Labor Should Organize Globally

“If a worker in China or India can do the same work as one in the United States, then the laws of economics dictate that they will end up earning similar wages….  That’s good news for overall economic efficiency, for consumers, and for workers in developing countries – but not for workers in developed countries who now face low-cost competition.”

“New World Order:  Labor, Capital, and Ideas in the Power Law Economy”; Erik      Brynjolfsson, Andrew McAfee, and Michael Spence; Foreign Affairs, July-August, 2014

 

Academics have described the world.  The point, however, is to change it.

The world the capitalists have created is irreversibly global.  As they scan the world for the cheapest qualified labor, a global workforce scours the planet for opportunity.  From the perspective of a global capitalist, U.S. workers differ from workers in other parts of the world mainly in their cost.  For manufacturing industries, this means sending the work where labor is cheapest.  For hotel and some other service workers, by contrast, wage competition is local. Hotels catering to the global wealthy can afford to pay above-average wages.  But competition for better-paid jobs will grow fiercer as other wages fall.  No industry or union can indefinitely escape the pressure of low global wages.  Over time, national differences will decline, and wages will tend to equalize in services as well as manufacturing.

Without global solidarity, they will not equalize up.

In my original union, the International Ladies’ Garment Workers Union / ILGWU, for almost a century, organizers “followed the bundle,” as employers ran from Manhattan to Brooklyn to Pennsylvania and New England, and eventually to Los Angeles and Atlanta.  And early generations of internationally-minded, immigrant labor leaders like Sam Gompers, John L. Lewis, Sidney Hillman, David Dubinsky and Jay Lovestone understood Europe as part of their territory.  They were comfortable meeting with unionists – and national Presidents — there.  But for their U.S.-born successors, foreign was foreign.  Organizing stopped at the water’s edge.

U.S. union “demands,” of course, are much less welcomed by most overseas governments than employer dollars.  But mostly, we have simply not imagined a better world, or considered that within the range of business unionism.  With the heroic exception of the 1999 “Battle in Seattle,” we have not demanded that U.S. labor or human rights accompany U.S. job exports.

Today, we are overpowered, when not ignored, by worldly corporate honchos.  And we are in steady decline as nominally American corporations expand even in formerly communist nations like China or Vietnam.

I believe that Unions, like all organizations in our time, must globalize or die.  If global parity is destiny, as the authors quoted above assert, only global solidarity can equalize wages up.

Is global working class cooperation possible?

Most U.S. trade unionists dismiss this out of hand.  But I have seen global solidarity succeed among workers and governments — and it works.

Half a century ago, I was a Peace Corps community organizer in a Panama City squatter community.  My most savvy and committed fellow-organizer was communist (“Partido del Pueblo”) bus driver and union leader Carlos Zorita – “Camacho” to all who knew him.  He read books.  And he had balls.  I was his “Ugly American” friend.  On the massive front bumper of his bus were the words “Realidad Objetiva.”  He understood the sociology of his country and the world.  He was sympathetic to the left-oriented military dictator, Omar Torrijos, who took power eleven days after the election — for the third time in forty years — of pro-fascist coffee plantation owner Arnulfo Arias.  When now-President Torrijos came to our neighborhood to speak with the people, Camacho was the only resident with the nerve to stand next to the General and propose what our “Betterment Committee” had formulated:  residents wanted sewage lines, paved roads and, eventually, title to the land.  Torrijos’ wealthy successor, Ricardo de la Espriella (then in Torrijos’ cabinet) walked our muddy streets with our betterment committee.  Torrijos listened.    Over the next few years, all this was done.  U.S. A.I.D. provided a share of the funding.

It was a win-win for global cooperation, U.S. — and labor — values.

Also accomplished, over the next few years, on a larger playing field:  a shift in control over the Panama Canal from the U.S. to Panama, as negotiated by Torrijos and U.S. President Jimmy Carter. Despite predictions of catastrophe under Latino management, U.S. and global shipping are unharmed. The Canal has been successfully widened.  U.S.-Panama relations are good.

