The Lawrence Summers Memorial Award

The November/December Lawrence Summers Memorial Award* goes to the United Auto Workers. The normal standard of corporate globalization is that rich country workers are forced to accept lower wages and benefits to compete with workers in lower-wage countries. But the Associated Press reported in June that it is Mexican auto unions following the lead of their U.S. counterparts in innovating new concessionary deals. “Mexican auto unions are taking a cue from U.S. labor leaders by offering two-tier hiring schemes and salary cuts that bring already low wages down to near-Chinese levels,” AP reported. There shouldn’t be any doubt about the dynamics of the corporate-controlled race to the bottom, however: The Mexican unions believe they have to compete with low-wage workers in China.

Source: Associated Press, “Mexican unions to cut wages,” June 9, 2008.

* In a 1991 internal memorandum, then-World Bank economist Lawrence Summers argued for the transfer of waste and dirty industries from industrialized to developing countries. “Just between you and me, shouldn’t the World Bank be encouraging more migration of the dirty industries to the LDCs (lesser developed countries)?” wrote Summers, who went on to serve as Treasury Secretary during the Clinton administration and is the outgoing president of Harvard University. “I think the economic logic behind dumping a load of toxic waste in the lowest wage country is impeccable and we should face up to that. ... I’ve always thought that underpopulated countries in Africa are vastly under polluted; their air quality is vastly inefficiently low [sic] compared to Los Angeles or Mexico City.” Summers later said the memo was meant to be ironic.