6 Ways We Could Improve NAFTA for Working People

 by Jackie Tortora

6 Ways We Could Improve NAFTA for Working People

For years we’ve talked about the shortcomings of the North American Free Trade Agreement (we even released this detailed report on its 20th anniversary) and how trade deals created behind closed doors with corporate CEOs harm working people.

Today we released a blueprint for how to rewrite NAFTA to benefit working families. This past election there was much-needed discussion on the impact of corporate trade deals on our manufacturing sector and on working-class communities. The outline below puts forward real solutions that should garner bipartisan support if lawmakers are truly serious about realigning our trade policies to help workers.

We need a different direction on trade. This movement has been largely driven by working people. As we approach the inauguration of a new president, it is important that everyday working people’s perspectives lead the debate, starting with how to rewrite NAFTA.

 The AFL-CIO has long supported rewriting the rules of NAFTA to provide more equitable outcomes for working families. To date, the biggest beneficiaries of NAFTA have been multinational corporations, which have gained by destroying middle-class jobs in the U.S. and Canada and replacing them with exploitative, sweatshop jobs in Mexico. It doesn’t have to be this way. With different rules, NAFTA could become a tool to raise wages and working conditions in all three North American countries, rather than to lower them.

Key Areas for Improvement

1. Eliminate the private justice system for foreign investors.

NAFTA established a private justice system for foreign investors, thereby prioritizing corporate rights over citizens’ rights, giving corporations even more influence over our economy than they already have. This private justice system, known as investor-state dispute settlement, or ISDS, allows foreign investors to challenge local, state and federal laws before private panels of corporate lawyers. Although these lawyers are not accountable to the public, they are empowered to decide cases and award vast sums of taxpayer money to foreign businesses. Under NAFTA, these panels have awarded millions of dollars to corporations when local and state governments exercise their jurisdictional power to deny things such as municipal building permits for toxic waste processing facilities. ISDS gives foreign investors enormous leverage to sway public policies in their favor. Scrapping the entire system would help level the playing field for small domestic producers and their employees.

2. Strengthen the labor and environment obligations (the North American Agreement on Labor Cooperation and the North American Agreement on Environmental Cooperation), include them in the agreement, and ensure they are enforced.

The NAFTA labor and environment side agreements were not designed to effectively raise standards for workers or to ensure clean air and water. Instead, they were hastily patched together to quiet NAFTA’s critics. These agreements should be scrapped and replaced with provisions that effectively and robustly protect international labor and environmental standards. Violators should be subject to trade sanctions when necessary—so that we stop the race to the bottom that has resulted from NAFTA. Without stronger provisions, environmental abuses and worker exploitation will continue unchecked.

3. Address currency manipulation by creating binding rules subject to enforcement and possible sanctions.

Within months after NAFTA’s approval by Congress, Mexico devalued the peso, wiping out overnight potential gains from NAFTA’s tariff reductions. This devaluation made imports from Mexico far cheaper than they otherwise would have been and priced many U.S. exports out of reach for average Mexican consumers. Countries should not use currency policies to gain trade advantages—something China, Japan and others have done for many years. All U.S. trade agreements, including NAFTA, should be upgraded to create binding rules, subject to trade sanctions, to prevent such game playing.

4. Upgrade NAFTA’s rules of origin, particularly on autos and auto parts, to reinforce auto sector jobs in North America.

NAFTA’s rules require that automobiles be 62.5% “made in North America” to qualify for duty-free treatment under NAFTA. Even though 62.5% seems high compared with the Trans-Pacific Partnership’s inadequate 45%, it still allows for nearly 40% of a car to be made in China, Thailand or elsewhere. The auto rule of origin should be upgraded to eliminate loopholes (through products “deemed originating” in North America) and to provide additional incentives to produce in North America. This, combined with improved labor standards, will contribute to a more robust labor market and help North American workers gain from trade.

5. Delete the procurement chapter that undermines “Buy American” laws (Chapter 10).

NAFTA contains provisions that require the U.S. government to treat Canadian and Mexican goods and services as “American” for many purchasing decisions, including purchases by the departments of Commerce, Defense, Education, Veterans Affairs and Transportation. This means that efforts to create jobs for America’s working families by investing in infrastructure or other projects, including after the financial crisis of 2008, could be ineffective. This entire chapter should be deleted.

