Month: January 2014

THE IGNORED DEFICIT IN PUBLIC GOODS

ABSTRACT: The federal government’s budget deficit is getting more attention than it deserves. It is half of what it was in 2009 and is at what economists consider a manageable level. Meanwhile, our deficit in investments in public goods is being almost totally ignored. Public goods are things of value to society but in which individuals, businesses, and other private organizations don’t and won’t invest.

These public goods are essential to a prosperous society. However, the US has been under-investing in public goods for decades. The paradox of public goods is that they are forgotten, unacknowledged, and in effect invisible when they are readily available.

Government spending on public goods has been in a relatively steep decline since the 2008 economic crash. And for the 30 years before that the investment in public goods had been in a slow decline.

Those opposed to a robust government, ideologically or due to self-interest, have engaged in an active campaign to get the public to forget the personal and societal benefits they receive from government. A discussion about public goods is largely missing from our media and society.

We need to correct this omission in our discourse and our investment in order to have a prosperous society. Without necessary public goods, we cannot maintain our health and productivity as individuals; nor will we be able to maintain the health and productivity of our businesses and ultimately those of our economy and society.

FULL POST: The federal government’s budget deficit is getting more attention than it deserves. It is half of what it was in 2009 and is at what economists consider a manageable level. (See post of 4/6/13. [1]) Meanwhile, our deficit in investments in public goods is being almost totally ignored.

Public goods are things of value to society but in which individuals, businesses, and other private organizations don’t and won’t invest. Public goods provide public benefits and require collective efforts and responsibility. Therefore, the public sector, namely government, must take responsibility for them. Children’s education, from birth through high school and beyond, is a classic example. Transportation infrastructure is another, including roads, railroads, bridges, airports, and ports. Other examples include parks, libraries, scientific research, public and individual health (including healthy air and water), and public safety (including safe communities, workplaces, homes, food, and medicine). A large, thriving, economically solid middle class may be the ultimate public good.

These public goods are essential to a prosperous society. [2] However, the US has been under-investing in public goods for decades. Part of the reason for this is that when they are present and functioning effectively, we forget about them – they are out of sight and out of mind. This is the paradox of public goods: they are unacknowledged and in effect invisible when they are readily available. We forget that there was a need or problem that has been addressed. Or we don’t realize that a problem, such as polluted drinking water, could occur if we don’t invest in protective and preventive measures. We forget that public expenditures by government were what met the need, maintain the solution, and prevent problems. [3]

However, here in the US, we are beginning to notice our public goods deficit. We’ve had bridges collapse or be closed because they are unsafe. Many of our school buildings are old, out-of-date, and in some cases unsafe. Students are leaving college with huge debts. Local governments are cutting police, fire, and school personnel. Our middle class and its economic security is dwindling. And so on.

Government spending on public goods has been in a relatively steep decline since the 2008 economic crash. And for the 30 years before that the investment in public goods had been in a slow decline. Economist John Kenneth Galbraith warned us way back in the 1950s that improper government budget priorities could lead to “private opulence and public squalor.”

In addition to the invisibility of public goods, those opposed to a robust government, ideologically or due to self-interest, have engaged in an active campaign to get the public to forget the personal and societal benefits they receive from government spending and actions. They have explicitly labeled government as the problem not a solution to problems. In fact, a survey of the public found that 94% of those who reported never receiving a benefit from a government program had indeed received benefits from one or more government programs and on average from four programs. [4]

A discussion about public goods is largely missing from our media and society. The notion of air, water, parks, and so forth, as shared public goods that require and deserve public investment is mostly missing from public consciousness. Our discussion of the production of wealth and goods by the private sector is robust, but the discussion is atrophied in terms of the role of the public sector and of the public goods that it produces, maintains, and protects.

We need to correct this omission in our discourse and our public spending in order to have a prosperous society. Without necessary public goods, we cannot maintain our health and productivity as individuals; nor will we be able to maintain the health and productivity of our businesses and ultimately those of our economy and society.

