I was born into the House of Labor. My father was a Teamster who drove a truck for thirty-five years. He died with his first retirement check in his pocket, uncashed.
Even shrunken from its high point, the Teamsters union is a major force
in the American labor movement--for both good and ill. On the plus side,
building on its celebrated UPS strike of 1997, the union just negotiated
respectable wage increases for full-time workers, though as
BusinessWeek concluded, the agreement "doesn't deliver for
part-timers." On the downside, Teamsters' failures to organize
effectively hold back organized labor's drive to grow. In any case, much
of the credit for the rise from its nadir under mob control goes to a
1989 consent decree with the Justice Department, which has removed
hundreds of mob-influenced or otherwise corrupt leaders and given
members the right to elect major officers directly. Now Teamsters
president James Hoffa Jr. has made ending the consent decree and its
institutions--like the Independent Review Board (IRB), which
investigates and punishes corruption--his top priority.
That would be a bad move. It would risk undoing the good that pressure
from federal oversight has wrought, including gains in formal democracy
that surpass those at many other unions, such as last year's revision of
the constitution to mandate direct elections by members. But neither the
IRB nor internal union efforts at reform have yet succeeded in
establishing "a culture of democracy within the union," which the judge
overseeing the Teamsters identified as one of the two main goals of the
consent decree. Hoffa's internal structure to investigate and punish
corruption, RISE (Respect, Integrity, Strength and Ethics), so far has
only codified rules and done historical research, and Hoffa plans to put
it in action only after government oversight ends. Union democracy
experts, like professors Clyde Summers of the University of Pennsylvania
Law School and Michael Goldberg of Widener Law School, as well as the
Association for Union Democracy, argue that RISE is not sufficiently
independent to do the job and that top Teamsters brass could easily
override it. The Teamsters are certainly not the only union lacking a
robust democratic culture, but the Teamsters' unique history makes it
crucial that reforms are solidly secured.
The risks of backsliding are not just theoretical. In May the IRB
permanently barred from the union two of Hoffa's closest associates,
William Hogan Jr., president of Chicago's Joint Council 25, and Dane
Passo, Hoffa's former Midwest campaign manager and special assistant.
They were disciplined for trying for two years to force the Las Vegas
local to permit a mob-linked labor broker (of which Hogan's brother was
vice president) to provide low-wage, nonunion workers for convention
setup work, thus threatening to undermine the Teamsters contract and
displace union members.
Although the IRB did not reprimand Hoffa, he was distressingly close to
the corrupt deal-making. He knew the character of Hogan, who was Hoffa's
initial pick as running mate until the IRB charged Hogan with nepotism
and corruption. Passo had a history of physically attacking dissidents.
Hoffa also admitted receiving a "general overview" of the proposed deal
in a Chicago lunch meeting with Hogan and the broker's president. He
agreed to Passo's requests to put the local into trusteeship and later
to fire the assistant trustee and then the trustee when they resisted
the deal. But in March 2001 Hoffa rebuffed Hogan's bid to negotiate the
Teamsters' convention-industry contract in Las Vegas "because of the
background of all the things that have happened with the IRB," he told
investigators. Attorney Matt Lydon, who is appealing Hogan's expulsion,
said, "I don't know of anything that was kept secret from Hoffa or
anyone else about what [Hogan] was doing."
Union spokesman Brian Rainville argues that the initial aim of the
consent decree has been accomplished, and that continuing it simply
costs too much. But much of the expense would have occurred under any
regime that conducted democratic elections and investigated internal
wrongdoing. The Teamsters must demonstrate that RISE can do the job and
establish a final review board independent of Teamsters officialdom
before the IRB can be eliminated. "Of course, the Teamsters should
become a union like other unions," said Teamsters for a Democratic Union
organizer Ken Paff. "Rather than just complain about the IRB, prove you
can do it. Clean up your own house."
IRB decisions have not been beyond criticism. Supporters of former
president Ron Carey, for example, say that Carey's acquittal last
October on federal charges that he committed perjury in denying that he
knew about the scheme to embezzle union funds for his election raises
questions about the IRB's decision to expel him from the union. But
without some independent outside force, there would have been less
progress in reforming the Teamsters.
