The Wire

Dissecting the new trade deal and its real impact on American workers

The best coverage of the new trade deal has come from David Sirota who has a series of posts deconstructing the new trade deal reached last week by leading Democrats and the Bush administration.  In his latest writing, David notes the growing opposition to the deal:

It is now five days since a handful of senior Democrats joined with the Bush administration to announce a new "deal" on free trade, while refusing to release the actual legislative language of the deal. Today, environmental and health advocates have come out slamming the deal, noting like other grassroots groups that what the deal doesn't cover says as much about its potential problems as does the secrecy the deal is shrouded in.

Last week, Sirota pointed out that the vehemently anti-labor Chamber of Commerce was assured that the key labor provisions weren't really going to require compliance with international labor agreements:

U.S. Chamber of Commerce President and Republican Party bigwig Tom Donohue tells AFP news service that he is "encouraged by assurances that the labor provisions [in the deal] cannot be read to require compliance with ILO Conventions."

Paul Krugman weighed in on the new trade deal as well.  He wrote about some of the pitfalls of trade deals in his NY Times column on Monday, May 14, 2007 (subscription required).  Krugman not only wants pro-labor trade policy, he thinks American workers need universal health care:

The key element of the new trade deal is its inclusion of “labor standards”: countries that sign free trade agreements with the United States will have to allow union organizing, while abolishing child and slave labor.

The Bush administration, by the way, opposed labor standards, not because it wanted to keep imports cheap, but because it was afraid that America would end up being forced to improve its own labor policies. So the inclusion of these standards in the deal represents a real victory for workers.

Realistically, however, labor standards won’t do all that much for American workers. No matter how free third-world workers are to organize, they’re still going to be paid very little, and trade will continue to place pressure on U.S. wages.

So what’s the answer? I don’t think there is one, as long as the discussion is restricted to trade policy: all-out protectionism isn’t acceptable, and labor standards in trade agreements will help only a little.

By all means, let’s have strong labor standards in our pending trade agreements, and let’s approach proposals for new agreements with an appropriate degree of skepticism. But if Democrats really want to help American workers, they’ll have to do it with a pro-labor policy that relies on better tools than trade policy. Universal health care, paid for by taxing the economy’s winners, would be a good place to start.

 

Posted by Staff on Tuesday, May 15 | 5688 comments | Permalink

Democrats win major concessions from Bush admin. on labor, environmental issues in trade deals

Today's Washington Post reports on the major breakthrough in trade agreements.  Democrats obtained key concessions from the Bush administration on environmental and labor issues.  The Post documented the importance of the labor provisions for Democrats: 

The key to the agreement, said those involved, was the Bush administration's reluctant assent to Democratic demands for more stringent labor rules. Under the new policy, enforceable labor provisions will be written into the texts of trade deals to protect the rights of workers abroad to organize unions and bargain collectively, while banning forced labor, child labor and workplace discrimination.

The Bush administration resisted such rules, reflecting the fears of business interests that they could boost the power of U.S. labor unions, opening a backdoor for them to rewrite U.S. law to their advantage. But the administration concluded that it had to swallow the labor rules lest its trade deals die in a Congress controlled by the other party.

The deal also includes an agreement between the White House and Congress to develop a "strategic worker assistance and training initiative" that would increase job training and financial assistance for communities that suffer job losses to overseas competition and automation. Democrats said those programs would go beyond existing benefits, but they provided few details.

The New York Times also noted the environmental protections secured: 

It would also require trading partners to enforce environmental laws already on their books and comply with several international environmental agreements.

The new agreement applies to pending deals with Peru and Panama.  We'll continue to monitor this development.  Progressives have been pushing for labor and environmental protections in trade agreements for years.  Too many elected officials were willing to vote for trade deals without those key provisions.  Those days are over. 

Posted by Staff on Friday, May 11 | 702 comments | Permalink

Baucus re-confirms “fast-track” authority not likely this year

This week, Senator Max Baucus (D-MT) re-affirmed his doubts about a new fast-track bill:

Congress may balk at extending the president's "fast track" trade authority this year if there is not significant progress in global trade talks, the chairman of the Senate Finance Committee said Monday.

