Saturday, May 02, 2015

Did American jobs disappear under NAFTA?

General Motors

This is the GM site affectionately named "Chevy in the Hole." (click here)

This site was to be rehabilitated by planting trees to remove the contamination of the ground. This is Flint, Michigan.

Below is a black and white photo of the Chevy complex of 1920. Believe that? Chevy was actually this big in 1920. The arrow points to the original Buick factory on Kearsley street. (click here)

The Flint, Michigan plant opened it's doors in 1904 and was idled in 1999. It was a shock to the economy. This is an article from Forbes in 1998. The change in the USA consumption of goods and services was falling. The Middle Class was slowly drifting into poverty and Wall Street was worried. This was a foretelling of what was to come in 1999 and 2000. The country was on a slippery slope. It was slipping slowly, but, it was slipping just the same.

...O’Sullivan, (click here) one of the blue-chip bears, publishes an estimate of the impact of stock market gains on consumer spending, which makes up about 70% of GDP (see chart, left). Telling point: The market doesn’t have to go down to depress the economy. If it merely stabilizes, thus depriving consumers of that warm capital-appreciation feeling, consumer spending growth will ultimately tail off.

Just since this summer the Dow Jones industrials dropped nearly 2,000 points, regained most of the loss and then started slipping again....

This is a 1920 Buick Family Sedan. (click here)

NAFTA was introduced to the American legislature in 1990 by then President George H. W. Bush. It was signed on December 17, 1992 simultaneously by President George H. W. Bush of the USA,  Canadian Prime Minister Brian Mulroney and Mexican President Carlos Salinas. Once signed it went to the legislatures to ratify it. Canada's Parliament fought the hardest, but, lost the fight when the electorate split their next vote between Liberal and Democrats which allowed the Pro-NAFTA Conservatives to win more seats and ratify the agreement. 

In the US, George H. W. Bush fought to 'Fast Track" his signature to pass the agreement, but, it never happened under his presidency. Part of the election of President Bill Clinton was due to the fight by labor to defeat NAFTA. What Bill Clinton did was to pass two other agreements which was to help protect labor and the environment.

The North American Agreement on Labor Cooperation (NAALC) (click here)

The North American Agreement on Labor Cooperation (NAALC) was signed on September 14, 1993, by the Presidents of Mexico and the United States, and the Prime Minister of Canada, as one of the supplementary accords to the North America Free Trade Agreement (NAFTA). It entered into force on January 1, 1994.

The NAALC was the first international agreement on labor to be linked to an international trade agreement. It provides a mechanism for member countries to ensure the effective enforcement of existing and future domestic labor standards and laws without interfering in the sovereign functioning of the different national labor systems, an approach that made it novel and unique....

That sounds fancy enough. What it did was to insure labor unions were wiped out by laws outside the USA in either Canada or Mexico. The USA would still maintain it's freedom of assembly which guaranteed the right to organize a labor union. What it didn't do was to insure the current labor statistics remained the same. There was no mechanism to do that. It could not control private industry and to that reality, the NAALC did little to protect the American Worker.

The North American Agreement on Environmental Cooperation (NAAEC) (click here). 

It has a Preamble, seven parts and 51 articles. The preamble says it all really. The seven parts and articles simply put words to the understanding in the preamble. Here again it was an agreement to be sure one country's laws didn't effect the sovereign authority of another. In the USA the environmental laws would remain intact. 

The Government of the United States of America, the Government of Canada and the Government of the United Mexican States:
CONVINCED of the importance of the conservation, protection and enhancement of the environment in their territories and the essential role of cooperation in these areas in achieving sustainable development for the well-being of present and future generations;
REAFFIRMING the sovereign right of States to exploit their own resources pursuant to their own environmental and development policies and their responsibility to ensure that activities within their jurisdiction or control do not cause damage to the environment of other States or of areas beyond the limits of national jurisdiction;...

The two agreements added by Clinton pretended to be an iron clad agreement to labor and the conservation community. It passed the US House nearly divided at 234-200. The 234 would break down to 132 Republicans and 102 Democrats. NAFTA with the two additional agreements passed the US Senate 61-38 with 34 Republicans and 27 Democrats facilitating the passage. There was never a "Fast Track" with NAFTA. Clinton never asked for one and signed it on December 8, 1993 putting it into effect on January 1, 1994.

In September of 1993 there was a big promotion that took place so the stupid agreement cold receive a bipartisan appeal. 

...The presence of three former presidents, (click here) two Republicans and one Democrat, to join President Clinton here today on this stage, is evidence of our country's ability to support what is in our nation's best interest over the long term without respect to partisanship....

No different than with this mess today, Wall Street pressured the White House enough to pull out all the stops and pass the lousy agreement. 

This is the GM facility in Silao, Guanajuato, Mexico. It is 275,000 Sq. Ft. of engineering, prototyping and manufacturing. It has 530 Employees. It opened it's doors in 1994.

Got that? 

NAFTA went into effect January 1, 1994 and GM wasted no time to welcome what many Americans would call "The Greedy Treaty."

The Flint, Michigan plants would remain open for five more years to facilitate a smooth shut down. It was shuttered completely in 1999. 

