This is the Wizards of Money, your money and financial management series, but with a twist. My name is Smithy and I’m a Wizard Watcher in the Land of Oz. This is Part 17 of the Wizards of Money series and it is entitled “Caught Between a Dock and a Sweatshop”.
Introduction
As the Holiday Season of 2002 approaches, this 17th edition of the Wizards of Money will look at the path taken by the goodies that will end up under the Christmas Tree.
We start with the following analysis of Santa’s Business Model…
Although nobody really wants to tell their kids this, Santa does not start his journey at the North Pole in December. He starts in China in about June. The majority of the elves making the holiday gifts are migrants from rural China who Santa lures to the factory cities by the millions. Despite its mythical appeal, Santa knows that carrying all this cargo by air is not economically feasible, so the flying reindeer carrying the presents are really giant ships crossing the Pacific Ocean. The ships get unloaded by the tallest breed of elves who, much to Santa’s irritation, use their height to make demands on Santa. Once Santa gets past that barrier and the goods are trucked inland, they end up getting stocked to the shelves by some of the lowest paid elves in this land of holiday cheer. Since Santa is too fat to squeeze down the chimney he instead offers credit to tempt people into the stores to get the goodies themselves. Finally, all this credit plus a bit more, goes back to Santa in his home at the heart of the capital markets.
This snapshot of Santa’s business model provides a glimpse of some of the primary battles being waged today in the ages old war between labor and capital. This episode will focus on the following three contemporary battle-zones along Santa’s journey.
- Chinese Toy Factories,
- The Pacific Coast docks, and
- Wal-Mart.
The laborers in these three regions of Santa’s journey – the start, the middle and the end – sit at opposite ends of the spectrum in terms of securing a reasonable share of the fruits of their labor. The laborers at the start and the end of the journey traveled by internationally traded goods have almost no power to bargain with their employers, and consequently, are not getting their fair share. The start of the journey is the manufacturing end, which is made up primarily of factories in China. The end of the journey is the US retail stores, increasingly dominated the biggest retail giant in history – Wal-Mart.
In the middle of the journey sit the Pacific Coast longshoreman – some of the highest paid laborers today thanks to the gains made by the International Longshore & Warehouse Union (ILWU) over several decades. Given the triumph of capital over labor at the retail and manufacturing end-points of Santa’s journey, it is hardly surprising to see the forces of capital now pulling out all stops to bring this middle point into line.
Millions of us have to go through the process of shopping for holiday gifts for kids around this time of year. Last week I went to Wal-Mart to buy some little trinkets that will delight my nieces and nephews.
One toy was a Matchbox SUV. This cost only $1.47. Another toy was a “Bob the Builder” ball since that’s a favorite of one of my nephews. The Bob the Builder ball was more pricey than the Matchbox SUV, at $1.76. And, finally the most expensive item of all, a fancy little Barbie out-fit for one of my nieces at $1.84. In all, it cost me $5.07 (before tax) to complete my holiday shopping for two nephews and one niece.
But that’s not all they’ll be getting. You see, when me and my purchases got home, I couldn’t shut them up! Busting to share their experiences, but too afraid to talk in the Wal-Mart store, they gave a detailed account of their long journey from China, across the Pacific, and into the Wal-Mart shelves. They told me of the things they saw along the way, while some companies thought no one was looking.
First, the Barbie dress burst into tears when she recalled the conditions in the factory in China where she was made. She said that most of the ladies there would never be able to afford something as fancy as she, and yet they were working non stop with hardly any days off since the busy season started in about June. One young lady in a factory was literally worked to death, and the Barbie dress reminded me that this incident was covered in the Washington Post on May 13 this year. She said I better look it up.
The “Bob the Builder” ball, a young ball with a keen interest in unions, said that while he was being stitched up he tried to find out something about attempts to organize unions in China. But there was no talk on the job, so he waited till he saw something in the news when he got to the US about how China’s ruling Community Party had just ordered the extinction of something that was starting to look like an independent labor union, since the only official unions in China are operated by the Party run All-Trade Federation of Trade Unions. And Bob added, very disappointed, this government union is about as corrupt as can be.