[2]       Hacker, J.S., & Loewentheil, N., 2012, “Prosperity economics: Building an economy for all,” Prosperity for All (http://www.prosperityforamerica.org/wp-content/uploads/2012/09/prosperity-for-all.pdf)

[3]       Derber, C., & Sekera, J., 1/22/14, “An invisible crisis: We are suffering from a mushrooming public goods deficit,” The Boston Globe

[4]       Mettler, S., 9/19/11, “Our hidden government benefits,” The New York Times

HISTORY AND LEAKS MAKE CASE AGAINST “TRADE” TREATIES

ABSTRACT: Twenty years of experience with previous “trade” treaties and the recent leaks of draft language for the Trans-Pacific Partnership (TPP) make the case that the “trade” treaties currently in negotiation will not benefit the US economy, our workers, or our middle class. These treaties focus on and benefit multi-national corporations and investors, rather than trade and the public interest. (See my previous posts of 1/13, 1/8, 9/13/13, and 9/10/13 for more detail.)

The growing resistance to Fast Track authority and these new “trade” agreements in Congress and the public is fueled by growing data on the damaging impacts of the 20 year history of the North American Free Trade Agreement (NAFTA). The same claims are being made for the current trade treaties as were made for NAFTA: that they will promote economic growth, increase jobs, and reduce trade deficits or increase trade surpluses. However, the Mexican trade surplus ($2 billion in 1993) quickly turned into growing deficits, totaling $1 trillion over the 20 year life of NAFTA. With Canada, the other country in NAFTA, the story is similar.

It is estimated that NAFTA has eliminated almost 700,000 jobs in the US. NAFTA established the principle that US corporations could move production out of the US but import the goods produced back into the US without any tariffs or other disincentives. This undermines the wages and benefits of American workers and the middle class. In all three NAFTA countries, wages and benefits for workers have not kept up with increased worker productivity over the last 20 years.

Since NAFTA, the US has entered into trade agreements with Korea, China, and others. While the promise has always been growth in US jobs, our economy, and our trade balance, the result has typically been the opposite. The trade agreements of the past 20 years have cost our economy more than $1 trillion through increased trade deficits and close to a million jobs.

I urge you to contact your elected officials in Washington and tell them you have serious concerns about the “trade” agreements being negotiated. And that these “trade” agreements are too important and too far reaching to be approved quickly and quietly.

FULL POST: Twenty years of experience with previous “trade” treaties and the recent leaks of draft language for the Trans-Pacific Partnership (TPP) make the case that the “trade” treaties currently in negotiation will not benefit the US economy, our workers, or our middle class. These treaties focus on and benefit multi-national corporations and investors, rather than trade and the public interest. (See my previous posts of 1/13, 1/8, 9/13/13, and 9/10/13 for more detail.)

The latest leak has been of the environmental provisions of the TPP. They lack mandated standards and have weak enforcement provisions. They are even weaker than the provisions in previous trade agreements, such as the North American Free Trade Agreement (NAFTA). [1]

Those arguing for Fast Track consideration of the TPP and other treaties by Congress (i.e., short timeframe, no amendments, and no filibuster) argue that treaties should be negotiated by the President and the Executive Branch (and not fiddled with by Congress) and that treaties are generally negotiated behind closed doors. [2] However, the current trade negotiations have included extensive involvement and input from corporate interests but virtually no input from the public; from advocates for workers, the environment, or ordinary citizens; or from Congress and other elected officials (other than the President). Furthermore, the Fast Track process is not necessary to pass trade agreements. President Clinton implemented more than 130 trade agreements without the Fast Track process. [3]

The growing resistance to Fast Track authority and these new “trade” agreements in Congress and among the public is fueled by growing data on the damaging impacts of the 20 year history of the North American Free Trade Agreement (NAFTA). The same claims are being made for the current trade treaties as were made for NAFTA: that they will promote economic growth, increase jobs, and reduce trade deficits or increase trade surpluses. And TPP has specifically been described as NAFTA on steroids.

When NAFTA was being promoted for approval by Congress in 1993, it was stated that it would expand our trade surplus with Mexico, thereby creating 200,000 US jobs in two years and a million in 5 years. However, the Mexican trade surplus ($2 billion in 1993) quickly turned into growing deficits (of $16 billion in 1995, $65 billion in 2008, and $50 billion in 2013). Our trade deficit with Mexico has totaled $1 trillion over the 20 year life of NAFTA.

