Vol. V, Bulletin No. 7.                                                                      April 3, 2000 
AFL-CIO Launches Campaign for Global Fairness

Rallying against a Blank Check for China

Thousands of working families will converge on Washington, D.C., April 12 as part of a nation-wide AFL-CIO "campaign for global fairness."  The campaign's first objective is to deny China the permanent trade status that the World Trade Organization calls Most Favored Nation (MFN), but which, for cosmetic reasons, is dubbed Normal Trade Relations (NTR) in the United States. Whatever the label, the AFL-CIO and other groups are rallying against it under the banner of "No Blank Check for China."

At present Congress has the right, on an annual basis, to disapprove the favorable terms that MFN/NTR status bestows on China. Under the Clinton Administration's proposal,  Congress would permanently deprive itself of that right, even though Congress has used it only as an occasion to review China's human rights policies.

Last year China's exports of goods to the United States exceeded its imports from the United States by $68.7 billion, a record high that is very likely to increase this year. Interestingly, although the Administration and organized business have made many claims about the good things that will happen by granting China permanent MFN/NTR, they have not claimed that China's trade deficit with the United States will decrease.

No worker rights or other human rights conditions are attached to the present trade relationship with China or to the new agreement the Administration is now asking Congress to approve. As a result, the AFL-CIO executive council declared in February:

"We must make worker rights and human rights a mainstay of our trade and investment agreements and international institutions, with the defeat of permanent Normal Trade Relations with China our most immediate goal." (For background, check the AFL-CIO's Website.)
The anti-MFN/NTR protest on April 12 falls within a 10-day-long period of protests and demonstrations to be held in Washington, D.C., starting on April 9 with the Jubilee 2000/USA campaign to cancel the crushing debt of developing countries. The events are under the sponsorship of various groups, some committed to civil disobedience. For a listing check http://www.a16.org.

Heritage: China's WTO Entry Premature

The U.S. Congress should postpone its approval of a permanent change in U.S.-China trade relations, says the Heritage Foundation, an influential conservative think tank. "It is critical that Congress not allow the Administration's haste in this matter to hinder its own consideration of other priority interests with China, such as national security and human rights," Stephen J. Yates, the Foundation's senior policy analyst for China, wrote in a March 10 publicly distributed paper.

"The Administration's goal of normalized trade relations with China is correct, but its haste is unwarranted," Yates said. Among other things, he urged the adoption of "a more comprehensive approach to promoting freedom in China, one that fosters the foundations of democracy (for example, the rule of law and freedom of information and association)."  He added: "Counting on trade promotion and half-hearted denunciations at the United Nations alone will not drive systemic change in China."

(For the full text of the paper, check the Heritage Foundation's Website.)

Winning Living Wages at the Local Level

Grassroots campaigns involving unions and community organizations have succeeded in the adoption of "living wage" ordinances by 43 cities and counties across the United States, according to the Living Wage Resource Center of the Association of Community Organizations for Reform Now (ACORN).

Campaigns for similar ordinances are underway in 70 additional cities, counties, states, and universities. The ordinances have a limited range, covering only government service contractors, child care providers, nursing homes, and other businesses and non-profits that get public funding or public subsidies of some sort.

These employers typically get a double subsidy, as Jen Kern, director of the Living Wage Resource Center, puts it. They get government support, and then they pay the lowest possible wages.

"People who work shouldn't be poor," says Christine Silvia of the AFL-CIO public policy department. So the campaigns generally seek to bring pay to at least $8.19 an hour, the amount required (by U.S. government standards) to bring a family of four above the poverty level. Local chambers of commerce almost always oppose the increases. (See the Website of ACORN for its answers to opposing arguments.)

* * *
Workers as Commodities in Silicon Valley

"Down and Out in Silicon Valley" is the title and "Plenty are left behind by the greatest wealth machine in history" is the subtitle of an article in the March 27 issue of Business Week. It could also have been titled "How to Become Millionaires while Turning Workers into Commodities."

