President-elect Donald J. Trump took a well-documented victory lap last week after negotiating a deal with the Carrier Corporation to keep 1000 jobs in Indiana, reversing the company’s plan to ship the jobs overseas to its Monterrey, Mexico, factory. Trump was effusive on Twitter, crowing: “Big day on Thursday for Indiana and the great workers of that wonderful state. We will keep our companies and jobs in the U.S. Thanks Carrier.”
However, it was soon revealed that Trump had actually offered Carrier a $7 million subsidy in exchange for not moving the jobs overseas, which was facilitated by Vice-President Elect Mike Pence, who is conveniently still the Governor of Indiana until Inauguration Day. In addition to the subsidy, the President-elect also threatened Carrier with the possibility of its parent company, United Technologies, losing billions in federal contracts. Nevertheless, these details didn’t seem to diminish the praise he received by supporters, who hailed Trump’s actions as a new paradigm for saving American jobs.
Critics responded that not only was it not the job of the President to intervene in one specific business’s investment decisions, but also that the jobs saved represented only a tiny fraction of Indiana’s manufacturing sector, not to mention the nation-at-large.
Not to be outdone, Senator Bernie Sanders of Vermont, who has done yeoman’s work fighting for working people and the environment for nearly four decades, has promised to introduce an Outsourcing Prevention Act in Congress. The law would prevent companies that ship jobs overseas from receiving federal contracts, tax breaks, or other financial assistance, while imposing steep tariffs on executive bonuses.
Those opposed to the President-elect’s Carrier machinations certainly have a point about his haphazard approach to job creation and protection. However, both sides seemed to miss the most fundamental aspect of the whole scenario, which is the pitting of long-struggling US manufacturing workers against even poorer Mexican workers. For decades multinational corporations have matched cash and job-starved countries against each other in a “race to the bottom” in which governments compete to offer multinationals the most “business-friendly” environment. In practice, this means the least amount of regulation, lowest taxes, and weakest social and environmental protections.
Indeed, many analysts, observers and workers themselves have come to view the current international trade regime — codified in the World Trade Organization (WTO) — as either a zero sum game or a negative sum game. This refers to the fact that one country benefits from a multinational corporation’s investment at the direct expense of another country — i.e. one country’s gain is another country’s loss.
In the case of Trump’s Carrier deal the US was purportedly the winner, while Mexico was the loser, because it lost the 1000 jobs that would have been created had Carrier stuck to its original plan to move the jobs to Monterrey.
NAFTA, on the other hand, is widely believed to have led to hundreds of thousands, perhaps millions, of lost manufacturing jobs in the US, making America the “loser” in that 1990’s zero sum game trade pact. Apparently that’s what happens when governments and corporations write the rules of the trade road with very little input from workers, environmental and civic groups. Go figure.
The problem with Trump and Sanders’ equation, however, is that it sets workers in industrialized nations against their even lower-paid brethren in developing countries, conveniently ignoring the fact that global, multinational corporations are the ones controlling the chessboard and gaining the benefits when workers compete across borders.
At this point you might be thinking, wait, is this writer gonna issue an unreconstructed call for global worker solidarity, perhaps a new, Soviet-style manifesto by the Comintern? The answer is no, of course not, but, well, sort of.
It may be wholly unrealistic at this stage of post-industrial capitalist development to expect workers to fully empathize with the plight of their fellow workers in other nations. Some would simply say that as Americans, we should only care about American workers, and let the rest of the world’s employees find their own way. That’s the new globalization, right?
But is it? There are indeed numerous organizations devoted to global worker solidarity, and they have been around for a very long time. Among them are the Industrial Workers of the World, The Solidarity Center, and the UN’s International Labor Organization. Other groups focus on specific regions of the world, such as Latin American or European workers. All of these organizations have important missions. Unfortunately, for the most part multinational corporations have succeeded in convincing both governments and workers that they are in inexorable global competition with each other.
Maybe it’s time for a new paradigm that puts workers first, regardless of what country they reside in?
Let’s return to the Carrier situation for a moment, because I believe it’s instructive. Workers at Carrier’s Indianapolis plant reportedly earn $15 to $25 per hour. At the plant in Monterrey, Mexico, where the jobs were originally headed, Mexican workers earn $2 to $3 per hour. So, it’s fair to ask, are people making $2 an hour really the villains that Trump makes them out to be? Or is the Carrier Corporation, a $12.5 billion company with 43,000 employees across six continents, a better target of America’s ire? Perhaps it’s Carrier’s parent company, United Technologies Corporation, which is an $89 billion company (yes that’s billion with a B!), with nearly 200,000 employees, $56 billion in revenue in 2015, and $15 billion in annual profits.
Now I’m not a trade economist, but it sure seems to me the CEO’s, Directors and shareholders at Carrier and United Technologies are making out A LOT better than those vilified Mexican workers in Monterrey.
And just for context, let’s look at a couple of indicators regarding Mexico’s relative prosperity compared to the US. In 2015, Mexico’s GDP per capita was around $9,000. In the US, GDP per capita was nearly $56,000. Moreover, according to the Mexican government, a whopping 42% of Mexicans live below the poverty line. In the US, 13.5% of the population lives in poverty, which is obviously nothing to be proud of, but vastly better than our Southern neighbor. [Mexico data differ from World Bank data – see this link for explanation].
Indeed, I would hazard a guess that those good Carrier manufacturing jobs in Monterrey are providing a lot of otherwise poor Mexicans with a better life and an escape from the poverty too many of their fellow citizens endure.
Finally, what about Monterrey itself? Monterrey is in fact a relatively wealthy city, both by Mexican and even international standards. This is true in general of the northern Mexican cities and regions closest to the US border, which have received the bulk of US investment. Nevertheless, Mexico is experiencing an extreme inequality and wage disparity crisis that threatens to tear the country’s social fabric apart.
So what’s the point? Am I saying we shouldn’t care about American workers because Mexican workers are worse off? Of course not. The decline of the US manufacturing sector over the past 40 years has been well-documented. America definitely needs to find a way to either bring back some of those lost jobs, or else offer significant retraining and support to displaced workers, with the goal of creating millions of new, high-paying jobs.
Nevertheless, America and Trump’s demonization of Mexican and other developing country workers is misdirected. Instead of maligning foreign workers, we should spend a little more time focusing on the multi-billion dollar global corporations that “rig” the game and pit workers from industrialized nations against their poorer developing country counterparts. The CEO’s and shareholders have written the rules of the game, but do we have to play by them? That’s a question I’ll leave out there for you, the concerned reader.
After all, what do I really know? I’m just a struggling blogger trying to make his way in a cold, ruthless, late-stage capitalist world.
