April 22nd 2000


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Articles from this issue:

COVER STORY: Will Telstra be fully privatised?

EDITORIAL: The "stolen generation“

CANBERRA OBSERVED: John Howard trapped in Aboriginal mine field

RURAL AFFAIRS: WA report highlights declining rural infrastructure

HEALTH FUNDS: Will genetic tests lead to discrimination?

ECONOMICS: Lessons from Malaysia's Mahathir

TAXATION: Families may suffer under GST

Why Liberal and ALP economic policies are indistinguishable

RUSSIA: What Vladimir Putin's election signifies

AS THE WORLD TURNS

LETTERS

Globalisation: As capital goes global, unions go global

INTERNATIONAL AFFAIRS: How the "China factor" affects US relations with Asia

Bioethics: Move to harvest human embryo stem cells

INDUSTRY POLICY: Jobs for life: the Nucor approach

TAIWAN: Opposition wins presidential election

BOOKS: 'The Packaging of Australia: Politics and Culture Wars', by Gregory Melleuish

POLITICS: Straws in the Wind

TELEVISION: The Sopranos

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Globalisation: As capital goes global, unions go global


by Bob Browning

News Weekly, April 22, 2000
Bob Browning shows how some unions are challenging globalisation. Bob Browining's writings are available on the internet at www.sprint.au/~rwb

The backlash against neo-liberal-style globalisation is underway. Post Cold War-style capitalism is again sowing the seeds of its own destruction.

Advocates of the present policy orthodoxy may be remembered in the future for anything but their self-proclaimed rationality. Intelligent strategists would not be so blind to the deeper significance of events such as the populist outbreaks around the developed world, the protests at Seattle and Davos, and the recent victories of internationalised trade union action against the corporate US giants, the United Parcel Service (UPS) and Boeing.

These are the tips of social and political icebergs heading inexorably into the global trading lanes. Hazards of a comparable sort undid laissez-faire capitalism early last century - with catastrophic results for everybody.

The post World War II settlement - the welfare state concept of the famous economist John Maynard Keynes - sought to provide a new deal in the wake of the Great Depression, Nazism, Bolshevism, and two world wars. Its aspirations included economic growth, whose benefits would be reasonably if not equally shared by all citizens.

This was sought through full employment, job security, decent wages and working conditions, social insurance, and health, education and welfare services. What economic rationalists seem to have forgotten is that welfare policy was motivated more by the need to create national cohesion and to secure acceptance of capitalism than it was by socialist efforts to redistribute wealth.

The welfare state came nowhere near creating equality. What it created was tolerance for capitalism. As Karl Polanyi, in The Great Transformation, and others have explained, and common sense clearly tells us, society will bite back if the majority of people are not given some protection against the amoral nature of the market system, its injustices, its cyclical downturns, its ever-present risks and periodic crises.

Full employment was the crucial underpinning of the post-war settlement. Employment was the first source of income guarantee and welfare and the socialiser par excellence. The Keynesian welfare state came into existence largely in response to the human and financial costs of mass unemployment and the boom and bust business cycle.

Now there is deliberate pressure for higher unemployment under the euphemistically named policy concept of NAIRU - the non-accelerating inflation rate of unemployment.

The neo-liberal agenda

The warm-hearted neo-liberal solution to the flagging Keynesian welfare state is low-paid, casualised, precarious jobs, regressive taxes, reduced social spending, privatisation, and higher user-pays contributions for education and health care. We are told that, under the hammer of neo-liberal globalisation, the only choice now is between European-style high unemployment with welfare benefits, or US-style low paid service jobs with rising inequality, the working poor, and an underclass. What makes the financial and corporate power elite think they can get away with this for any length of time?

First, the fear of the Soviet Union, of expansionist armed and subversive socialism is gone. And social democrats in the West are demoralised by the current inadequacy of post-war Keynesian economics.

Secondly, trade unions are weaker. Labor-intensive highly-unionised mass production manufacturing has declined in the West. The majority of wage earners now are in poorly unionised service jobs or in higher-skilled knowledge worker occupations. If trade unions push hard, corporations can punish workers by taking production and jobs offshore.

Thirdly, international agencies like the Organisation for Economic Co-operation and Development (OECD), the International Monetary Fund (IMF), the World Bank and the Group of Seven (G7) are limiting what national governments are able or willing to do. These agencies push governments to deregulate economies according to the neo-liberal Washington Consensus.

They give politicians an excuse to go against democratic pressures. If governments respond to certain democratic demands they too can be quickly punished by credit-downgrading and capital flights. Electoral funding of political parties by corporations can be withheld or transferred. Government parties can be hit by intensified propaganda campaigns. With multinational corporations managing the lion's share of the mainstream media, and with the plethora of corporation-funded think tanks, the neo-liberal lobby has a propaganda edge.

