The Multinational Monitor

May/June 2004 - VOLUME 25 - NUMBERS 5 & 6


D i s s e c t i n g  B u s h

Dissecting Bush
Bush Administration Policies
Under the Microscope

The Authors

II. Labor
Repetitively Straining Workers


Just two months after taking over the White House, President George W. Bush acted on one of the top priorities of big business -- a repeal of a new workplace ergonomics standard enacted at the end of the Clinton administration. The new ergonomics standard was designed to reduce the estimated 1.8 million repetitive stress workplace injuries -- ranging from neck sprains to carpal tunnel to more serious musculoskeletal disorder injuries -- occurring annually in U.S. workplaces. It would have protected 102 million workers at six million workplaces.

On the day he signed the repeal into law, Bush said in a statement that "there needs to be a balance between an understanding of the costs and benefits associated with federal regulations. The ergonomics rule would have cost both large and small employers billions of dollars and presented employers with overwhelming compliance challenges."

Balance, however, has not exactly been the administration's watchword when it comes to workplace safety regulations. Instead, the Bush administration approach has pretty much been all management, all the time.

"This administration absolutely has the worst record when it comes to workplace safety," says Margaret Seminario, director of occupational health and safety for the AFL-CIO. "They are the only administration that has issued no new rules. They just don't believe in the role of government regulation. They are just opposed to mandatory requirements. They are very much of the view that voluntary efforts by industry are sufficient, and that's the approach that they've taken."

"Our emphasis is on partnerships and alliances with trade associations," explains Al Belsky, a spokesperson for the Department of Labor. "We are trying to get whole industries to cultivate a culture of safety rather than just doing it through enforcement, enforcement, enforcement."

Enforcement actually seems to factor very little into the Bush administration strategy. A year after repealing the Occupational Safety and Health Administration (OSHA) workplace safety rule, the administration issued a new workplace safety policy that consisted entirely of voluntary rules. Big business lobbyists cheered the lack of mandatory requirements, which they claimed would have cost companies more than $100 billion (Clinton administration estimates put the cost of compliance at closer to $4.5 billion). And in 2003, the Bush administration revoked a requirement that forced employers to even keep track of carpal tunnel syndrome in the first place.

The ergonomics rule isn't the only major rule that has been scuttled by this administration.

For example, last May, the administration dropped a rule that would have required hospitals, prisons and other high-risk facilities to do a better job of protecting workers against tuberculosis. Though the rule had undergone 10 years of careful development, the Bush administration simply asserted that the threat of TB was no longer serious.

Meanwhile, this March, the Bush administration EPA proposed exempting industrial laundries from hazardous and solid waste regulations, even though production workers and drivers have reported illnesses from exposure to towels soaked in toxic solvents. These solvents have also been linked to cancer and reproductive disorders.

The administration has also refused to strengthen the rules to prevent chemical explosions, even though at least 167 workers have been killed during the past 20 years due to explosions caused by reactive chemicals and hundreds of millions of dollars in property have been destroyed. In February, the U.S. Chemical Safety and Hazard Investigation Board (which includes three Bush appointees on its four-member board) called OSHA's action "unacceptable." Earlier, the Board had found that reactive chemicals posed a "significant safety problem."

That is not all. The administration has ignored National Institute of Occupational Safety and Health recommendations to toughen limits on silica dust, which has killed thousands of miners and construction workers, and it has ignored recommendations by the OSHA Metalworking Fluids Standards Advisory Committee to protect workers who handle metalworking fluids, which contain a complex mixture of oils, detergents, lubricants and other potentially toxic fluids that have been linked to both cancer, skin diseases and respiratory diseases. "[This administration] is hostile to any kind of government intervention in the workplace," says Seminario. "They are very hostile to workers and unions and very pro-business. When you put this all together, you have an administration whose method of operating is to work very closely with business. Whatever management determines they want to do, that's what the Labor Department will support."