Ultimately, democracy should make the Teamsters and the labor movement
stronger. The union's desperate focus on ending the consent decree is
doing the opposite. It has partly driven their courtship of Republicans,
from their full-throated but failed support for Bush's plan to drill in
the Arctic National Wildlife Refuge to Hoffa's recent vote against
funding the AFL-CIO's successful political mobilization, because he
wants to give 30 percent of his support to the GOP. Also, unlike unions
such as the letter carriers and utility workers, Hoffa supports Bush's
controversial Terrorism Information and Prevention System (TIPS), which
would try to turn UPS workers into government informers. Although a new
dues increase will boost funds for organizing and strike pay, members
have more reason to worry about proliferating multiple salaries for
officers and about the decline in organizing victories and expenditures
than about the costs of federal oversight. Ending the consent decree
wouldn't have salvaged a failed organizing strike against the ruthlessly
antiunion Overnite, but it might have let a sweetheart deal undermine
Las Vegas Teamsters. Democracy, including ferreting out corruption, is
worth the price, and democracy in the Teamsters still needs outside
Attempts to organize are squelched by a flying column of
Labor-backed politicians are being asked to return the favor in union fights.
Unions are gradually making fuller use of the Internet's capacities to
improve communication with their own staffs or members. But increasingly
they are also using the web to recruit new members or to establish
"virtual communities" of union supporters in arenas not yet amenable to
the standard collective-bargaining model.
Alliance@IBM (www.allianceibm.org) is an example of an effective
Net-supported minority union, operating without a demonstrated pro-union
majority and without a collective-bargaining contract at a traditional
nonunion company. The alliance provides information and advice to
workers at IBM through the web. A similar effort at a partially
organized employer is WAGE ("Workers at GE," www.geworkersunited.org), which draws on contributions from fourteen cooperating
international unions. The Microsoft-inflected WashTech
(www.washtech.org) and the Australian IT Workers Alliance
(www.itworkers-alliance.org) are open-source unions that are closer to
craft unions or occupational associations. Both are responsive to the
distinctive professional needs of these workers, such as access to a
variety of job experiences and additional formal education, and the
portability of high-level benefits when changing jobs.
The National Writers Union (www.nwu.org), a UAW affiliate, is another
example of a union virtually created off the Net. It provides
information and advice--including extensive job postings--to members,
and it lobbies on their behalf, most spectacularly in the recent Supreme
Court decision it won on freelance worker copyright rights. But most of
its members work without a collectively bargained contract.
In Britain, UNISON (the largest union in the country) and the National
Union of Students have a website that tells student workers their rights
and gives them advice about how to deal with workplace problems
(www.troubleatwork.org.uk). It is a particularly engaging and practical
illustration of how concrete problems can be addressed through Net
Finally, for a more geographically defined labor community, take a look
at the website of the King County AFL-CIO (www.kclc.org), the Seattle
central labor council that uses the Net to coordinate its own business,
bring community and labor groups together for discussion and common
action, post messages and general information to the broader community,
and otherwise create a "virtual" union hall with much of the spirit and
dense activity that used to be common in actual union halls in major
Let's create "open-source unions," and welcome millions into the
From Padua's Piazza Insurrezione, where I was standing at 11 in the
morning on April 16, the general strike--Italy's first in twenty
years--looked and sounded like a great success. More than 70,000 people
were already jammed inside the mid-sized square along with their broad
union banners and thousands of flags. Three immense vertical
standards--one for each of the labor confederations--loomed over the
crowd. The noise was deafening: drums, horns, gongs, a PA system on the
electronic equivalent of steroids and 70,000 voices cheering each
"We're ten million strong! More than half the labor force is striking
against the antidemocratic policies of Silvio Berlusconi's center-right
government! Three-hundred thousand are marching in Florence, two-hundred
thousand in Rome..."
The demonstrators in Padua--a university town forty minutes west of
Venice--weren't just striking, they were celebrating. Gathering together
70,000 adversaries of Berlusconi in the heart of the miracolo del
nord-est--the economic miracle of Italy's conservative northeast
where small- and mid-scale manufacturers have produced one of Europe's
greatest concentrations of wealth--was a miracle in itself. The union
banners identified the protesters: eyeglass assemblers from Santa Maria
di Salva, carpenters from Iesolo, leather workers from Verona (most of
them African immigrants), poultry processors from San Martino, hospital
workers and schoolteachers from Venice. But students, university
professors, insurance brokers and television producers also carried
union banners. Thousands of others--teenagers, homemakers, young
professionals--marched with family and friends.
