The Workforce: John J. Sweeney

Aug. 9, 2006
For national security and manufacturing workers' sake, the U.S. must reexamine its trade and tax policies.

Nearly 40,000 manufacturing establishments have closed and 3 million manufacturing jobs have vanished since 2001. Alarms should be going off nationwide, but the manufacturing jobs crisis is deliberately drowned out by an economic orthodoxy that tells us "globalization is inevitable" and "it's good for consumers." This rhetoric provides cover for government policies shaped by transnational corporations and financial interests that are unraveling America's middle class. The fight for manufacturing is a fight for national security and the economic heart and soul of our country.

The past five years have been a brutal, widespread and deep structural decline for manufacturing. Almost every subsector suffered from double-digit employment declines. Studies by the Economic Policy Institute, the AFL-CIO Industrial Union Council and others confirm that over half this job loss is trade related.

The knowledge jobs economists promised would take the place of lost manufacturing jobs in the globalized "new economy" never appeared. While real wages declined since 2001, the entire net job growth was in non-tradable service-providing activities. Over 725,000 professional, business and information service jobs disappeared.

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Today, Chinese imports outstrip our exports by almost six to one. We now borrow an unsustainable $2 billion a day to pay for the goods we consume that we do not produce as a nation. The Chinese suppress wages by repressing workers' rights. That means domestic manufacturers and their workers struggle with the downward pressure on profits and wages. And when China and other nations manipulate their currency, beleaguered American firms are competing in a 100-yard race with opponents that start on the 40-yard line.

From a national security point of view, the startling loss of 40,000 manufacturing establishments and over 3 million jobs directly impacts the greater industrial base that meets both commercial and defense needs. Many of the engineers, scientists and skilled workers who work on commercial products one week are the same ones who work on defense applications the next. The vital link between production and innovation is being severed as manufacturers move offshore, a move aided and abetted by our own trade and tax policies.

The diagnosis is sobering. The loss of skilled workers across the manufacturing sector is a devastating blow to our technical capacity to make things. For the economy it means that the next best idea, the next innovation, the next generation of products and the next investment will be made somewhere else, not in the United States.

John J. Sweeney, president, AFL-CIOThe U.S government must take action to ensure that workers here and abroad will benefit from trade. We can no longer ignore trade deficits that undermine economic stability. We must enforce our existing trade laws. We must ensure workers' rights and environmental standards are addressed in our trade deals and at the World Trade Organization with the same level of attention and force of law that commercial property and financial rights receive.

At the same time, our nation needs to examine our own trade and tax policies that encourage the offshoring of our production and innovation capabilities. And finally, it's paramount that we address the healthcare crisis in America that leaves manufacturers struggling to compete with European and Asian competitors that have government-sponsored healthcare.

Manufacturing is critical to the future of our country. It is vital to our national security. It is at the core of our domestic economic problems and the key to the solution. Trade deficits are the stepchildren of policies and practices that serve transnational firms and the financial community. The national interest must not be held captive by their narrow interests. It is time for us to chart a new course.

John J. Sweeney is president of the 9 million-member AFL-CIO.

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