Export Products, Not Jobs
When globalization strikes, public services
decrease and privatization increases.
By William Lucy
Before Congress approved the North American Free Trade Agreement in 1993, Big Business told us NAFTA was going to create thousands of high-wage U.S. jobs. Thus far NAFTA has cost 420,000 jobs, depressed wages in manufacturing, and converted our trade balance with Mexico from a surplus of $1.7 billion to a deficit of $16.2 billion last year. But the big banks, the big corporations, and the big investors are making out like bandits.
NAFTA is limited to the United States, Canada and Mexico. Now President Clinton wants "fast track" authority to extend it to every country in the Western Hemisphere. Fast track means that Congress can vote the deal up or down, but cannot fix the flaws. As things stand, NAFTA doesn't protect workers and the environment. Employers below the border are essentially free to run sweatshops and poison the air and water, and the food they ship north.
NAFTA has hurt every private-sector worker who has seen his or her job vanish or wages shrink — but don't think that public workers aren't also taking hits.
As bad as NAFTA is, it is important to understand that it is just one symptom of a much bigger problem. Economists call it "globalization;" they say what we are experiencing is the birth pangs of a global economy. But what's really happening is that Big Business is grabbing for world power.
The multinational banks and corporations believe that if government would just leave the "free market" alone, it would regulate itself and in time everyone would benefit. That's why we are seeing attacks on government in general and regulations in particular in the United States, Europe, Asia and Latin America.
Irving Stelzer of the conservative American Enterprise Institute points out that multinational employers depend on the cheapest labor pools they can find to keep everybody's wages down. NAFTA is an example of globalization in action.
You can even measure the progress of globalization. It leaves tracks, and the most evident are in the public sector. When globalization strikes, public services decrease and privatization increases. Social safety nets get weaker and welfare systems suffer. Economic inequality increases (you may have noticed that while CEOs are paid millions, wages are stuck in a rut and the ranks of the middle class are thinning out) and collective bargaining gets tougher — with employers threatening to move abroad if they don't get concessions on wages, benefits and working conditions.
But if you still don't think this affects you, read on.
In 1995 $231 billion in investment capital flowed from the U.S. into developing countries. Could your community or state have used some extra bucks for job training, infrastructure, child protection services, better schools, pay raises or pensions?
Big Business may not like government on principle, but if it is a potential source of profits, that's something else. We've already seen corporate invasions of schools, prisons and sanitation, and attempts to privatize social services. Because of privatization around the world, hundreds of thousands of public workers have been laid off.
Globalization also weakens federal, state and local tax bases. Today businesses almost routinely threaten to relocate to gain tax concessions, and every time they win, more of the burden of supporting public services is shifted to ordinary wage-earners. This leads to tax revolts. If businesses don't get their way, they move, and the communities that supported those businesses for years or decades are left to clean up the social wreckage. Either way, public services — and the public workers who provide them — get the short end of the stick.
Maybe the most damaging effect of globalization is on public policy. Democrats and Republicans alike promote free trade as a one-way ticket to prosperity. Thus far it has led to the export of millions of American jobs. Today Big Business routinely spends millions to win tax breaks, weaken regulations, erode labor laws, and attack social spending, and again we pay the price.
The "experts" say that what's wrong is all economic. That may be so, but one thing's for sure: The cure we have to seek is political. We have to support politicians who see "free trade" for what it is: a rip-off.