The unions called the strike to protest a reform that would undermine
the 1970 Workers' Statute, the key guarantee of labor rights in Italy.
That's why Sabina Tonetto, a 26-year-old software consultant from the
town of San Donà di Piave, said she was in the piazza. Yet the
company she works for doesn't come under the statute's jurisdiction;
it's too small. And with her skills, she said, "I run no risk of being
laid off." She stayed away from work as a matter of principle: "Certain
things"--the Workers' Statute--"must not be touched. All of us have to
do our part."
Just a few blocks away, the stalls in the farmers' market in Piazza
della Frutta and the shops along Via Dante and Corso Garibaldi were open
for business. Well-dressed pedestrians perused the displays of
handcrafted shoes, silk scarves and designer jackets--variations of what
they were already wearing. The espresso bars were serving up sandwiches,
pastries and pricey chocolates. The streets were peaceful. Nothing in
the shoppers' demeanor, nothing in the merchants' conversation,
connected to what was happening nearby. The noise from Piazza
Insurrezione didn't carry. For anyone who wasn't right there, the
general strike might as well not have taken place.
That's Italy today. While much of Europe has been shifting rightward,
Italy tilted somewhat faster and farther and is now precariously poised,
its citizenry both evenly and deeply divided. About half voted
free-marketer Berlusconi into office in May 2001. His supporters include
the business elite and some workers disillusioned with the left, but
most are small and medium-sized manufacturers, store owners,
professionals and self-employed craftspeople. They are numerous in
Italy, prosperous and happy to have Berlusconi as long as he doesn't
raise their taxes. The other half of the citizenry is outraged by a
prime minister who aims to undermine the labor movement, dismantle the
public sector and foil the prosecutors who have indicted him for
After nearly a year of collective depression and political paralysis,
anti-Berlusconi citizens are starting to mount a credible opposition,
coalescing around the left wing of the labor movement but reaching
beyond to include intellectuals, students, media figures and ordinary
people who are getting involved for the first time. Since January not a
week has gone by without a rally or march or strike bringing anywhere
from 3,000 to 2 million people into the piazzas. The protests are
uniting generations and social classes. So far they've remained loose
enough to attract independents and broad enough to incorporate both the
center and left.
According to Valentino Castellani, a left Catholic and former mayor of
Turin, "The healthy parts of society are finally saying, 'Enough! This
can't go on.'" For Luciano Gallino, a prominent sociologist, the social
protest movements that have sprung up in the last few months represent
"an awakening of civic passion."
Berlusconi provoked the uprising by refusing to modify a series of
"reforms" custom-designed to protect his vast business empire and shield
him (and several Cabinet members) from prosecution for corruption. The
naked self-interest, the almost outlandish specificity of the
legislation, was too much for many Italians to take. One law (already
passed by Parliament) decriminalized the falsification of financial
statements in the private sector. This let Berlusconi off the hook
because he was under indictment for that crime. A second law, also
enacted, makes it difficult for Italian prosecutors to use "letters
rogatory," the standard instrument for obtaining evidence from another
country. This conveniently sabotaged a case in which Berlusconi was
accused of bribing judges, a case that depended on evidence from Swiss
Another law, which has passed the Chamber of Deputies, states that
owning a business does not constitute a conflict of interest for a prime
minister as long as he or she does not run the business. Since
Berlusconi has turned over the administration of his enterprises to
members of his immediate family, he would not have to sell any of his
holdings, which include three of Italy's four private television
networks, the nation's largest publishing conglomerate, Mondadori, and
an advertising agency that dominates the national market.
Although the left unions have been fighting Berlusconi's policies from
the start, the spontaneous street protests began in response to a reform
that would allow the government to exert political pressure on the
judiciary. When judges and prosecutors staged a walkout, two professors
at the University of Florence called on citizens nationwide to support
them. The response was overwhelming and persistent. By February a rally
in Milan's Palavobis sports facility, which holds 12,000, drew a crowd
of 40,000. That same month, leftist film director Nanni Moretti (Caro
Diario, The Son's Room) set off a political revolt when he
spoke to a rally in Rome's Piazza Navona organized by the center-left
Ulivo (Olive Tree) coalition. Instead of making the predictable rally
remarks, Moretti lambasted the coalition leaders, who were standing next
to him, for focusing on petty internal power plays rather than offering
an alternative to Berlusconi. He claimed that he no longer identified
with their politics. The crowd's wild applause and the ensuing debate,
which went on for weeks in the newspapers, embarrassed the Ulivo
leadership into admitting they had lost touch with their constituency.
