Nickel & Dimed, Peso & Centavo-ed
Well, apparently the 2.6 million jobs our president is expecting to turn up between now and December are going to be slow in coming. So far this year, we’ve seen only about 120,000 new openings, most of them at Circuit City and WalMart. Just kidding. Office Depot and Mr. CarWash also posted three or four dozen new positions. But, to assure us that highly remunerated full employment is just around the corner despite the dismal numbers, our president promises that his new trade agreements are going to open markets, create demand, and inspire U.S. employers to hire us. Why, just a month ago Robert Zoellick, the U.S. Trade Representative, negotiated a new bilateral trade agreement with the Kingdom of Morocco, where the average citizen’s income is roughly 9 percent of our own. Nevertheless, according to the White House, this deal will “create new opportunities for America’s workers, farmers, businesses, and consumers by eliminating barriers in trade.” Moroccans, presumably, are even now gearing up to speed over to the mall and load their colorful plastic shopping carts with tasty U.S.-produced pita bread. And don’t forget, the multilateral trade agreements will soon prosper, and then the U.S. job market will really start smokin.’ Although Mr. Zoellick suffered a small setback in Miami in November, when the talks for the Free Trade Area of the Americas collapsed, he did pull the Central American Free Trade Agreement (CAFTA) out of his hat the following month.
Now, CAFTA is an interesting creature because it straps onto the U.S. market five other economies, four of which have the worst labor protections and working conditions in the hemisphere outside of Haiti (which, thanks to the Bush Administration, no longer has any working conditions at all). It is also interesting in that it is every bit as much an “investment” agreement as it is a “trade” agreement. That is, CAFTA will allow free movement of U.S. capital to Central America, as well as free movement of goods and services. People, of course, will need to stay put.
Like its evil twin, NAFTA, CAFTA’s only restriction on labor exploitation is that each country must enforce its own domestic labor legislation. This means that in Honduras, for example, a U.S. manufacturer would be obliged to pay an employee about $3 a day and allow a day off every eight days. Such wage levels represent quite a savings when compared to the cost of U.S. labor, which can only be sweated at the rate of $5.15 an hour. If we do the math, we find, for example, that an underwear assembler with 500 employees who moves from North Carolina to Tegucigalpa saves roughly $382,000 a month on labor alone, assuming that he/she actually pays the minimum wage in Honduras, which he/she often does not. As a result, just like NAFTA, CAFTA is more likely to destroy U.S. jobs than to create them.
Unhappily for Mr. Zoellick and others pushing for U.S. ratification of CAFTA, the deplorable labor standards in Central America were on full display in Washington, D.C., on March 5 at a session of the Inter-American Human Rights Commission (IAHRC). The Commission held a 60-minute Thematic Session on Freedom of Association during its semiannual regular meeting. Because labor unions depend on this right in order to exist, workers from Guatemala, El Salvador, Costa Rica, Nicaragua, and Honduras came to Washington to tell the Commission about the problem of labor rights abuses in the region. Since they only had an hour, they ran out of time.
Together, the presentations showed that in no country are labor laws effectively enforced, and that even if they were, the laws are still inadequate according to the International Labour Office in Geneva (ILO). Forming a union in many places is still punishable with dismissal, death threats, and murder. Take Costa Rica, for example, which enjoys a reputation as a civilized place with less violence and fewer brutal law-enforcement types than its neighbors. In 1998, the banana company COBASUR, Costa Rica, denied recognition of the Union of Workers of the South (SITRASUR) and fired the union’s leader. Next, the company created a phantom union with which it began phantom negotiations in order to undermine the real union. When SITRASUR complained in the courts, the now-unemployed leader, Adrian Herrera Arias, received death threats, and his car was attacked. On April 13, 1999, as the legal process dragged on, attackers ferociously beat Mr. Herrera Arias and threatened to kill him. On April 27, 1999, an international labor federation to which SITRASUR belonged filed a complaint with the ILO. After three years, the case was finally settled as a result of that complaint. The national justice system never effectively intervened.
At the IAHRC hearing, the Costa Rican spokesman also reported that his government de facto outlaws striking for virtually any reason. During the past 50 years, the government has legally recognized only two strikes. This means that the strikers in the remaining cases could be dispersed by the police and fired by employers.