6. Upgrade the trade enforcement chapter (Chapter 19).

NAFTA allows for a final review of a domestic anti-dumping or countervailing duty case by a binational panel instead of by a competent domestic court. This rule, omitted from subsequent trade deals, has hampered trade enforcement, hurting U.S. firms and their employees. It should be improved or omitted.

Reposted from the AFL-CIO News blog

AFL-CIO Endorses Keith Ellison to Lead DNC

Kenneth Quinnell, AFL-CIO News Blog

Photo courtesy Wikimedia Commons

 

The Executive Council of the 12.5-million-member AFL-CIO has voted overwhelmingly to endorse Rep. Keith Ellison to lead the Democratic National Committee. Over the past few weeks, several candidates have sought the endorsement of the AFL-CIO and met personally with members of the Political Committee, which ultimately recommended the endorsement.

“Representative Ellison meets the high standard working people expect from leaders of our political parties,” said AFL-CIO President Richard Trumka. “He is a proven leader who will focus on year-round grassroots organizing to deliver for working families across America. Under his leadership, the Democratic Party will embody the values that our members stand for every day.”

“The AFL-CIO knows the challenges facing America’s working families and how to speak to working Americans of all colors, genders and backgrounds,” said Ellison. “I am proud to be on their side, and I am even prouder that the AFL-CIO is on mine. Workers will be central to the Democratic Party.”

[Ed. Note:  Keith Ellison, Co-chair of the House Progressive Caucus, has been endorsed by Senators Sanders and Warren.  His selection would symbolize a new progressive direction for the Democratic Party.  A few conservatives on the Executive Council opposed the endorsement of Ellison while others abstained].

Trump and The Crisis of Labor

By Harold Meyerson

As Pennsylvania, Ohio, Michigan and Wisconsin – states that once were the stronghold of the nation’s industrial union movement – dropped into Donald Trump’s column on election night, one longtime union staff member told me that Trump’s victory was “an extinction-level event for American labor.”

He may be right.

A half-century ago, more than a third of those Rust Belt workers were unionized, and their unions had the clout to win them a decent wage, benefits and pensions. Their unions also had the power to turn out the vote. They did — for Democrats. White workers who belonged to unions voted Democratic at a rate 20 percent higher than their non-union counterparts, and there were enough such workers to make a difference on Election Day.

That’s not the case today. Nationally, about 7 percent  of private-sector workers are union members, which gives unions a lot less bargaining power than they once had, and a lot fewer members to turn out to vote. The unions’ political operations certainly did what they could: An AFL-CIO-sponsored Election Day poll of union members showed 56 percent had voted for Hillary Clinton and 37 percent for Trump, while the TV networks’ exit poll showed that voters with a union member in their household went 51 percent to 43 percent for Clinton, as well. In states where unions have more racially diverse memberships, Clinton’s union vote was higher (she won 66 percent of the union household vote in California). Continue reading

The Dakota Access Pipeline and the Future of American Labor

by Jeremy Brecher

Labor Network for Sustainability

dakota-pipeline-solidarity-poster

As United States Energy Transfers Partners began building the Dakota Access Pipeline through territory sacred to the Standing Rock Sioux tribe, the tribe began an escalating campaign against the pipeline. By this summer nearly 200 tribes around the country had passed resolutions opposing the pipeline and many hundreds of their members joined nonviolent direct action to halt it. Amidst wide public sympathy for the Native American cause, environmental, climate protection, human rights, and many other groups joined the campaign. On September 9, the Obama administration intervened to temporarily halt the pipeline and open government-to-government consultations with the tribes.

The Dakota Access Pipeline has become an issue of contention within organized labor. When a small group of unions supported the Standing Rock Sioux and opposed the pipeline, AFL-CIO president Richard Trumka issued a statement discounting Native American claims and urging that work on the pipeline resume. Other constituencies within labor quickly cracked back. Why has this become a divisive issue within labor, and can it have a silver lining for a troubled labor movement?