That authority lets President Bush negotiate a trade agreement and submit it to Congress for a simple yes-or-no vote without amendments. It was last extended by Congress in 2002 and is to expire on July 1.

"Absent any progress, any meaningful progress on the Doha negotiations it's going to be difficult for, I think, the Congress to get excited about extending fast track trade promotion authority this year," Sen. Max Baucus, D-Mont., said at the National Press Club. "Many are going to say, `Wait, give it to the next president, why do we need it right now anyway because there's no Doha.'"

This is significant because just a couple months ago, Baucus, chair of the Senate Finance Committee, was a strong advocate for renewing the President's fast-track trade authority.  But, in mid-April, Baucus announced a major shift in policy by announcing that he was no longer thought it was necessary to push the fast-track renewal legislation.  Coincidentally (or not), at the end of February, the Montana State Senate approved a resolution telling Congress not to renew the President's fast-track authority.  Then, in mid-March, "They Work For Us" ran radio ads on 13 radio stations in Montana attacking Baucus' position on free trade. 

 

Posted by Staff on Thursday, May 10 | 1260 comments | Permalink

Rep. Henry Cuellar still isn’t working for us

Steve Rosenthal, Treasurer of Working For US PAC, just posted this diary about Rep. Henry Cuellar at Daily Kos:

If anyone thought that the Democrats capturing the U.S. Congress would result in any real change in Congressman Henry Cuellar, they were wrong.  Just last week, Cuellar voted with only four other Democrats to allow Corporate CEO’s to be paid huge multi-million dollar compensation packages without ordinary shareholders having any opportunity to cast even a symbolic vote on whether the compensation was deserved or could be afforded.  Cuellar’s “NO” vote on this common sense bill, H.R. 1257, makes it crystal clear he remains solidly on the side of irresponsible corporate fat cats and his friend George Bush, who vowed to veto the legislation after it passed the House. 

Over the past several years, Cuellar has managed to vote with Bush 85% of the time – more than any other Democrat in even Bush’s home state of Texas.  While some have suggested that now that the Democrats are in the majority he would change, this vote proved that this guy knows which side he’s on…and it’s not the side of working class families. 

Cuellar’s vote shouldn’t be a surprise.  After all, his top campaign contributors are the PACs of the right-wing Club for Growth (he was the first Democrat endorsed by the Club) and the International Bank of Commerce.  And as Bush’s favorite Democrat, Cuellar is more likely do what’s helpful to corporate CEOs and the wealthiest in our country, rather than the regular working folks who, in large part, make up his constituents.   Cuellar represents the Rio Grande Valley, which, according to the local paper, The Monitor.com, has "some of the lowest wages in the nation.".

As we wrote on the Wire at workingforus.org last week, in 1965 CEOs of major US companies made 24 times more than the average worker - by 2005, they made 262 times more.  Given today's staggering disparity between the very rich and the poor, shining a little light on executive compensation packages is just common sense and we can't understand why Congressman Cuellar thinks this is a bad idea.  (see MissLaura’s recent post for more great info on income inequality)

The final tally for the vote was 269 - 134.   214 Democrats and 55 Republicans voted yes and only four other Democrats voted against the bill --Boyd (FL-2), Boyda (KS-2), Cardoza (CA-18) and Tanner (TN-8).

H.R. 1257 would allow shareholders to have an advisory vote on executive compensation.  A shareholder voice in the executive pay process will encourage boards of directors to consider shareholder interests before approving questionable compensation plans.   It’s one small but important step toward opening up the process around CEO pay packages and ensuring sound corporate governance.  It shouldn’t be a difficult vote for a Democrat – and it wasn’t for 214 of them in Congress.  But let’s face it – Henry Cuellar is a Democrat in name only.

Posted by Staff on Friday, April 27 | 1854 comments | Permalink

More troubling signs in housing market as existing home sales experience largest drop since 1989

The problems in the housing market, fueled by the subprime mortgage debacle, are continuing to reverberate as existing home sales dropped precipitously.  Clearly, the growing crisis is affecting homeowners outside of the subprime market.   According to the National Association of realtors, median home prices will drop in 2007 -- the first time that has ever happened.  That decline will affect the financial status of many American families:

Growing problems in the mortgage industry combined with bad weather in some parts of the country to fuel the steepest one-month decline in sales of existing homes in nearly two decades, the National Association of Realtors reported yesterday.

