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By David Bacon
September 28. 2000
        Despite the end of the cold war, U.S. military, economic and
political intervention around the world continues to grow, while at home,
the military budget consumes the hopes for a radical reordering of economic
priorities.  The idea of a peace dividend has been all but forgotten, as
peace itself recedes further away than ever on the global horizon.
        Whose interests are being protected?
        U.S. unions and workers increasingly challenge globalized
production and free trade.  At the same time, however, most continue to
accept the idea that a common national interest abroad should unite all
segments of society, including labor and capital.  National security, we
are told, is an overarching common bond.
        But in a world divided between rich and poor, in which the security
of the few is obtained and assured at the expense of the many, the real
question is - security for who?
        Do countries have a right to control their own economic development
in the interests of their own security?  Or should guaranteeing a free
market, and unlimited opportunities for corporations to boost productivity
and make profit, override national interests in making economic decisions?
        The transformation of national economies around the world is
forcing unions and workers everywhere to debate the meaning of
international working-class solidarity - to ask who has the right to
economic security.
        In U.S. labor, although this debate simmered through the Reagan
administration's interventions in Central America, it broke out into the
open in the wake of the passage of NAFTA.  Since the treaty went into
effect in January of 1995, the Department of Labor has certified over
200,000 U.S. workers for extended unemployment and training benefits
because it cost them their jobs.  Most sources believe this is a small
fraction of the true count.
        According to Cornell professor Kate Bronfenbrenner, the number of
times has more than doubled, in which U.S. employers have told unions
across the bargaining table that if they didn't agree to concessions the
companies would move production out of the country.
        Insecurity for U.S. workers hasn't led to more jobs, and greater
security for Mexicans, however, although both their government and ours
told them it would. Over 1,000,000 Mexican jobs were eliminated in 1995
alone, by the government's own count.  State-owned enterprises were
privatized and bought by wealthy investors, who laid off workers to
increase productivity and profits.  Many others lost their jobs when small
Mexican producers couldn't compete with the flood of cheap imports coming
from the U.S., and went bankrupt.
        In Tijuana, the maquiladora daily wage averages 50 pesos (a little
over $5).  A gallon of milk in the supermarket, which sold for 7.5 pesos
when NAFTA passed, today costs about 20.  It takes half a day's work to
earn enough money to buy it.
        Well before NAFTA's passage, the disparity between U.S. and Mexican
wages was growing.  Mexican salaries were a third of those in the U.S. up
to the 1970s.  They are now less than an eighth.  Since the 1981 debt
crisis they've dropped to even a 12th or 15th, depending on the industry -
even during a period in which U.S. wages have declined in buying power.
        During the last two decades, the income of Mexican workers has lost
76% of its purchasing power.  Under pressure from foreign lenders, the
Mexican government has ended subsidies on the prices of basic necessities,
including gasoline, electricity, bus fares, tortillas and milk, which have
risen drastically.  It estimates that 40 million people live in poverty,
and 25 million in extreme poverty.  And while it says unemployment is less
than 6%, the country's new independent union federation, the National Union
of Workers, puts the number at over 9 million people, or a quarter of the
        These results are largely the product of the imposition of economic
reforms on Mexico by the International Monetary Fund, backed up by
conditions on U.S. bank loans and bailouts.  The most fundamental of those
conditions, beyond even ending subsidies and opening the Mexican economy to
imports, has been privatization and policies designed to encourage foreign
        Last year, one of the most important Mexican labor struggles was
fought to prevent the sale of the electrical grid in central Mexico. In
three weeks in February, 1999, the Mexican Electrical Workers Union (SME)
collected 2,700,000 signatures in opposition.  "It is indisputable that the
move to privatize our electrical system is a condition dictated by the
International Monetary Fund, intended to create opportunities for private
investment, particularly foreign investment," says Ramon Pacheco, the
union's secretary for international relations.