No harm, no foul – no loser.  The doubters were wrong.  All humans are created equal.

When I visited the old neighborhood two years ago, I did not hear complaints of Yankee imperialism.  With paved streets and modern water infrastructure, homeowners had improved the cinder-block houses they had once built and now legally owned.  They had become the struggling middle class, friendly to the U.S.A..

Would they, or other Panamanian workers, objecPuente de las Americast to joining a U.S.- based union, and building strength, with the understanding that a truly International union was the goal?  In my view, no.­­­  U.S. Labor’s isolation and decline reflect no defeat by global capitalism or global working-class anti-imperialism.  We have surrendered to our own fear and ignorance, without a fight.  Afraid to grow, we have begun to die. What is wrong with “workers of the world, unite!”?

For a union with global ambition and imagination, Panama, the crossroads of the world, is an obvious organizing opportunity.

Hotels and casinos could be perfect early targets.  Every U.S. hotel chain has one or several hotels in Panama.  U.S. President Donald Trump owns two hotels, and several other buildings.  Casinos catering to global travelers prosper.  Panama City could be a base for a UNITE HERE VP, on a par with San Francisco or Las Vegas.  And after success in Panama, a truly “International” union could look to Costa Rica Argentina, and Vietnam.  Why would they not?

Victory for UNITE HERE in Panama could mark a turning point for U.S. labor.  We might salvage our long-term future by going global like every other organization.

But UNITE HERE, like other U.S. unions, has no Panama affiliate.  We have not challenged global hotel chains on a global basis.  We are, as the story goes, more sensitive than capitalists to the patriotic sentiments of people in other countries.  But what if the people would actually prefer a U.S. standard of living?  How would we even know?

I believe the barrier to global unions is maintained by our parochial union leaders, each with his or her established (and shrinking) turf.  Most seem unmotivated or baffled by the thought of challenging capital on its limitless turf.

Does this matter?  I would say that if U.S. and Panamanian representatives could work together to turn a squatter neighborhood into a middle-class community, or an imperialist Canal Zone into a highly efficient point of pride for that nation; and if nominally “U.S.” corporations can manage much of Panama’s economy; then U.S. labor must not fear organizing Hyatt, or Trump, or Hilton wherever they roam.

Why should we not look forward to a Mexican President of the UAW, or a Hong Kong Vice President of SEIU?  Are we really concerned about appearing “imperialist?”   Or do we simply know so little about the world that we are afraid to put our toes in the global water?

If we cannot follow, we will not survive.

Is asking U.S. labor to go global like asking a hippopotamus to fly?

Ask any capitalist.  You grow or die.  There is a lot of evidence that today’s U.S. labor movement, after inheriting the fruits of a century of struggle, is dying for lack of respect and innovation.  We must return to pursuing capital, as we did in our glory days, wherever it goes.

Globally.

ORGANIZED LABOR AND DEMOCRACY

       (for a PowerPoint version of this document, click here: ORGANIZED LABOR AND DEMOCRACY)

October 21, 2015       

When people hear that I spent most of my working life in the labor movement, they often say to me, “unions are really in trouble today.”

My default answer: “the country is in trouble; democracy is in trouble.”

That answer is what I want to explain.

My political belief, generally, is that the Founding Fathers were right to recognize the dangers of concentrating too much power in one person, or one institution. I believe in checks and balances. Applying that radical moderate belief to our economic system places me pretty far to the left in this country today.

 

I share the understanding of Teddy and Franklin Roosevelt, who faced the then-new phenomenon of giant corporations (“trusts” in Teddy’s day). These continental organizations wielded economic power great enough, if left unchecked, to overwhelm a weak and passive national government. The Roosevelts, from their lofty perspective, saw that American society needed the countervailing power of free labor unions as well as a strong national government to balance corporate power.

