Enriching China

0 Comments | Insight on the News, June 25, 2001 | by Sheila R. Cherry

Thea Lee, a spokeswoman for the AFL-CIO, scoffs at claims that increased trade translates to higher-paying U.S. jobs. "With China, it's kind of pathetic to make the argument that this is job creation. We ran more than an $80 billion trade deficit last year. So, the fact that export jobs pay higher is sort of irrelevant. We don't have very many of them," she tells Insight. "Our imports are six times as large as our exports."

The U.S. Department of Labor (DOL) defines a displaced worker as an adult who has lost or left his or her job because the plant or company either closed or moved, there was insufficient work or the position or shift was abolished. In August 2000, DOL reported that from January 1997 through December 1999, 3.3 million workers were displaced from jobs they had held for at least three years. But that number more than doubled to 7.6 million when an additional 4.3 million workers, who were displaced from jobs they'd held for less than three years, were added. According to the DOL report: "Of the 3.3 million long-tenured workers who had been displaced from January 1997 through December 1999, 74 percent were re-employed, 10 percent were unemployed and 16 percent were not in the labor force when surveyed in February 2000."

Nearly half of these workers had lost their jobs due to manufacturing plant closures, including 1 million factory workers. Although the report declared that "slightly more than 7 in every 10 workers displaced from manufacturing were re-employed when surveyed in 2000" the workers were not necessarily re-employed in the same industries from which they were displaced.

Sarah Anderson and John Cavanagh, senior fellows of the left-leaning Institute for Policy Studies, think they know why. In 1998, they examined 16 companies that announced layoffs of 3,000 or more workers. They asserted that CEOs are receiving major compensation packages in exchange for downsizing their workforces. All but three of the 16 corporate executives on average received 20 percent increases in either salary, bonuses or option grants, which only become valuable if the corporate stock price rises.

The idea is that corporate bigwigs are being paid huge sums by stockholders eager to profit from moving American capital, technology, know-how and jobs to take advantage of cheap labor in China and elsewhere. This is highly profitable for everyone but workers, say the critics, who note that well-paying jobs in manufacturing tend to be replaced by jobs that pay less in "Information Age" processing. And public opinion seems to agree until the spin artists of the National Association of Manufacturers, the National Chamber of Commerce and allied voices of the special interests that profit from capital and job export turn on the heat. Before last year's Republican-controlled Congress approved conditional PNTR with China, public-opinion polls were as much as 79 percent against approval. Given the recent exposure of China's military arrogance with the downing of a U.S. reconnaissance aircraft on Hainan and the holding of the aircraft and crew, that figure could go higher this year.