during a garment factory disaster in Bangladesh in mid-2005. There Kearney had his first direct contact with Inditex, the giant Spain-based global clothing retailer, which imported from a factory whose collapse killed over 61 workers and injured many more. From low-key cooperation to bring relief to families of the dead and to the injured, Inditex and the global union went on to deal with labor problems elsewhere in the multinational’s supply chain.

“Inditex and ITGLWF soon concluded that global problems required global solutions, implemented locally,” says Kearney Late last year the two sides signed what Kearney calls a “trail-blazing international framework agreement.” Under it, Inditex recognizes the ITGLWF as the chain’s global trade union partners throughout its supply chain.

The agreement has typical code provisions -- no child labor, no forced labor, no discrimination, no excessive working hours, no unsafe or unhealthy workplaces – adds another, “payment of a living wage,” and affirms a stronger “right of all workers to unionize and bargain collectively as the cornerstone of decent work.” But to insure that the standards aren’t empty words, the agreement also puts in place a: a labor-management relationship that extends beyond the domestic and into global levels, including not only direct suppliers but contractors and subcontractors.

Does it work? The Inditex Framework Agreement now has five major garment manufacturing companies under its umbrella. About 1,100 workers dismissed for union membership or activity have been reinstated. Moreover, in February, two Inditex suppliers signed company-level agreements with ITGLWF affiliates in Cambodia. Significantly, Kearney outlined these achievements in a presentation in Phnom Penh before Her Majesty, Queen Sophie of Spain, during her visit to Cambodia..

For its part, United Students against Sweatshops has been working for two years on a plan to transform how its anti-sweatshop policies are implemented. Its “Designated Suppliers Program” would require that university logo apparel be made only in factories producing mainly for the collegiate market and certified as paying a living wage and meeting other labor standards. Moreover, it would require licensees, such as Nike, adidas, Wal-Mart) to pay those factories a price sufficient to meet those standards.

Those responsibilities of course need more than a one or two-page code of conduct. In fact, the Designated Suppliers Program needs 11 pages to spell out its requirements on transparency, the living wage standard and how it is determined, licensee obligations, implementation, and enforcement, including binding arbitration.

So far 40 major universities – including Duke, Georgetown, the University of Wisconsin-Madison, and other 1990s pioneers in adopting codes of conduct – have given written support to DSP. So far, that support has not yet reached the critical mass needed to put DSP into operation.

Both ITGLWF and USAS/WRD are engaged in heroic struggles that pit modern Davids against today’s Goliaths. What side is the U.S. government on? In a contorted act, it is on both sides. The rhetoric aims to cheer David and his side. But the administraion’s zeal for Free Trade Agreements puts it firmly on the side of multinational Goliaths.

Print Page Read more!

The 'Opting Out' NAFTA Distraction

Now that the Democratic debate over NAFTA has burst into an international incident, it is instructive to read how relentlessly NBC Moderator Tim Russert pressed Hillary Clinton and Barrack Obama to take a position on “opting out” of NAFTA.

Neither Clinton nor Obama brought up the “opting out” idea. It was Russert who introduced it by quoting this statement that he said Al Gore made to Ross Perot in their 1993 debate: “If you don’t like NAFTA and what’s done, we can get out of it in six months.” Then, given that both candidates had sharply criticized NAFTA in the Ohio campaign, Russert asked: “Will the [next] U.S. President say we are out of NAFTA in six months?”

Senator Clinton quickly responded: “I have said that I will renegotiate NAFTA, so obviously, you’d have to say to Canada and Mexico that that’s what we’re going to do. But you know, in fairness – “

Russert pressed on, in different words: “You will get out? You will notify Mexico and Canada, NAFTA is gone in six months?”

Clinton: “No, I will say we will opt out of NAFTA unless we renegotiate it, and we renegotiate on terms that are favorable to all of America.” She later repeated the same point while renewing her criticism of the absence of labor and environment in NAFTA’s core agreement.

Russert wouldn’t let go. “But let me button this up. Absent the change you’re suggesting, you are willing to opt out of NAFTA in six months?”

Clinton: "I'm confident that as president, when I say we will opt out unless we renegotiate, we will renegotiate."

Then Russert turned to Obama, and after mentioning an AP story about Obama’s supposed ambivalence toward NAFTA, asked: “Simple question: Will you, as president, say to Canada and Mexico, ‘This has not worked for us; we are out?’”

Obama: “I will make sure that we renegotiate, in the same way that Senator Clinton talked about. And I think actually, Senator Clinton’s answer on this one is right. I think we should use the hammer of a potential opt-out as leverage to ensure that we actually get labor and environmental standards that are enforced. And that is not what has been happening so far.”

So Tim Russert had his point buttoned up to his satisfaction. But were Obama and Clinton really serious?

Gripped with the same question, diplomats at the Canadian consulate in Chicago thought they would get a candid answer about Obama from someone right there at the University of Chicago: Austan D. Goolsbee, professor of economics and also an advisor to the Obama campaign.

Goolsbee obligingly accepted the invitation to brief the consulate on Obama’s views. Like good diplomats, the Canadian officers took notes, wrote a report, and sent the report to Ottawa. Somehow, it leaked, and its message hit the fan: it soft-pedaled Obama’s tough talk on the campaign trail, specifically claiming that his language was “more reflective of political maneuvering than policy.”

At first, Obama denied that the meeting had taken place (Goolsbee did not report it to the campaign, in the naive belief that he was acting only in his role as a professor). But after the Canadian memo made headlines in Canada and the United States, an Obama spokesperson insisted that Obama’s public position on NAFTA is also his private position. Hillary Clinton insisted he was hypocritical and untrustworthy. And by Wednesday this week Canada’s Prime Minister, Stephen Harper himself, spoke up publicly, saying that the consulate report was “blatantly unfair” to Obama and his campaign.

That doesn’t end the debate over NAFTA, and shouldn’t. Both Clinton and Obama need intensive briefings to be able to explain their fair trade positions more convincingly.

Especially unimpressive, in my view, was how they both buckled under Tim Russert’s pressure, and embraced the tactic of Presidential wielding the “opting out” threat to quickstart negotiations. That’s a dumb way for a government to deal with neighboring governments, so dumb that it doesn’t happen in real life, much as it may be favored by pundits and reporters keen about “gotcha” questions based on fanciful scenarios.

Final point. Obviously, Clinton and Obama are far from isolationists, opposed to trade. They know that the economic and other interests of the three nations are such that, with or without a renegotiated NAFTA, the United States, Canada, and Mexico absolutely need some kind of a formal trade agreement among them and that the dispute is only about its contents. This fact is so obvious, I guess, that nobody at the Cleveland debate thought to mention it.

Print Page Read more!