The concept that free trade will create jobs in the United States is probably true. But what type of jobs? That should be the real question; and what impact will it have on the middle class?
Because of cheap labor and non-existent pollution control laws in Mexico, the trade-off will be the loss of high-paying manufacturing jobs from the United States to Mexico and the possibility of hundreds of thousands of minimum-wage jobs being created here in the USA.
In the early 1940s the economy boomed because of World War II. This is because (1) manufacturing jobs were plentiful, (2) management had complete control over the work force, (3) quality products were still being produced, and (4) companies were still paying low wages.
At about that time the unions began to make inroads in all of the industrial states. The unions also got control of interstate trucking, railways and airports. The unions actually had the power to shut down the entire country at the drop of a hat. Because of this kind of power, wages and benefits for workers began to rise. A large middle class was born. The world was changed forever, or so we thought.
Manufacturing corporations came up with a plan to destroy the unions and at the same time restore corporate power and excess profits. The first nail was to break the unions. How was this done? Corporation lobbyists poured millions of dollars into the elections of politicians who would vote for a law that would allow non-union workers to work in union shops without paying dues.
The corporations eventually moved those jobs from high tax states to states like North Carolina and Florida, where cities would offer free land and tax breaks for up to 30 years. Industrial states such as New York and New Jersey lost hundreds of thousands of manufacturing jobs to low tax states. This literally destroyed the tax base of the industrial states.
The weird part of all this was that the manufacturing companies had an ally _ the unions. The unions must take a lot of the responsibility for their own decline. From the 1940s through the end of the 1970s, "featherbedding" was the norm. Unions would call for a strike at the drop of a hat, be it for legitimate reasons or just to prove how powerful they were. A good example _ sleeping on the job. It didn't matter if the worker was sleeping or not. Power corrupts and absolute power corrupts absolutely.
Business owners, by nature, would prefer slave labor rather than to pay a worker middle-class wages, making it possible for workers to afford a mortgage on a house, own a car, send their kids to college, purchase medical care, pay daily living expenses and have money left over for vacations.
Early on, companies had little incentive to move their manufacturing bases overseas because of the breaking of the unions and the high tariffs on imported goods into the United States.
This situation changed dramatically soon after the war, as foreign countries such as Japan and Germany were rebuilt by the U.S. Marshall Plan. Those countries became very competitive. At the same time, corporations in the United States began to go downhill soon after the Reagan administration opened the barn door to deregulation and greed. Every CEO, manager, stockbroker, banking official _ you name it _ swelled his pockets with cash. Corporation heads continued skimming company profits for themselves instead of rolling a good portion back into plant equipment and machinery to meet the challenge of those foreign countries.
The second nail was for the corporations to once again have their lobbyists pour millions of dollars into the election of politicians to push for free trade south of the border. Once this has been accomplished, corporations will transfer what's left of the manufacturing jobs to Mexico to compete with foreign corporations on a cost basis by doing away with the expense of high wages and benefits paid to American workers and pour still more of those dollars into corporate heads' pockets.
Free trade must be fair trade. The U.S. government must penalize businesses that transfer American jobs to foreign countries to avoid livable wages for workers, to avoid comparable benefits for workers similar to U.S. workers and to avoid the investment cost of environmental laws in the United States.
Corporations will invest in their country only if it is in their own interest to do so.
Then, and only then, can free trade be considered fair trade. Then, and only then, will there be a rebirth of the middle class in this country.
Sylvester (Sonny) Gibbons, 63, is a retired postal worker who moved to Hudson in 1989 from New York City.