Global Privatization Threatens U.S. Workers
By William Lucy
We regularly alert our members to the dangers of privatization and our efforts to fight in all 50 states for members’ jobs and the protection of public services. But it is equally important to note the rapid expansion of global privatization and its impact on domestic policy.
The entities most responsible for implementing economic globalization (the World Trade Organization, the World Bank and the International Monetary Fund) have been aggressive champions of privatization, at the expense of working families in every nation.
Our brothers and sisters around the world who fight privatization face many of the same struggles that we do in the United States. It is not surprising that the same greedy corporations that jeopardize our members’ jobs and the integrity of public services here at home are also wreaking havoc on the economies of developing nations.
For example, at the same time Local 3410 (Council 8) members in Ohio were fighting privatization of city water services, workers in the remote province of Cochabamba, Bolivia, were facing a similar struggle.
Under pressure from the World Bank, Cochabamba privatized its public water system last year, awarding the contract to a subsidiary of the Bechtel Corporation. (Bechtel’s board of directors includes former Reagan cabinet member George Schultz, representatives of Standard Oil, J.P. Morgan and other corporate giants.) Although Bolivia is South America’s poorest nation, the World Bank urged that “no public subsidies” be used to hold down prices for even the neediest citizens.
After privatization, water prices doubled in most instances. Families with incomes of less than $100 per month were faced with $20 water bills. In many cases, they were literally forced to choose between feeding their families or having clean water.
Led by Bolivian labor activists, a citizens’ coalition was formed to protest the privatized rate hikes and to demand affordable water from the government. When the government refused to hear their concerns, thousands of citizens took to the streets to protest the unfair rates.
In support of the corporation, the military was called to the scene and at least two demonstrators were killed. Nevertheless, the protests continued and the corporation was forced to flee the country, returning water services to the public.
Although that is an extreme example of the dangers of privatization, we must realize that the trend of international privatization will add to the weight of those policy-makers and corporations calling for privatization in the United States.
Social Security is a prominent example of this trend. Long before the Social Security privatization debate began, the World Bank was advocating that nations add a private/market component to their retirement systems.
The bank’s efforts were extremely effective. In 1985, only three nations had private components to their retirement systems. In the aftermath of World Bank pressure, much of South America, Europe and Asia now include an element of privatization in national pension systems.
Many of the same investment banks and financial houses that have benefited from this change are now lobbying in this country for privatization of Social Security.
AFSCME’s position is that Social Security must be maintained as a retirement safety net and not made subject to the rise and fall of the stock market. Our members have worked too long and hard to see their Social Security funds disappear in one disastrous day on Wall Street. Yet that could happen if privatization advocates have their way.
One such advocate is George W. Bush, who recently announced a plan to create private investment accounts for Social Security funds. Al Gore, who opposes privatization of Social Security, immediately pointed out the risks of this plan.
AFSCME and Al Gore agree that our budget surplus should be used to shore up Social Security for all our futures, at the same time we eliminate our national debt. But the Bush plan will use that surplus in part to create these individual accounts that will put retirement funds at risk.
It is clear that the global trend in privatization is making an impact on domestic policy that will affect voting issues in this election. When it comes to privatization, it truly is a small world.