 

So, they let unions happen, and on a large scale. Through trust-busting, facilitated by media muckrakers, increased government management of the economy, and facing unprecedented waves of strikes and organizing, they allowed and occasionally encouraged the growth of unions, while also pushing through a series of other progressive reforms.

 

The country prospered.

 

A lot of us in this room lived through the post-World War II era of strong government, strong business and strong labor. We benefited from rapid growth during a period of balanced power within our country; and of relatively unchecked U.S. power around the world.

 

But today, we are in a new era, dominated by global corporations, strong and patriotically indifferent enough to play whole countries – even the USA – against each other, in a struggle for the wealth and jobs these private interests control. In our rapidly changing times, even nationally based unions, where they still exist in this country, are often too weak – just as our democratic government appears too weak – to provide an effective balance.

 

Today, both our unions and our country are under siege by the new Great (Private) Powers. Those of us who prefer a balance of economic, civil society and democratic political power should be allies, not enemies.

 

 

 

As many writers have pointed out, we’re in a second Gilded Age. Still waiting for the next Teddy – or for rational grass-roots movements strong enough to challenge the power of concentrated wealth. But the popular voice seems weak or misled, and as the dream of democratic power leading from below recedes, we hear talk of oligarchy as the “natural” state of affairs in this world.

 

 

As someone who has spent the majority of my life in the labor movement, let me say – and then try to clarify — something you may not believe, based on much of what you hear from the media or political officials, or even disillusioned union members:

 

..American labor unions are democracies, modeled after our constitutional democracy – complete with unpopular dues, in place of taxes. I believe you should defend them as an irreplaceable base for political democracy and for political education in a corporate era.

 

And you might want to consider why the folks who are most anxious to wreck unions are often the same folks who describe our democratic government as the people’s enemy – something to be weakened, shut down or, in some un-named way, replaced.

 

As for the parallels between American government and most American unions, a legal foundation in written constitutions is one commonality. (Here is a sample union constitution, if you want to look at it after this talk.)

 

Popular election of union officials is another. Many people mistakenly believe that leadership elections define union democracy, or the lack of it, just as they define our political institutions. But that is a partial misunderstanding that I want to clarify.

 

Members of UNITE local 311, (Polartec) voting on their contract, 1990s.

 

 

Unions differ from our government in that election of union officials is NOT the heart of democracy for union members, though it obviously has some importance. Rather, the direct membership vote on their union contract is what naturally matters most to union members. It is the contract that sets the wages, benefits, working hours and days, and the rules by which members live all their working days, as well as their benefits when they can no longer work,

 

U.S. citizens, by contrast, don’t get to vote directly, as a rule, on the laws that govern us. We elect OTHER people to make laws for us. But Union members – I’ll say it again – do vote directly on contracts that govern much of their everyday working life.

 

Contracts also define union employees’ “right to work” in the honest sense of the word. That is, a union member, once they complete their trial period (which can vary from a few days to a few years) can only be fired for “just cause” – a fair reason – absenteeism, poor performance, theft, insubordination, and so on. The legal standard that applies in non-union workplaces, by contrast, is known as “employee at will.” That ancient term – “at will” — means that the employee is free to quit when he or she wishes – she is not indentured or enslaved – and the employer is free to hire or fire her for any reason (except, under our laws today, not because of her race, religion, sex and so on).

 

But our jobs are too important to be left entirely in someone else’s hands. They define our identity, our family’s standard of living, our future prospects – and how we spend our days. They should not be lightly erased, like a number on a spreadsheet. Even many undemocratic countries understand that. Just ask a Chinese employer who has been temporarily kidnapped by his employees until some understanding is reached.

 

When I was growing up, I often heard my father say, “property is nine tenths of the law.” Maybe you heard that expression as well.

 

Well, her or his job is the most real property most working people have. Unions take that seriously.