        By organizing a Front of National Resistance, the union was able
top stop the privatization effort, but Pacheco believes that the proposal
will resurface, since the new Mexican government of Vicente Fox remains
committed to neoliberal reforms, and has announced that electrical
privatization is high on its agenda.  "We will only be able to stop these
proposals when people in Mexico establish a new government, committed to a
different course of economic development," he says.
        If the SME campaign had failed, thousands would have lost their
jobs, their union contract would have been torn apart, and their union
itself would have nearly disappeared.  This is what has already happened to
workers at Mexico's airlines, railroads, telephone system, and in many
other industries.  In February of last year, this disaster befell the
copper miners in Cananea, one of Mexico's oldest mines and site of the
historic battle which initiated the Mexican Revolution in 1906.  Hundreds
of miners lost their jobs after the mine was privatized.  Their union was
virtually destroyed when the threat of military occupation was used to end
their strike.
        In countries like Mexico, with mixed economies in which socialism
was put forward as an eventual goal of economic development, a large
percentage of workers have been employed by state enterprises.  A majority
of Mexican industrial workers worked for the state until economic reforms
began transforming its economy in the 1970s.  Its organized labor movement
had its greatest strength in the state sector.
        While three-quarters of the workforce in Mexico belonged to unions
three decades ago, less than 30% do so today.  In the state-owned oil
company, PEMEX, union membership still hovers at 72%.  But when the
collateral petrochemical industry was privatized over the last
decade-and-a-half, the unionization rate fell to 7%.  New private owners
reduced the membership of the railway workers union from 90,000 workers to
36,000 in the same period.
        Mexico is just one country where the same economic war is being fought.
        In Honduras, the U.S. government used its political and military
influence to gain permits for the construction of Export Processing Zones,
providing garment companies with a new area for factory construction.  That
influence didn't just support the physical infrastructure.  The U.S. Agency
for International Development hired Price-Waterhouse to study labor supply
problems in the San Pedro Sula Valley, to avoid a labor shortage which
might drive wages up.
        Price Waterhouse documented labor participation by girls as young
as 14.  This was normal, the firm's report said.  "The legal minimum
working age in Honduras is 15, but in the rural economy it is normal to
work from ten onwards," it stated.  And to keep it normal, USAID funded
programs by the Honduran Family Planning Assn. to distribute birth control
pills inside the plants on a mandatory basis.
        One of the plants was OshKosh, a company which makes children's
clothing for U.S. families, but which forbade its own workers from having
families of their own.  OshKosh, like the other manufacturers, wanted to
avoid having to pay legally-mandated maternity benefits.  But more
important, USAID and the companies it supported wanted to keep these young
women, at an age when they were beginning to think of having families, from
getting pregnant and dropping out of the workforce.
        The end goal was an ample and dependable supply of workers at low
wages.   Price Waterhouse noted with disapproval that "the pregnancy rate
among women of childbearing age was 4% in June 1992, up from 2.5% six
months earlier.  This is regarded as too high (3% would be the maximum
        Loan conditions enforced by the IMF and World Bank reflect U.S.
economic policies, which encourage high unemployment to keep pressure on
wages.  The loans themselves are not available for social benefits - in
fact, their conditions require ending subsidies on things like transport
and food.  Instead, loans are made for infrastructure improvements to make
countries more attractive for foreign investment.
        They require governments to cut off rural credit - driving people
into the cities, while opening up the market for imports of food.  At the
1996 World Food Summit in Rome, US Agriculture Secretary Dan Glickman
boasted that the U.S. "is the leading supplier of food to the world," where
farmers "plant for world demand instead of for government programs."   For
the U.S., "the private sector is the great untapped frontier in the world
war on hunger."
        Just to drive the point home, the U.S. position at the summit
declared that "the United States believes that the attainment of any 'right
to adequate food' or 'fundamental right to be free from hunger' is a goal
or aspiration to be realized progressively that does not give rise to any
international obligations nor diminish the responsibilities of national
governments toward their citizens."  Translation:  if you don't have money
to buy our food, we're not obligated to give you a thing.