Although Silicon Valley has turned thousands of ordinary people into millionaires, it has done badly for workers at the low end of the economic pyramid, the magazine reported. Worst off are the area's huge "contingent" labor force composed of temps, contract workers, and others vulnerable to exploitation.

"Average wages for low-end workers...[are] 10% lower today than a decade ago," the magazine revealed. "A key reason: high tech's heavy reliance on outsourcing and subcontracting. It's a model that helps higher-skilled techies thrive, able as they are to hop from one employer to another, jacking up their pay with every move. But for the less skilled, outsourcing only serves to hold wages down."

At the same time, "the purchasing power of poor families has plunged in the midst of unrivaled prosperity" as housing and other living costs have zoomed (40% higher than the rest of the country). 

Upgrading Guidelines for Multinationals

A fresh breeze is blowing through the Paris headquarters of the Organization for Economic Cooperation and Development (OECD), the intergovernmental agency representing 29 industrial nations, including the United States. The OECD is in the process of updating its Guidelines for Multinational Corporations, a document adopted in 1976 and not significantly changed since then.

Among the points introduced in a new version, still in draft form, is that multinational enterprises should:

Specifically, the draft calls upon companies to "contribute to the effective abolition of child labor" and "contribute to the elimination of all forms of forced or compulsory labor"--both of which would be additions to the Guidelines. The draft also has improved language on unionization rights, by urging multinationals to:
"Respect the right of their employees to be represented by trade unions and other bona fide representatives of employees, and engage in constructive negotiations, either individually or through employers' associations, with such representatives with a view to reaching agreements on employment conditions."
The OECD plans to have the final text ready for ratification at its annual ministerial meeting in Paris June 26-27. A big issue still unresolved is the implementation mechanism. The OECD Trade Union Advisory Council (TUAC) is pressing for a procedure with teeth to make the Guidelines effective. The OECD Business and Industry Advisory Council (BIAC) is concerned that the new version is already too "aggressive."

(For more information check the OECD, TUAC, and BIAC Websites.)

Some Radical Ideas of a Leading Economist

"Worker rights should be a central focus" of economic development, a mainstream economist, Joseph Stiglitz, said last January in a major address that was his swan song after three years as the Bank's chief economist. The media at that time emphasized his criticism of the "narrow economic focus" of Bank policies. Actually his most radical contribution was to expose the phoniness of some economic propositions held sacred by members of his own profession.

From the perspective of neoclassical economics, he pointed out, "labor is just another factor" of production, with "nothing special about labor, nothing to suggest that labor should be treated differently from any other factor." He cited that as one of the key propositions that historically "served to eviscerate the rights and positions of workers." Market-driven development policies based on such erroneous propositions, he said, led to a "low road" system of industrial relations that stifled workers.

"It is time to view the issues of labor relations through new lenses--and begin a shift in the prevailing paradigm," he said, and explained what that shift would involve:

"By becoming advocates of stronger worker rights and representation at every level--from the workplace, to the local, regional, and national level, to the international level--I believe we can achieve much more than improvements in efficiency. Labor unions and other genuine forms of popular self-organization are key to democratic economic development."
The above excerpts are just samples of the many highly quotable ideas continued in
Stiglitz' address, which was delivered in Boston to the annual meeting of the Industrial Relations Research Association. Fortunately the full text is available on the IRRA Website. I should have written about it much sooner, but better late than never.

So much of what Stiglitz said cries for comment.  He noted in passing, for example, that "there is a strange 'studied inattention' to the possible role of the labor movement in economic development." Studied inattention is a polite phrase. "Prejudice," in my view, would be more accurate for the attitudes of economists and many other members of the academic community.

When will Stiglitz' paradigm shift take hold widely enough to show up in the economics and history texts used in the nation's high schools and colleges?

Human Rights for Workers: Bulletin No. V-7, April 3, 2000
Robert A. Senser, editor
Copyright 2000
hrfw@senser.com. (Send e-mail)

Back to Home Page
A short cut to a list of Bulletins in 1999, 1998, 1997, and 1996