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Worker Rights Must Be Trade Policy Bottom Line

How long have you and your dad been selling furniture at the flea market? "About a year," the young man said. "Since the mill closed."

He told me that his father had lost his job after twenty years as a textile dye supervisor. "It's the Asians," he said, his voice taking on an edge. "They make their stuff so cheap that they're putting American companies out of business. We just can't compete."

We put the tables I'd bought in the bed of my truck. "Good to see you're driving American," he said, rapping his knuckle on the tailgate near the D in Dodge. I asked him to come around to the front of the truck so I could show him something.

I raised the hood and pointed to the manufacturer's label on the firewall. "Damn," the young man said, shaking his head. My Dodge D-50 truck, the label informed him, was made by Mitsubishi.

This happened several years ago, and since then millions of displaced American workers have learned the same painful lesson: the drive for profit has no national loyalties. If a company can make more money by importing and relabeling a product than it can by making the same product itself, then that's what it will do.

At one time, American workers benefited when U.S. manufacturers forged business ties abroad. They benefited because this usually meant opening new markets for American products. But things began to change in the 1960s.

As American workers won wage increases and improved workplace safety regulations, and as legislators responded to public pressure for tougher anti-pollution laws, manufacturers began to look at third world countries as places where production costs could be greatly lowered.

Most of the savings would come from cheaper labor and from the reduced expense of meeting weaker safety and environmental standards. Many third-world government leaders, eager for development and a piece of the pie for themselves, were glad to cooperate. Often this meant - and still does - repressing unions and other groups striving for democracy.

There has been a corresponding increase in foreign investment as a source of profit. Throughout the 1960s, overseas investment yielded about 13% of U.S. corporate profits. In the 1990s it peaked at about 30%.

Large U.S. corporations have sought to further increase profits from investment in foreign production by promoting so-called free trade agreements. Prior to such agreements, investing in foreign manufacturing made less sense, because even if production was cheaper, import tariffs could more than offset the cost advantage.

Tariffs and import quotas also protected American jobs. Opponents of NAFTA understood this well, and have seen their warnings borne out. Between 1994 and 2001, according to a report by the Economic Policy Institute, North Carolina lost over 133,000 jobs because of NAFTA.

To blame these massive job losses on foreigners who don't play fair is pro-corporate propaganda. It's not the Mexicans or the Chinese who are the problem. The problem is homegrown American capitalists who put profits before people.

The Greensboro-based textile manufacturer Unifi, to take one local example, has been cutting jobs in North Carolina, citing the pressures of international competition. At the same time, Unifi has been seeking to expand production in Thailand and China. Yarn once made in North Carolina may soon come to the U.S. from Asia, made by workers earning less than a dollar an hour.

One way to limit job loss is with trade policies that protect workers' rights. NAFTA and other trade agreements have given corporations tools to nullify state and federal laws that impede profit making. Our priority instead should be protecting workers from corporate behavior that impedes making a safe and decent living.

We should thus insist that international trade agreements require corporations to pay living wages, to respect the right to unionize, and to adopt workplace safety and anti-pollution standards equivalent to those in the United States.

If workers everywhere were ensured these basic human rights, the incentive to move production out of the U.S. would be vastly reduced. In fact, no country or manufacturer should be let off the hook. Proof that workers' rights are honored should be a precondition for access to U.S. markets.

The young man who was surprised by the label under the hood of my truck had been bamboozled. We shouldn't make the same mistake. Xenophobic rhetoric about "the Chinese," or whoever the foreign economic villain of the day might be, obscures the fact that preserving jobs at home will require protecting workers' rights everywhere.

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Michael Schwalbe

Michael Schwalbe is a professor of sociology at North Carolina State University. He is the author of: Rigging the Game: How Inequality Is Reproduced in Everyday Life (Oxford, 2008). He can be reached at

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