Thursday, October 13, 2005

Globalization And the Making of A Third World USA

Globalization and the Making of Third World USA

“With the emergence of China, India and Eastern Europe, the dam of Socialism that held back two billion workers has been removed. If two swimming pools are joined, the water level will eventually equalize. That is what is happening with globalization. Manufacturing has already been placed in competition across countries, with dire consequences for manufacturing workers. The internet promises to do the same for previously un-tradable services, and higher-paid knowledge workers will start feeling similar effects. Not since the industrial revolution has there been a transformation of this magnitude, and that revolution took one hundred and fifty years to complete. By comparison the new revolution is a mere 25 years old. These developments have a significance that goes far beyond the currency manipulation and WTO rules violations that have been the focus of trade deficit policy discussions. There is no reason to think the end is in sight, and American workers can look forward to the international economy exerting downward pressure on wages and work conditions for the next several decades. As is so often the case, workers have understood the new reality long before economists and policymakers.”- Labor Threat Thomas Palley

The media disseminated images of poor stranded black folks on tops of roofs attempting to survive amidst squalid condition during Hurricane Katrina alarmed many AmeriKKKans and people around the world. Many in their indignation and shock compared what they saw to “third world countries”. Well I have more alarming news for you. The horrific conditions of poverty and marginalization Hurricane Katrina revealed are going to get worse! As the US economy unravels from the deliberate globalization policies that have been foisted upon the AmeriKKKan people by elected officials who have sold their souls to the multi-national capitalist class. Legislation like NAFTA broke down existing trade barriers and made it so AmeriKKKan factory jobs could be shipped off to Mexico as well as places like Eastern Europe and Asia (China, India and the Pacific). AmeriKKKan workers at Delphi Corp, Ford and GM are now experiencing the negative side of the globalization coin, that industrialized “advanced” countries’ workers will suffer because it is more profitable to build factories in third world countries where the owners can now pay next to nothing in wages and benefits. It is a variation of the stratagem the owners used here in the late ‘60's and early ‘70's when they moved plants, factories and jobs from the industrialized areas in the North to the South to take advantage of non union “right o work” laws; or their move to the suburbs to take advantage of tax abatements and other cost saving incentives. During the late ‘60's urban areas like Philadelphia Chicago and New York loss literally hundreds of thousands of jobs. William Julius Wilson in his enlightening book When Work Disappears The World of The New Urban Poor states, “The problems of joblessness and social dislocation in the inner city are, in part related to the processes in the global economy that have contributed to greater inequality and insecurity among American workers in general and to the failure of U.S. social policies to adjust to these processes. It is therefore myopic to view the problems of joblessness ghettos as if they are separate from those that plague the larger society.” p 220. The same issue facing jobless inner city dwellers will soon be on the door step of their blue collar working class urban and suburban peers!
In an article written by Thomas Palley which appeared on Znet states, “If the United States were to add two billion low-wage workers, you'd expect that wages would fall across the board, right? Well, there is a famous theorem in international economics--the Stolper-Samuelson theorem--that says when a rich capital-abundant country (such as the United States) trades with a poor labor-abundant country (such as China), wages in the rich country fall and profits go up. The theorem's economic logic is simple. Free trade is tantamount to a massive increase in the rich country's labor supply, since the products made by poor country workers can now be imported. Additionally, demand for workers in the rich country falls as rich country firms abandon labor-intensive production to the poor country. The net result is an effective increase in labor supply and a decrease in labor demand in the rich country, and wages fall. The relevance of the Stolper-Samuelson theorem is clear. For the last two decades, U.S. policy makers, from both major political parties, have worked assiduously to create a global market place in which goods and capital are free to move. Over the same period, two and a half billion people in China, India, Eastern Europe and the former Soviet Union have discarded economic isolationism and joined the global economy. Now, these two tectonic shifts are coming together in the form of a 'super-sized' Stolper-Samuelson effect, and they stand to have depressing consequences for American workers. Much attention has been devoted to the adverse impacts of the U.S. trade deficit, particularly with China. And the U.S. government has been rightly criticized for failing to apply adequate pressure to get China to remedy its unfair and illegal trading practices. However, no one in Washington is talking about the deeper question of what happens to wages when two billion people from low-wage countries join the global labor market.” We are seeing the Stolper-Smauelson Theorem being played out in AmeriKKKa now. AmeriKKKan law makers enacted trade legislation against the best interests of their working class hourly wage earning constituents ( NAFTA and the recent CAFTA favor the multi-national corporate elite) and now low wage earning foreign nationals are taking jobs away from U.S. workers as it becomes more profitable for AmeriKKKan companies to build offshore factories in “developing countries” and hire native workers for next to nothing. This is causing downsizing, unemployment, wage stagnation and bankruptcies in major industries like steel and auto that are affecting the wages and lifestyles of their U.S. workers. This coupled with the reverse Robin Hood wealth redistribution from the poor to the rich of the Bu$h administration, the future for unionized AmeriKKKan workers looks bleak. If you doubt what I’m saying, talk to blue collar workers in the steel, airline and auto industries; especially since the recent Delta, Northwest and Delphi Corp bankruptcy filings. This is the down side of globalization for AmeriKKKan workers and families.



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