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Can Doing What Seems to Be the Right Thing Turn Out to Be the Wrong Thing?
In Promoting Protectionism, American Labor May Be Putting US Workers at Risk
Leo Gerard of the United Steelworkers union is one of America's most progressive and outspoken labor leaders. I met him at a Cornell University conference that brought environmental organizations and labor unions together to fuse a forward looking consensus on the need for green jobs as key to the transformation of our declining industrial base.
A union blog speaks of us being in the best of times and the worst of times. The best because we finally have a Democratic president sensitive to labor concerns. The worst because American workers are up against hard times as unemployment grows because of a financial crisis that labor had no role in. Among the trends cited: "30 years of stagnant and declining wages while workers' productivity climbed by 75%; lower take home pay than in 1973; Yawning inequality."
Yet for all the union's activism and militancy, it has also been looking for someone to blame for this situation. Rather than focus on Wall Street's predatory practices or financing job outsourcing, it has turned its anger on workers on the other side of the world. China has become "the enemy." It is seeking protectionism in the belief that that can save American jobs.
Their target is tire companies in China that manufacture the least expensive tires on the market for cars and light trucks and sell them in America. The union argues that its imports are stealing American jobs and "disrupting the market" and has petitioned a government body, the International Trade Commission (ITC), to slap limits on them.
Bloomberg News reports: "The Chinese import surge has been a significant factor that has led to the idling of factories," Leo Gerard, president of the United Steelworkers, told reporters. The union represents about 15,000 tire workers at 13 plants including those owned by Bridgestone Corp. and Goodyear Tire and Rubber Co."
The ITC, set up under our trade laws, has now, by a 4-2 vote, agreed with the union and then went even further recommending stiff tariffs on all Chinese made tires in a remedy sent to President Obama. Perhaps unknowingly, the ITC decision also puts tariffs on Goodyear tires made in China, potentially hurting a US company as well. (1 out of every 6 tires manufactured by US firms are made in China!)
Explains the news service: "The president has the final decision over whether to take action or disregard the commission's recommendation, and that will be due in September."
Gerard sees the decision as a big victory but the logic is illogical and illustrates the dilemma of trying to fight our economic decline in an age of globalization by taking refuge in protectionist policies that often lead to counter attacks, in this case, from the one country that has kept the US economy alive by buying our treasury bills and debt.
Without China's financial support, we would be in far more dire straits, perhaps a deeper depression. Everyone knows that.
What's most revealing is that that none of the US-based tire companies have joined the union in this China bashing. If their business was at risk from predatory trade practices from China, they would speak up, but they know that tire imports from China constitute only 11% by value of the US tire market.
Another reason for the silence of US companies: they had long ago stopped producing lower-cost so-called "Tier 3" tires and instead opted to manufacture premium more expensive and more profitable products which are not in the same category, hence, not directly competitive. Some of these companies benefit as well because they import the third tier economy-priced tires from China for their own US distribution networks.
When US brands got out of the cheaper so-called replacement-tire low-profit market, China got into it, including working through these US manufacturers' American distribution networks and dealership which hire thousands of American workers. They service cost-conscious US consumers who can't afford higher priced brands. These consumer will be hurt if the Steelworkers and ITC prevail in this wrong-headed move.
And who are they? They are the union's own constituency, American workers who are coping with high unemployment levels and all sorts of economic distress because of the collapse of our financial system. Why victimize them further?
Stopping Chinese firms from manufacturing low-cost tires and selling them here will not create new jobs in America or turn the economy around.
Then, why is the union advocating it? Clearly to do something, to be perceived symbolically as fighting for its members by taking a popular "Buy America" stand even though there are no comparable American tires at that price point that are made here or even sold here.
The likely outcome is that if Chinese made tires are sanctioned, imports of tires made in Venezuela and other countries will replace them. Who will benefit? Not American workers!
Instead the Chinese work force with 20 million out of work because of the economic crisis will face even more painful job losses that will likely enrage them, and then put pressure on the Chinese government to strike back, perhaps with more pressure on the American dollar, or other US businesses there.
As the saying goes, what's good for the goose is good for the gander.
Many in China already resent US economic bullying and blame Wall Street for selling them junk loans and infected financial products that have caused vast economic losses. (Even as the US blames China for selling us infected peanuts or risky toys.)
To be honest, there is plenty to find fault with on all sides.
China-made tires meet US safety standards. If these more affordable tires go up in price, consumers would likely replace them less, leading to real safety worries.
So, let's stop reducing this problem to black and white, right and wrong, to demonize the "foreigners" with whom we are, like it or not, in an economically co-dependent relationship. In this industry there are both American owned firms in China and Chinese firms doing business in America.