In March the girotondi ("ring-around-a-rosy protests") began.
Resurrecting a feminist tactic of the 1970s, protesters, holding hands,
circle around a building that figures in one of Berlusconi's reforms. If
they are protesting his control over 90 percent of the airwaves, they
circle around the state broadcasting headquarters; if they are
protesting steps toward privatizing education or healthcare, they circle
around a school or hospital. Girotondi are taking place all over
Italy--often initiated by grassroots groups, announced just a few days
ahead of time, and advertised through leaflets and by word of mouth. In
addition to citizen protests against Berlusconi's reforms, there are
frequent demonstrations against corporate-led globalization and racist
treatment of immigrants.
According to Nicola Tranfaglia, dean of the humanities faculty at the
University of Turin and one of the opposition's prominent intellectuals,
"These movements don't trust the political parties. They are similar in
some ways to 1968, but then it was young people. Today you see people of
What anchors this spirited civic engagement is the labor movement--more
precisely, the largest and most left-leaning of the three union
confederations, the Italian General Confederation of Labor, or CGIL. "In
just three months, the CGIL has pushed the center-left so there's a
tougher opposition and greater unity," Tranfaglia said.
If any one issue unites the opposition to Berlusconi, it is the attack
on the Workers' Statute. Berlusconi wants to drop Article 18, which
stipulates that if a judge finds that an employer has fired a worker
unfairly, that worker can choose to go back to his or her job or accept
a money settlement. Italians in the opposition see Berlusconi's move as
an attack on basic individual rights. L'articolo 18 non si tocca
("Article18 cannot be touched") has become the central slogan of the
Berlusconi and his allies in the most powerful business organization,
Confindustria, argue that Article 18 creates labor market rigidity; as
long as it stays on the books, they say, employers will refuse to hire
additional workers, the economy will produce no new jobs and investors
the world over will shun Italy. Sociologist Luciano Gallino thinks this
is nonsense. "Eliminating Article 18 has nothing to do with creating
jobs. It's the first step in labor market deregulation. It would open
the door to creating a class of the working poor"--a phenomenon that
Italians on the left see as typically American. Berlusconi's attack on
Article 18 serves another purpose: "He is trying to split the labor
movement," former Mayor Castellani said. Everyone in the opposition
Italy has had three politically diverse and competing union
confederations since the onset of the cold war. Their ability to
cooperate is endlessly fluctuating. The Italian Confederation of Workers
Unions (CISL) is the second-largest confederation, the most willing to
compromise with Berlusconi's government and the least interested in
defending Article 18. The smallest confederation, the Italian Union of
Labor (UIL), was also inclined to bend on Article 18. But Sergio
Cofferati, secretary general of the CGIL, refused to budge an inch. He
ended up rescuing the entire opposition.
Cofferati is the new hero--patron saint says it better--of Italy's left.
When the other two confederations refused to support a protest march to
defend Article 18, Cofferati insisted that the CGIL hold the
demonstration by itself. Over a million people converged on Rome on
March 23 in the largest rally since the Second World War. Cofferati also
called for the general strike on April 16, and his March triumph
embarrassed the other unions into going along. By the time of the April
25 Liberation Day rallies and the May Day rallies, 200,000 people were
showing up wherever he spoke. The crowds chant "Sergio! Sergio!" no
matter who else is standing on the stage, senior citizens break through
the security lines and throw themselves into his arms, teenagers line up
Cofferati's second and, by statute, final term as head of the CGIL ends
in June. The opposition activists are begging him to lead the
center-left coalition of parties. But he has decided to return to
Pirelli, the giant rubber and tire company where he worked as a
technician two decades ago--to do what, he won't say. He claims that he
has no intention of withdrawing from politics. In April, he helped found
"Aprile," a group that will coordinate the work of the large left
faction within the party of the Left Democrats. But he'll make no bid,
yet, to lead the left formally.