        As a result of U.S. insistence, point four of the summit's plan of
action was dedicated to the pursuit of "a fair and market-oriented world
trade system," which, it admitted, may cause "short term negative effects"
on the world's poorest countries.  The free market is the goal, not feeding
the hungry.
        Privatization opens up important sections of the economies of
developing countries to transnational corporate investment.  Even more
important, it reduces the ability of states to control their national
economies, and use that control to promote social goals other than
profit-making, whether promoting strategic industries, subsidizing prices
for farmers and workers, or maintaining social benefits, high wages and
        And while economic reform has its price, not everyone pays.  Almost
invariably, workers at privatized enterprises face huge layoffs and wage
cuts, as new private owners seek to cut labor costs.
        But as in Mexico, free market policies are often bitterly resisted.
        Around the world, workers have been fighting for over two decades
to keep the social gains they won in the years following World War Two.
They ask over and over again, in a globalized world, who has the right to
        Within weeks of the Seattle demonstrations against the World Trade
Organization, thousands of workers at India's state power company struck to
prevent the privatization of electricity generation and distribution in
Uttar Pradesh.  Despite the jailing of hundreds of their leaders, they
succeeded in halting it, at least for a time.  Meanwhile, in ports along
the subcontinent's coast, thousands more longshore workers also stopped
work over the same issue.
        In countries like Russia and China, where the state controlled the
economy completely, and employed virtually everyone, the impact of
privatization has been even more devastating.   The governments of both
countries, which formerly guaranteed jobs for life and retirement security,
now disclaim responsibility for both as enterprises are closed and sold.
Workers face a bleak future of unemployment, while retirees go hungry and
sell their possessions when their pensions evaporate.
        In the Russian and Chinese industrial heartlands (and in the
formerly socialist countries of eastern Europe), whole cities were built
around huge mills, mines, and factories.  Every social benefit, from
subsidized housing and childcare, to schools and hospitals, was financed by
those enterprises whose doors are now being closed, or which are being sold
off to private owners.  In Russia, where economic reforms are further
advanced, millions of workers have even gone months at a time without
getting paychecks.
        These free market reforms are imposed everywhere U.S. influence is
extended.  One of the conditions of the Rambouillet Accords, whose
rejection by the Yugoslav government led to the bombing last year, was that
"the economy of Kosovo shall function in accordance with free market
principles."  This was also a condition of the Dayton Accords, applied to
the economy of Bosnia.  By agreement, the head of the Bosnian Central Bank
is not even a Bosnian, but an appointee of the IMF.
        Secretary of Defense William Cohen, in fact, described NATO's
mandate to the Boston Chamber of Commerce in 1998 in terms of the creation
of investment opportunities for multinational corporations.  Expanding into
Eastern Europe spreads political stability, "and with that spread of
stability," he noted, "there is a prospect to attract investment."
Instability, on the other hand, he cautioned, "destroys lives and markets."
Creation of a free-market economy is a key element in the program of the
Serbian opposition in the Yugoslav elections, to which the State Department
admits it gave $77 million.
        This is the iron fist, the ultimate threat for countries which
reject the loan conditions and their attendant economic reforms.  U.S.
foreign policy is based on supporting governments that implement these
policies, like those of El Salvador, Honduras, and increasingly Mexico,
which rely on encouraging economic development by making themselves
attractive to foreign investment.
        Countries which don't go along risk being declared rogue states,
subject to economic sanctions and military intervention.
        Workers in developing countries, however, have the right to pursue
economic development in their own interest.  And for economic development
which benefits all people, there must be an alternative to becoming
low-wage export platforms, with increasing social and economic inequality
enforced at the point of a gun.