Can it last? Is it possible unions will rise again phoenix-like from their ashes?

The first edition this year of the influential US journal, Foreign Affairs, featured an article written by Jay Mazur, Chairman of the International Affairs Committee of the AFL-CIO, the peak council of the US trade union movement. Headed "Labor's New Internationalism", Mazur's article explained that, during the Cold War, the AFL-CIO had the support of government because strong independent unions were seen as strengthening democracy by distributing some of the benefits of economic growth so that workers felt they had a stake in market economies.

But, he says, "The collapse of the Soviet Union changed government perspectives towards labor. Unions have been viewed as less politically relevant and obstacles to corporate interests. A broad ideological offensive by corporations has portrayed unions as outmoded relics of a bygone age. But as big business has gone global and it wages an increasingly aggressive assault on unions, the labor movement has become more not less internationalist. Virtually every major dispute in the United States now has an international dimension. ... In dealing with management, today's unions understand that they must have an accurate picture of the company's entire global structure to pressure effectively in vulnerable points."

US parcel workers

Two recent disputes illustrate the rising reinvigoration of the trade union movement. One was the 1997 action against the multinational United Parcel Service (UPS).

A year before the UPS strike, the US Teamsters Union formed a World Council of UPS unions with the help of the International Transport Workers Union. It brought together representatives from the UK, France, the Netherlands, Belgium, Italy, Spain, Canada, Germany, Brazil, Ireland and the US. They formulated a common case and launched it on what they called UPS World Action Day.

A principal concern was UPS conversion of full-time into part-time jobs. Over ten thousand UPS workers were working over 35 hours a week - that is, full-time hours but for part-time pay and part-time health and pension benefits. UPS annual profits were in the billions of dollars, yet they were cutting back even further on full-time job opportunities. They were increasingly subcontracting out work, including to overseas suppliers, and were trying to shift to more of what the union described as "low-wage, part-time, throwaway jobs".

In 1997, unionists worldwide hit UPS with more than 250 stoppages, job actions and demonstrations. On the part-time issue, national US polls showed that Americans supported the strikers by two to one. There had never been a national strike at UPS before, let alone an international strike. UPS caved in.

The unionists won 10,000 brand new full-time job opportunities at UPS by convincing the corporation to combine existing part-time jobs into full-time jobs with full-time pay and full-time health benefits and pensions - at improved rates. Henceforth their pensions will be controlled jointly by the union and employers, not solely controlled by UPS. Limits were put on sub-contracting jobs out.

Unions have historically been weak in the service sector. The UPS campaign was an important victory for unions precisely in the service sector where three out of four jobs in the US.

Boeing workers strike

In 1998, Boeing made the stunning announcement that it was eliminating 48,000 jobs over the next two years. The company claimed it was being forced to slash thousands of blue and white collar jobs because of growing competition from other aircraft makers.

In late 1999, thirty-two thousand members of the International Association of Machinists and Aerospace Workers, Boeing's largest union, walked off their jobs. Later, 17,000 Boeing engineers followed suit. Their union, the Society of Professional Engineering Employees in Aerospace (SPEEA), had virtually no strike experience. The union had no strike fund, no treasury to help bail out workers on the picket lines. In the history of the union there had never been even a single-day walkout in 56 years.

Boeing's upper management banked on the belief that its indispensable professional white collar engineers would never strike. But they did strike. And they won almost everything they wanted in regard to wage rates, medical insurance, and a stronger voice inside the company.

It was revealed during the strike that five of Boeing's top executives stood to make multi-millions of dollars from their stock option bonuses through boosting the value of the company's stock by downsizing Instead, during the strike, the price of Boeing's shares dropped 25 per cent.

The union claimed the dominant issue was not just wages, benefits, and bonuses, but something they thought they had lost at Boeing - respect. Striking engineers, men and women machinists all believed Boeing had become impersonal, more focused on profits than quality.

Jay Masur warns economic rationalists against continuing to deliberately confuse labor's concern for fairness and social harmony with narrow protectionism and special interest. What we actually seeing, he says, is organised demands for, "Accountability for the powerful, and a voice for the voiceless. Such idealism has a practical effect. Shared prosperity increases the purchasing power of workers, creating new demand to absorb the excess capacity that now depresses global markets."

Supply siders would be acting rationally if they realised that more efficient, more profitable production is futile if people are denied the wherewithal to purchase it. They should be wary of letting greed and ideology lead them to act contrary to their own longer term self-interest.




























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