Combating the Perils of Globalization

...The dramatic shortfall is not reflected in unemployment statistics because of the service sector's growth...

...Originally, the IMF was charged with stabilizing exchange rates to prevent a country from weakening its currency to make imports more expensive and exports cheaper...

...Each subsequent year has seen the purchasing power of that amount diminish...

...Moreover, the institutions needed to negotiate worldwide economic policies already exist in the form of the IMF, the World Bank, the WTO, and the International Labor Organization (ILO...

...These subsidies are so large that the crops they encourage can be sold on the world market below cost and still yield a profit...

...But, he added, the entrepreneur would never be able to pull it off, because he could not personally oversee what was happening in Portugal...

...Many union contracts specify raises when the legal minimum goes up...

...Western manufacturing corporations licked their chops and cheered...

...Sadly, quite the opposite has been happenning...

...and the EU, as the world's largest consumers, could simply resolve that all trade pacts negotiated in their jurisdictions must accept specified minimum labor conditions...

...Yet important as global action is in a mix to forestall a world depression, it will take time to achieve...

...At the minimum wage, a person working 40 hours a week for 50 weeks earns S10,300 before taxes...

...X will thereby acquire enough foreign capital to start paying back other countries and the IMF...

...Federal funds would be required...

...In the postwar expansion, U.S...

...Country after country would bar imports, close the gates to all immigrants, and seek to get rid of "undesirables" from within...

...They were paying only five or six cents an hour in parts of the country, and having trouble staying afloat...

...Principles of Political Economy and Taxation (1817), he posed a rhetorical question: What would happen if a British textile merchant took his knowhow to Portugal and paid local wages...

...That was made possible by the second factor: the mobility and reach of business...

...In every case...

...When garment workers spent money in their neighborhoods, workers in the service sector enjoyed increased income that they in turn spent...

...They will foster political, ethnic, ideological, and religious extremism, along with the violence that often accompanies it...

...Instead, the 2001 total was 17 million...

...and European agribusiness brought the applauded "green revolution" to foreign lands...

...In addition, it has to keep the currency weak, to insure that its products will attract consumers abroad...

...The "race to the bottom" forever cheaper and more docile labor can be graphically charted: Early in the postwar era American, European and Japanese businesses began to open plants, or hire contractors, in Taiwan...

...Such competition, said Ricardo, would ruin the British textile industry...

...Although the prescription is painful for working people to swallow, the international corporations love it...

...The impact was not limited to the so-called Third World...

...The dramatic "Battle in Seattle," pitting activists against the World Trade Organization (WTO) at its April 1999 meeting, and subsequent protests in Prague, Washington, D.C., and Genoa, have attracted widespread attention to the issue...

...If that percentage had persisted, there would be 39 million such jobs today...

...But its recommended code of conduct never had teeth...

...Big and little Hitlers would emerge overnight, even in countries with glorious traditions of internationalism and tolerance...

...Another move in the same direction would be a government-sponsored project to develop new sources of energy— that is, nonfossil fuels...

...A good portion of those funds would be available if the Administration's giveaways to the wealthiest Americans were discontinued...

...History provides the answer...

...Interestingly, the Business Roundtable favors such a measure to stimulate the lagging economy...

...In 1940 the minimum was raised to 40 cents an hour, and the economy took on more life...

...In 1979 there were 21 millionjobs in American manufacturing, constituting 30per cent of allU.S...

...At present the U.S...

...In the 20 years following World War II, the automation of farming in the American South annually drove out about 1 million agricultural workers and owners of small farms...

...Four factors account for where we stand and where we are headed economically...

...Their employees now had money to buy clothing...

...A typical autoworker earns, with fringe benefits, about $50,000 a year...

...Before long the headquarters of a company could keep watch over every move made by its far-flung factories, could communicate instantaneously with them, and could ship products halfway around the world in a matter of hours...

...It must also minimize spending on social programs: food relief, housing, health care, unemployment benefits, Social Security, etc...

...And, like the Work Projects Administration and the Civilian Conservation Corps of the New Deal, it would create jobs...

...he would not know the language and customs, let alone the law...

...The current minimum of $5.15 an hour was enacted in 1997...

