I. Capital on the Move: An Overview
Project, NACLA-East Apparel
The American economy has expanded at an unprecedented rate since World War II. Within the United States, however, economic growth has proceeded unevenly. Investment and employment have...
...XI, No.3 CONTENTS: March 1977CONTENTS: NACLA's Latin America & Empire Report is published monthly, except for May-June and July-August issues, at 207 W. 106th Street, New York, NY 10025...
...2 Between 1960 and 1975, the Northeast suffered a net loss of 400,000 jobs in the manufacturing sector alone--a decline of nine percent in New England and 13.7 percent in the Mid-Atlantic states...
...America and Europe...
...Business Week, May 17, 1976...
...Today, in the midst of a severe recession, it shows no signs of abatement...
...years...
...7. National Journal, op...
...These changes in the relations between capital and labor, as well as the complex causes of capital's movement, have yet to be examined in a serious and systematic manner...
...Inter-regional differences that tend to attract capital or expel it have been largely ignored...
...Capital's movement from the Northeast to the South has altered fundamentally the terms of labor's struggle with capital over wages, working conditions and unionization...
...history, manufacturing jobs in the South outnumbered those in the Northeast (see Chart A...
...15S...
...NACLA-East Apparel Project Apparel is the generic term for a branch of production that incor- porates both the ladies' garment industry and the men's and boys' clothing industry...
...State and local taxes in the Northeast were already 20.6 percent higher than the national average in 1975.5 The alternative to raising them still further has been to drastically diminish the quantity and quality of essential social services...
...Today, it is the most serious casualty of changes in the geographic pattern of capital accumulation...
...Africa, IV...
...Even labor's essential ability to organize itself has been called into question by capital's flight to the non-union South...
...economy, has been the major beneficiary of economic expansion in the post-war period...
...blocked the establishment of union shops in two of its six southern plants, a move that has drawn considerable attention from other companies contemplating a move Southward...
...Copyright @ 1977 by the North American Congress on Latin America, Inc...
...The abundance of low-wage, non-union labor in the South has attracted many industries: In 1970, wages in the South were 20 percent lower than the national average and only 15 percent of its work force was unionized...
...In the words of one legislative aid, "if we don't do something soon, the federal government is going to have to start an Appalachian Regional Commission for the Northeast...
...The movement of capital from North to South began in the post-war period of rapid economic expansion...
...3 By 1974, for the first time in U.S...
...Asia (incl...
...14 General Electric and Westinghouse, also expanding in the South, are less than 50 percent unionized...
...ISSN No...
...According to a study conducted by the National Journal, the movement of investment, jobs and population to the South began to accelerate "with unprecedented speed" around 1970...
...3. National Journal, June 26, 1976, p. 885...
...See for example, Sale, Power Shift, Oglesby's articles in Ramparts and Boston Phoenix, 1971-77, and Domhoff, Fat Cats and Democrats (New Jersey: Prentice Hall), 1972...
...Traditionally unionized sectors of U.S...
...NEXT MONTHInstitutes of Labor-Management Collaboration Typesetting by Guardian Typesetters3 sional caucus from the Northeast region had already been formed a year earlier...
...cit., p. 885...
...42 for three years...
...0 Labor has been particularly hard hit by the flight of capital to the South...
...10 per year for individuals ($18 for two years...
...Bureau of Labor Statistics...
...5. Ibid., p. 886...
...In the post-war period, thousands of jobs in the apparel sector have been exported abroad...
...The most noted proponents of this thesis are Kirkpatrick Sale, Carl Oglesby and William Domhoff...
...industry are moving South and fighting tooth and nail against unionization in their relocated plants...
...Per capita income is rising more slowly there than in any other region of the United States...
...The South is the target area of every major campaign...
...Air Mall Subscriptions: No...
...Single Issues: $1.25 plus 25C postage...
...domestic production has dramatically shifted its geographic locus...
...Box 226, Berkeley, CA 94701...
...Employers in the Northeast now take the threat of shutdowns along to the bargaining table as the ultimate weapon in their battle to keep labor costs down...
...But the conflict can nonetheless be bitter and divisive, because it will be a struggle for income, jobs, people and capital...
...And at least 40 of Fortune's top-ranked industrial firms have fled the Northeast in the last ten years, to set up shop in the South...
...National Journal, op...
...Second Class postage paid at New York, NY...
...Between 1969 and 1974, total non-agricultural employment rose by approximately 20 percent in the South, compared to only 7.1 percent in New England and 1.8 percent in the Mid-Atlantic states.4 The outflow of capital and jobs from the Northeast has eroded the tax bases of state and city governments, driving many to the brink of bankruptcy...
...Union membership, as a proportion of the total non-agricultural labor-force in the United States, has declined steadily over the past few decades, from 31.5 percent in 1950 to 26.7 percent in 1972.13 Long-time bastions of anti-unionism in the South-such as textile giant J.P...
...An Overview...
...The needle trades have steadily abandoned their birthplace-the large industrial cities of the Northeast and Midwest-in favor of the rural South...