Berlusconi may have made a mistake by going after Article 18. Two of the
several parties in his coalition--the National Alliance (the
ex-neo-Fascists) and remnants of the old Christian Democrats--have
criticized his hard line. Whereas Berlusconi considers himself a
conservative in the mold of Britain's Margaret Thatcher, the other two
parties are less ideologically pure free-marketers. It is difficult to
predict Berlusconi's next move. Some Cabinet members hint that he would
like to find a face-saving compromise on Article 18. His labor minister,
however, claims he will fight the unions to the end. If the reform
becomes law, the unions have vowed to collect signatures for a national
referendum. Organizing for a referendum to revoke the law on letters
rogatory has already begun.
With the right and far right in Europe gaining ground, the ongoing
protests in Italy look like a hopeful sign. But Berlusconi still has the
upper hand. He is the first head of government in post-Fascist Italy
ready and able to disregard "the piazza" and impose his will through his
solid majority in Parliament. "Berlusconi is setting up a regime for
himself. He's not a fascist. He's populist and authoritarian. A
Peronist. Liberal democracy in Italy is in danger," Nicola Tranfaglia
On May 26, about 11 million Italians will vote in local and regional
elections. Although these contests do not necessarily mirror public
opinion on national issues, everyone will interpret them as a showdown
between Berlusconi and the opposition. The center-left has a chance to
improve its standing. The far-left Communist Refounding party has agreed
to cooperate with the center-left coalition--something it refused to do
in last year's election, thereby assuring Berlusconi's victory.
In the meantime, citizens are rallying in the piazzas, collecting
signatures and marching around buildings. As a result, most Italian
small-d democrats would agree with Luciano Gallino when he says, "I'm a
little less pessimistic."
As a Russian studies major at Yale in the 1970s, I observed Soviet
"elections" that were conducted more fairly than the 2002 Yale
Corporation's board of trustees election. Why is the Yale Corporation so
threatened by the candidacy of a prominent New Haven pastor who cares
about Yale and its workers?
The last time a prospective trustee was nominated by petition was almost
forty years ago, when William Horowitz became Yale's first elected
Jewish trustee. Back then 250 signatures were required for ballot
qualification; that has since been raised to 3 percent of eligible
alumni--some 3,200 signatures today. The Rev. Dr. W. David Lee, an
African-American pastor of one of New Haven's largest churches and a
graduate of the Yale Divinity School, gathered 4,870 signatures. If
elected, he would be the only New Haven resident other than Yale's
president to sit on the corporation's board.
But he is also supported by Yale's employee unions, and the
university--one of America's great institutions of higher learning--does
not like that. Normally, the Standing Committee for the Nomination of
Alumni Fellows of the Association of Yale Alumni nominates two or three
alumni to stand for election. This year, apparently threatened by Lee's
grassroots efforts, the committee nominated only one, Maya Lin, creator
of the Vietnam War memorial, around whom the Yale Corporation and its
allies could rally.
As an alumnus, I received no fewer than six mailings--from the alumni
organization, from wealthy Yale alumni, from former corporation board
members--all criticizing Lee for failing to identify who paid for his
mailing, for his "aggressive campaign" and for his "ties to special
interests, labor unions."
In a campaign flier (containing no disclosure of who paid for it), the
Association of Yale Alumni quoted comments from Lee critical of the
university. It is not surprising that a minister of a large church at
which many Yale employees worship might at times express substantial
differences with a university that pays many of those workers less than
a living wage.
As if the Yale Corporation had not already made its interests known,
even the ballot package--paid for by the university and sent to all
voters--was slanted in favor of the corporation's candidate. The
official publication intimates support for its favored candidate from
"over 700 alumni," including the Association of Yale Alumni, the
officers of Yale college classes and Yale clubs and other alumni
associations. The other candidate, the Yale Corporation stated in the
ballot package, was "nominated by petition"--(as though Lee's 4,870
signatures did not indicate the support of those alumni).
Reminiscent of elections conducted in one-party states, the corporation
refused to allow an observer to be present when the ballots are counted.
It is not in the Yale bylaws, he was told.
