How 'unfettered' global trade led to the 'ravaging of working-class communities'
It seems impolite to say “we told you so,” but the working class and labor unions were so unjustly maligned more than two decades ago — when they fought the push to expand unfettered global trade — that it seems more than fair to serve some humble pie to global trade’s champions.
This article originally appeared in Working-Class Perspectives, a project of the Kalmanovitz Initiative for Labor and Working Poor at Georgetown University.
With today’s broken supply chain and working-class communities across the nation still struggling from the loss of millions of US manufacturing jobs, it’s important to look back at the consequential trade agreements a generation ago, when then-President Bill Clinton assured “a future of greater prosperity for the American people.”
Back in late 1999, the World Trade Organization held its Third Ministerial Conference in Seattle. It was the first (and, to date, the last) WTO ministerial conference to be held in the US.
During the Seattle conference, America’s working class could see the storm on the horizon for the American economy. Fifty thousand people showed up to protest the WTO during its November 30-December 4, 1999, meeting. Their presence couldn’t be ignored.
It became known as “The Battle in Seattle.” The ranks of protesters included thousands of union members who were concerned about the lack of global labor regulations encouraging even more multinational corporations to shift manufacturing operations to offshore locations with low-paid workers and few labor protections.
A majority (52 percent) of Americans supported the protesters in Seattle, according to a national Business Week poll conducted after the conference. In another survey, the same percentage predicted that the future global trade economy would hurt average Americans.
The protests of 1999 warned of what might happen to advance the global trade economy. The warnings were right. In 2000, the US Senate approved permanent favored nation status for China, greasing the wheels for its accession to the WTO in 2001.
The protesters were also correct about the WTO not helping workers. Despite their occasionally welcoming language about labor standards, or their creation of a working group on Trade and Labour Standards at the 1999 meeting, the WTO ultimately took no action. More than 20 years later, it still has not endorsed any labor standards to aid the working class in this country or any member country.
Again, we told you so.
A fair appraisal at the time would have revealed what so-called “free trade” agreements were already doing to working-class communities across the US. In the 1990s, one only needed to look at places like Edison, New Jersey; Willow Run, Michigan; Decatur, Illinois; Van Nuys, California; Bloomington, Indiana; St. Louis, Missouri; and Youngstown, Ohio, to see how global trade would destroy the American working class.
As Nobel Prize-winning economist Joseph E. Stiglitz wrote in Globalization and Its Discontents: “The fact that trade liberalization all too often fails to live up to its promise – but instead leads to more unemployment – is why it provokes strong opposition.”
But in 1999, despite the evidence in hollowed-out communities across the country and 50,000 people on the WTO’s doorstep, most politicians and the news media cheered on the neoliberal vision.
Clinton and his administration deployed hopeful (if tired) metaphors like “a rising tide lifts all boats” (previously used by John F. Kennedy) and growing a “bigger economic pie.”
But we now know in the structure of the global trade economy, the yachts have the rising tide to themselves, and the captains of the yachts serve themselves increasingly larger portions of the pie.
The mainstream media was all-in on expanding global trade.
An NBC report on the eve of the Seattle conference included a warning of the dangers of China’s unregulated entry into the WTO from John Sweeney, then president of the AFL-CIO. But the story concluded by dismissing critics: “Most experts say getting rid of trade barriers on both sides is a good thing, for American workers and consumers. That no matter what comes out of this four-day meeting, and a lot of analysts don’t think it will be much, world trade has such momentum, almost nothing will get in its way.”
Conservative critic Michael Medved made the same point in USA Today on Dec. 7, 1999: “a global economy isn’t debatable — it’s inevitable.” New York Times columnist Thomas Friedman, who has made a career of rhapsodizing about the global economy, ridiculed the 50,000 protesters on Dec. 1, 1999, as “a Noah’s ark of flat-earth advocates, protectionist trade unions and yuppies looking for their 1960’s fix.”
This Bureau of Labor Studies chart on manufacturing employment in the US from 1939 to 2013 shows what happened next: manufacturing employment peaked in 1979 before falling off a sharp cliff after 2000 when trade with China blew open and manufacturing jobs in the US plummeted.
Research from the Economic Policy Institute shows that the trade deficit with China alone cost 3.4 million jobs in the US from 2001 to 2017, a period in which a total of 5.5 million manufacturing jobs were lost, according to the Bureau of Labor Statistics.
The EPI noted that job losses occurred in all 50 states, as much as 2.57 percent to 3.55 percent of total employment in some states. The working class took the hardest hit, of course.
As the EPI study concluded: “Trade with low-wage countries like China is largely responsible for reducing wages by nearly $2,000 per worker per year, for all of the 100 million non-college-educated workers in the United States. Most of that income was redistributed to corporations and to workers with college degrees at the top of the income distribution.”
We’ve encountered the results of that over the last two years.
When the pandemic struck in 2020, Americans realized with some shock that PPE (personal protective equipment) like masks, gowns, gloves and test kits are mostly manufactured in China. With shortages and shortfalls for hundreds of those and other products and supplies, attention has turned to the global supply chain.
In 2004, an extensive study by Public Citizen identified the damage a supply-chain based global economy – supercharged with China’s admission to the WTO – had already caused the working class in the US.
“The loss of manufacturing capacity and jobs is unprecedented in US history and should be triggering an urgent review of this intensifying trend’s implications for US capacity to produce goods essential for its infrastructure and security needs,” the authors wrote.
Last year, the US ran a record trade deficit on goods of $1.1 trillion, meaning the US imported that much more in goods from China and elsewhere than it exported. But the system of low-cost outsourced labor works well for corporate America: The S&P 500 profits margins in 2021 were a “remarkable” 13 percent, CNBC said.
From media accounts, you would think the global supply chain is a reality that just simply exists for the good of all consumers. Instead, it is a simple matter of capitalism, designed to deliver the highest profits and lowest labor costs to multinational corporations. It’s a system that was put in place by people in power and their patrons in government.
Last November, US Senators Rob Portman and Gary Peters took a victory lap as their “Make PPE in America Act” was signed into law by President Joe Biden. “American people should not have to rely so heavily on foreign countries for personal protective equipment,” Portman said.
While he is retiring from the Senate this year, Portman has been around Washington for decades. In fact, as a member of the House of Representatives in 2000, he voted “yes” for the resolution on normalizing trade with China — a vote that led to the export of millions US manufacturing jobs, the ravaging of working-class communities across the country, and today’s broken global supply chain.
Next time, it would be wise to listen to the working class.
We told you so.
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