With Canada, the other country in NAFTA, the story is similar: our trade deficit of $11 billion in 1993 grew to $78 billion in 2008 and $28 billion in 2013. (The dramatic drop in the deficit after 2008 is due to reduced imports because of our Great Recession.) [4]

It is estimated that NAFTA has eliminated almost 700,000 jobs in the US, with 60% of them being in manufacturing. Most of the workers who lost jobs have experienced a permanent loss of income; if they have found other jobs, they pay significantly less. [5] Many workers have experienced long-term unemployment (more than 6 months), which is at historically high levels. Numerous other workers have simply dropped out of the labor force. All of this has led to increases in the costs of government assistance programs, including unemployment benefits and food assistance. [6]

NAFTA established the principle that US corporations could move production out of the US but import the goods produced back into the US without any tariffs or other disincentives. This undermines the wages and benefits of American workers and the middle class. It increases job insecurity and weakens labor unions’ ability to negotiate because of the threat that jobs will be moved out of the US. The result has been stagnant wages for all but the richest Americans and, therefore, growing income inequality. In all three NAFTA countries, the US, Canada, and Mexico, wages and benefits for workers have not kept up with increased worker productivity over the last 20 years. [7]

Even Mexican workers have not experienced any significant increase in wages. An important reason for this is that the export of cheap, subsidized corn from the US to Mexico undermined the livelihoods of an estimated 2.4 million Mexican farmers. This displaced Mexican farmers and led to increased immigration (legal and illegal) to the US. Due to the abundant supply of desperate workers, it also pushed down wages in the maquiladora factory zone (the area just south of the US border). [8]

Although Mexico has experienced increased trade and some job growth under NAFTA, the jobs, even those in manufacturing, have been at low wages. The average Mexican manufacturing wage is only 18% of the US wage and that percentage has grown only slightly. The poverty rate in Mexico is 51%, down only slightly from the 52% when NAFTA went into effect. There has been an increase in the availability of consumer goods, but environmental protections have had mixed results at best. Disposal of US waste in Mexico has increased, including, for example, a 500% increase in US exports of highly toxic, spent lead-acid car batteries, with minimal control to ensure environmentally safe handling of them. [9]

Under NAFTA, US corporations have attempted to weaken Canadian regulations on a range of issues, including offshore oil drilling, fracking, pesticides, and drug patents. [10] Mexico and Canada have paid $350 million to foreign corporations for claims that their laws, rules, regulations, or other actions reduce current and expected profits.

Since NAFTA, the US has entered into trade agreements with Korea, China, and others. While the promise has always been growth in US jobs, our economy, and our trade balance, the result has typically been the opposite. Since the 2012 agreement with Korea, the US trade deficit with Korea has increased by $8.5 billion and an estimated 40,000 jobs have been lost. Our trade deficit with China has soared to $294 billion in 2013 from $83 billion in 2001 when China was permitted to join the World Trade Organization. [11]

The trade agreements of the past 20 years have cost our economy more than $1 trillion through increased trade deficits and close to a million jobs. They are key reasons that unemployment is high and the economic recovery is so weak. Furthermore, the mitigation provisions for these past trade agreements, such as retraining for workers who lost their jobs, have been woefully inadequate and ineffective.

I urge you to contact your elected officials in Washington and tell them you have serious concerns about the “trade” agreements being negotiated. And that these “trade” agreements are too important and too far reaching to be approved quickly and quietly. Full disclosure and debate of their provisions is what democracy requires.

[1]       Queally, J., 1/15/14, “Leaked TPP ‘Environment Chapter’ shows ‘Corporate Agenda Wins,’” Common Dreams (http://www.commondreams.org/headline/2014/01/15)

[2]       Boston Globe Editorial, 1/19/14, “Pacific, EU trade deals need up-or-down votes,” The Boston Globe

[3]       Johnson, D., 1/10/14, “New Fast-Track bill means higher trade deficits and lost jobs,” Campaign for America’s Future

[4]       US Census Bureau, retrieved 1/7/14, “U.S. trade in goods by country,” http://www.census.gov/foreign-trade/balance/

[5]       Johnson, D., 12/18/13, “Will we fast-track past the lessons of the NAFTA trade debacle?” Campaign for America’s Future (http://ourfuture.org/20131218/obama-administration-to-push-fast-track)

[6]       Folbre, N., 8/5/13, “The free-trade blues,” The New York Times

[7]       Faux, J., 1/1/14, “NAFTA, twenty years after: A disaster,” Huffington Post

[8]       Wallach, L., 12/30/13, “NAFTA at 20: ‘Record of damage’ to widen with ‘NAFTA-on-steroids’ TPP,” Global Trade Watch, Public citizen

[9]       Stevenson, M., 1/3/14, “20 years after NAFTA, a changed Mexico,” The Boston Globe from the Associated Press