It is unfortunate that Yale, which has produced so many national
leaders, has earned a widespread reputation for its antiunion activities
[see Kim Phillips-Fein, "Yale Bites Unions," July 2, 2001]. To all but
declare war on Yale's workers and its union, and on an outstanding young
New Haven leader, can only exacerbate city-university tensions and roil
Yale's already troubled labor-management waters.
How could one pro-worker candidate who aspires to a lone seat on a board
of nineteen of America's most influential people unleash the fury of an
entire university hierarchy? Why do powerful people--the kind who sit on
Yale's board--feel so threatened by a local minister? Why can't one of
the world's most prestigious universities--with a multibillion-dollar
endowment--pay its workers a living wage?
For God. For Country. For Yale.
The Enron "outrage," AFL-CIO president John Sweeney told a rapt crowd of several hundred workers at Milwaukee's Serb Memorial Hall, is "not the story of one corporation's abuses, but sadly it's an example of business as usual in boardrooms and executive suites all across the country." Over the coming months, at a series of town-hall meetings around America, the AFL-CIO will warn workers that they, too, could be "Enroned," and it will call for "no more business as usual."
In an unprecedented way, argues AFL-CIO corporate affairs director Ron Blackwell, the Enron scandal "opens up a channel of public discourse on issues of retirement security and corporate accountability." In the booming nineties nobody wanted to hear why corporations and capital markets had to be better regulated, and reformers were left pleading for corporations to be "socially responsible." But today, "new economy" job-hoppers as much as steelworkers have good reasons to listen to union warnings about deeply flawed 401(k) plans and Social Security privatization.
The labor movement helped win millions in severance pay for laid-off Enron workers, provided legal counsel for workers battling Enron's creditors, sued Enron executives (through union-affiliated Amalgamated Bank) on behalf of pension funds that lost hundreds of millions of dollars in Enron's collapse and helped ex-Enron workers--both union and nonunion--tell Congress and the public how they were misused. The AFL-CIO requested new Securities and Exchange Commission rules and forced four Enron directors to withdraw from renomination at other corporate and public boards. Now labor is challenging Enron director Frank Savage's renomination to Lockheed Martin's board, sending the message that independent directors have a public trust.
Besides supporting auditor reform, the AFL-CIO is promoting legislation to strengthen the rights of workers in 401(k) plans--to a point. Senator Jon Corzine, backed by the Pension Rights Center, initially proposed prohibiting employees from holding more than 20 percent of their employer's stock in their plans. But after complaints from unions representing some workers who had bet big with their employers' stock, like pilots and GE employees, the AFL-CIO backed Senator Ted Kennedy's legislation, which places a less stringent limit on the employees' 401(k) holdings of their employers' stock but which, quite importantly, would require equal worker and employer representation in governing the plans. Enron worker Dary Ebright, who lost $300,000 from his 401(k), argues that limits make sense. "If that had been in place," he said in Milwaukee, "I wouldn't be here today."
Sweeney hopes that unions can use votes on Enron-related reforms to draw lines in this year's elections showing what candidates put first--corporations or workers. The AFL-CIO attacked Republican Representative John Boehner's legislation, passed in April, for "wip[ing] out existing retirement protections for workers under the guise of responding to" Enron. The House bill would permit investment firms to advise workers about financial products, like mutual funds, from which those firms profit--precisely the kind of 1990s conflict of interest that is under investigation at several Wall Street brokerages. While providing limited protections for workers and preserving executive privileges, the House bill would also make it easier for corporations to exclude most employees from retirement plans. Labor's advocacy for Enron workers and retirement security could also strengthen organizing, including efforts among white-collar workers, by sparking a more "enlightened" view of a collective voice at work, as it did with former Enron vice president Dennis Vegas, now a union enthusiast.
But a budding labor scandal threatens the movement's credibility on corporate accountability. It appears that a few labor leaders, sitting on the board of ULLICO, parent of Union Labor Life Insurance Company, personally profited from privileged deals in the Enronlike boom and bust of telecommunications upstart Global Crossing, while their unions' pension funds were denied the same opportunity. Robert Georgine, president of ULLICO and former president of the AFL-CIO's building and construction trades department, former Iron Workers president Jake West, Plumbers president Martin Maddaloni and Carpenters president Douglas McCarron are among those who got windfalls of several hundred thousand dollars. In March Sweeney, who did not take part in the deal, called on ULLICO, like Enron, to appoint an independent committee and counsel to investigate, but in mid-April Georgine said he would take a "somewhat different" approach. "We're not going to ask Enron to live by one set of standards and ULLICO to live by another," Sweeney insisted. Many union officials say they were shocked and disgusted by the news, a reminder that "no more business as usual" is a widely applicable slogan, even within union ranks.