General Motors had it's international interests from early on with an Opel plant in the UK in 1905 and a Astra plant in Brazil in 1930, but, for the most part it was an American company until then. There were some international interests that took place in the 1950s or so, but, until NAFTA General Motors was primarily a United States Company. 

Once the gate was open, the company began to run into trouble, focused on large cars and trucks, lost a large part of it's market in the USA and began to tank. See what GM and most other Wall Street companies failed to grasp was the need for a well paid work force in the USA so they could sell their products. The foreign interests of these companies didn't provide the same size market place as the USA with consumers very different in their tastes and attitudes. Basically, poverty wages and employees didn't provide an income base to their products.

I have yet to hear of a success story from NAFTA. There might be one or two. The population in Canada in 1994 was slightly more than 29 million. The population in Mexico in 1994 was 93 million. The USA population in 1994 was 263 million. While Canada has a large geological footprint, it has dearly fewer people living there. The northern territories are not as interesting for settlement. 

But, from Wall Street's point of view the new populations of people in Canada and Mexico were nothing more than a huge increase in their bottom line. In other words, "The Gold Rush" was on. 

To say I am not impressed with the CEOs of GM from the past is to realize how completely stupid I know they were. GM took healthy markets for their products and discarded them because the employees were organized by unions. That was the only reason. Collective Bargaining has been hated by CEOs and Republicans alike. Yet, neither Republicans or CEOs will admit how completely ludicrous that hate is as it continues until today.

Should the Labor Agreement attached to NAFTA been eliminated? No. The markets in the USA to that point was very healthy. In order to make the "Booming Economy" of NAFTA happen Mexico would have to value a Middle Class and reform their laws to that outcome. That didn't occur, remember the word U-N-I-O-N was as good as a four letter word.

The rest is history. But, it isn't even pleasant history.

So, when people such as Mr. Furman attempt to pull the wool over the eyes of American Labor, they are making fools of themselves. For what outcome? Go figure.

May 1, 2005
By Julie Hirschfeld Davis 

...The 52-page report by Mr. Furman (click here) makes just one mention of Nafta, citing a 2007 study asserting that in Mexico in the decade after it went into effect, people born in states with “high exposure to globalization” made higher wages.

The report also seeks to debunk a common refrain by critics of Nafta and free-trade agreements in general: that they lead to job losses in the United States.

Free-trade agreements, the report asserts, “do not actually encourage outsourcing abroad. Instead, what may increase the outsourcing of American jobs is to remain in the status quo.”... 

Do we trust the federal government to do the right thing? According to the NY Times article, President Obama promised to renegotiate NAFTA during his election. In the Trans-Pacific agreement he states he has included Mexico and Canada. In that inclusion is the election promise he made to American Labor.

Labor understands what it had in NAFTA, but, it has yet to understand what it has in the TPP or the TiPP. 

Today, the USA has over 322 million people. That includes all age categories so that does not translate to 322 car buyers, but, there is a consumption of services to the GDP in all those age ranges. 

So, what will happen to the economy of the USA with these international agreements? So far no one is venturing a guess and there has not been concrete estimates in any of the countries signing these agreements. All anyone knows is that Wall Street has designs on growth and want anything and everything that can be included in that growth. Supposedly, everyone can trust Wall Street to do the right thing.

The question is not actually "Do we trust government?" The question actually is "Do we trust Wall Street?" The only people that do are the majorities in the US House and Senate because their jobs and income are secure if they deliver the goods to Wall Street.

After Citigoup pulled the stunt in the budget by adding an amendment under a majority Republican House and Senate, there is no controlling the greed or the need for more bailouts in the way of annual deductions for monies lost to exotic financial instruments. 

The amendment to the Budget by Citigroup simply makes the bailouts invisible as it moves from a legislative process every time it happens, to a place on the IRS form whenever it pleases the CEO to pull the plug for a bigger annual bonus.

Let's see the agreements and then we'll know exactly what we are looking at. There is every indication Labor will know better than anyone what is good for Wall Street and the government and it's tax base and what is not. There is no one that cares about the Middle Class except Labor Unions. They know more about the USA economy than anyone else in the picture.

The American people want guarantees. The Labor Unions are the only ones that can supply them without destroying the USA economy.

...Between 1993 and 1999, (click here) during the first seven years (peace time economy), President Bill Clinton’s presidency, the U.S. economy continued to grow consistently. However, by 2000, with the IT bubble bursting (and GM moving it's labor to foreign interests), the growth began to slow down and the decline continued during the first year of President George W. Bush. Of course, 9/11 did not help matters in that year....

End of discussion.
The reason cities, such as Baltimore, fall into disrepair and hopelessness and alternate economies is because 'State Rights" alone does not support the cities and people in their needs.

The reason there is a federal income tax and policies such as "The Education Department" with a Secretary at the President's Cabinet is to assist all American to find equity in their ability to live the promise of their birth right.

"The Military" is not the only purpose of the federal treasury.  

As of 2015 Maryland is ranked 15th in the country in GDP, $351,234,000,000.