One indication of the pro-business bent of the administration when it comes to workplace safety came in 2002. The administration broke with 32 years of precedent, placing seven management representatives and only two union representatives on OSHA's workplace safety advisory committee. The administration did this by dropping five current members, including representatives from the AFL-CIO and Steelworkers Union. This marked the first time the advisory committee did not contain a balance of union and management representatives.

Meanwhile, every year of its tenure, the Bush administration has proposed cuts in OSHA's funding, particularly in regard to standards and enforcement. The administration also continues to recommend major reductions in worker training (from $11 million to $4 million) while proposing big increases for compliance assistance, which union representatives say essentially gives employers more control over workplace safety design without consulting workers. Congress has rejected these cuts and generally maintained OSHA's funding at current levels, however.

The administration says its real focus is on results, setting a goal of a 15 percent drop in fatality rates and a 20 percent drop in injury and illness rates by 2008 in its 2003 Five-Year Strategic Plan.

"Our 5-year management plan will focus on achieving cultural changes that value safety and health as opposed to just racking up violations and penalties," Assistant Secretary of Labor for Occupational Safety and Health John L. Henshaw said in a speech announcing the new plan.

But results -- at least health and safety improvements -- have not been forthcoming.

Nor are they likely to be, say worker representatives. "History has shown that voluntary efforts are not sufficient," notes Seminario. "The bottom line is that there needs to be minimum standards. Look at what brings about change in the workplace. It is setting those standards for the performance that is expected and demanded of employees. We need to do this on a broad basis."

-- Lee Drutman

Small Steps for Corporate Trade Pacts

President Bush came into office intent on pushing a straightforward trade agenda that would benefit his corporate backers. His plan: Kickstart the stalled World Trade Organization (WTO) negotiations that had broken down after the demonstrations in Seattle in 1999 and expand the even more pro-business North American Free Trade Agreement (NAFTA) throughout the Americas. Three years later, these two broad trade agenda items are no closer to completion than they were in the Clinton administration.

In the United States, the political will for free trade deals withered during the Bush administration as nearly 3 million manufacturing jobs evaporated and high tech jobs were outsourced. Internationally, the will for NAFTA and WTO expansion was equally lacking. The September 2003 Cancun WTO Ministerial collapsed after industrialized nations refused to address the concerns of the developing world that the WTO disproportionately benefited rich countries and harmed poorer ones.

The next month, talks in Miami significantly scaled back the scope of the negotiations for the Free Trade Area of the Americas, a U.S.-led initiative effectively to expand NAFTA to the entire hemisphere, minus Cuba. Instead of continuing the negotiations of the entire agreement as a single undertaking, the negotiators agreed to an la carte approach (with countries agreeing only to different parts of the trade treaty) that mired the negotiations. This April, an emergency meeting to resuscitate FTAA negotiations failed to produce a breakthrough.

While the U.S. continues to pursue a new round of WTO negotiations and enactment of NAFTA expansion through the FTAA, it is working on many parallel tracks to use bilateral and mini-regional free trade agreements (FTAs) to advance the WTO and FTAA agendas.

"Step by step, country by country, region by region, the United States is opening markets with top-notch, comprehensive FTAs that set the standard," explained U.S. Trade Representative (USTR) Robert Zoellick in December of last year.

Under the Bush administration, the United States has entered into trade agreements with Chile and Singapore, and commenced or completed negotiations for FTAs with the Central American countries and the Dominican Republic, Australia, Bahrain, Colombia, Peru, Bolivia, Morocco, Panama and Thailand.

Regardless of the scope (global, hemispheric, regional or bilateral), the goal of all of the trade agreements is to establish trade pacts that guarantee multinational corporate interests will be protected. Intellectual property rights of pharmaceutical companies are advanced while the ability for developing countries to ensure access to generic medicines is compromised. The agreements deem many national and local environmental regulations to be illegitimate expropriations of profit. Copyright and trademark protections are enforced with trade sanctions, but violations of labor and environmental law are at best subject to fines and more frequently are totally ignored.