 

But beyond that, union members get to vote on working rules and standards, along with their fellow members. That is democracy at work. Literally.

Members of UNITE HERE Local 313, rallying

In support of contract demands, 2008.

(photo by Dana Simon)

 

But does union power work for the country?

 

Right now, I’ll just say, the American majority, the middle class, did better when unions were strong and growing than they do today. (coincidence?) does not prove causality. But it’s something to think about.

 

Now let me say something about how union NEGOTIATIONS – which are the real core of union democracy — work.

 

Some of you who have enjoyed professional or executive careers, may know what it is to negotiate as individuals for your terms of work. Union negotiations are similar – but most Americans, by themselves, don’t have the power to negotiate their terms of employment. Far from it. Union members negotiate, instead, as a – hopefully irreplaceable – group.

 

Let’s look at an example of how this works.

 

In late summer and early Fall, 2015, the New York Times and the Washington Post both reported extensively on contract negotiations for the new 4-year contract between the United Auto Workers Union and the Fiat-Chrysler Corporation. Their reports illustrate pretty well how this works.

 

Here is what happened

 

A union committee headed by the UAW’s International President, Dennis Williams, and including local union officers and worker delegates, first sat down with Fiat Chrysler management to work out a new contract in July, 2015. The union came in with a list of proposed improvements, from their members’ perspective. They had developed this list over years and months of discussion among local and national leaders, and members. The leaders believed these were ideas that had a chance of winning management approval.

 

Management also had a set of goals.

 

The political and economic environment for the negotiations included several salient realities:

 

. The U.S. auto industry and economy had largely recovered from the Great Recession. But auto industry wages and working conditions had not.

 

. The company CEO, Sergio Marchionne, was being paid $millions per year.

 

. State governments in the Midwest had been passing laws to make the payment of union dues optional. Union leadership did not want to be in the position of asking unhappy members for their dues.

 

The key union demand was to equalize wages between the relatively high rates paid to workers hired before the near bankruptcy of the company during the Great Recession; and the much lower wages paid to new hires after that date – some as low as half the senior worker rate. Both the newer and older workers wanted this equalized, because the difference caused division within the union, and that made the union weaker.

 

 

 

There were also proposed changes in health insurance, and on many other subjects. Union members wanted assurance their jobs would not be outsourced.

 

During the course of negotiations, the union and company agreed to reduce, but not eliminate, the wage differential between senior and post-recession hires. Progress was made on other issues as well. Union and management shook hands on an agreement they thought was ready to bring to union members for a vote.

 

But then, 40,000 members, in many Locals, voted – and I mean virtually all actually showed up and VOTED, because they understood how the agreement would affect them. The vote was by secret ballot on September 14 and 15. The “NO’s” had it, by 65%.

 

Management on both sides had misjudged. Potential for an expensive strike at a time when demand for cars was high was in everyone’s mind

 

Negotiators went back to the table. They agreed to virtually eliminate the senior-junior employee differential, over a few years. Issues with a new health insurance idea were relatively straightened out. There was some assurance that Ram truck production would not be shifted to Mexico.

 

 

Now I’d like to read some comments union members made to Times and Post reporters over the course of negotiations. To me, they are not wild-eyed, or wide of the mark. They suggest that members knew exactly what they were voting on, as well as what they wanted and thought they could get.

 

(from NY Times): One Fiat Chrysler worker said Thursday that he needed more information before endorsing the tentative agreement, “Our contract is up in four years, and the plan [to equalize wages] takes eight years,” said Brian Keller, a worker at a company distribution center in Michigan. He questioned whether Fiat Chrysler and the union “can change the commitment” after four years are up. “You’ve got to read between the lines,” he said.

 

“When you’re seeing the CEO making $72 million, how do you justify that, compared to what we make?” Keller added. “When we see a company making record profits, and we gave up so much in bankruptcy during the company’s darkest days, it’s only fair that they come back with something better.”