Pretty soon, the Matchbox SUV chimed in and stated that both he and the Barbie dress were Mattel products and that I could find the Consumer Information number on their backs. He urged me to call Mattel at this number to ask them some questions about their factories in China. I did just this. However, when you call the Mattel Consumer Information number, where you are supposed to be able to ask any question whatsoever about a Mattel product you bought, there is apparently one question you can’t ask. And that’s about the conditions under which these products were made. In no time at all I was whisked over to the Mattel Public Relations department and got to speak with a Public Relations Vice President. The dress suspected it was Barbie herself, but I wasn’t quite sure. Anyway she was extremely nice and assured me that all the information I needed was on the Mattel web site.
So me, the Barbie dress and the Matchbox SUV hopped on the internet and looked up Mattel’s site. We soon found that the Barbie Vice President at Mattel had told us a bit of a fib. The only information on the Mattel site about its operations in China were two years outdated and also there was no information about how its so-called “independent monitoring team” was selected or compensated. We wanted to know these things and also wanted more up-to-date information about the factories. So we spoke to the Barbie VP again and she said she would investigate the matter and then get back to us. To this day she still hasn’t called back and the poor little Barbie dress sits by the phone in silence with a forlorn look, like she’s been betrayed by one of her heroes or something.
The toys later told me that their trip across the sea was pretty humdrum since they were stuffed in containers in the dark. But when they got to the docks on the West Coast of the US all hell had broken loose. There they bobbed up and down for 10 days without moving because the shipping companies had locked out the dock-workers. After this long delay, the Bob the Builder ball managed to pop himself out of the container long enough to ask a dock-worker what was going on. He heard about their concerns that their union was under the attack of some very powerful business interests, and some very crafty PR people who actually made it seem like the workers had been on strike.
Finally, the toys made it to my local Wal-Mart store. After hearing all this stuff about freedom and democracy in the Wonderland of America, boy, were they disappointed when they saw what kind of lives some of the Wal-Mart workers had. And, after being in China for so long they certainly recognized propaganda when they saw it.
I told the toys that I couldn’t believe they were so cheap! Altogether they only cost me $5. But then I realized this was not a very nice thing to say, even to a toy. So I didn’t discuss their cost with them anymore. Instead, later that week, I got some clarification on this issue from Bill Meyer at the United Food and Commercial Workers union in Las Vegas, epicenter of labor organizing for Wal-Mart.
Excerpt from Interview with Bill Meyer. UFCW Local, Las Vegas.
We’ll hear more of this interview later on, along with an interview with Mike Leonard at UFCW in Washington DC, heading up the National Wal-Mart Campaign.
But first, the little toys asked me to do a little history lesson on labor issues. So I thought I’d start at a point in time a few thousand years ago.
The “Spartacus Problem”
Excerpt: Spartacus “March on Rome”
Big capital has been using two primary weapons against organized labor consistently for thousands of years, namely propaganda and intimidation. The third – physical force – fell out of favor in the 20th Century as the other two became increasingly effective and as the excesses of physical force sometimes led to too much sympathy for labor and thereby undermined the propaganda efforts. In the lands where electronic communications media are pervasive, this third arm of Capital’s army is barely needed anymore.
Modern capital learned many lessons from the leaders of the great Roman Empire, built largely upon the complete submission of labor. While Rome did not have unions to contend with, there arose the occasional force that Rome feared most on the homefront – solidarity of the slaves, spearheaded by the rare charismatic leader. The most famous slave organizer of Roman times was, of course, Spartacus. Rome went to great trouble to use all these strategies to deal with the organized slave problem.
Excerpt: Spartacus – Closing Crassus Speech
For intimidation purposes, the crucifixion of thousands of slaves from the Spartacus army along the Appiann Way was remarkably effective. But even following the death of Spartacus, Rome still had something of a “Spartacus problem” on its hands. After all, they didn’t want slaves or cheap labor to get ideas about organizing, or to get high hopes that they actually could achieve a better life. For this reason, Rome most probably went to a lot of trouble to eliminate the legend of Spartacus.
So too it would seem for the great labor organizers that would emerge in the 20th century under the American Empire. One of these was the Australian born Pacific Coast longshoreman Harry Bridges, who was to have a profound influence on the improvement of labor conditions for American workers, and whose union was to be one of the pioneers in getting benefits like healthcare and pensions for workers. Yet, how many people have ever heard of him?