The Steelworkers deserve support in their fight for economic fairness and new laws to help them organize. They deserve respect for their advocacy of an environmentally sustainable economy.
Their ‘save our tires' tactic, however, is a throw back, a step in the wrong direction and likely to hurt all sides in our economic relationships. We need each other to achieve economic stability.
Instead of gaining jobs for Americans, this measure could lose them. 500 US businesses could be hurt if this "remedy" goes through. Also, bear in mind, those US tire plants that were closed down before the Chinese imports from China began.
We need to ask: whom does protectionism really protect? When things are so bad, why make them worse?- Posted in
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Show All"Without China's financial support, we would be in far more dire straits, perhaps a deeper depression. Everyone knows that. "
Actually, we're already in dire straights. By China cutting off ties, we the people will be forced to be a truly independent nation. Depression? Maybe at first but how long can this country afford to keep running away from its financial problems. The sooner our nation faces them, the happier she will be.
Unions have for too long been the lapdogs of the Washington consensus. A more forward-looking argument for unions to adopt would be that global corporations and global corporate trading need to be confronted by global trade unions.
And so the spectre of the Comintern resurrects to haunt capitalism again.
The USW is possibly the leading union in North America that argues for and particpates in global unionism as a matter of course. And has been doing so for decades. Certainly, Leo Gerard, a Canadian, is a union internationalist.
In addition to participating in numerous "official" global union federations, the USW has independently taken the following ACTIONS in recent years:
Participated in an international council to deal with the Rio Tinto mining conglomerate;
Taken a lead in North America in fighting for workers' rights in South and Central America at great danger to some its staff and members;
Participated in and/or led the the Bridgestone/Firestone, Goodyear and Titan Tire Campaigns -- all dealing with multinational tire corporations;
Has been working closely with the South African federation of unions (COSATU) and the militant South African mine workers union (NUM) long before apartheid was defeated;
Worked with other African unions;
Is closely allied with German steel workers and other European unions on a number of issues;
Ran the successful (international)Ravenswood Aluminum Campaign.
These are just a few examples that I'm personally aware of. I participated in some of them. Check Google and the USW website for more details. Alot of this stuff remains on record.
The author dictates supposed facts but offers no evidence. Why is the shoddy, miserable excuse for analysis allowed in Common Dreams?
Instead of learning economics at an economics school, he should learn it in the unemployment line. The lessons are different.
This is nothing be an apology for corporations who are screwing over people in the US.
Shame on Common Dreams for including such a poorly thought through, shallow article.
"Instead of learning economics at an economics school, he should learn it in the unemployment line. The lessons are different."
The difference between them is simple...the previous is rational while the latter is emotional.
A successful society needs both to survive.
Danny Schecther is a journalist, not an economist and he learned his economics by reporting on real-world events and talking to people, yes, in unemployment lines.
That said, his resistance to market protection, while pragmatic, is problematic. Pragmatic because starting a trade war with China, while they hold the bulk of our debt, is like playing chicken with a bullet train. But problematic because "Free Trade" as practiced, has allowed US corpos to move whole industry segments offshore, wiping out US jobs and making US dependent on former (and maybe future) adversaries. The focus of the USW should be on the US boardrooms that make the decision to unemploy Unionized American, tear down the factories Americans built and ship them to other countries where near-slaves will do the job for peanuts.
While Danny Shechter is so right on so many issues, this piece is absolutley wrong.
It is simply another argument for so-called global free-trade, a system of unfettered capital mobility that is impoverishing billions of workers in the US, China and around the world.
There is absolutley nothing wrong with a nation using tariffs, quotas or other forms of protection to serve its markets, workers and citizens.
That is one of the chief purposes of the nation-state. If the nation-state wants to participate in global trade (and it is impossible not to) then it must do so based on the interests of its citizens first, not the interests of the owners and controllers of capital.
The core problem here is one of hypocricy and imperialism. The US has been the leading force in imposing "free trade" on much of the world through economic bribery, blackmail, gunboats and the air force -- not to mention assassination, violent overthrow of governments, etc.
So when USW Pres. Gerard calls for rules and practices to protect North Americans economically, ironically he is taking a very "anti-American" stance.
Certainly it is a conumdrum. But the way out is closer to what Leo Gerard suggests, than what Danny Shechter implies. Sometimes the right thing is actually the right thing.
Historically, tariffs help local labor.
There's a larger context here. Labor and management in the US, however witlessly or unwillingly, tend to support US depredations abroad. Those depredations exist primarily to keep foreign wages and benefits low.
American workers gain cheaper goods, but lose jobs, wages, benefits, the right to organize, control over (somewhat) representative government, and the constitutional protections derived from that control.
