Labor Lines Up Against PNTR

Comments | Insight on the News, July 3, 2000 | by Sheila R. Cherry

The recent House vote in favor of `permanent normal trade relations' for China has angered unions, which fear their high-wage U.S. jobs will be exported to the People's Republic.

This may be the Chinese Year of the Dragon, but US workers are beginning to smell a rat. On May 24, the House passed HR4444, the U.S.-China Relations Act of 2000, by a surprisingly strong vote of 237-197. This legislation, if approved by the Senate and signed by the president, will grant "permanent normal trade relations," or PNTR, to the People's Republic of China, or PRC. It also would ensure that China becomes a member of the World Trade Organization.

According to House Democratic Caucus Chairman Martin Frost of Texas, supposedly a last-minute convert to supporting PNTR, the bill is good for the country. He was quoted after the vote as assuring voters that "trade with China will ultimately lead to more jobs in the United States, because it will open an enormous market to the superior products made by American workers."

But the Teamsters don't agree. In a June 1 speech to the National Press Club, Teamster President James P. Hoffa made it clear that his union will hold politicians accountable for any support of PNTR. "Tens of thousands of Americans have lost good-paying jobs because of the U.S. government's misguided trade policies," Hoffa said. "Our elected officials refuse to see that behind those numbers are actual working families, with real hopes and hardships." According to the Teamsters' leader, "The granting of PNTR for China, backed by a White House-led campaign of outrageous lies bankrolled by big business, was a deep disappointment to all working Americans."

Hoffa said the vote identified in the starkest possible terms which members of Congress are the real friends of American labor and which are not. There's an old political saying adopted by the unions: "Reward your friends and punish your enemies." And with that warning, Hoffa signaled the Teamsters will exercise the financial and voting clout of their 1.5 million members in the upcoming congressional elections. They even may affect the presidential elections: Hoffa said he had invited presidential candidates, including Green Party candidate Ralph Nader and Reform Party candidate Pat Buchanan to a Teamsters executive board meeting. Both men have been anti-PNTR.

Almost equally furious, the United Auto Workers, or UAW, has indicated it even will withhold its endorsement of a presidential candidate for now to give consideration to Nader. But it is doubtful that other major unions either can or will follow the Teamsters' and UAW's lead. Many unions seem inextricably tethered to Democratic candidates by a near-primordial fear of a Republican president combined with a Republican Congress. Nonetheless, the PNTR vote continues to infuriate labor just as the NAFTA vote did in the 1994 elections when the unions sat on their hands as the GOP took control of the House for the first time in half a century. The AFL-CIO estimates that 800,000 U.S. jobs have been lost so far as a result of the trade deficit with China. It predicts that PNTR will exacerbate that figure dramatically. Still, AFL-CIO Assistant Director of Public Policy Thea Lee tells Insight the union "is not going to vow to take out everybody who voted wrong." Such a blanket approach "will not accomplish our goals."

Lee admits the union is disappointed by the significant number of "pro-labor Republicans" and, more so, by the mass defection of congressional Democrats who otherwise identify themselves as labor supporters but who voted in favor of PNTR. "We could take them out and put a Republican in their place, but that would not accomplish anything," the union official says.

Alan Tonelson, an educational foundation research fellow with the anti-PNTR U.S. Business and Industry Council, affirms that labor has many other concerns aside from trade. "But if they don't elevate trade to the top concern all the others will go by the wayside anyway" he warns. Scott Nova of the Economic Policy Institute, or EPI, predicts 600,000 U.S. jobs will be lost within the first three years after PNTR enactment. He also predicted pro-PNTR members of Congress could be looking at a "NAFTA II" election backlash this fall.

The industries most affected by PNTR are expected to be fabrics and apparel, electronics and high tech, especially in the areas of computer and cell-phone manufacturing. The average high-wage job in China, say analysts, pays 83 cents per hour. A similar job in manufacturing high tech for the U.S. auto or steel industry is estimated to pay $20 to $25 per hour. In China, low-wage jobs such as those in the apparel industry pay approximately 23 cents per hour. The hourly wage for U.S. apparel workers is estimated at a $12 industry average.

Moreover, U.S. companies moving operations to the PRC to produce for the U.S. market can operate in China without the workplace safety standards and environmental safeguards they face in the United States. And in an EPI briefing paper, "U.S. Investment in China Worsens Trade Deficit," James Burke, an EPI fellow, says that PNTR "is as much about making it easier for U.S. multinationals to invest and operate in China as it is about trade."