Outsourcing Isn’t an Excuse to Abandon the Working Class

Barack Obama and Mitt Romney agree on one thing: Outsourcing is a problem.

Of course, they disagree on who’s to blame. To Obama, it’s private equity firms like Romney’s Bain Capital. To Romney, it’s deficit spending like Obama’s 2009 fiscal stimulus.

(As I pointed out two weeks ago, there’s plenty of evidence that the 2009 stimulus created millions of jobs right here in America. But never mind.)

“Countries around the world are…giving their workers and companies every advantage possible,” says Obama, but “we can win that competition.”

On Romney’s website, you can find the same language. He says our tax code “needs to be more competitive and business friendly.” We need to create a “level playing field for American products in foreign markets.”

This rhetoric is more dangerous than it seems.

It’s true that many of our exports are at a disadvantage. In countries that we trade with, the average manufacturing wage is 65 percent of the American average. In Mexico, manufacturing workers earn 11 percent of what their U.S. counterparts make. In China, they earn 3 percent.

So, the question is: Just how “level” does Mitt Romney want the “playing field” to be?

When it comes to outsourcing, Romney has a solution, but he won’t say it…because you won’t like it: The easiest way to create a “level playing field” is to lower American wages.

The dirty secret about Republican economics is that it’s all about cheap labor.

While most of the industrialized world (and much of the developing world) has experienced rising real wages in the past thirty years, American wages have stagnated.

Union membership has plummeted. The minimum wage has failed to keep up with inflation. Taxes and regulations that previously restricted the rich from siphoning the wealth of the middle class have been eviscerated.

In short, Mitt Romney’s game plan has already been put to the test.

We were told that it was a new era. We were told that we needed to sacrifice our job security, our wage increases, our retirement benefits — all in the name of globalization. We were told that America couldn’t compete with those costs around its neck. We were told that the manufacturing sector was deadweight. We were told that the working class was pulling us down. We were promised a better world filled with high-tech jobs and rapid innovation, low taxes and rising asset prices, cheap imports and even cheaper investments.

We did everything we were told. We gave up our protections and our power. And, in return, we got lower economic growth, higher inequality, productivity growth that went almost entirely to the top 1 percent, and — irony of all ironies — even bigger trade deficits.

All that cheap labor didn’t make us “competitive” after all.

All it did was line corporate coffers with more profits than ever before.

But not everyone made that mistake. According to the conservative Heritage Foundation, U.S. tax revenue is currently 27 percent of GDP. In Denmark, it’s a whopping 49 percent. They have the world’s highest minimum wage and arguably the lowest level of income inequality. Yet their unemployment rate (7.7 percent) is currently lower than ours (8.1 percent), and their economy grew at the same rate as ours from 1979 to 2007.

For another comparison, look at Sweden, where tax revenue is 48 percent of GDP. They consistently battle Denmark for the world’s lowest level of income inequality, yet they’re also ranked as the second most competitive country in the world (after Switzerland). Their unemployment rate (7.8 percent) is also lower than ours, and their economy grew faster than ours from 1979 to 2007.

Needless to say, unions are more prevalent and powerful in both of these countries than in the U.S. But arguably the most heavily unionized country is Germany, where employee representatives sit on corporate boards and have a say in industry-wide decisions. Germany’s unemployment rate (5.6 percent) is way lower than ours, and they boast a large trade surplus.

Clearly, we can raise wages and compete in the global economy at the same time. We don’t need a “level playing field” to beat outsourcing. We just need a proactive government.

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This op-ed was published in today’s South Florida Sun-Sentinel.

What’s Sauce for the Goose Is Sauce for the Gander

by Norman Horowitz

Yesterday, I questioned the hypocrisy of punishing Ozzie Guillen for “admiring” Fidel Castro while simultaneously honoring the repression of our trading partner China. I also questioned the hypocrisy of apologizing to the victims of Castro’s dictatorship while simultaneously ignoring the victims of the US-backed dictatorship of Fulgencio Batistia, whom Castro overthrew.

Today, I have a new “proportional dilemma”:

[Last month,] Pope Benedict XVI…met with Fidel Castro for a half-hour before departing for Rome, wrapping up a weeklong trip to Mexico and Cuba.

The pope did not meet with Cuban dissidents during his trip…

The site where the pope delivered Wednesday’s Mass — Havana’s Plaza of the Revolution — is the same place where Castro…delivered countless speeches over the decades.

If critics of the Castro government were looking for a more direct challenge to Cuba’s one-party state and a push for greater political freedoms, Benedict did not deliver.

If Catholics insist that Ozzie Guillen must apologize, will they also insist that Pope Benedict apologize? If Guillen must step down from his job for five days as punishment, must the Pope also step down for five days?