For tax year 2014, Maryland's personal tax rates begin at 2% on the first $1000 of taxable income and increase up to a maximum of 5.75% on incomes exceeding $250,000 (or $300,000 for taxpayers filing jointly, heads of household, or qualifying widow(ers)).

That state tax is among the lowest in the country. Maryland is the boundaries that meet the national capital. It has median incomes that are highest in the country, however, Baltimore is among the poorest cities in the state and country. The median income in Baltimore is over $30,000 less than the median income of the State of Maryland.

Maryland - $73,783

Baltimore - $41,385 

The poverty rate in Baltimore is among the highest in the country at 28.3 percent. The poverty rate in Maryland is is 9.8 percent and among the lowest in the country. The country's poverty rate is currently 15 percent. 

Baltimore's demographics is 63 percent African American. The state of Maryland is 30.1 percent. The national average is 13 percent. 

The home ownership rate in Baltimore is 48.3 percent. Maryland has a home ownership rate of 67.6 percent. The current national home ownership rate is 64 percent. 

An article in "The Baltimore Sun."

December 1, 2014

"Poor Kids in Baltimore Have it Worse Than Those in Nigeria" (click here)

"When a teenager from East Baltimore was asked to describe his neighborhood, he spoke of “big rats going around in people’s trash, vacant houses full of squatters and needles on the ground.” A young woman in New Delhi, asked the same question, described the dirt and the “dirty water found lying on the roads,” while a young man in Ibadan, a large city in Nigeria, spoke of the smell of urine and streets “littered with paper and other refuse.”

Getting the picture yet?

While Maryland does relatively well as a US State, it is unable to bring about hope in Baltimore. The city is not completely unique. There are plenty of cities struggling to bring about hope for their impoverished. Yes, impoverishment is frequently a Democratic concern. 

The agricultural community of the Midwest sees poverty and demographics differently. If someone is so called "Lazy" in the Midwest where most Republicans find their victories in the Electoral College it is because they aren't ambitious enough to find a job. 

Regional Unemployment (Seasonally Adjusted) (click here)

In March (2015), the Midwest had the lowest regional unemployment rate, 5.0 percent, while the West had the highest rate, 5.9 percent. Over the month, the only statistically significant unemployment rate change was in the West (-0.2 percentage point). Significant over-the-year rate decreases occurred in all four regions: the Midwest (-1.3 percentage points), West (-1.2 points), and Northeast and South (-0.9 point each). (See table 1.)

Among the nine geographic divisions, the West North Central had the lowest
unemployment rate, 4.2 percent in March. The Pacific had the highest rate, 6.3
percent. Over the month, the only statistically significant jobless rate change
occurred in the Pacific (-0.2 percentage point). All nine divisions had significant
rate declines from a year earlier, with the largest of these decreases occurring in
the East North Central (-1.4 percentage points).  

Baltimore has profound problems that require intense and high amounts of investment. That is not available especially after a global economic collapse. The people of Baltimore understand their problems. They know they are faced with complying with 'alternative economies' such as "The Drug Economy." They don't have hope in achieving a 'real life' so much 'an engineered life' of crime.

In that lies the reality of many African Americans considering the intense amount found in Baltimore. After generations of loss of hope they have adapted a life of relationships that exist between jail/prison and "the community." We saw Rep. Elijah Cummings with a loud speaker in his hand to tell everyone to go home when the curfew was looming. Why is that? Those folks didn't understand what 10 PM means or did they believe their opposition of government would lead to a greater opportunity to change the element of hope in Baltimore. BOTH.

About 9% of Maryland adult residents over the age of 18 had less than a high school diploma in 2009; 19% of these residents were from Baltimore City.

Illiteracy. Yes, in the USA a large city such as Baltimore has very high illiteracy rates. So, when a police officer confronts someone in Baltimore that can't sincerely change his life because of lack of opportunity what happens is a dehumanizing of the "career criminal." That is a heck of a designation, isn't it? "Career Criminal," you have arrived as the deepest fear of the majority of white Americans.

AND. "Career Criminals" have CHOSEN to be such. "W"rong. 

The cities, such as Baltimore, need help. They need help to change the future of their children. When the cities aren't able to provide THAT PATH to their children then parents such as Mr. Eric Garner 'take it on the chin' and tell his children to stay in school and go to college. Mr. Garner besides attending the PTA meetings also sells $1 cigarettes to pay for the next class trip his children will benefit from and ?college?, "Yeah, right." 

So, when I realized the children in Baltimore decided to march AFTER school let out, it was a profoundly different reality than I expected. They wanted to stay in school until the last bell because they now believe education is their 'way out of poverty.' Yet, they felt 'the call' to end the deaths of their peers and fathers at the hand of police. 

Now. When someone is completely disregarded by police as a 'viable' entity of the country and dehumanize them creating a culture that kills for absolutely no reason at all; people are going to get upset. When people get upset count on far more than an obituary and tears.

Today, due to the complete heinous reality of Black Men there is going to be people upset. Do not kill them. Do not maim them. Ask them what they need to make changes that matter and will create a life outside of poverty. 


Oh, by the way.

The Working Poor is NOT AN ANSWER.