Here’s are two quotes from the Post:

As the midnight deadline approached [after the revised contract was voted on], UAW representatives inside the Warren plant told employees there was a deal. “There was a lot of relief,” said a skill-tradesman named Diego, who declined to give his last name. He voted no on the last contract because he’s concerned that it allowed FCA to move assembly to Mexico. While he feels secure as a skilled tradesman, “I worry about the rest of these guys.” 

…. “I heard it was a good deal,” a member in another plant was quoted as saying. “I voted no [the first time] because we need to know what’s happening with this truck” — the Ram assembled here. (Members had heard work on that truck might be shifted to Mexico.) “The money was good. That wasn’t my issue.”

Some members just cited better communications from the union, after the initial “no” vote from members: “Vernita Glover, [the New York Times reports,] an entry-level worker at the Sterling Heights assembly plant, who said she had voted against the initial contract, partly because she did not understand some of the plan’s provisions, also cited the improved communication.

“Digital-wise they kept us updated, and that eased everybody’s minds as far as questions and answers,” she said. “On websites, Facebook and other places, they really got involved and kept their members informed.”

On October 22, the second round of membership balloting was completed in all locations, and the revised agreement had been approved by 77% of the membership.

(Next stop for the union: General Motors, where an initial agreement was reached by the end of October.)

In the end, UAW/Fiat Chrysler had conducted a serious negotiation between informed and responsive parties – not too different than one some of you might have had, individually, with your employer, or employees – but it affected 36,000 wage-earners and 4,000 salaried employees, plus their management and stockholders, directly. And it set a pattern for negotiations with tens of thousands more at G.M. and Ford. It affected our country.

If you compare the rationality of the discussion with what you hear about elected political officials in Washington and elsewhere, today – the contrast, for better or worse, would seem to favor the labor-management process.

Both sides understood they needed each other, and why. And blue collar immigrants understood that the New York Yankees of the economy still put their pants on one leg at a time, just like them. They were only human. Workers understood that, if corporate management created jobs, employees’ work created wealth.

Will the Union President who first misjudged, but then dug his way out, be re-elected? Very possibly. But that is not the most important question in a polity where people can vote directly on their economic lives – their contracts.

These negotiations affected America, for the better.

I’ve been a union Education Director, talking to members about politics, economics and all kinds of things. But I believe the experience of sitting down with management across a table, and negotiating, based on an informed and intimate understanding of differing interests, instead of rumor, prejudice and so on, is the best political, sociological and economic education there is.

If you take this right away from the American working and middle class, you take away the most genuine democracy we know, one where many Americans are more involved, better informed, and less likely to make crazy, symbolic gestures than in our national political system. Their livelihood is involved. They have jobs and a stake in our economy. Workers listen and learn from each other, and can judge based on facts, instead of personality.

Do we have “social classes” in America?? Yes. We do. Union members almost never use that term, but they get it. They see it, firsthand. And they are OK with that, as long as there is some respect, and some justice.

Today, I would say, a lot of Americans who vote for anti-union politicians either never had a union – or DID belong to a union and then saw their job exported or automated. Now they vote their resentment, not their interest. Negative democracy. People do dumb or mean things when they are denied a voice, as equals, over what matters.

Good unions make good citizens.

 

 

ORGANIZED LABOR AND DEMOCRACY

U.S. multinationals pursue victory in Capital strike against taxes

Global, nominally U.S. corporations have been on a tax strike since the last “repatriation holiday” in 2005. Corporations like Apple computer and General Electric are refusing to bring an estimated $1.7 trillion in “overseas earnings” back to the U.S. as long as the United States demands a 35% tax payment on those earnings. Apple, for example, has more than $12 Billion parked offshore. Google has $17 billion and Microsoft, $29 billion. “To the companies,” Washington Post reporters Jia Lynn Yang and Suzy Khimm note, “no other tax issue matters more.”