        "Governments are told that workers' rights and economic development
are a zero sum game, that improving workers' lives slows development," says
Zwelinzima Vavi, general secretary of the Congress of South African Trade
Unions.  "In the pursuit of profit, they are told to remove worker
protections, and then use that as an inducement for investment.  But
development is a wider concept  Development can't exist with mass
unemployment and poverty."
        Unless the international trade structure is changed drastically,
national development alternatives, based on rising wages and production for
a domestic market, will not be possible.  Proposing a social clause within
that trade structure, even one which limits the prerogatives of foreign
investors, does little to support national development less dependent on
transnational capital.  At the same time, it provides political support to
the very institutions which seek to stop it.
        "The struggle by unions, social justice groups and
environmentalists is about more than just winning a seat at the table, or a
'social clause' or environmental rules," a Canadian Labour Congress
statement declares.  "We're determined to change the entire trade regime."
        For copper miners in Cananea, security disappeared after their
mine's privatization.  And since there's almost no other work in Cananea, a
small mountain town, the jobless miners had to leave.  Many of them crossed
the border, just fifty miles north, to find work and a new economic future
in the United States.
        They're not alone.  The UN High Commissioner for Refugees estimates
that over 80 million people today live outside of the countries in which
they were born.  They're not just moving from Mexico to the U.S., but from
developing countries to developed ones all over the world.
        What do they find when they arrive with their dreams of a better
        They become part of an migrant workforce with conditions and wages
at the bottom.  They're denied the most basic rights - no unemployment
insurance, no medical care, no social benefits of any kind.  Undocumented
immigrants have no right to a job.  Not only can they be fired at a
moment's notice, like most workers, but the very act of working for them is
a crime, a violation of the law.  They are denied the right to be a
resident of a stable community - to live here at all.
        And the irony is that they often wind up working for the same
corporations whose operations in their countries of origin are part of the
reason why they're here to begin with.  Those corporations have used U.S.
immigration law to increase insecurity even further, by recruiting contract
workers from developing countries.  Visas for these workers are dependent
on their job status - not only can they be fired if they protest bad
conditions or low wages, but they then get deported when they lose their
jobs.  Two bills in Congress vastly expand these programs, for high tech
workers and for farm workers.  Other industries, meanwhile, are waiting in
        "These programs are selling our human potential," says Anuradha
Mittal, Indian-born co-director of Oakland's Food First.  "Our educational
system produces highly-skilled workers, who then leave to become the
working poor in America, while breaking down our ability to industrialize
our own country.  We wind up subsidizing U.S. industry."
        But global inequality produces insecurity and economic desperation.
        No matter how many walls are built on the border, no matter how
many troops or National Guardsmen or helicopters patrol it, workers will
still cross it looking for a future.  There's no more eloquent testimony to
this than the fact that 400 women and men - workers and farmers -- died in
the last 3 years in the desert, trying to make the journey from northern
Mexico into the U.S.  Or that 57 Chinese immigrants starved to death in a
truck trailer bringing them across the English Channel into Great Britain.
        Workers in this country become victims of the same free-trade
economy, losing their jobs when their plants close, or when the shrinking
tax base which pays for social services leads to job cuts.  And when this
happens, they are told to find someone to blame.
        Blame workers in Mexico or China for taking your job.  Blame
immigrant workers in the United States for the same thing.
        As a result, anti-immigrant hysteria has now become an extremely
serious problem in all developed countries, as immigrants have become an
integral part of the workforce.
        This system creates severe economic insecurity on all sides of all
borders.  The Federal Reserve Bank reports that the median income for
California families went from $26,700 a year in 1997 to $26,800 in 1998.
When the median drops, it means that the number of poor families, earning
less, is growing.
        And to earn this income requires more hours of work.  The average
work week is now 43 hours, and rising.  Latino workers work an additional 5
hours a week, and African-American workers an additional 9 hours.