Sales of previously owned homes in March fell 8.4 percent from February, the group reported. It was the largest one-month drop since sales plummeted 12.6 percent in January 1989, when the country was in a housing recession. It was also 11.3 percent below the number of units sold in March 2006.

The drop -- from a seasonally adjusted rate of 6.68 million homes sold in February to 6.12 million in March -- followed three consecutive months of increases in sales of existing single-family houses, townhouses, condominiums and co-ops. Those gains had led to speculation that the market was coming back after a sluggish 2006.

David Lereah, chief economist for the Realtors group, attributed the downturn partly to bad weather in parts of the country in February that carried over to transactions closed in March.

But more troubling are the problems in the subprime mortgage industry, he said. During the housing boom, lenders gave non-traditional loans to many of those borrowers, who typically have blemished credit records. Now that delinquencies and foreclosures are on the rise, lenders are tightening their standards.

Posted by Staff on Wednesday, April 25 | 358 comments | Permalink

House passed Shareholder Vote on Executive Compensation Act

The Gavel reports that despite the veto threat from the Bush Administration noted in the post below, today, the U.S. House of Representatives passed HR 1257, the Shareholder Vote on Executive Compensation Act, by a wide margin of 269 - 134.  (Link to The Gavel's post and watch the video of Barney Frank on the House floor.  It's classic.)

Posted by Staff on Friday, April 20 | 441 comments | Permalink

Bush was for controlling exorbitant executive salaries—before he was against it

One of the tenets of Working for US PAC is to insure sound corporate governance.  That's not happening in America today when executive salaries are spiraling out-of-control.  Even President Bush took notice of that trend -- and it appeared we had something in common with the President.  On January 31, 2007, George Bush railed against excessive compensation for corporate executives:

In his “State of the Economy” speech today, delivered from the financial center of the world, President Bush aimed at bringing his economic message out of the shadows of the Iraq war. On his second day in a row he focused on the economy, the government reported faster-than-expected growth of 3.5 percent in the final quarter of last year.

In his address, Bush took aim Wednesday at lavish salaries and bonuses for corporate executives, standing on Wall Street to issue a sharp warning for corporate boards to “step up to their responsibilities” and tie compensation packages to performance.

But, no surprise, the President isn't working for us on this one.  Less then three months after that Wall Street speech, George Bush is opposed to legislation that will give shareholders the power to control those salaries:

The Bush administration is opposing a bill before the House, pushed by Democrats, to give shareholders at public companies a formal say in executives’ compensation packages.

The legislation, written by Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, comes at a time of growing public and shareholder anger over lavish compensation for executives unrelated to their performance. It would give shareholders a chance to cast an advisory vote on executive pay plans, allowing them to show their approval or disapproval of them.

Investor advocates, union pension funds and shareholder groups have been pushing for such “say on pay” votes as the chasm between executives’ salaries and the pay of rank-and-file employees continues to widen.

 

Posted by Staff on Friday, April 20 | 987 comments | Permalink

59% of Americans think life for the middle class has gotten worse over the past ten years

The White House website proclaims that "President Bush's actions are moving our economy forward."  The Bush administration may think that, but most Americans don't.  According to the latest CBS News poll, released earlier this week, 57% of Americans disapprove of the way Bush is handling the economy.  More importantly, Americans think things are getting worse for the middle class:

The last few years have seen economic gains for the wealthiest Americans, at least in part resulting from tax cuts and investment gains, and many Americans are living well — buying large homes, expensive cars and luxury products. But has any of this wealth trickled down to the middle class?

According to the latest CBS News Poll, most Americans — and most of those with mid-range incomes — don't think so; instead, many think the middle class has experienced tougher times. 59% think that life for middle class Americans has gotten worse in the last 10 years. Just 30% think it’s gotten better.

Something isn't working for the middle class. 

Posted by Staff on Thursday, April 19 | 169 comments | Permalink