...8. Business Week, May 17, 1976...
...In the southern states, on the contrary, state tax revenues have grown at a faster rate than the average for all fifty states in every fiscal year since 1970-71.8 Nb southern city is bordering on fiscal crisis...
...Box 57, Cathedral Station, New York, NY 10025 or P.O...
...6. Congressional Record, June 15, 1976, p. E3388...
...Stevens-remain unorganized...
...New York Times, November 17, 1976...
...In the same period, manufacturing employment rose by 43.3 and 67.3 percent in the Southeast and Southwest, respectively...
...1 2 The massive movement of capital to the South has put heavy pressure on workers in the North to accept wage cuts, forfeit benefits and tolerate speedups, retrenchment and automation as a means toward saving their jobs...
...Indeed, the history of world capitalist development is precisely a history of capital pushing beyond regional and national borders, invading new markets and internationalizing production...
...For precise definitions of the regions used in this study, see Appendix A. INTRODUCTION 1. New York Times, November 11, 1976...
...9. Ibid...
...Subscriptions: I. Capital on the Move...
...cit., p. 891...
...7 Estimates indicate that between now and 1990, manufacturing employment will rise more slowly in the Northeast than in any other region of the United States: 2.7 percent in New England and 7.7 percent in the Mid-Atlantic...
...Hence, to counterpose old capital to new, northern to southern, is to obscure the basic movement taking place in the pattern of capital accumulation...
...1 In North Carolina, the most industrialized state of the South, only 9.8 percent of the labor force belonged to unions in 1974-compared to 45.4 percent in New York and similar percentages in most Northeastern states...
...Industries such as rubber, auto, textiles, petro-chemicals and electrical parts are all expanding southward...
...Some theories refer to this new configuration as a struggle for economic (and political) hegemony between "old" capital and "new" capital...
...A CASE STUDY The apparel industry,* producing clothes and accessories for men, women and children, provides a clear illustration of capital's mobility and its effect on the working class...
...borders has received only superficial treatment...
...And the crucial impact of capital's movement on the conditions of labor's existence have not been examined...
...According to the New York Times, "General Motors has successfully 50 40 30 20 10 = Northeast I South Source: Handbook of Labor Statistics, 1975...
...Investment and employment have risen consistently and dramatically in some regions, while declining precipitously in others...
...ISBN No...
...25 for three II...
...Yet the geographic restructuring of capital within U.S...
...Within the past five years, the shift appears to have achieved a critical mass, with grave implications for 'older' America...
...USSR...
...A CongresVol...
...Business Week, May 17, 1976...
...Department of Labor, Bureau of Labor Statistics, Handbook of Labor Statistcls, 1975 (Bulletin 1865...
...The Northeast region, stretching from Maine to the Delaware border, was once the industrial heartland of the United States...
...16 per year for institutions ($30 for two years...
...The Needle Trades...
...9 Indeed, inter-regional rivalry is intensifying as a result of capital's flight to the South...
...Australia, $25 (all yearly rates...
...The reasons for this exodus and its effects on the working class, particularly in the Northeast and the South are the subject of this Report...
...0095-5930...
...Address all correspondence to P.O...
...Over the past few years, a considerable amount of study has been devoted to the question of capital movements abroad and their effect on the domestic economy...
...In 1976, seven governors from the Northeast formed a coalition to save "the aging industrial belt" from economic extinction...
...8 Highlighted by the fiscal crisis of New York City, the economic crisis of the entire Northeast has attracted the attention of business, government and labor...
...An Industry on Wheels...
...Labor's Response...
...Regional growth patterns indicate that a wholesale movement of capital has occurred in the post-war period, reversing the economic fortunes of entire geographic regions...
...4. Ibid...
...They are demanding a greater share of federal expenditures on national defense, transportation and social services for the Northeast...
...It has the highest unemployment rate in the nation, the highest rate of business failure and the slowest rate of population growth...
...What these theories ignore is that capital is a mobile force, bound neither by regional nor national frontiers...
...Personal income, jobs, markets and population are all growing faster than the national average...
...15 Today, the platform of every insurgent candidate for union office stresses the need to "organize the unorganized" as a matter of survival for the labor movement as a whole...
...Employment in the Southeast and Southwest will increase by 30.6 and 31.8 percent respectively...
...In a special report, Business Week recently compared the current situation to the American Civil War, predicting that "the second war between the states will take the form of political and economic maneuver...
...0-916024-25-3...
...Both groups charge that federal tax and spending policies reveal a pattern of regional favoritism toward the South...
...Others more prosaically call it a confrontation between "yankees" and "cowboys," representing northern and southern capital.' 6 Theories of sunbelt supremacy have been woven to explain the rise of political figures from the South and the presumed demise of the "Eastern Establishment...
...1 The South, on the other hand, once the most backward sector of the U.S...
...2. See, for example, Kirkpatrick Sale, Power Shift: The Rise of the Southern Rim and Its Challenge to the Eastern Establishment (New York: Random House), 1975...
Vol. 11 • March 1977 • No. 3