Be Careful Whom You Admire

by Norman Horowitz

Ozzie Guillen said something “politically incorrect.” For his punishment, the Miami Marlins have suspended him for five games.

In his “politically incorrect” remarks, Guillen expressed admiration for Fidel Castro. In response, the team apologized to “victims of [Castro’s] dictatorship.”

It appears that it no longer matters that Fidel Castro led a movement that overthrew Fulgencio Batista:

[Batista] was the United States-aligned Cuban President dictator and military leader who served as the leader of Cuba from 1940 to 1944 and from 1952 to 1959, before being overthrown as a result of the Cuban Revolution.

…Batista suspended the Constitution and revoked most political liberties, He  aligned with the wealthiest landowners who owned the largest sugar plantations, and presided over a stagnating economy that widened the gap between rich and poor Cubans. Batista’s increasingly corrupt and repressive regime then began to systematically profit from the exploitation of Cuba’s commercial interests, by negotiating lucrative relationships with the American mafia, who controlled the drug, gambling, and prostitution businesses in Havana, and with large multinational American corporations that had invested considerable amounts of money in Cuba. To quell the growing discontent amongst the populace — which was subsequently displayed through frequent student riots and anti-Batista demonstrations — Batista established tighter censorship of the media, while also utilizing his anti-Communist secret police and U.S.-supplied weaponry to carry out wide-scale violence, torture and public executions; ultimately killing as many as 20,000 Cubans.

The victims of Batista’s dictatorship never received an apology…from the Marlins or anyone else in this country.

Moreover, the “Batista transgressions” were, to the best of my knowledge, unreported in our freedom-loving country by our freedom-loving mainstream media.

To punish Ozzie Guillen for speaking of his admiration of Fidel Castro is about an un-American an act as I can remember anyone perpetrating in the game of baseball.

At this very moment, representatives from the mainstream media outlets are visiting China, a horridly repressive country that does not honor copyrights, and they are honoring their repressive television service.

So riddle me this: If it is a good thing to be nice to a repressive country and their media, why is it a bad thing to say something nice about Fidel Castro?

Our hypocrisy is stunning and sad.

Quote of the Day: Noam Chomsky

American decline is real, though the apocalyptic vision reflects the familiar ruling class perception that anything short of total control amounts to total disaster. Despite the piteous laments, the United States remains the world dominant power by a large margin, and no competitor is in sight…

— Noam Chomsky (MIT)

The Agony and the Ecstasy of Steve Jobs, Part Eight

This is Part Eight of “The Agony and the Ecstasy of Steve Jobs” by Mike Daisey, the 2011 Trading 8s “Journalist of the Year”.

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8. “The Secret Union”
by Mike Daisey

I’m at a restaurant in the factory zone, seated at a table with Cathy, and this aphorism is running through my head over and over again—I can’t remember who said it originally—that paranoia is not paranoia when they’re actually out to get you.

And I go through my checklist again: I’ve gone through my pockets and found every slip of paper with an email address or a phone number and I’ve destroyed all of those. I’ve hidden all my paper notes off of my person, and I’ve erased everything on my laptop, and anything I can’t erase is on an encrypted partition that I hope is encrypted enough. I have done all of these things because I am at this restaurant to meet with a union.

Because there are unions in China. There are the ones that are fronts for the Communist Party, and then there are actual unions, interested in labor reform. They’re called “secret unions” because in China, if you are caught being a member of or affiliating with a union like that, you go to prison. You go to prison for many years, and that’s why I’ve had to take these precautions.

And getting this meeting involved climbing a ladder of associations, going to meeting after meeting, and each step of way just making good my intentions, just being clear that I am a storyteller, that I just want to hear people’s stories, I just want to hear what they have to say.

And the union organizers come in and sit down, and it’s awkward at first, and then they tell me about the situation on the ground. There is so much turmoil in southern China, so much happening just beneath the surface. And they tell me about the two Honda plants that have gone on strike in the north of the province and how they helped organize that strike, and I think about what it would mean to go on strike in a country where even being a member of a union can get you thrown in prison, what it would take to be pushed to that point.

And these organizers are young. They don’t even look college-aged, they look younger than that. And I say to them, “How do you know who’s right to work with you? How do you find people to help you organize, to do what you do?”

And this sort of breaks the narrative, and they look at each other bashfully, and they say, “Well, we talk a lot, we have a lot of meetings—we meet at coffeehouses, different Starbucks in Guangzhou, we exchange papers, sometimes there are books…”

And it’s so clear, in this moment, that they are making this up as they go along.

The way so many of us do.

The way pirates do. The way rebels do.