        According to a study by two researchers at the University of
California in San Francisco released in August, 2000, employed Latinos were
11 times more likely than whites to live in poverty, and African-Americans
5 times more likely.  One reason for both growing poverty and the
increasing racial gap is the abandonment by large corporations of permanent
jobs.  Only a third of white workers now work in traditional jobs - with
permanent, fulltime status, working directly for the company rather than a
contractor.  And only 25% of Latino and African-American workers hold
traditional jobs.
        Globalization doesn't affect all people in the same way.  In the
U.S., workers experience speedup, runaway shops and declining income.  In
less developed countries, they endure superexploitation, environmental
degradation and the destruction of their traditional way of life.  But the
gap in living standards, enforced by U.S. political and military power,
affects all workers, across all borders.  As long as that gap exists, jobs
will leave developed countries, and superexploitation in the developing
world will increase.
        U.S. labor has an objective interst, therefore, in opposing U.S.
foreign policy in areas where it has led to a drastic decline in living
standards, whether through loan bailouts in Mexico, austerity programs in
East Asia, or economic reforms in Eastern Europe.
        When the new administration of AFL-CIO President John Sweeney was
elected in 1995, leaders like Secretary-Treasurer Richard Trumka said the
time had come to find a new policy for building international
relationships. "The cold war has gone," he declared at the New York
convention.  "It's over.  We want to be able to confront multinationals as
multinationals ourselves now.  If a corporation does business in 15
countries, we'd like to be able to confront them as labor in 15 countries.
It's not that we need less international involvement, but it should be
focussed towards building solidarity, helping workers achieve their needs
and their goals here at home."
        Jack Henning, past executive secretary of the California Labor
Federation, one of the most vocal critics of the old AFL-CIO Department of
International Affairs, noted that "we were associated with some of the very
worst elements...all in the name of anti-communism.  But I think there's an
opportunity now to review our foreign activities, to stop the global
competition for jobs among the trade unions of the world."
        These statements, however, move towards a position that would put
the labor federation at loggerheads with the economic, political and
military policy of every U.S. administration, Democratic or Republican.  In
the end, it is impossible to pursue this position while avoiding potential
conflicts with both parties.  The problem is compounded by the subsidy many
AFL-CIO international programs continue to receive from USAID and the
National Endowment for Democracy.  There is a basic conflict of interest.
        Recognizing this, the South Bay Labor Council in Silicon Valley
passed a resolution in September, calling on the AFL-CIO to "describe,
country by country, exactly what activities it may still be engaged in
abroad with funds paid by government agencies and renounce any such ties
that could compromise our authentic credibility and trust of workers here
and abroad, and that would make us paid agents of government or of the
forces of corporate economic globalization."
        The resolution also called on the federation to account for its
past cold war activities in Chile and elsewhere, to renounce the policies
that led to them, and invite discussion of both past and present
international activities.  Such discussion of the real history of
intervention is a necessary condition for pursuing a new policy of
solidarity, based on openness and transparency.
        Real solidarity requires political independence - that unions
pursue a political agenda that focuses on guaranteeing rights and security,
not on maintaining loyalty to a particular party machine.  Mexican workers
and voters made that historic decision just this year, casting aside the
party that had governed them for 71 years, for its failure to follow an
agenda which protected their interests.  The new government of the
conservative National Action Party may also betray those hopes, but no
party in Mexico can count any longer on the automatic support of workers
and unions.
        U.S. labor needs a similar independence.
        Labor needs to fight for equal rights for all people, especially
the migrants who are the refugees of globalization, and have the least
security of anyone.  The right of all workers to organize, and fight for
greater security and a higher standard of living, must be protected.
        But those who the system currently protects are not going to
concede greater security to those who lack it, in the interests of an
overarching classless national security.  Security may be a right, but it
is one that has to be fought for.
        To win it, workers need class solidarity, not the national security
promoted by their employers.  No one can win by themselves.
        Security is not national, but international.  It must be extended
beyond borders to include all the world's working people.
david bacon - labornet email            david bacon
internet:      1631 channing way
phone:          510.549.0291            berkeley, ca  94703


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