Management gains profits and, without steeply graduated taxes, increased social control. Of course large companies that can do business internationally gain over local outfits.
American labor organization has done fine things, but has made persistent errors. Primarily, we must recognize solidarity with foreign workers. We need to recognize that the Marines operate like Pinkerton's troops, like strikebreakers.
The argument from the left so often goes that Americans get the benefits from foreign occupation and that we must forego our guilty gains like some penance to help our neighbors. This is false.
Sure we need to stop the conspicuous consumption and shrink the carbon footprint vastly, but for other pressing reasons. If we get the soldiers out of the hundred-and-some bases abroad, stop the occupations, quit terrorizing labor abroad, we can free ourselves as well, build our unions, take back our work, and quit working 50+ hours while our kids are home hoping for attention from some domestic worker.
"Primarily, we must recognize solidarity with foreign workers."
Yes, that's the whole problem with global capitalism. Labor is the devalued end of the equation. The article on which we are posting suggests that American labor must forego protectionism for the long run benefits of foreign trade, yet globalism is a form of global trade which benefits only the owners in the capitalist equation. The whole purpose of the movement known as "globalism" is to prevent labor rights and environmental concerns from interfering with the making of profits.
Aside from that, I still have no idea why we have business relations with China, a totalitarian country with no concept of human rights, where bereft parents of children who died from melamine tainted baby formulas were thrown in jail for protesting in public, yet we're not allowed to travel to Cuba.
Schecter is described as a "graduate of the London School of Economics." He might as well be a graduate of the Chicago School or the neo-liberal school of Saint Thomas Friedman for all his repetition of the mantra of free trade philosopy. No one should read this without referring to Thom Hartmann's incisive critique of free-trade liberalism in an article posted yesterday on CD.
In my humble opinion global trade is for the most part a massive waste of energy. Oil is a very precious non renewable resource. Someday, possibly in the not two distant future, we will reach peak oil production and demand will outstrip supply indefinitely after that. Future generations will look back at us and say "What the hell were they thinking!"
Besides water oil is probably the most important resource man has have found, and we are squandering it in many cases to ship worthless crap like plastic pumpkins halfway around the world so the few at the top can make bigger profits.
Throw in how we are also changing the environment as we burn oil to move this junk around the planet and it looks like pure madness.
Some say peak oil doesn't exist. Others way we hit it at 85 million barrels/day a few years ago. Some even say that it was peak oil that triggered this financial debacle because as oil got more expensive, industrial, global investment was no longer providing the big profits, thus the reliance on derivatives, et. al.
We would not have the problem you describe and many others if we hadn't been subsidizing oil all these decades (and gas and nuclear). And we're still doing it! Guess why? Yes, we are subsidizing the destruction of our country and the planet.
You hit the nail on the head on the second paragraph. Could you imagine the difference it would make it government switched to subsidizing wind and solar energy instead of nuclear and fossil fuels? On subsidizing the destruction, let's add corn to the list. It's criminally insane that government would subsidize a crop for fuel that actually guzzles up fossil fuels and water big time while making it illegal to grow and cultivate hemp that would actually repair the soil and not guzzle.
The MODEL is broken. That workers in China make less "wages" and US workers see eroding "wages" are merely symptons of an economic model that does not work.
In order to have JOBS people must CONSUME More. In order to CONSUME more we need to extract more and more resources from a finite pool. The extraction of those resources leaves behind REAL Costs which make us collectively POORER and will make our descendants poorer. These costs are to our health, to the ecosystem and or are the shifting of those finite resources to the WAR Machine to ensure one can control those finite resources.
Throwing tariffs on trade, increasing minumum wages, having more or less taxes on the wealthy are treating symptons of an economic model that impoverishes everyone.
We have to rethink growth, rethink consumption and rethink what it is we LABOR at.
Just because one makes 30 dollars an hour as opposed to making 10 dollars an area by blowing the tops of mountains and strip mining millions of acres , does NOT mean it somehow better or more acceptable.
At the end of the day WHAT it is we produce and labor at and on WHAT we commit our resources to be it our intellectual capital , our financial capital or that pool of resources we must extract from the Earth , is far more important then what we are PAID in dollars to perfrom a given task.
The real reason he is right is that, thanks to our Wall St brethren, China holds all the cards. She's on the move, colonizing areas of Africa and purchasing resources and signing resource agreements all over the world. If anyone saw Charlie Rose's interviews in China last year you would know that the mantra is "China is a peaceful nation".
They will kill every Uigher in sight if they have to but they won't change their mantra and it won't matter.
JenniferBedingfield is right (12:05pm). We'd be far better off just facing our problems. But we aren't and we won't so China will be calling the shots...