Eliminating the Legacy of Harry
Harry caused something of a modern day “Spartacus Problem”. The first president of the International Longshore and Warehouse Union, Bridges was one of the 20th century’s most effective labor leaders; a key figure in the General Strike of 1934 and in the lead-up to the breakthrough National Labor Relations (or “Wagner”) Act of 1935. His work in the ILWU and other organizing bodies inspired a lot of workers to fight for a better life. Naturally, work begun almost immediately to tarnish his name. Bridges was to suffer constant attacks and many attempts at deportation, leading up to and during the McCarthy era.
And today, in line with the general decline of union power, his legend lives on only in the margins. Furthermore, many of gains in getting benefits for workers pioneered by his union are now either not available for non-union sectors or becoming a thing of the past in union sectors.
In order to understand the contemporary dispute on the Pacific Coast docks that President Bush recently stepped into, and its significance well beyond these docks, we first go back in time to the days of the Great Depression. In our trip back in time we will hear some excerpts from a documentary called “From Wharf Rats to Lords of the Docks”, a radio documentary produced by the Harry Bridges Institute and Public Radio International about the life of Harry Bridges. A link to this show will be placed on the Wizards of Money web site at www.wizardsofmoney.org.
Back to the Docks of the 1930s
The docks that my little toys from China got unloaded on were certainly a tough place to work at the start of the 1930s. Not only was pay lousy and the hours long, but the safety precautions in place were dismal. To make matters worse, the way that workers got work was mostly through a system of favoritism by the employers based on bribes and kickbacks. Men who hadn’t participated in this corrupt process may stand in line for hours a day and not get any work. And, certainly anyone known to be an organizer, or have an interest in unions, could easily be passed over for work. In that time at the start of the Great Depression the shippers had all the power and the dock-workers had none.
Fed up with this situation and to put pressure on their employers for a fairer slice of the shippers profits, the dock-workers up and down the Pacific coast, along with many other maritime workers, went on strike in 1934. Harry Bridges, a dock-worker in his early thirties, was appointed Chairman of the Joint Strike Committee of Maritime Workers.
A turning point came a day after Independence Day 1934 when two striking longshoremen were killed by the San Francisco police. After this and a solemn funeral procession including tens of thousands of workers across the city, public sympathy swayed towards the longshoremen. Not too long afterwards, this evolved into a general strike in San Francisco, with many other unions showing their solidarity with the longshoremen and also going on strike. Bringing commerce to a screeching halt certainly put the national spotlight on the longshoremen’s issues. Armed with the support of the public and the other unions, the longshoremen had bargaining power and were finally able to negotiate a contract that included better pay, and more reasonable hours. Very importantly, it also included some control over the hiring process so that employers couldn’t just pick and chose employees based on their corrupt selection process. Later they would form a new union called the International Longshore and Warehouse Union, with Harry Bridges as its first president.
The mid-1930’s, in the midst of the Great Depression, was a time when the power of capital was greatly weakened, and a chance for labor to make gains. And so it did. The victory of the longshoremen and other maritime workers in the General Strike of 1934 was one example. But perhaps the most significant national victory of that time was the passage of the landmark National Labor Relations Act (also known as the Wagner act) of 1935.
The Wagner Act (or the original National Labor Relations Act) for the first time guaranteed employees the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid and protection. To implement and uphold these rights, the act created the National Labor Relations Board (NLRB). Before the enactment of the NLRA, the federal government had refrained almost entirely from supporting collective bargaining over wages and working conditions and from facilitating the growth of trade unions. This Act facilitated the growth in trade unions and union membership over the next two decades, which peaked sometime in the 1950s.
Never one to sit idly by and watch its power be weakened, the forces of capital and big business set to work the day the Wagner Act came into force to dismantle the power of unions. The old tricks of propaganda and intimidation were back in full force. And capital was back to full strength by the end of World War II. And so the Taft-Hartley Act, an amendment to the National Labor Relations Act in favor of big business was passed in 1947, even over the objections of President Truman.
