Yet another plant moving to Mexico. Recession is over? Yeah right. You would think that if you pay attention to major media - but then they don't report important news, just trivia, which shapes public perception.



FTAA, candy factory closing not sweet
People's Weekly World Newspaper, 11/06/03 10:47


CHICAGO – Nearly a thousand Chicagoans rallied in front of the nearly closed Brach’s candy factory on the city’s West Side Nov. 1 to denounce three harmful economic trends: runaway shops, corporate globalization and the Free Trade Areas of the Americas, as well as the “Wal-Martization” of the U.S. retail economy.

The Brach’s plant, which at one time employed 5,000 workers at union wages with benefits, is moving all its production to Mexico by the end of the year, throwing its remaining 300 employees into the street. The closing is particularly devastating for local residents and Teamsters Local 738, which represents Brach’s workers. For a number of years, Brach’s has played an extortionate game of demanding both subsidies from the city of Chicago and wage concessions from its workers as the price of staying in the city. Now, pocketing these excess profits, it has announced it is closing.

James Thindwa, executive director of Chicago Jobs with Justice, demanded that Brach’s be forced to pay back every penny of the $10 million in concessions the city had granted it in exchange for staying.

Terrence J. Hancock, a trustee of IBT Local 738, related the Brach’s closing to corporate globalization and the policies of the Bush administration, saying “show George W. Bush the door in ’04, and kill the FTAA in its tracks.”

The FTAA is the Free Trade Area of the Americas agreement, a trade treaty being pushed by the Bush administration. Labor, farmers, environmental and community groups, even many governments, throughout the Western Hemisphere see the FTAA as a pro-corporate, anti-people agreement, which forces privatization, job loss, environmental degradation and wage cuts.

Trade ministers from the 34 countries of the FTAA will meet in Miami, Nov. 20-21, to negotiate this agreement. Tens of thousands of activists are expected to demonstrate.

Numerous speakers asserted that the coming of Wal-Mart to the area will be no substitute for the jobs being lost at Brach’s. Doris Pate, a forklift driver who has worked at the Brach’s factory for 31 years, said, “We need high paying jobs in this community, not Wal-Mart jobs.”

Rep. Danny K. Davis (D-Ill.), Illinois Secretary of State Jesse White, Lt. Gov. Pat Quinn and State Sen. Barack Obama, currently a candidate for the U.S. Senate, all spoke against Wal-Mart’s unfair labor practices, which drag down labor standards in the retail trade industry. White denounced both the closing of Brach’s and the Wal-Mart policies as “a violation of law and decency.” Other speakers pointed out that Wal-Mart will destroy struggling small businesses all over the city’s West Side.

The demonstration, organized by Chicago Jobs With Justice, the Chicago Federation of Labor, Student Labor Action Project, and several unions and community organizations, was part of a national “March to Miami.” The march, which was initiated by the Alliance for Sustainable Jobs and the Environment and Districts 11 and 7 of the United Steelworkers of America, began in Seattle on Sept. 26. The march is geared to show the effects of free trade in local communities throughout the U.S. and is co-sponsored by many labor, environmental and community groups.

Mary Ann Parisi, a worker at the local Dominicks supermarket, pointed out that because of the enormous size of the Wal-Mart corporation, their anti-worker policies have served as a dead weight to drag down labor standards of retail trade all over the United States. To compete with Wal-Mart, big retail chains all over the country have banded together against their workers, contributing to the current strike situation in California.

Illinois AFL-CIO President Margaret Blackshere wound up the rally with a three-point rallying cry: “We’re not shopping at Wal-Mart, we’re not buying Brach’s and we’re not going to let the FTAA be enacted.”

 

Those stories are happening all over the country. If you’re a CEO, you have no choice but to lower your costs to remain competitive or be sued by the stockholders. What you do get from the media is '126,000 new jobs', etc. etc. What we're seeing where I live is a greater number of service level businesses relocating from California and other states, so the State of Nevada reports those 'new jobs' (to comply with the 'Deadbeat Dad’ Federal reporting requirement that any new hire must be reported within 20 days) while ignoring the unemployment claims that are exhausted and drop off the statistical reports to become 'less unemployment claims filed in week blah, blah blah’.

One of the problems arising from switching from a manufacturing to service level economy is the difference in wage scales. While domestic construction is now about the hottest industry going because of low interest rates allowing more people to qualify for mortgages, service level employees are generally unable to qualify. That switch creates a demand for rentals, driving those prices up for the people who can least afford rent increases. A vicious circle with no end in sight until manufacturing closes the doors forever. The Fed has no choice but to keep interest rates low because the only real demand is that one strong industry, construction. Manufacturing certainly isn’t borrowing for expansion to create new jobs.

 

>>>> The Fed has no choice but to keep interest rates low because the only real demand is that one strong industry, construction

Interest rates low or high - that's a false dilemma. Why do you need the Federal Reserve at all with their disruptive economic stimulus - that's the unexamined alternative and that's not accidental.

The important fact is all this construction and real estate is almost all generated through debt caused by low interest rates. In other words, as an addition to GDP, it is meaningless. No one has gotten rich by borrowing.

If they discounted construction and related jobs being in a perpetual state of boom for the last 10 years, they couldn't claim that recession is over. The official numbers are fraudulent through and through.

The other important point that should be made is that you cannot be prosperous with a service type industry. Only heavy industry can make you prosperous. Programming has been deported to India. Textile to Mexico and Taiwan. Car making to Mexico and Japan. Now, in fact Japan is using us as a colony to build their Toyota Camry. We make them, sell them but the profit goes to Japan.

We are becoming a third world country. Almost there, step by step.

 

With me, you're preaching to the choir. I'm a firm believer in debt when used as it should be, and that's to leverage expansion when debt is less than the cost of internally generated capital. I don't see any expansion taking place and I laugh at those who worship GDP.

Though with the way things are going it is very tempting to encumber all my assets and bury the gold in my backyard. With the antique Homestead Act still intact, that combo is looking attractive.

 

Carpe
Just the name of that newspaper sounds left-wing liberal. Shame on you!

 

I have to agree with that one. Sounds way too socialist.

 

Until US labor costs and living costs (and those in other Western nations) become more competitive the decline must continue. For example, steel tariffs protect the steel makers but the higher cost of steel punishes domestic manufacturers. Those of us who don't do something impossible to outsource are gonna be hurting...

 

well, only the liberals accomplish anything in this society. If you are a conservative, what exactly do you want to conserve?

the federal reserve system?

progressive taxation?

never-ending foreign wars?

trade deficit with commie countries?