Faced with the same situation seven years ago, President George W. Bush let capitalist allies off with a five percent tax payment, and nearly $400 billion was eventually brought back to the U.S. But, while the tax holiday was “sold” to the public with the promise of job-creating domestic investment, ninety-two percent of that money was instead returned to shareholders in the form of dividends and stock buybacks.. Times reporter David Kocieniewski describes two differing versions of how one of the big winners, pharmaceutical giant Merck Corp., used the tax giveaway. According to:

Merck spokesman, Steven Campanini…. the company used the [repatriated] money for “U.S.-based research and development spending, capital investments in U.S. plants, and salaries and wages for the U.S.”

But..

According to regulatory filings, the company cut its work force and capital spending in this country in the three years that followed. …

Merck brought back $15.9 billion in October 2005. The next month, it unveiled a restructuring plan to cut 7,000 jobs. Over the next three years, about half those cuts were made in the United States, where the company’s employment fell to 28,800 jobs, from 31,500….

Much the same happened elsewhere, according to a review of taxpayer data by the National Bureau of Economic Research. “For every dollar that was brought back, there were zero cents used for additional capital expenditures, research and development, or hiring and employees’ wages,” said Kristin J. Forbes, a professor of economics at the Massachusetts Institute of Technology’s Sloan School of Management who was a member of President Bush’s council of economic advisers and who led the study.

The pitch today is to eliminate U.S. taxes on foreign profits altogether, and switch to a “territorial” system – in which a company only pays taxes where it claims the money was made. But global companies have many ways of attributing earnings to tax havens like the Cayman Islands to avoid local taxation – or avoiding taxes altogether in “free trade zones” around the world. (U.S.-based Intel Corporation, for example, negotiated “foreign trade zone” status to avoid taxes in 2011 on its new facility in Chandler, Arizona.)

Unsurprisingly, wealthy global corporations find widespread political support for their strike, including from Co-Chairs Alan Simpson and Erskine Bowles of the National Commission on Fiscal Responsibility and Reform. “At least,” says Bowles in justifying the giveaway, “(the money) will be here and not circulating in other countries.” The territorial system of taxation was also endorsed by President Obama’s Jobs Council, headed by General Electric CEO Jeffrey Immelt. Thankfully, this Council has not met since early 2012. A call for this colossal break was also part of GOP Presidential nominee Mitt Romney’s economic platform, and House Republicans have passed a budget that includes a transition to a territorial tax system.

The effects of caving in to this “bring it home free” demand would include long-term damage to future U.S. budgets. “The territorial tax system they envision would gut the entire U.S. Corporate tax code,” according to Edward D. Kleinbard, a Professor of Tax Policy at the University of Southern California. Kimberly Clausing, an Economics professor at Reed College calculates that as many as 800,000 jobs could be added to low-tax countries instead of the United States.

Among factors making a complete Obama Administration cave-in on this demand unlikely is opposition from domestic firms, which already pay higher taxes than the country’s biggest multinationals. But some negotiated compromise seems likely, though not necessarily as part of “Fiscal Cliff” negotiations. A 20-25, percent taxation agreement, followed by significant financial repatriation, could be a significant Democrat victory, and a boost to the domestic economy.

Another arguably positive resolution might be following the Japanese example. Japan switched to a territorial system in 2009. But they also tax a company’s foreign income if taxes paid in another country are less than 20 percent. While 20 percent is still a low number, a global 20 percent standard would represent a remarkable move toward tax discipline in a global world.

It seems likely, however, that U.S. corporations would respond to this idea by continuing their strike.…

Materials cited in this article:

In ‘Fiscal Cliff’ Debate Companies Quietly Push For Tax Break On Foreign Profits,” Jia Lynn Yang And Suzy Khimm, Washington Post, November 29, 2012

Companies Push for Tax Break on Foreign Cash,”David Kocieniewski, New York Times, June 20, 2011