...But those jobs—replenishing shelves in a supermarket, cutting grass, cleaning a home or hospital—usually pay the minimum wage...

...It will spawn conflicts at home and abroad, ensuring an even wider gap between regional winners and losers than exists today...

...Short of their becoming matchmakers, the U.S...

...When wages pushed upward there, a shift was made to China's interior, where inexpensive workers were plentiful...

...The schemes set forth here are not a substitute for wiser management of the world economy...

...Management forces seized the opportunity...

...After all, it gives them a big pool of hungry citizens willing to sweat their lives away for close to nothing, and being ordered by the state not to make trouble...

...The demonstrators vented their fear of the effects of globalization as it is now manipulated by pressure from the multinational corporations and the presumably protective international financial entities...

...But that hasn't stopped it from assuming a larger role in running—and ruining—the economies of needy nations...

...By establishing a balance between the public and private sectors—and thereby balancing the capacity to produce and the capacity to consume—the large industrial democracies were able to forestall oldfashioned depressions for over a halfcentury...

...Gus Tyler is a longtime New Leader contributor and former Assistant President of the ILGWU...

...Imagine the alternative, a worldwide depression...

...The hope was that these new workers would awaken and organize to secure higher wages, so that eventually they would not only improve their own circumstances but become buyers of products made in the United States...

...Created in 1919, the ILO has over the years elaborated a set of guidelines that include outlawing child and slave labor, plus giving workers the right to join unions, bargain and strike...

...is least affected, much ofEurope is experiencing double-digit unemployment, and Japan is in deep trouble...

...Most, however, have actually done the opposite—but moved their operations to countries where cheap child and even slave labor is readily available...

...For a couple of decades there has been a slow but steady deterioration of die spine of the U.S...

...In the interim, there are things we can do to pump needed new blood into the American economy that center on boosting the purchasing power of the working poor...

...When Englishman David Ricardo wrote his masterpiece...

...They were successful because they had the authority to tell business what it was and was not allowed to do...

...The IMF says it will only assent under certain conditions, the foremost being unmitigated "austerity...

...A 2000 Central Intelligence Agency report projecting global trends for 15 years arrived at the following conclusions: "The rising tide of the global economy will create many winners, but will not lift all boats...

...Nevertheless, the law was enacted...

...This dual effect of earnings is much less potent now because our market is flooded with imports—often hidden in the parts of a U.S.-assembled refrigerator, auto, tractor, plane, train, or suit...

...It would liberate us from dependence on the oil sheiks of the Mideast...

...Regions, countries, and groups feeling left behind will face deepening economic stagnation, political instability and cultural alienation...

...Today, by contrast, big companies thumb their noses at their governments as they carry on operations outside the geographic limits of their native lands...

...The costs of adjusting to greater openness are borne exclusively by the poor, regardless of how long the adjustment takes...

...With roughly 70 per cent of the economy depending upon purchases by workers, a decline in the effective demand of blue-collar families means a decline in the customer base our market economy depends on...

...Globalization's evolution will be rocky, marked by chronic financial volatility and a widening economic divide...

...During the previous year the World Bank declared: "Globalization appears to increase poverty and inequality...

...What is more, once the aforementioned programs and others like them got under way, they would not only stimulate consumption but increase revenue for Uncle Sam...

...The danger is that things will one day come full circle: The collapse of manufacturing in the industrial nations has led to slowdowns that have led to recessions that could be the prelude to depressions...

...Here were millions of people (actually a few billion) ready to do for pennies what had been costing relatively heavy dollars...

...Consequently, farm exports to Third World countries make it impossible for their farmers to compete...

...The fourth factor, in some respects an extension of the first, is the excessive support provided by the United States and Europe for domestic agricultural production...

...A third factor that has contributed to the worsening state of global economic affairs is the uneven performance of agencies created at Bretton Woods in 1944—the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (now called the World Bank...

...This would have a multifaceted effect...

...If it were upped by one dollar, that would add approximately $24 billion to the wallets of those most likely to put the money to use...

...Workers earning more have always pushed to maintain their position by demanding similar hikes...

...As a result, some multinational corporations now have over 100 plants scattered throughout the globe...