The Bush administration's focus on smaller trade measures has a two-fold purpose: to isolate some countries who were skeptical of the U.S. trade agenda at the WTO and the FTAA; and to set markers for future trade deals based on what countries acquiesced to in bilateral agreements.

The United States is using FTAs to isolate FTAA critics and loosen the negotiating logjam.

Brazil, Venezuela and Argentina are resisting the U.S. agenda for the completion of the FTAA. They object to U.S. demands over services liberalization (that foreign companies should be able to compete for service provision -- everything from telecommunications to package delivery to electricity -- on equal footing with national companies), procurement rules (prohibiting governments from favoring national suppliers), investment measures (defining some environmental and other regulations that harm company profits as indirect expropriations requiring compensation) and agricultural tariffs and quotas (maintaining protections and subsidies for U.S. farmers, especially big agribusiness).

But the United States has already reached or started negotiations for trade deals with a dozen Latin American countries. Indeed, when announcing the proposed U.S.-Panama FTA negotiations, USTR noted that "high-quality agreements that promote regional economic integration (Chile, CAFTA) with like-minded, ambitious trading partners complement and provide impetus for the FTAA negotiations." Such deals disadvantage FTAA critics, because their neighbors are already entering into agreements with the United States that lower tariffs on their exports to the United States.

The smaller FTAs also set the standard for future agreements. For example, the Singapore FTA rolled back modest advances made by the Clinton administration on labor and the environment in the Jordan FTA. The Jordan FTA contained the strongest measures to date on enforcing domestic labor and environmental laws. These provisions were absent from the Singapore FTA and signaled that the Bush administration would remove any remotely effective labor and environmental provisions from future trade deals.

The inclusion of broader services agendas in the FTAs makes it more difficult to resist the stalled U.S. services market liberalization agenda in the FTAA or the WTO. The president of the Coalition of Service Industries, Robert Vastine, endorsed the Singapore FTA because "the agreement provides commercially meaningful market access for services" and continues the "negative list" approach to services negotiations. The negative list requires countries to open all of their services markets unless they specifically opt out of specific services liberalizations.

The Central America Free Trade Agreement (CAFTA) also includes the investor-to-state provisions of NAFTA that allow companies, instead of governments, to challenge domestic safeguards as illegitimate barriers to profits and trade, imperiling environmental and labor laws which restrict profiting from pollution and labor exploitation. "Since multinational companies could challenge environmental and public interest protections before international tribunals, demanding tens of millions in compensation, how many Central American countries will still take action to safeguard their citizens and the environment?" asks Friends of the Earth (U.S.) President Brent Blackwelder.

CAFTA also expands patent monopolies for U.S. pharmaceutical companies in Central America, effectively limiting affordable access to generic medicines to treat HIV/AIDS and other diseases. This intellectual property provision runs counter to promises made at the WTO negotiations in Doha in 2001 to respect countries' right to take measures to ensure "medicines for all."

"The issues that have [the WTO] hung-up, and that created a stalemate in FTAA, like investment, procurement, rules on competition and trade facilitation, are the issues Zoellick and his negotiators can get more easily on a one-on-one basis," concludes the Washington, D.C.-based Global Trade Watch's Chris Slevin.

Whether this is an effective strategy for advancing corporate interests is controversial in the business community. Many corporate representatives say USTR is distracted by the numerous negotiations with small market countries and has lost sight of the big picture.

What is clear is that, unless citizen movements in the United States can defeat them in Congress, a legacy of the Bush administration will be a series of trade agreements that establish a wide array of special protections for corporations in many small and vulnerable economies around the world.

-- Patrick Woodall

"The Latest Gains From Trade"

For a presidential administration that prides itself on discipline, this year has been unusual for its string of White House message gaffes. One of the first mishaps came in February, when Gregory Mankiw, chair of the White House Council of Economic Advisers, appeared to give White House support to the outsourcing of skilled jobs as he told reporters that the "offshoring" of service jobs is "the latest manifestation of the gains from trade that economists have talked about" for centuries.