From El Salvador, the IAHRC heard about the conduct of Confecciones Niño, a children’s clothes company in the San Marcos Free Trade Zone, named for the patron saint of captives, prisoners, and insect bites. Confecciones opened in April 1993 and employs about 300 people, 95 percent of them women between the ages of 18 and 30. General Juan Orlando Zepeda, a retired army general, owns the company. According to the testimony, workers at the factory began an organizing drive in March 2001, in response to delays in salary payments, failure to pay overtime, “bad treatment in word and deed,” unattainable production goals, and limited access to bathrooms, among other inconveniences. The union, SITRACON, held a founding assembly on August 25, 2001, and submitted a request for recognition to the Ministry of Labor the following month. In violation of national law, the Ministry rejected the union’s registration request and at the same time, General Zepeda began pressuring workers to resign from the union. Over a period of 10 days, Zepeda summoned 40 workers, one at a time, to his office and accused them of being ungrateful and betraying him. He threatened to fire them unless they signed documents saying they had not attended the SITRACON founding assembly. The provisional secretary of SITRACON herself received a summons to Zepeda’s office: “[Zepeda said] that he had been good to me. He knew me well, and he didn’t think I was like this…. [He asked] ‘Don’t you realize that because of you the company will close—because of the union?’ [He said that] not only would I be without a job but over three hundred co-workers would be without jobs and would not be able to find work…. He even said to think of my daughter.” She added that shortly after this scene, her mother and the union president received anonymous threatening phone calls about belonging to the union.
nd then there’s Guatemala, where Oswaldo Monzon Lima, member of the General Federation of Guatemalan Workers (CGTG), was kidnapped and murdered in June 2000. After the murder, the CGTG leadership met repeatedly with the Public Ministry to encourage the officers to advance their investigation. The Ministry simply asked the union for more information and showed union members the same reports for three years running. When the union’s General Secretary called the assassination “suspicious,” given the unpleasant history of labor rights abuse by Monzon’s employer, the employer sued him for defamation. The suspicion in question fell, without a doubt, upon the employer. The justice system in Guatemala adopted the defamation suit with alacrity and the suit now awaits a sentence in the Supreme Court. After nearly four years, the assassination case remains in the preliminary stages of investigation. And Mr. Monzon remains, of course, dead.
Meanwhile over at the Guatemalan maquilas, union organizing seems to have hit a snag. Estimates show that more than 100,000 workers are employed in the export zones and maquilas of Guatemala. Fewer than 1,000 of them are covered by any collective bargaining agreement—less than one percent. The brief before the IAHRC explains that “It has taken more than a decade of consistent effort to achieve this, and the accumulated loss of hundreds and possibly thousands of jobs as factories have closed down in order to avoid unionization.” At this rate, we’re going to need a time horizon of roughly 990 years to organize the rest of the export zones. We are thinking long-term strategy here.
Under certain circumstances, a trade and investment agreement with Central America might make sense, but not under conditions like these. With CAFTA ratified, U.S. workers would have to compete with the salary levels of Central American workers, who cannot organize to protect themselves and whose governments and employers routinely violate international labor conventions. Now we might ask ourselves, how is it possible for the Bush Administration to project job gains for the U.S. on the one hand and negotiate trade and investment agreements like this on the other?
Actually, it’s not hard. They lie. And when one of them, such as the hapless presidential adviser Gregory Mankiw, slips up and reveals the administration’s true position on jobs—i.e., that overseas outsourcing “makes sense”—he is bound and gagged and stuffed in a closet. Mr. Zoellick is much smoother about exporting jobs by supporting increased exploitation abroad: “It’s clear economic isolationism won’t work. I think one has to be very careful about bureaucratic interventions that will increase prices for people.”
Mr. Zoellick does not mention the bureaucratic interventions that will increase wages for people (i.e., trade unions), but these are the irritating intrusions into doing business that concern him most. It isn’t surprising, then, to discover that Mr. Zoellick’s CAFTA, as currently negotiated, has no mechanism to oblige the signatory countries even to enforce their miserable labor laws, never mind to improve them.
Fortunately for the workers of Central America, the IAHRC agreed on March 5 to hear and decide labor rights cases from the region. The Commissioners did not need time to confer. They reasoned that under the existing inter-American human rights conventions, which have construed economic and social rights as human rights since 1999, they have the jurisdiction to seek redress for the victims of abuse. This is a small but positive sign for the U.S. economy and workers in the hemisphere. Figures now show that since the start of the 2001 recession, perhaps as many as 35 percent of jobs lost—or nearly 1 million—have been exported, and that therefore the continuing drain on U.S. manufacturing jobs is largely an off-shoring phenomenon. Should the day come when Central American workers could make a living wage in exchange for eight hours a day of labor, the temptation for U.S. manufacturers to boost profits by exploiting them will cease to be so compelling. Until then, though, U.S. workers will continue losing jobs. And when these same jobs reappear in Central America, they will continue to be barely worth having. Workers of the world…
Gabriela Bocagrande lives in Washington, D.C.