The problem with cheap foreign labor isn't that it's foreign- it's that it's cheap

May 5, 2005
The problem with cheap, foreign labor is not that it’s foreign – it’s that it is cheap. Editor in Chief Paul Studebaker talks about the role of labor unions in global competition.

By Paul Studebaker, editor in chief

We learn as little children that sharing is good, giving others a fair share is better, and taking more than your share is just plain wrong.

Over the past decade or so, unions in general and the USW (then the USWA) in particular appear to have been beaten into submission by global competition in manufacturing. They’ve shifted from organizations of dubious integrity, bent on extracting all they could get from members and management alike, to get-the-job-done dealmakers ready to sit down with the new owners of now-huge conglomerates to figure out how a dwindling number of their members will fit in as capable contributors to the new order.

Occasionally you’d hear about them showing up in busloads in Washington, D.C. to moan and rant about NAFTA or dumping or trade relations with China, but no one paid much attention.

And few reporters took notice during the week of April 11-14 when the USW held its 32nd Constitutional Convention in Las Vegas (more on page 32). But the proceedings of that meeting show a new level of power and resolve, and gave me a fresh interpretation of what’s going wrong with globalization.

When it comes to foreign competition, it’s not really an issue of us versus them – the U.S. versus China, West versus East or technology versus cheap labor. It’s the much more ancient and pervasive competition between the haves and the have-nots: the robber barons versus the indentured servants, the lords versus the serfs, the enslavers versus the slaves.

The free market is a wonderful thing, but it drives a hard bargain when people have to compete for enough to eat and a roof over their head. Organized labor came into power in Western countries because it was far too easy for company owners and selected management to take advantage of individuals, and it is rising again, this time on a global scale, because oppressed workers and unfair labor practices are international problems.

“Our union was organized by courageous workers who united to overcome the power of dictatorial employers and to win their fair share of social and economic justice for the wealth their labor produced,” says the Steelworkers Action Plan. “Globalization continues to drive our jobs abroad as corporations and financiers pit worker against worker and region against region in a race to the bottom on wages and working conditions.”

In the United States, compensation and opportunity for skilled workers in manufacturing continue to fall as corporate profits and executive pay packages surge. The average CEO’s take in 2004 reached $9.97 million, a 12% rise over 2003, while real wages for the working class sank steadily. Americans are becoming increasingly dependent on dirt-cheap foreign-made manufactured goods, and a select few are getting rich on handsome profit margins.

The problem with cheap foreign labor is not that it is foreign, it’s that it is cheap. Any employer that tried to pay China-level wages and benefits on U.S. soil would be breaking the law. If instilling U.S.-style government and free market systems are worth fighting a war in Iraq, why not our fair labor practices?

If labor unions can effectively embrace, voice and champion the causes of social justice and fair wages on a global basis, they will put themselves in the company of the world’s great human rights organizations. Perhaps they will help Americans understand that, along with contributing to unemployment, our staggering trade deficit and the steady devaluation of the dollar, excessive corporate compensation and profits fueled by cheap labor are de facto evidence of unfair labor practices and social irresponsibility.

Maybe they can even help teach Americans that factory labor is only a tiny percentage of the price they pay for typical mass-produced goods. Any manufacturer, distributor or retailer that feels compelled to support exploitation of cheap labor is selling our future for very little, and doing it just to further stuff their already-full pockets.

 I’d sign up -- how about you?