Not surprisingly, the Democratic opposition pounced quickly. "These people, what planet do they live on?" then-presidential candidate Senator John Edwards asked. "They are so out of touch."

Senator John Kerry, at the time trying to develop some populist chops as he assailed "Benedict Arnold corporations" for offshoring jobs and dodging tax payments, echoed Edwards: "Three million jobs destroyed on their watch, and now they want to export more of our jobs overseas. What in the world are they thinking?" Even a few Republicans called for Mankiw's resignation.

As the heated reactions to Mankiw's statement reveal, the offshoring of service jobs has already become one of the most emotional issues of this political year. With millions of jobs lost on the Bush administration's watch and the economy stuck in a "jobless recovery," job anxiety is shaping up as a top voter election concern. The specter of even the best-paid jobs fleeing overseas deepens those worries. This means offshoring is poised to be a make-or-break issue for any candidate this year.

In a sense, the White House's Mankiw was right: Offshoring is nothing new, but rather just a fresh twist on the endemic "free trade" problem whereby jobs move from high-wage countries to low-wage ones. It's deju vu all over again. In the 1970s, U.S. corporations started shipping manufacturing jobs to low wage countries such as Mexico, Korea and Indonesia in an effort to cut labor costs. Now, that same drive to reduce labor costs is beginning to hit more highly skilled workers in the United States, as service jobs go to well-educated workers in New Delhi and Prague and Singapore. The logic of cost cutting doesn't distinguish between blue and white collars.

The trend is very likely to speed up. A widely quoted November 2002 study by the consulting firm Forrester Research estimates that over the next 15 years some 3.3 million U.S. service sector jobs will be sent abroad. A more recent report by economists at the University of California-Berkeley says as many as 14 million programming, accounting, paralegal and other service jobs are at risk of being off-shored.

By cutting white-collar positions, U.S. businesses are sowing the seeds of a populist backlash. To appreciate how deep the brewing resentment runs, check out the postings on the Outsourced Worker page of Meetup.com, where 33 "meetups" were scheduled across the United States for May. Or tune in to Lou Dobb's "Tonight" on CNN to hear the newly minted pinstriped populist rail against the "Exporting of America" and blackball hundreds of companies -- from Aalfs Manufacturing to Zenith -- that are guilty of "hollowing out" the United States.

In recent months, a slew of proposals has been offered to staunch the hemorrhage of jobs, or at least ease the pain.

Sarah Anderson and John Cavanagh of the Institute for Policy Studies say the best strategy for reducing the incentives for off-shoring is to close the wage gap between rich and poor countries, and that the way to do this is by reforming financial and trade agreements and via "debt reduction where appropriate, or aid that benefits the poorest."

Senator Kerry advocates eliminating tax breaks for companies that outsource, while providing tax credits to firms that do not. Kerry is also calling for banning foreign outsourcing of government contract work, a demand that's being echoed in statehouses across the country.

Others, noting the rapidly growing U.S. trade deficit, have started to make the case for re-imposing tariffs, a strategy that would address manufacturing more than service outsourcing.

Some observers believe that outsourcing is a done deal -- that there is no way to challenge the imperatives of the global economy -- and so recommend policies to ameliorate workers' suffering. For example, former Clinton Labor Secretary Robert Reich is urging policy makers to put more money into education programs to give U.S. workers the ability to fill even higher-skilled jobs than the ones they are losing.

The Bush White House's approach is, basically, to call for more of the same. The administration remains staunchly committed to the "free trade" status quo. At the same time, the U.S. Trade Representative's office is aggressively pushing other nations to move forward with the liberalization of trade in services.

But critics say that if U.S. service sector firms are provided new opportunities to expand abroad, it will likely give companies more chances and greater incentives to shift skilled positions to other countries.

As White House spokesperson Scott McClellan said about six weeks after the Mankiw dust-up: "One important way to continue to strengthen our economy even more is to continue opening markets. Free trade is vital to continuing our economic growth."

Expect the downsizing to keep climbing up the corporate ladder.

-- Jason Mark