Labor Leaders – Honduras Near “Failed State” Status Due to Trade Agreements

Honduras Near ‘Failed State’ Status Due to Free Trade Agreement, Says Labor and Latino Leaders

By Michael Oleaga. Latin Post.

honduras-immigrants-immigration

Representatives from national Latino and labor organizations described the situation one of the Central American countries as “unbearable,” and natives continue to migrate north into Mexico and the United States.

Communication Workers of America (CWA) President Larry Cohen, American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) Executive Vice President Tefere Gebre and National Day Laborer Organizing Network (NDLON) Executive Director Pablo Alvarado were among a group of individuals visiting Honduras Oct. 12-15 to meet with Honduras on how the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA-DR) benefited the country. Alvarado, Cohen and Gebre agreed Honduras has not seen improvements from the agreement, which was implemented 10 years ago.

The CAFTA-DR agreement has been regarded as the first free trade agreement between the U.S. and the smaller developing economies of Costa Rica, Dominican Republic, El Salvador, Guatemala, Honduras and Nicaragua. According to the Office of the United States Trade Representative (USTR), the agreement would create “new economic opportunities by eliminating tariffs, opening markets, reducing barriers to services, and promoting transparency.” Continue reading

Linking Trade, Work, and Migration

Globalization and NAFTA Caused Migration from Mexico

By David Bacon, Political Research Associates

Immigrant Oaxacan Farm Worker and Weaver, and her Family

Rufino Domínguez, the former coordinator of the Binational Front of Indigenous Organizations, who now heads the Oaxacan Institute for Attention to Migrants, estimates that there are about 500,000 indigenous people from Oaxaca living in the U.S., 300,000 in California alone.1 [1]

In Oaxaca, some towns have become depopulated, or are now made up of only communities of the very old and very young, where most working-age people have left to work in the north. Economic crises provoked by the North American Free Trade Agreement (NAFTA) and other economic reforms are now uprooting and displacing these Mexicans in the country’s most remote areas, where people still speak languages (such as Mixteco, Zapoteco and Triqui) that were old [2] when Columbus arrived from Spain.2 [3] “There are no jobs, and NAFTA forced the price of corn so low that it’s not economically possible to plant a crop anymore,” Dominguez says. “We come to the U.S. to work because we can’t get a price for our product at home. There’s no alternative.” Continue reading

Corporate Titans throw millions into the anti teacher campaign in California

by Duane Campbell

VergaraSlider-24Corporate school  “reformers” have raised over $4 million from the very rich during the last week to contribute to the campaign to elect anti union leader Marshall Tuck as Superintendent of Public Instruction in California.  According the Sacramento Bee The fund includes $1 million each from Los Angeles businessmen Bill Bloomfield and Eli Broad, a major financier of efforts to overhaul public education. The Gap co-founder Doris Fisher and Laurene Powell Jobs, philanthropist and widow of Steve Jobs, have each contributed $500,000.

Incumbent Tom Torlakson is a former teacher and is supported by both major teacher unions. He supports extension of Prop. 30 taxes passed in 2012 which have restored funding to California schools after the devastation of the national economic crisis when over 30,000 teachers were dismissed in the state. Schools in other states without new taxes currently continue to reel from austerity budget cuts. Continue reading

Trade, Yes. Bad Trade Deals, No!

by Stan Sorscher

My job depends on trade. I’m 100 percent in favor of trade.

By the same token, we can have good trade policies that raise living standards, or bad trade policies that deindustrialize our economy and distort social and political power relationships.

What people hear, when you say “trade deal.”

Two cases in point: the “Trans-Pacific Partnership” (TPP) and the “Trans-Atlantic Trade and Investment Partnership” (TTIP). Both are variations on NAFTA, a vigorously oversold agreement with Canada and Mexico.

Journalist William Greider explains the origin and intent of one particularly troubling feature of the NAFTA model. NAFTA’s legal process helps global companies enforce certain provisions in the agreement. In full jargon, it is called “investor-state dispute settlement,” or ISDS.

We understand how the US Constitution establishes our legal framework. The Constitution and Bill of Rights were specifically written to protect individuals from tyranny, and balance public interests with private interests. Our courts settle legal disputes by applying Constitutional principles.

NAFTA, as a legal framework, creates a parallel structure at the global level. However, NAFTA and similar deals have a very different design goal. They prioritize corporate investor rights, while pushing public interests to the side.

As the cynical catchphrase goes, under NAFTA, governments can do “whatever they want,” to protect the environment, labor rights, human rights, public health, prudent financial regulation, and internet freedom (for instance), as long as they pay corporations for any lost profit — including potential profit for activities that have not even occurred, yet!
Continue reading

Free Riding On The Labor Movement

by Amy B. Dean 

Amy B. Dean

Amy B. Dean

We all benefit from what organized labor has accomplished .

American communities depend on collective action. Fire and police departments are great examples: They can function successfully because all of us pay in — not only those whose houses have burned down or been burglarized. 

These institutions work on the principle that the most effective way to protect individual interests is for all to contribute a little for the common benefit. When someone doesn’t contribute, everyone suffers. If someone didn’t want to chip in for firefighters or police officers but still expected the benefits of these collective protections, they would be considered freeloaders, and their behavior would be rightly vilified.

Yet when it comes to the labor movement, free-riding is exactly the response that conservatives are encouraging.

Throughout the country, Republicans have been pushing to expand “right to work” laws, which force unions to represent employees who do not pay to receive these benefits. It’s as if people were allowed to avoid paying in for firefighters yet the fire department were still required to serve them. Continue reading

A Labor Day Lesson on How Corporations Use Profits

by Harold Meyerson

meyersonharold2 

In corporations, it’s owner-take-all

Labor Day — that mocking reminder that this nation once honored workers — is upon us again, posing the nagging question of why the economy ceased to reward work. Was globalization the culprit? Technological change? Anyone seeking a more fundamental answer should pick up the September issue of the Harvard Business Review and check out William Lazonick’s seminal essay on U.S. corporations, “Profits Without Prosperity.”

