OPINION: ‘We told you so’ – On trade, the working class was right

By CHRISTOPHER MARTIN
Kalmanovitz Initiative for Labor and the Working Poor
Georgetown University

Seattle (PAI) – It seems impolite to say “We told you so,” but the working class and labor unions were so unjustly maligned more than two decades ago—when they fought the push to expand unfettered global trade—that it seems more than fair to serve some humble pie to global trade’s champions.

With today’s broken supply chain and working-class communities across the nation still struggling from the loss of millions of U.S. manufacturing jobs, it’s important to look back at the consequential trade agreements a generation ago, when then-President Bill Clinton assured “a future of greater prosperity for the American people.”

In late 1999, the World Trade Organization held its third Ministerial Conference in Seattle. It was the first — and, to date, the last — ministerial conference in the U.S. Others have been held in places such as Singapore, Doha, Cancun, Geneva, and Bali locations inconvenient for American protesters. Some are hostile to the concept of protest itself.

During the Seattle conference, America’s working class could see the storm on the horizon for the American economy. Fifty thousand people showed up to protest the WTO during its Nov. 30-Dec. 4, 1999 meeting and their presence couldn’t be ignored.

It became known as “The Battle in Seattle.” The ranks of protesters included thousands of union members concerned that the lack of global labor regulations would encourage even more multinational corporations to shift manufacturing operations to offshore locations with low-paid workers and few labor protections.

52% SUPPORTED THE PROTESTERS
A majority of Americans – 52 percent – supported the protesters in Seattle, according to a national Business Week poll conducted after the conference. In another survey, the same percentage predicted the future global trade economy would hurt average people.

The protests of 1999 warned of what might happen to advance the global trade economy. And the warnings were right. In 2000 the Senate approved permanent favored nation status for China, greasing the wheels for its accession to the World Trade Organization in 2001.

The protesters were also correct that the WTO would not help workers.

Despite its occasionally welcoming language about labor standards, or creation of a working group on Trade and Labour Standards at its 1999 meeting, the WTO ultimately took no action. More than 20 years later, it still has not endorsed any labor standards to aid the working class in this country or in any of the member countries.

Again, we told you so.

‘FREE TRADE’ AGREEMENTS
A fair appraisal at the time would have revealed what so-called “free trade” agreements were already doing to working-class communities across the U.S. In the 1990s, one only needed to look at places like St. Louis, Edison, N.J., Willow Run, Mich., Decatur, Ill., Van Nuys, Calif., Bloomington, Ind., and Youngstown, Ohio, to see how global trade would destroy the American working class.

As Nobel Prize-winning economist Joseph Stiglitz wrote in Globalization and Its Discontents, “The fact that trade liberalization all too often fails to live up to its promise–but instead leads to more unemployment–is why it provokes strong opposition.”

But in 1999, despite the evidence in hollowed-out communities across the country and 50,000 people on the WTO’s doorstep, most politicians and the news media cheered on the neoliberal vision. Democratic President Bill Clinton and his administration deployed hopeful, if tired, metaphors like “a rising tide lifts all boats” – previously used by John F. Kennedy – and growing a “bigger economic pie,” to justify their agenda.

But we now know that in the structure of the global trade economy, the yachts have the rising tide to themselves, and the captains of the yachts serve themselves increasingly larger portions of the pie. The rest of us were either sent to rowboats, or sunk.

DISMISSING CRITICS
The mainstream media was all-in on expanding global trade. An NBC report on the eve of the Seattle conference included a warning of the dangers of China’s unregulated entry into the WTO from John Sweeney, then president of the AFL-CIO.

But the story concluded by dismissing critics: “Most experts say getting rid of trade barriers on both sides is a good thing for American workers and consumers. That no matter what comes out of this four-day meeting, and a lot of analysts don’t think it will be much, world trade has such momentum, almost nothing will get in its way.”

Conservative critic Michael Medved proclaimed in USA Today on Dec. 7, 1999: “A global economy isn’t debatable — it’s inevitable.” New York Times columnist Thomas Friedman, who has made a career of rhapsodizing about the global economy, ridiculed the 50,000 protesters on Dec. 1, 1999 as “A Noah’s ark of flat-earth advocates, protectionist trade unions and yuppies looking for their 1960’s fix.”

MANUFACTURING EMPLOYMENT FELL OFF A CLIFF
A chart from the Bureau of Labor Statistics on manufacturing employment in the U.S. from 1939 to 2013 shows what happened next: Manufacturing employment peaked in 1979 before falling off a sharp cliff after 2000, when trade with China blew open and manufacturing jobs in the U.S. plummeted. Company honchos and their factories decamped for China, to use its cheap and oppressed labor — or tanked.

Research from the Economic Policy Institute shows the trade deficit with China alone cost 3.4 million jobs in the U.S. from 2001-2017, a period in which the Bureau of Labor Statistics reported the U.S. lost 5.5 million factory jobs. The EPI noted that job losses occurred in all 50 states, as much as 2.57 percent to 3.55 percent of total employment in some states.

The working class took the hardest hit, of course. As EPI concluded, “Trade with low-wage countries like China is largely responsible for reducing wages by nearly $2,000 per worker per year, for all of the 100 million non-college-educated workers in the United States. Most of that income was redistributed to corporations and to workers with college degrees at the top of the income distribution.”

LOSS OF MANUFACTURING CAPACITY
We’ve encountered the results of that over the last two years. When the pandemic struck in 2020, Americans realized with some shock that PPE (personal protective equipment) like masks, gowns, gloves, and test kits are mostly manufactured in China. With shortages and shortfalls for hundreds of those and other products and supplies, attention has turned to the global supply chain.

In 2004, an extensive Public Citizen study identified the damage a supply-chain based global economy – supercharged with China’s admission to the WTO – had already caused the working class in the U.S.

“The loss of manufacturing capacity and jobs is unprecedented in U.S. history and should be triggering an urgent review of this intensifying trend’s implications for U.S. capacity to produce goods essential for its infrastructure and security needs,” the authors wrote.

It’s only gotten worse. Last year, the U.S. ran a record trade deficit on goods of $1.1 trillion, meaning the U.S. imported that much more in goods from China and elsewhere than it exported. But the system of low-cost outsourced labor works well for corporate America: The S&P 500 profit margins in 2021 were “a remarkable” 13 percent, CNBC said.

A SIMPLE MATTER OF CAPITALISM
From media accounts, you would think the global supply chain is a reality that just simply exists for the good of all consumers. Instead, it is a simple matter of capitalism, designed to deliver the highest profits and lowest labor costs to multinational corporations. It’s a system put in place by people in power and their puppets in government.

Last November, Sens. Rob Portman (R-Ohio) and Gary Peters (D-Mich.) took a victory lap as Democratic President Joe Biden signed their “Make PPE In America Act” into law.

“American people should not have to rely so heavily on foreign countries for personal protective equipment,” Portman said. While he is retiring from the Senate this year, Portman has been around Washington for decades. In fact, as a House member in 2000, he voted “yes” for normalizing trade with China — a vote that led to the export of millions of U.S. manufacturing jobs, the ravaging of working-class communities across the country, and today’s broken global supply chain.

Next time, it would be wise to listen to the working class.

We told you so.

(Christopher Martin is a professor of digital journalism at the University of Northern Iowa and the author of No Longer Newsworthy: How the Mainstream Media Abandoned the Working Class  -ILR/Cornell University Press.)