An old tale about two mid-20th-century titans may be apocryphal, but it offers insights into our economic history. Henry Ford II and Walter Reuther are jointly touring a modern auto plant. Ford jokingly jabs at Reuther: "Walter, how are you going to get these robots to pay UAW dues?" Not missing a beat, Reuther responds: "Henry, how are you going to get them to buy your cars?"
It is easy to romanticize the '50s, but the era did have some positive features. Unions along with minimum wage and unemployment insurance contributed both to the emergence of a strong middle class and to rapid economic growth. Americans may well have paid more for cars than if the "Big Three" had not been unionized, but unions had a protective effect that went well beyond their immediate membership. Many bosses -- from construction to the emerging giants in retailing and services -- hated unions and were willing to pay above market-rate wages in order to forestall union organization.
Many workers benefited, but some were left out. Despite Reuther's support for national civil rights legislation, African Americans were relegated to the worst auto jobs. Just as important, American labor leadership of the fifties and sixties was myopic not merely on the Vietnam War but over US government repression of labor unions abroad. An antiunion climate abroad and marginalized women and minority workers at home benefited white working-class males -- but only in the short term. These gaps provided fertile territory to divide and conquer at home and eventually to export jobs to cheap labor havens abroad.
Global trade agreements often are blamed -- correctly -- for labor's woes, but they are only part of the story. Consumers make choices that also add to workers' woes. When GM outsources auto production to Mexico, it puts downward pressure on auto worker wages, but the initial impact for many other workers will be a moderation in auto price, for which many are grateful.
Gains for many middle- and working-class citizens, however, are temporary. As union clout and resources decline in such industries as auto and steel, other major industries worry less about union organizing. Then when large retail giants like Wal-Mart use their economic and legal muscle to pursue cheap wages and low-cost suppliers, the pressure to expel unions from firms that supply electronics, textile, clothing and other merchandise only intensifies. With unions ever less of a threat, call centers move abroad, and even many engineering jobs are following.
In the last quarter-century, American working-class families have made only tiny economic gains despite considerable increases in their economic productivity. Though they may have slightly more consumer goods, these achievements have been more than offset by the longer hours of work and the economic costs associated with having both parents in the workplace.
More American workers are becoming aware that they are both workers and consumers and that injustice within any workplace has a way of spreading. Many American consumers are also increasingly bothered by the inhumanity of sweatshop conditions. Studies by the National Bureau of Economic Research have indicated that on average consumers would be willing to pay as much as 15% more on a $100 apparel item if they could be sure it was not made under sweatshop conditions. Other studies have indicated that increases in the retail price as low as 2% would finance a doubling of the producer's wage.
It is hard, however, for consumers to act on these concerns. Individual purchases are the proverbial drop in the bucket. How does one know that one's dollars are really going to honest companies?
Maine has been a leader in addressing these concerns. In 2001 the state passed legislation requiring companies with which it does business not to buy from subcontractors that rely on sweatshop labor. More recently, this legislation has been updated and Gov. Baldacci has begun to reach out to other governors to establish a coalition of states that would unite behind these principles. Since state governments as a whole purchase over $400 billion a year in goods and services -- more than twice Wal-Mart's expenditures -- the potential for more humane working environments is immense.
These initiatives could replace the economic race to the bottom with worker collaboration across ethnic and national lines. When more US consumer dollars go to firms in the developing world that recognize worker rights, these unions can in turn engage in broader national organizing efforts. And producers and retailers have a market incentive to move toward better employment practices. As wage standards and organizing rights are implemented in developing countries, faster rates of growth, reductions in inequality and decreasing pressures to emigrate follow. This is a win-win scenario for workers in both the so-called developed and developing nations.
Efforts to expand the outreach of the governor's commission are in the groundbreaking stage. The commission could use support in all forms as efforts in Maine are being replicated in such states as Colorado, Connecticut and Wisconsin. Help is needed in many forms, including letter writing, modest donations, research assistance and even calls to friends and neighbors. Interested readers should contact Bjorn Claeson (bjorn@sweatfree.org or 207-262-7277). With our national political leadership deeply committed to the status quo, there has never been a more apt time for state and local action.
John Buell lives in Southwest Harbor, Maine, and writes regularly on labor and environmental issues. Email jbuell@prexar.com.
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