[10]     Carter, Z., 12/8/13, , “Obama faces backlash over new corporate powers in secret trade deal,” The Huffington Post

[11]     Johnson, D., 12/18/13, see above

STOP FAST TRACK FOR CORPORATE POWER GRAB

ABSTRACT: Bipartisan legislation was introduced in Congress last Thursday to allow the President to submit “trade” agreements to Congress and require expedited consideration of them. There is opposition to this Fast Track consideration (formally known as Trade Promotion Authority) in both parties. There is also opposition to the “trade” agreements currently being negotiated themselves. One reason for this opposition is concern that the agreements benefit multi-national corporations (including foreign corporations) at the expense of local businesses, US workers and citizens, and national sovereignty.

Corporations, who have had access to the agreements’ negotiations (while the public has been kept in the dark), are lobbying to weaken current standards for food safety, labor, health, Internet freedom, the environment, and the financial industry. According to leaked documents, the US is pushing for multi-national corporations to be able to challenge countries’ laws and regulations in privately run international courts or tribunals. Concerns about such provisions stem in part from experiences under existing “trade” agreements. For example, under current “trade” treaties, tobacco corporations are suing or threatening to sue a range of countries over existing or proposed smoking reduction efforts. These legal actions are undermining the World Health Organization’s tobacco control efforts.

I urge you to contact your Representative in the US House and your Senators and tell them you do not want Fast Track authority approved. Full disclosure and debate of the provisions of “trade” agreements is what democracy requires, especially given the essentially irreversible nature of them.

FULL POST: Bipartisan legislation was introduced in Congress last Thursday to allow the President to submit “trade” agreements to Congress and require expedited consideration of them – on a quick timetable, with no amendments, and no filibuster. The bill would require that Congress have access to draft language as agreements are being negotiated (which is currently being kept secret); would specify protections for labor, the environment, and intellectual property; and would require provisions in agreements against currency and exchange rate manipulation. There is opposition to this Fast Track consideration (formally known as Trade Promotion Authority) in both parties, so it is unclear when or if this bill will move forward. Alternative bills that give Congress more say over “trade” agreements are likely to be introduced. (I put trade in quotes because recent “trade” agreements, such as the North American Free Trade Agreement [NAFTA], go well beyond trade issues and cover a broad range of legal and regulatory issues. The provisions for reducing trade barriers and increasing trade are only a small part of the agreements.)

The President and the supporters of the “trade” agreement (largely corporate America) want Fast Track authority for the two broad “trade” agreements mentioned in my previous post (1/8/14): the Trans-Pacific Partnership (TPP) among a dozen Pacific Rim countries and the Trans-Atlantic Free Trade Agreement (TAFTA) [1] with 28 European countries. In addition, there is a global agreement on services (as opposed to manufactured goods) with about 50 countries that is currently being negotiated that would also be covered by the Fast Track authority. [2]

As I noted in my previous post (1/8/14), there is opposition to the “trade” agreements currently being negotiated and Fast Track consideration of them for 3 main reasons, one of which is concern that they benefit multi-national corporations (including foreign corporations) at the expense of local businesses, US workers and citizens, and national sovereignty (our ability to control what happens within the boundaries of the US). For example, a goal of TAFTA is to establish health and safety rules and regulations that would be standard across the US and EU. [3] Many people are concerned that this will lead to a race to the bottom, with the weakest standards winning out. For example, the US is demanding that the EU reduce restrictions on importation of genetically modified foods and hormone-treated beef. Europeans, however, want strong regulation of their food. Corporations, who have had access to the agreements’ negotiations (while the public has been kept in the dark), are lobbying to weaken current standards for food safety, labor, health, the environment, and the financial industry. [4]

In the TPP, according to leaked documents, the US is pushing for multi-national corporations to be able to challenge countries’ laws and regulations in privately run international courts or tribunals. This would result in a significant loss of national sovereignty. (This is a change to current rules under the World Trade Organization where countries’ own courts rule on such matters, although NAFTA included a similar but narrower provision for international tribunals.) The US is also advocating for expanded intellectual property protections, including long-term patents, and therefore monopolies, on drugs (similar to current US laws). It is also pushing to ban government agencies from negotiating lower drug prices with pharmaceutical corporations. (Such a ban is included in the US Medicare program and costs the program billions of dollars every year.) There is widespread concern that such provisions would increase drug prices, pharmaceutical corporations’ profits, and health care costs. This would seem to be borne out by the fact that drug prices are much higher in the US than in other countries. The US is also pushing for weak regulation of the financial industry. Leaked TPP documents have raised concerns among health, Internet freedom, environmental, and labor advocates over provisions supported by the US, the US Chamber of Commerce, and corporations in general. [5]