In early March, the Bush Administration adopted a policy that the steel industry as well as the United Steelworkers of America (USWA) have long been agitating for--tariffs on steel imports. The official reason is to give the industry some "breathing space," so it can restructure while shielded from foreign competition. It's more likely that Bush wants to carry some important industrial states in 2004.
Thanks to NAFTA, Canada and Mexico are exempted, as are some poorer countries. Imports from elsewhere will face initial duties ranging from 8 percent to 30 percent, though the levels will decline over the next three years as they are gradually phased out. This is less than what labor and management wanted, but it's still striking coming from a professed free-trader. The Clinton Administration never did anything remotely like it--and if it had, Wall Street, which was unfazed by the Bush announcement, would have panicked about the protectionist threat.
Loud complaints did come from abroad, though. Even British Prime Minister Tony Blair, usually found waving the Stars and Stripes with hysterical glee, denounced the move as "unacceptable and wrong." He urged the industry to restructure rather than hide behind trade barriers--exactly the prescription the United States usually gives other countries (with similar indifference to displaced workers). Blair was joined by politicians, businesspeople, unions and pundits around the world--and by Bush's own frequently indiscreet Treasury Secretary, Paul O'Neill, who told the Council on Foreign Relations that the tariffs would cost more jobs in steel-using industries than they could save in steel.
Indeed the industry is in dire shape. It's lost 35,000 jobs in the past two years. Sixteen producers are operating in bankruptcy. Steel employed 1.5 percent of US workers in 1950, 0.6 percent in 1980 and 0.2 percent in 2000, versus 0.1 percent today. It's hard to believe three years of protection can reverse that long slide.
Clearly the Administration structured its tariffs with an eye on the political map. The kinds of steel offered maximum protection happen to be produced in the electoral battlegrounds of Ohio, Pennsylvania and West Virginia. There's a political pattern to the victims too: Turkey, an important factor in the likely war on Iraq, was spared. Brazil, key to any future hemispheric free-trade agreement, got off relatively lightly, as did Russia, key to many things. The most affected producers are in South Korea, Japan, China, Taiwan and the European Union. Most have filed complaints with the World Trade Organization. The EU is also threatening to retaliate against US steel and textiles, which could limit Bush's political gain in steel country and alienate the textile-intensive South.
Defenders of the tariffs--from US Steel to the union-friendly Economic Policy Institute--argue that everyone subsidizes and protects its steel industry except us. As a result, the US steel industry is getting killed. So the tariffs are necessary to defend it.
Not everyone agrees with this picture of America as victimized innocent. According to the EU's count, the United States has imposed more than 150 measures over the years to protect steel. More than subsidized foreign competition, the US steel industry is suffering from the high value of the dollar, recession, global overcapacity and high pension and healthcare costs.
The United States could have filed a complaint with the WTO, but it would have had a hard time proving its case. Another multilateral route was available too--negotiations to reduce world steel capacity by some 12 percent are well under way. But the Administration and its supporters claim that having the tariffs will strengthen Washington's negotiating hand.
The USWA seems to have no idea of how offensive foreign workers find Bush's big stick policy. Most of the affected countries have higher unemployment rates than ours. The EU, Japan and Latin America haven't seen a boom in decades, and Asia is still recovering from its 1997 financial crisis. Gary Hubbard of the Steelworkers' Washington office conceded that the EU and Japanese unions were annoyed but wasn't sure whether the USWA had consulted at all with its counterparts abroad (no one had ever asked the question before). So much for solidarity.
It's nice to imagine another world, where we protect workers, not their jobs. If we had a good system of income support, retraining, job placement and job creation, we wouldn't have to disemploy foreign workers to fight what's probably a losing battle to save jobs here. Sweden has long had such an active labor market policy, as it's called. Workers wouldn't have to fear innovation if they knew they wouldn't end up on the sidewalk. But that's not the way the world works these days. It's all about market solutions--except when George W. Bush is cruising for votes.