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Joslyn Williams and the Metro DC Labor Council

by Kurt Stand

Reposted from the Washington Socialist, April 2016

joslyn williams

After nearly 30 years, Joslyn Williams is stepping down as president of Metro Washington Council, AFL-CIO.  He is succeeded by two people – Jackie Jeter, president of Amalgamated Transit Workers Local 689, will serve as Council President (the first woman elected to that position), and Carlos Jimenez, most recently field organizer for Jobs with Justice, will take on the new position of Executive Director.  Each embraces the social unionism – unionism that connects workplace rights to workers’ democratic and civic rights – Williams espoused.

In order to fully appreciate the meaning of this moment when the torch is being passed to a new generation of leaders, it is worthwhile to look back upon the tradition of struggle within which Williams played such an important role.

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Labor for Bernie Activists Take the Political Revolution into Their Unions

by Dan DiMaggio and Rand Wilson

sanderslabor3-27-2016

Presidential candidate Bernie Sanders shakes hands after speaking at the UAW Local 600 hall in Dearborn, Michigan, in February. Jim West, jimwestphoto.com.

 

Last June a small group of volunteers kicked off a network called “Labor for Bernie.”Their goal was to build support inside their unions for Senator Bernie Sanders’ presidential campaign.

Since then, Sanders has come a long way—racking up primary wins in nine states, including a major upset in Michigan. The all-volunteer Labor for Bernie operation has come a long way too, growing to include tens of thousands of union members.

So far they’ve helped Sanders win the endorsements of more than 80 local unions and four national or international unions, including the Postal Workers (APWU), Communications Workers (CWA), and National Nurses United.

CWA made its endorsement after polling its members online—and after Sanders rallied with Verizon workers who are battling for a contract. The candidate is a longtime advocate for postal services, which impressed the Postal Workers. He’s also a lifelong proponent of single-payer health care, NNU’s signature issue. Nurses have crisscrossed the country on their union’s “Bernie Bus,” talking to voters.

The latest big union to endorse Sanders was the Amalgamated Transit Union. In a March 14 press release, President Larry Hanley cited the senator’s “longstanding fidelity to the issues that are so important to working people.”

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South Carolina Raising Wages Summit

by Rick Patelunas

south carolina

The last of four Raising Wages summits sponsored by the AFL-CIO was held at the International Longshoreman’s Hall in Charleston, South Carolina on February 6th.  Previous summits were held in Iowa, Nevada and New Hampshire, but South Carolina might present the environment most hostile to raising wages.  South Carolina is one of only five states without a minimum wage; it is a right-to-work state and Governor Nikki Haley said:

“We discourage any company that has unions from wanting to come to South Carolina because we don’t want to taint the water . . .[W]e educate different companies coming in from outside to understand that’s not what we want to do in South Carolina; and if they’re interested in that, we’re not where they need to come.”

That’s the same Governor Haley who delivered the Republican response to President Obama’s State of the Union address in January.  She is also responsible for the infamous “It’s a great day in South Carolina” phase that state workers are forced to say when they answer the phone.  Speakers at the Raising Wages summit tell a different story.

Charleston Mayor John Tecklenberg explained how his office is wrestling with the falling wages in the city at the same time housing costs continue to climb.  Using the Massachusetts Institute of Technology living wage calculator, the Mayor found that $11.60 an hour was needed for a living wage in Charleston.  With no state minimum wage, the federal minimum wage of $7.25 prevails.

On the legislative front, State Senator Marlon Kimpson talked about two bills he sponsored in the state legislature:  one to raise the minimum wage to $15 per hour and one to provide paid sick leave to workers.  It’s an uphill battle with the Koch brothers behind some of the opposition in the state, but workers need to be respected with a livable wage and paid sick leave.

At the federal level, Congressman Jim Clyburn spoke of his support for a livable wage of $15 per hour.  He also recognized that everyone should do what they can at the local level and if $10.50 is all that’s possible in South Carolina, South Carolina needs to work for that.