These concerns stem in part from experiences under existing “trade” agreements. For example, under existing “trade” treaties, tobacco corporations are suing or threatening to sue a range of countries (including Australia, Canada, Gabon, Namibia, New Zealand, Norway, Togo, Uganda, and Uruguay) over existing or proposed smoking reduction efforts. These legal actions are undermining the World Health Organization and its Framework Convention on Tobacco Control, a public health treaty signed by 170 countries, whose goal is to reduce smoking and its negative health effects by limiting and controlling advertising, packaging, and sale of tobacco products. As a specific example, Philip Morris is suing Australia for its cigarette packaging law claiming it will reduce current and future profits. The suit is brought under a treaty between Australia and Hong Kong, and the case will be decided in a private, non-public proceeding of a private international tribunal of arbitrators in Singapore. Although the US says it wants the new TPP to promote public health, and specifically named tobacco as a concern, the US Chamber of Commerce objected because it felt that such public health provisions could allow the regulation of other products such as sugar and soda. [6]

My next post will focus on our 20 year experience with NAFTA and some of its implications for what could be expected with these new “trade” agreements.

In the meantime, I urge you to email, call, write, and, if you can, meet with your Representative in the US House and your Senators [7] and tell them you do not want Fast Track authority approved. These “trade” agreements are too important and too far reaching to be approved quickly and quietly. Full disclosure and debate of the provisions of “trade” agreements is what democracy requires, especially given the essentially irreversible nature of them.

[1]       Also known as the Trans-Atlantic Trade and Investment Partnership

[2]       Calmes, J., 1/9/14, “A proposal to speed up action on trade accords,” The New York Times

[3]       Dahlburg, J., 11/12/13, “US, EU restart trade talks,” The Boston Globe from the Associated Press

[4]       Todhunter, C., 10/4/13, “The US-EU Transatlantic Free Trade Agreement (TAFTA): Big business corporate power grab,” Global Research (http://www.globalresearch.ca/the-us-eu-transatlantic-free-trade-agreement-tafta-big-business-corporate-power-grab/5352885)

[5]       Carter, Z., 12/8/13, “Obama faces backlash over new corporate powers in secret trade deal,” The Huffington Post

[6]       Tavernise, S., 12/13/13, “Tobacco firms’ strategy limits poorer nations’ smoking laws,” The New York Times

[7]       You can find contact information for your US Representative at http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

TRADE TREATIES NEED OPEN DEBATE, NOT FAST TRACK

ABSTRACT: Action in Congress on requiring Fast Track consideration of trade treaties is likely to happen soon. Two broad “trade” agreements are scheduled for Congressional action this year: the Trans-Pacific Partnership (TPP) with a dozen Pacific Rim countries and the Trans-Atlantic Free Trade Agreement (TAFTA) with the European Union (EU). Fast Track authority requires that Congress consider and act on a treaty in a short timeframe with no amendments or changes allowed and with no filibustering.

I urge you to email, call, write, and, if you can, meet with your member of Congress and your Senators and tell them you do not want them to approve Fast Track authority. These “trade” agreements are too important and too far reaching to be approved quickly and quietly.

Business groups are pushing hard for Fast Track consideration in Congress. They are supporters of the treaties, which are widely viewed as very favorable to corporate interests. The growing resistance to Fast Track authority is fueled in large part by:

  • Secrecy on the negotiations and agreement provisions, which breeds suspicion;
  • Concern that they benefit multi-national corporations at the expense of others; and
  • Growing data on the damaging impacts of 20 years with the North American Free Trade Agreement (NAFTA), on which these treaties are modeled.

The indirect effects of the past and these possible new “trade” agreements on the balance of power in employer-employee relations and in our political system, as well as on economic inequality, may be more significant than the direct effects, such as job losses. The TPP and the TAFTA, based on what is known about them, will likely benefit corporations and investors, while hurting US workers and citizens. Moreover, if approved, these treaties will be very difficult to change, as the consent of all the parties is required. At the least, a full discussion of their provisions, based on full disclosure, is warranted.