At this point the anti-union propaganda and activities of business of the past few decades culminated in the frightening full-blown McCarthy era. For decades, successful union leaders like Harry Bridges, who represented the best interests of their rank and file members, were constantly under surveillance and investigation, harassed, intimidated, and of course, called Communists. In addition, Bridges suffered numerous attempts to deport him back to Australia.
Nevertheless, through all this, Harry and the ILWU continued their work on behalf of the rank and file longshoremen and today they are some of the most well compensated union workers. According to the documentary “From Wharf Rats to Lords of the Docks”, Harry and the ILWU pioneered the establishment of employer sponsored benefits such as healthcare, dental care, pensions and paid vacations.
Excerpt: “From Wharf Rats to Lords of the Docks”
Finally, as the McCarthy era was coming to a close and after 21 years of constant harassment, Harry became a US citizen and the constant attempts to deport him came to a halt. Here’s Harry Bridges …
Excerpt: Harry Bridges Speech
Apart from its tools of propaganda, intimidation and the constant whittling down of the effectiveness of the National Labor Relations Act, organized capital still had two more powerful weapons up its’ sleeve – ones that Organized Labor still has no counteroffensive for. These are (1) Technology and (2) Overseas Labor.
By the nature of its work, the ILWU never really faced the latter to any great extent. But it has faced the former on two major occasions. The first in the 1950s when “containerization” technology entered shipping, culminating in the 1960 Mechanization and Modernization Agreement between the shippers and the dock-workers. The ILWU dealt with this entry of technology by acknowledging that the number of available jobs would decrease, ensuring that new technology jobs would remain in the union and that workers who would be retired would receive reasonable benefits. Overall there was an increase in wages and benefits. In this way the current generation of workers shared in the gains made through the implementation of technology, but they also passed on less union jobs to the next generation.
Excerpt: Harry Bridges Speech on Technology
The second major time the ILWU has faced the Technology issue is now, with the implementation of technology to make the labeling and identification of cargo, and data entry more efficient. Only now, organized labor has been under such fierce attack for so many years, that the general power of unions is much weakened. Now it is harder even for the historically stronger unions such as the ILWU to bargain with employers, and, as we shall see when we get to the Wal-Mart issue, the National Labor Relations Act has become something of joke in terms of protecting the worker’s right to organize and bargain collectively.
It would seem that the ILWU would have liked to resolve the contemporary technology issue using a compromise similar to the “M&M Act” as it is known, of 1960. But the shippers don’t seem to want to come to such a compromise. Regardless of the claims on either side about what lead to the closing of the docks in October this year, there are two things that seem clear.
- It was the Pacific Maritime Association, the association of employers, who instigated the lock out. It was not a strike! However, it sometimes seems that this is how the media portrays it, and, indeed many people seems to think this is what happened.
- The ILWU appeared to have no intention of striking.
The business press claims that the ILWU might initiate a slowdown rather than strike, because their compensation is already so high that they would not win public support, and this slowdown led to the lockout. The union claims that the PMA (i.e. the shippers and port operators), possibly with the help of the big retailers (like Wal-Mart) who import their Asian made goods through the West Coast ports, are trying to bust or weaken the union.
Both arguments have merit. But it is the argument of the union that I find worthy of much attention. For, if it is true then the implications are profound. The ILWU’s arguments also deserve more attention because they seem to have gotten so little press coverage. Few people seem to have considered the broader implications of this case if indeed it is an attempt to weaken or bust the ILWU. To understand this side of the story I recommend a radio show produced by People Tribune’s radio recently and I will post a link to this on the Wizards of Money web site.
It will be very interesting to see what happens next. Will the ILWU, for decades one of the leading trendsetters in establishing gains for workers, come out of this process significantly weakened?
And how much do the big retailers, who import an increasing amount of their manufactured goods from the newest member of the World Trade Organization through these docks, have to do with all this?
A weakening of the ILWU would certainly deal a huge blow to the labor movement at a time when it is battling the trend of the big retailers at home to lower standards in the ever growing retail sector.
On that note, lets now take a good look at the biggest one of these retailers – Wal-Mart.
Life at the World’s Largest Retail Giant and the Biggest Importer from China
Interview: Mike Leonard. National Wal-Mart Campaign Organizer. UFCW
Interview: Bill Meyer. Las Vegas UFCW Wal-Mart Organizer.