Chris Kromm, Executive Director of the Institute for Southern Studies provided examples of South Carolina’s “low road” approach to economic development.  For instance, the $1,020 Billion incentive package the state put together to attract Boeing to North Charleston.  A handout from Mr. Kromm reports that the State newspaper “estimated that the price tag for incentive deals for just four companies – BMW, Boeing, Bridgestone and Michelin – totaled $800 million, or about $100,000 for each of the 8,000 jobs created.”

It’s interesting to find BMW in the list of incentives given Governor Haley’s anti-union polemics and policies.  From the BMW website:  “In accordance with the regulations contained in the German co-determination Act, BMW AG’s Supervisory Board shall comprise ten shareholder representatives . . . and ten employee representatives.”  Those ten employee representatives are the union.  That’s the law in Germany and it’s not simply for show — the Supervisory Board has final veto power of whether plants open or close.

Eight hundred million dollars is more than a price tag.  It’s $800 of taxpayer money that is not used elsewhere.  Politicians made a decision to use that money for business incentives rather than investing in the people of South Carolina.  Consider the plight of two Raising Wages panelists.   After ten years as a fast food worker, Rachel Nelson toils for $9.00 an hour with shifts lasting twelve hours with no breaks.  That’s above the minimum wage, but it is not a livable wage.  Likewise, Amy Reece is a child care worker who considers leaving the job she loves because her pay may be above the minimum wage, but it is not a livable wage.  Both are fighting for $15 an hour and the chance to unionize.

At a time when South Carolina’s education system, health and quality of life rankings are routinely at the bottom of the country, incentives to lure businesses to low wage, no union “havens” have another cost.  It’s corporate welfare.  Corporations keep the profits from paying low wages and leave taxpayers the responsibility of helping the underpaid.  Days before the Raising Wages summit, the Economic Policy Institute released a report showing how raising the minimum wage to $12.00 an hour would save billions of taxpayer dollars by 2020.

  • Among workers in the bottom three wage deciles, every $1 increase in hourly wages reduces the likelihood of receiving means-tested public assistance by 3.1 percentage points. This means that the number of workers receiving public assistance could be reduced by 1 million people with a wage increase of just $1.17 an hour, on average, among the lowest-paid 30 percent of workers. These workers would see higher incomes, even as they no longer received public assistance.
  • For every $1 that wages rise among workers in the bottom three wage deciles, spending on government assistance programs falls by roughly $5.2 billion. This estimate is conservative, as it does not include the value of Medicaid benefits.
  • Raising the federal minimum wage to $12 per hour by 2020 would reduce means-tested public assistance spending by $17 billion annually. These savings could fund a variety of improvements to government anti-poverty tools, such as expanding the Earned Income Tax Credit (EITC) to childless adults, or provide funding for new education initiatives, such as improving access to preschool for children from low- and moderate-income families.

Governor Haley’s anti-worker, anti-union, anti-minimum wage, anti-government policies are not particular to her or South Carolina.  At the Republican forum on poverty in South Carolina three weeks before the Raising Wages summit, six Republican Presidential candidates shared their remedies for poverty.  Governor Christie called teachers unions the single most destructive force in education.  Ben Carson called the US progressive tax system socialism that doesn’t work in America.  Senator Rubio dismissed raising the minimum wage because it would make people more expensive than machines.

On the Democratic side, both Secretary Clinton and Senator Sanders favor raising the minimum wage, support unions and advocate raising taxes on the wealthy.  Their plans are different, but understanding the problems and the way towards solving them stands in stark contrast to Republican policies.

Our economic situation did not just happen.  It is not the working of some free market.  It is the result of government decisions and policies that have rigged the system against workers for forty years.  A number of the speakers called for the need to change the rules and the upcoming primaries and elections are an opportunity to begin the change.  Hold politicians accountable.  Ask them what they’ve done, what they’re doing and what they will do.

The Raising Wages summit provided a road map listing policies that can begin to turn things around for workers:

  • Restore Freedom of Association
  • Restore and Strengthen Labor Standards
  • Ensure Full Employment
  • Reform the Global Economy
  • Reform Wall Street
  • Increase Productivity Growth to Allow for Higher Wage Growth.