FULL POST: Action in Congress on requiring Fast Track consideration of trade treaties is likely to happen soon. President Obama would like to have Fast Track authority, formally known as Trade Promotion Authority, for two broad “trade” agreements that are scheduled for Congressional action this year: the Trans-Pacific Partnership (TPP) with a dozen Pacific Rim countries and the Trans-Atlantic Free Trade Agreement (TAFTA) [1] with the European Union (EU). (I put trade in quotes because these “trade” agreements, like NAFTA, go well beyond trade issues and cover a broad range of legal and regulatory issues. The provisions for reducing trade barriers and increasing trade are only a small part of the agreements.)

Fast Track authority requires that Congress consider and act on a treaty in a short timeframe with no amendments or changes allowed and with no filibustering. Fast Track authority was first used in 1974 and has been used on a number of occasions since then.

I urge you to email, call, write, and, if you can, meet with your member of Congress and your Senators and tell them you do not want them to approve Fast Track authority. [2] These “trade” agreements are too important and too far reaching to be approved quickly and quietly. Full disclosure and debate of the provisions of “trade” agreements is what democracy requires.

The Democratic and Republican leaders of the Senate Finance Committee, along with the Republican chairman of the House Ways and Means Committee, have reportedly reached an agreement on a Fast Track authority bill, although they have not yet released its details. The argument for Fast Track consideration of trade treaties is that it means other countries will be more likely to make concessions and reach agreement on the treaty if they are confident that the US Congress can’t change it.

Business groups, including the US Chamber of Commerce and the Business Roundtable, are pushing hard for Fast Track consideration in Congress. They are supporters of the treaties, which are widely viewed as very favorable to corporate interests, [3] and are presumably worried that debate in Congress and the public on the treaties would reduce their chances for approval.

There is significant opposition to granting Fast Track authority in Congress and outside of it. Nearly 200 members of the US House, mostly Democrats but some Republicans, have signed letters strongly questioning the granting of Fast Track authority for these treaties. [4]

The growing resistance to Fast Track authority for these new “trade” agreements in Congress and the public is fueled in large part by:

  • Secrecy on the negotiations and agreement provisions, which breeds suspicion;
  • Concern that they benefit multi-national corporations at the expense of local businesses, workers and citizens, and national sovereignty; and
  • Growing data on the damaging impacts of 20 years with the North American Free Trade Agreement (NAFTA), on which these treaties are modeled.

Both treaties are being negotiated in great secrecy. For the TPP, the Obama administration has deemed the negotiations classified information, restricting Congressional access to documents and banning discussion of the negotiations and treaty provisions with the press or the public. [5] In 2013, Senator Elizabeth Warren opposed the confirmation of the US Trade Representative because he refused to share any of TPP’s provisions. She noted the important need for transparency and public debate on the treaty. [6]

These treaties are seen by many advocates for health, labor, safety, environmental, and financial industry standards and regulations as a masquerade for a corporate power grab, designed to weaken regulation and run roughshod over workers’ and citizens’ interests. [7] These “trade” agreements would enable multi-national corporations to operate with weakened oversight by national governments, free of nations’ court systems, and with reduced consumer and citizen protections. Corporations would become supra-national entities and would answer only to a separate system of rules and courts, administered by new international tribunals. In essence, an international system, parallel to the United Nations system of international governance for nations, would be created for international governance of corporations – a United Multi-national Corporations system, if you will. (More on this in a subsequent post.)

The same claims are being made for these two trade treaties that were made for NAFTA: they will promote economic growth, reduce trade deficits or increase trade surpluses, and increase jobs. The actual experience with NAFTA is that it has done none of these things, which is probably the best indicator of the likely effects of these new trade treaties. And the TPP has specifically been described as NAFTA on steroids. (More on this in a subsequent post.)

The indirect effects of the past and these possible new “trade” agreements on the balance of power in employer-employee relations and in our political system, as well as on economic inequality, may be more significant than the direct effects, such as job losses. The corporations and investors who have been the winners in this globalization of trade and commerce can invest their winnings (i.e., profits) in campaign contributions, lobbying, and political strategies that ensure they are the victors in next round of “trade” agreements. [8]

Although President Obama recently described growing economic inequality in the US as a major issue, NAFTA has increased inequality and the new trade treaties are likely to as well. NAFTA and other recent “trade” agreements have provided benefits to corporations and investors globally, while hurting workers and the middle class in the US, and sometimes hurting workers in other countries. The TPP and the TAFTA, based on what is known about them, will similarly benefit corporations and investors, while hurting US workers and citizens. Moreover, if approved, these treaties will be very difficult to change, as the consent of all the parties is required. At the least, a full discussion of their provisions, based on full disclosure, is warranted.