The way the crazy ones who change the world do—they all make it up as they go along.

Then the workers start coming in. They come in twos and threes and fours, they come in all day—it’s a nine, ten hour day. I interview all of them. Some of them are in groups—there’s a group there talking about hexane.

Hexane is an iPhone screen cleaner; it’s great because it evaporates a little bit faster than alcohol does, which means then you can run the production line even faster and try to keep up with those quotas. The problem is that hexane is a potent neurotoxin, and all these people have been exposed. Their hands shake uncontrollably, some of them can’t even pick up a glass.

I talk to people whose joints in their hands have disintegrated from working on the line, doing the same motion hundreds and hundreds of thousands of times. It’s like carpal tunnel on a scale we can scarcely imagine. And you need to know that this is eminently avoidable: if these people were rotated monthly on their jobs this would not happen—but that would require someone to care. That would require someone at Foxconn and the other suppliers to care, that would require someone at Apple and Samsung and the other customers to care; currently, no one in the ecosystem cares enough to even enforce that.

And so, when you start working at fifteen or sixteen, by the time you are twenty-six, twenty-seven—your hands are ruined.

And when they are truly ruined, once they will not do anything further—you know what you do with a defective part in a machine that makes machines.

You throw it away.

And the thing that unites all these people is that they are all the kind of people who would join a union in a place where joining a union can ruin your life.

I talk with one woman—bird-like, very nervous—and she just wants to explain to me how it is she came to be in a union. Because she never thought she would be in a union, it’s just that she couldn’t get her company to pay her overtime. And she complained and complained, this went on for weeks and for months—and Cathy says to her, kind of sharply, “Why didn’t you go to the Labor Board? That’s what they’re there for. You should have complained to the Labor Board.”

And the woman says, “I did. I went to the Labor Board, and I told them about my problem, and they took down my name and my address and my company, and they took my name and they put it on the blacklist. And they fired me.”

And then she shows me a copy of the blacklist—a friend of hers in accounting photocopied it and snuck it out to her. She gives it to me, I hand it to Cathy to translate. You know, in a fascist country run by thugs, you don’t have to be subtle. You can say exactly what you fucking mean. The sheet is very clear that it comes from the Labor Board, and it says, right across the top, “The following is a list of troublemakers. If any of them are found in your employ, dismiss them immediately.”

And then there’s column after column after column of names, page after page after page of them.

Cathy’s hand trembles as she translates it.

I talk to an older worker with leathery skin. His right hand is twisted up into a claw. It was crushed in a metal press at Foxconn.

He says he didn’t receive any medical attention and it healed this way, and then when he went back to work, he was too slow, and they fired him.

Today he works at a wood-working plant. He says he likes it better. He says the people are nicer and the hours are more reasonable. He works about seventy hours a week.

And I ask him what he did when he was at Foxconn, and he says he worked on the metal enclosures for the laptops and he worked on the iPad.

And when he says this, I reach into my satchel and I take out my iPad, and when he sees it, his eyes widen. Because in one of the ultimate ironies of globalism, at this point, there are no iPads in China. Even though every last one of them was made at this factory in Shenzhen, they’ve all been packaged up in perfectly minimalist Apple packaging and then shipped across the seas so that we can all enjoy them. He’s never actually seen one on. This thing that took his hand.

I turn it on, unlock the screen, pass it to him. He takes it. The icons flare into view. And he strokes the screen with his ruined hand, and the icons slide back and forth, and he says something to Cathy, and Cathy says, “He says it’s a kind of magic.”

<<silence>>

It’s a long day. And at the end of it, I’m packing up everything to go, and Cathy says something to me—out of nowhere—she says, “Do you think these people are mentally ill? Do you think it is possible that they are making all this up?”

And I look at her, as though for the first time, because, I mean, let’s be clear: she’s my Chinese worker. I mean, I pay her for her time, I don’t think about her very much at all. But now, I really look at her. She is exactly who all these workers I’ve been talking to for weeks, she is exactly who they all are dreaming that their children will one day be. She has a good life in the center of Shenzhen for her, for her family—what does this look like to her?

I say to her, “What do you think? Do you think they’re mentally ill?”

And she suddenly looks very tired. And she takes off her glasses. And she rubs the bridge of her nose. And she says,

“No. I do not think they are mentally ill. It’s just that…you hear stories, but you do not think it is going to be so much. You know?

It’s just so much. Do you know what I mean?”

And I reach across the table and I touch her hand.

It’s the first and last time we will ever touch, I and this woman whose real name I don’t even know. I say to her,

“I know exactly what you mean.”

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Tomorrow: “Part Nine: A Virus of the Mind”