...There are about 12 million people earning the minimum wage...

...But so far the somewhat amorphous "antiglobalization" movement has not put forward a coherent program for improving matters...

...Representatives of the world's great industrial powers and economic agencies agreed that conditions in the underdeveloped countries are worse now than they were just after World War II, when the drive for "development" started...

...Typically, the government of country X has been borrowing heavily because it is on the verge of bankruptcy...

...The multinationals then started to move their operations to coastal mainland China...

...They are a way to stem the bleeding while working with other nations and international institutions toward a policy to balance the capacity to produce with the capacity to consume on a global scale...

...The first is the mechanization of agriculture...

...NEITHER the distress in the developing countries nor the stress building up in the developed ones has gone unnoticed...

...employment...

...As the island's labor market tightened, workers began to make demands and costs rose...

...In the 1930s,adollar earned wasadollar to be spent by one worker to employ another who wouldproduce goods "Made in the US A." Manufactured imports were an infinitesimal slice of the Gross National Product...

...Luckily, the U.S...

...That task is difficult, primarily because there is no global government that can function the way national governments did, say, after the Great Depression...

...Declaring a moratorium for six months or a year on the Social Security payroll tax of low-earning employees would also reinvigorate the economy...

...A global government to balance the global economy would not be a bad idea, but is unlikely to find fulfillment...

...This would be a valid analysis if the multinational corporations had reduced the number of people on their payrolls...

...Much more could be done if the government addressed the need for education, health care, housing, and environmental protection...

...economy: manufacturing...

...But they were soon literally starving...

...Then, regardless of where the multinationals manufacture, their products could be barred from the major markets when those labor standards are not met...

...In desperation, it turns to the IMF for a loan...

...If it were adopted by the WTO, that would no longer be true...

...The author of a dozen books, he is currently a syndicated columnist...

...In the poorer countries, too, farmhands moved to urban areas in search of employment...

...Raising the minimum has traditionally produced a ripple effect, too...

...economy was then expanding and many found industrial jobs in Northern cities...

...To begin with, merely raising the Federal minimum wage to keep pace with the cost of living would have a significant impact...

...Last March the United Nations International Conference on Financing for Development, held in Monterrey, Mexico, confirmed the gloomy global picture...

...The CIA was not alone...

...X must sharply reduce the cost of its products, whether agricultural or industrial, which means keeping wages low and resisting union demands...

...No, the moratorium would not endanger the Social Security Trust Fund, which has assets of roughly a trillion dollars drawing interest at a rate of 6 to 7 per cent...

...The situation changed radically after World War II, of course, with the technological transformation of communications, transportation, materials handling, and data processing...

...The downward trend started in labor-intensive industries like apparel, shoes, rubber wear, dolls, toys, and novelties...

...A common explanation for the shrinkage of manufacturing jobs is that technological advancements have made it possible to meet demand with fewer employees...

...Technological improvements deprived millions of farmers and peasants of their income and their homes...

...The obvious question is whether employers can afford these cost bumps when many are struggling to stay alive...

...At the moment indications are that the price of labor is rising again, so the ever alert corporations are turning their attention to Africa...

...On the Troubled Economic Front Combating the Perils of Globalization By Gus Tyler This country's present economic problems did not begin with the ascension of George W. Bush and certainly not with 9/11 —although the President's policies and the terrorist attacks undoubtedly contributed to the decline...

...Step One might be an agreement between the United States and the European Union (EU) to arrange a marriage between the ILO and the WTO...

...The suggestions I have mentioned do not by a long shot exhaust all the possible economic stimuli...

...It would slow down, and perhaps even reverse, global warming...

...The fearful employers survived—and were revived...

...In 193 8, when the first Federal minimum wage of 25 cents an hour was under consideration, employers in the apparel industry testified that it would force them out of business...

...Partially idle factories with costly overhead were soon running at full capacity...

...Ententes among the major industrial powers, though, are feasible and could very well serve the same purpose...

...It spread first to electronic assembly, and then to capital-intensive businesses: autos, steel, pharmaceuticals, computers...

...Updating the minimum would be both an act of justice and a shot in the arm for the U.S...