 

[1]       Also known as the Trans-Atlantic Trade and Investment Partnership.

[2]       You can find contact information for your US Representative at http://www.house.gov/representatives/find/ and for your US Senators at http://www.senate.gov/general/contact_information/senators_cfm.cfm.

[3]       For more information see my previous posts, “Trade” Agreement Supersizes Corporate Power, 9/10/13, (https://lippittpolicyandpolitics.org/2013/09/10/trade-agreement-supersizes-corporate-power/) and “Trade” Agreements & Corporate Power, 9/13/13 (https://lippittpolicyandpolitics.org/2013/09/13/trade-agreements-corporate-power/).

[4]       Politi, J., 12/13/13, “US Senate deal sets up fierce trade battle,” Financial Times

[5]       Carter, Z., 12/8/13, , “Obama faces backlash over new corporate powers in secret trade deal,” The Huffington Post

[6]       Loth, R., 12/21/13, “Take trade agreement off fast track,” The Boston Globe

[7]       Todhunter, C., 10/4/13, “The US-EU Transatlantic Free Trade Agreement (TAFTA): Big business corporate power grab,” Global Research (http://www.globalresearch.ca/the-us-eu-transatlantic-free-trade-agreement-tafta-big-business-corporate-power-grab/5352885)

[8]       Folbre, N., 8/5/13, “The free-trade blues,” The New York Times

GOOD NEWS FROM THE GRASSROOTS

ABSTRACT: The dysfunction in Washington is discouraging. However, there is good news from the grassroots. Every day people are standing up and taking action when government policies and corporate practices are favoring special interests over the interests of the average citizen and worker.

Workers at Wal-Mart and in the fast food industry are taking action to improve their wages and working conditions. On the day after Thanksgiving, protest rallies were held at roughly 1,500 Wal-Mart stores around the country, about a third of their stores. On December 5th, fast food workers went on strike for a day and were joined by supporters at rallies in roughly 200 cities across the country. They are asking for more full-time jobs, more regular schedules, better pay and benefits, and to stop retaliating against workers who speak out or participate in strikes. They want to ensure they do not have to rely on government assistance to make ends meet.

Efforts to increase the minimum wage are occurring at the federal, state, and local levels, driven by strong grassroots support and activity. In 13 states, the minimum wage increased on January 1, 2014. A number of jurisdictions passed laws in 2013 mandating current or future increases. A push is underway to increase the federal minimum wage from $7.25 per hour to perhaps $10.10, as President Obama has proposed. Analyses indicate that this could lift about 5 million people out of poverty. It would grow the economy by $22 billion and 85,000 jobs because the increased income would be spent in the local economy. Polls show that over 70% of the public, including a strong majority of Republicans, support increasing the minimum wage.

FULL POST: As we enter the New Year, the dysfunction in Washington is discouraging. However, there is good news from the grassroots. Every day people are standing up and taking action when government policies and corporate practices are favoring special interests over the interests of the average citizen and worker. Examples include the following:

  • Workers at Wal-Mart and in the fast food industry are taking action to improve their wages and working conditions. (See below for more information.)
  • Efforts to increase the minimum wage are occurring at the federal, state, and local levels, driven by strong grassroots support and activity. (See below for more information.)
  • State efforts to require the labeling of food containing genetically modified organisms (GMOs) are gaining traction.
  • State and local efforts in opposition to fracking are gaining momentum.
  • In North Carolina, grassroots protests are occurring every week at the capitol, known as Moral Mondays protests, to oppose policies that hurt the middle and working class.
  • Teachers, parents, and other supporters of public education are protesting the top-down, corporate-style “reform” and privatization of our schools.
  • Communities are supporting home owners and fighting back against foreclosures with eminent domain takings of homes that financial corporations are trying to foreclose on.