Like Thomas Piketty, Lazonick, a professor at the University of Massachusetts at Lowell, is that rare economist who actually performs empirical research. What he has uncovered is a shift in corporate conduct that transformed the U.S. economy — for the worse. From the end of World War II through the late 1970s, he writes, major U.S. corporations retained most of their earnings and reinvested them in business expansions, new or improved technologies, worker training and pay increases. Beginning in the early ’80s, however, they have devoted a steadily higher share of their profits to shareholders.

How high? Lazonick looked at the 449 companies listed every year on the S&P 500 from 2003 to 2012. He found that they devoted 54 percent of their net earnings to buying back their stock on the open market — thereby reducing the number of outstanding shares, whose values rose accordingly. They devoted another 37 percent of those earnings to dividends. That’s a total of 91 percent of their profits that America’s leading corporations targeted to their shareholders, leaving a scant 9 percent for investments, research and development, expansions, cash reserves or, God forbid, raises.

As late as 1981, corporations directed a little less than half their profits to shareholders, but the shareholders’ share began rising in 1982, when Ronald Reagan’s Securities and Exchange Commission removed any limits on corporations’ ability to repurchase their own stock and when employers — emboldened by Reagan’s destruction of the federal air traffic controllers’ union — began large-scale union-busting. Buybacks really came into their own during the 1990s, when the pay of corporations’ chief executives became linked to the rise in the value of their company’s shares. From 2003 through 2012, the chief executives of the 10 companies that repurchased the most stock (totaling $859 billion in aggregate) received 58 percent of their pay in stock options or stock awards. For a CEO, getting your company to use its earnings to buy back its shares might reduce its capacity to research or expand, but it’s a sure-fire way to boost your own pay.

Exxon Mobil, for instance, devoted 83 percent of its net income to stock repurchases and dividends, and 73 percent of its CEO pay was stock-based. Cisco Systems devoted 121 percent of its net income to repurchases and dividends, and 92 percent of its CEO pay was stock-based.

About that 121 percent: With companies lavishing virtually all their net income on shareholders and executives, the way many of them cover their actual business expenses — their R&D, their expansion — is by taking on debt through the sale of corporate bonds. A number of companies, however — most prominently, IBM — borrow specifically to increase their payout to shareholders. And IBM is not alone. Friday’s Wall Street Journal reported that U.S. companies are currently incurring record levels of debt, much of which, the Journal noted, “is being used to refinance existing debt, being sent back to shareholders as dividend payments and share buybacks, or banked in the corporate treasury as executives consider how to potentially deploy funds as the economy expands.” Many of the companies that have spent the most on buybacks, Lazonick demonstrates, have also received taxpayer money to fund research they could otherwise afford to perform themselves.

What Lazonick has uncovered is the present-day American validation of Piketty’s central thesis that the rate of return on investment generally exceeds the rate of economic growth. Indeed, Lazonick has documented that wealth in the United States today comes chiefly from retarding businesses’ ability to invest in growth-engendering activity. The purpose of the modern U.S. corporation is to reward large investors and top executives with income that once was spent on expansion, research, training and employees. To restore a more socially beneficial purpose, Lazonick proposes scrapping the SEC rule that permitted rampant stock repurchases and requiring corporations to have employee and public representatives on their boards.

Lazonick’s article does nothing less than decode the Rosetta Stone of America’s economic decline. The reason only luxury and dollar stores are thriving, the reason German companies outcompete ours, the redistribution of income from workers to investors – it’s all here, in Lazonick’s numbers.

The lesson for Labor Day 2014 couldn’t be plainer: Unless we compel changes such as those Lazonick suggests to our model of capitalism, ours will remain a country for investors only, where work is a sucker’s game.

This article appeared on the Opinions Page of the August 26 issue of the Washington Post and is reposted with the permission of the author. Harold Meyerson is a Vice Chair of DSA. 

Why the Democrats Need to Take Sides in America’s Class–an excerpt

Harold Meyerson has an informative and insightful long-form essay up on The American Prospect.  It is, we think, an important analysis which should be widely read. The theme is “Straddling class divisions so last century. There’s a new base in town, and it includes a lot of people who used to be middle-class but aren’t anymore.” It is too long for a Talking Union post, so we present this excerpt.–Talking Union

by Harold Meyerson

Harold Meyerson

Harold Meyerson

This spring, a prominent Democratic pollster sent a memo to party leaders and Democratic elected officials advising them to speak and think differently. The nation’s economy had deteriorated so drastically, he cautioned, that they needed to abandon their references to the “middle class,” substituting for those hallowed words the phrase “working people.” “In today’s harsh economic reality,” he wrote, “many voters no longer identify as middle class.”

How many voters? In 2008, a Pew poll asked Americans to identify themselves by class. Fifty-three percent said they were middle-class; 25 percent said lower-class. When Pew asked the same question this January, it found that the number who’d called themselves middle-class had shrunk to 44 percent, while those who said they were of the lower class had grown from 25 percent to 40 percent.

Americans’ assessment of their place in the nation’s new economic order is depressingly accurate. Though most of the jobs lost in the 2007–2009 recession were in middle-income industries, the lion’s share of the jobs created in the half-decade since have been in such low-paying sectors as retail and restaurants. Median household income has declined in every year of the recovery. The share of the nation’s income going to wages and salaries, which for decades held steady at two-thirds, has in recent years descended to 58 percent—the lowest level since the government began its measurements. Continue reading

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