American Labor Numb to Trade-Related Job Losses

November 18, 2009

http://www.reuters.com/article/domesticNews/idUSTRE5AG30Y20091117

Just at the very time when it is finally dawning on American leadership that our enormous trade deficit lies at the heart of our economic problems, American labor, numbed by decades of brow-beating about the supposed benefits of free trade and globalization, seems to have given up the fight.  Just when President Obama most needs for American workers to rally behind his efforts to restore a balance of trade – while meeting with the Chinese premier in an effort to stop Chinese manipulation of the currency exchange rate – the labor movement has fallen silent.  America’s most powerful labor union prepares for a summit on job creation without one mention of correcting our trade imbalances. 

As reported in the above-linked Reuters article, AFL-CIO President Richard Trumka is preparing for a December 3rd White House Summit on job creation, focusing on such things as steering government stimulus spending toward small businesses.  His plan doesn’t include a single mention of trade. 

In a preview of labor’s contribution to Obama’s December jobs summit, AFL-CIO President Richard Trumka said money from the Troubled Asset Relief Program could be lent directly to small- and medium-sized businesses at commercial rates.

He said TARP money could also help small community banks that were ignored during the financial rescue effort by having them manage the loans.

… The AFL-CIO jobs plan also calls for extended unemployment benefits, food assistance and healthcare for the unemployed, more money for infrastructure projects and state and local governments, and job creation aimed at distressed communities.

Never mind the fact that the President’s emphasis on currency exchange rates will have little effect on the trade deficit with China, or that his whole approach to trade has been far too timid.  Without the support of American labor on this issue, he has virtually no chance of softening foreign opposition to trade policy inititatives. 

I suppose that labor leaders like Trumka can hardly be blamed for giving up the fight after decades of being ignored on the trade issue by their own party and mocked by business leaders and economists as being unwilling to “compete” in the global economy.  For decades, labor complained bitterly about the effects of trade policy while administrations and both political parties remained enamored with the false promises of a doomed model of free trade and globalization.  But the climate on trade policy is changing rapidly in the wake of the global economic collapse and this is exactly the wrong time to give up the fight and become dependent on government largesse.  The very moment in history when you were proven to be right all along is not the time to admit defeat.