Wal-Mart workers: On the day after Thanksgiving, so-called “Black Friday,” protest rallies were held at roughly 1,500 Wal-Mart stores around the country, about a third of their stores. The protesters were striking Wal-Mart employees and their supporters, who have been organizing under the banner of OUR Walmart (Organization United for Respect at Walmart). The first strike occurred in Los Angeles in October 2012 and the movement has been growing ever since. OUR Walmart is asking the corporation for more full-time jobs, more regular schedules, better pay and benefits, and to stop retaliating against workers who speak out or participate in strikes. [1] Ultimately, their goal is to ensure that Walmart associates do not have to rely on government assistance, such as food stamps and subsidized health insurance, to support their families. Multiple studies have found that the average Wal-Mart employee receives $2,000 – $3,000 per year in government assistance. Nationwide, that means taxpayers are supporting Wal-Mart employees to the tune of $3 – $4 billion annually. [2] (In 2012, Wal-Mart had $444 billion in revenue and profits of $26.6 billion.)

Fast food workers: On December 5th, fast food workers went on strike for a day and were joined by supporters at rallies in roughly 200 cities across the country. These protests for better wages, targeting $15 per hour, began about a year ago and have been gaining momentum. They target McDonald’s, Burger King, Wendy’s, Yum Brands (which owns Kentucky Fried Chicken [KFC], Taco Bell, and Pizza Hut), and others. [3] (See my previous post, Pay for Workers in the Fast-Food Industry, 9/8/13, https://lippittpolicyandpolitics.org/2013/09/08/updates-on-posts-on-low-pay-for-fast-food-workers-pesticides-and-bees-detroit/ for more information on the affordability of worker pay raises.) Low wage fast food workers are estimated to receive $7 billion a year in government assistance to help them make ends meet.

The minimum wage: These efforts to improve wages and working conditions for low wage workers are also reflected in efforts to increase the minimum wage. In 13 states, the minimum wage increased on January 1, 2014. A number of jurisdictions passed laws in 2013 mandating current or future increases, including California ($9/hour), Connecticut ($8.70), New Jersey ($8.25/hour), New York ($8/hour), Rhode Island ($8/hour), two counties in Maryland ($11.50/hour), the city of Seatac in Washington state ($15/hour), and the District of Columbia ($11.50/hour). [4] A push is underway to increase the federal minimum wage from $7.25 per hour to perhaps $10.10, as President Obama has proposed. Analyses indicate that this could lift about 5 million people out of poverty. It would grow the economy by $22 billion and 85,000 jobs because the increased income would be spent in the local economy. [5] Numerous other efforts to raise the minimum wage are underway in states and communities across the country. Polls show that over 70% of the public, including a strong majority of Republicans, support increasing the minimum wage. (If the minimum wage had kept up with inflation since 1968, it would be $10.50 not $7.25. If it had kept up with productivity gains, it would be over $15 and perhaps close to $22.) (See my previous posts, Lack of Good Jobs is Our Most Urgent Problem, 10/30/13, https://lippittpolicyandpolitics.org/2013/10/29/lack-of-good-jobs-is-our-most-urgent-problem/, and Labor Day and the Middle Class, 9/2/13, https://lippittpolicyandpolitics.org/2013/09/02/labor-day-and-the-middle-class/, for more information.)

There is also a growing effort to institute a “living wage” of $15 per hour. The fast food workers and low wage retail workers, and the unions supporting them, are the core of this effort, along with Kshama Sawant, a Seattle City Council member. The 15Now Campaign (http://15now.org) is also supported by newly elected Seattle mayor, Ed Murray. [6]

I’ll provide more information on these and other promising grassroots activity in future posts.

[1]       Berfield, S., 11/29/13, “On Black Friday, strikes and counter strikes at Wal-Mart’s stores,” Bloomberg Businessweek

[2]       Mitchell, S., 6/7/13, “New data show how big chains free ride on taxpayers at the expense of responsible small businesses,” Institute for Local Self-Reliance (http://www.ilsr.org/chains-walmart-foods-free-ride-taxpayers-expense-responsible-small-businesses/)

[3]       Choi, C., & Hananel, S., 12/6/13, “Fast-food workers, advocates rally in US cities for more pay,” The Boston Globe from the Associated Press

[4]       Davidson, P., 12/30/13, “13 states raising pay for minimum-wage workers,” USA Today

[5]       Berman, J., 1/2/14, “A $10.10 minimum wage could lift 5 million out of poverty,” The Huffington Post

[6]       Queally, J., 1/3/14, “The fight for $15: Campaign for Living Wage readies national push,” Common Dreams (http://www.commondreams.org/headline/2014/01/03)