Labor Center


Press Room


In the News 2007-08

2006

2005

2004

2003

2002

Union Media Contacts


The globalization debate
Low prices are not worth job losses and eroding standards

The Press Enterprise, September 2, 2007

 By KATIE QUAN

With Labor Day upon us, it is worth checking on the state of U.S. workers in our global economy. Globalization definitely has its benefits. Many people enjoy the lifestyles that this brings, such as driving fuel-saving Japanese cars, eating burritos for lunch and drinking wines from Australia. Others point to cheaper prices for consumer goods at stores such as Wal-Mart, and say that this would not be possible without importing goods made in low-wage countries.

In spite of these benefits, a lot of people are dissatisfied with globalization. This July, pollsters from Britain's Financial Times and the U.S. company Harris Interactive asked people in the United States and Europe whether globalization was having a positive or negative effect in their countries.

A majority of people in Britain, France, Spain and Italy said globalization was hurting their countries, and in the United States, 45 percent of the people polled said the same thing. What is it about globalization that people in these relatively wealthy countries object to?

For working people, the biggest problem with globalization is job losses. The Economic Policy Institute, a think tank based in Washington, D.C., estimates that growing trade deficits with Mexico and Canada have displaced production that supported more than 1 million U.S. jobs since the North American Free Trade Agreement took effect in 1994.

The institute estimates that the U.S. trade deficit with China between 1997 and 2006 has displaced production that could have supported 2 million U.S. jobs. Free-trade policies have allowed and even encouraged companies to move jobs to where the labor is cheapest.

Though jobs have moved to other countries, workers there have not necessarily benefited. In many countries, sweatshop conditions have arisen, where workers toil 14 to 16 hours per day for only a few cents per hour. In China, workers in special economic zones get only one to two days off per month, in South Asia there is widespread use of child labor and in Latin America and Africa, supervisors regularly use corporal punishment to discipline workers.

In all of these places, workers who stand together to demand fair treatment may be fired or jailed, and prevented from forming unions of their choice. Globalization has also resulted in job losses in some developing countries. In Mexico, an estimated 1.3 million agricultural jobs were lost in the 10 years after NAFTA went into effect.

Even jobs that remain in the United States are affected by global labor markets. Workers whose jobs haven't yet been outsourced face intense pressure to keep wages and benefits low so that companies can remain "competitive" with foreign-labor markets. This has long been the case with workers in manufacturing, but is now increasingly true in service jobs.

Jobs that few imagined could be affected by globalization are being hit hard, such as plumbers whose pipe fittings are being prefabricated in China and health-care workers whose employers are building hospitals in Thailand so that foreigners can get cheap elective surgery performed by Western-educated doctors.

So globalization comes at a high price to working people -- loss of jobs and erosion of labor standards; on balance, it does more harm than good. There was a time when Americans blamed foreign workers for "stealing" their jobs, but now it is clear that foreign workers are not to blame; all workers are actually in the same boat, whether they live in the United States, China or Mexico.

The challenge for workers and their unions is to put the brakes on the global race to the bottom by strengthening networks across national borders, and by promoting international policies that will ensure labor rights and create higher standards across the globe.



 
Center for Labor Research and Education
2521 Channing Way # 5555
Berkeley, CA 94720-5555
TEL (510) 642-0323    FAX (510) 643-4673


A public service and outreach program of the Institute for Research on Labor and Employment
and an affiliate of the University of California Miguel Contreras Labor Program.
CLRE