. NAFTANAFTANAFTA

Unsuppressed! Bronfenbrenner Report's Findings      NAFTA Index

25,000 people waited to fill out applications for 500 City of San Francisco jobs on January 25, 1997. Municipal bosses can't threaten to move the whole workplace to Mexico or Canada.
Photo by ©Alain McLaughlin, Impact Visuals

Go ahead -- organize. Who's stopping you?

. . . But we feel it's only fair to warn you, if you do we may be forced to move this facility to Mexico. After all, we're operating in a world economy here, and the competition is tough. Paying union wages and benefits -- well, it'll price us right out of the market. So the choice is yours: Do you want a union? Or would you rather have a job?

That's the boss's script in workplaces all over the country since the passage of the North American Free Trade Agreement -- NAFTA -- in 1993. NAFTA has not only resulted in the loss of hundreds of thousands of jobs, it has become a powerful tool employers use to keep unions out and wages low.

Back in 1993, we suspected this would happen, but now we have solid evidence, thanks to a new survey commissioned by the NAFTA Secretariat itself. The survey found that an outright majority of employers are using plant closing threats to intimidate workers from joining the union. Worse, some 15 percent of employers follow up on that threat by actually closing the plant down. Many companies are explicit about where they plan to move: Mexico, where wages are low and trade barriers are few. In other words, NAFTA delivers a double-whammy: It not only invites employers to move jobs out of the country, it gives them a new weapon to terrorize us into giving in to their demands.

The new survey, authored by Cornell University researcher Kate Bronfenbrenner, is making Clinton administration officials squirm. They don't need new evidence that NAFTA is a bum deal for workers. At the moment, they're working hard to extend NAFTA to Chile and Central America, and they're courting Congress in an effort to get "fast-track" negotiating authority. ("Fast track" means that once an international trade pact is negotiated, Congress can only vote it up or down -- they can't fiddle with it.) One of the Clinton administration's top priorities -- and one that endears it to big business -- is its promise to turn the entire western hemisphere into a free-trade zone by 2005.

It's a little embarrassing, perhaps, that this unpleasant evidence against NAFTA is emerging from the NAFTA apparatus itself. At the time NAFTA was passed, unionists and environmentalists fought long and hard to include labor and environmental protections in the Mexico-U.S.-Canada trade agreement. All they got were toothless "side agreements." The labor side agreement created a "Labor Secretariat" whose job is to hear complaints arising from NAFTA and to study those complaints. However, the Secretariat has no power to punish violations, only publicize them.

The first complaint lodged under the NAFTA agreement came from the Mexican Telephone Workers Union on behalf of a U.S. union, the Communications Workers of America. The Mexican union charged that the phone company Sprint had violated workers' rights by shutting down its Hispanic marketing division in San Francisco, La Conexion Familiar, just one week before workers there were scheduled to hold a union election. The tri-national NAFTA Labor Secretariat responded to the complaint by calling for a study on "the effects of the sudden closing of the plant on the principle of freedom of association and the right of workers to organize in three countries." The Secretariat commissioned several specific studies to explore this question -- including the survey by Bronfenbrenner, director of Labor Education Research at Cornell. Her job was to research the effects of plant closings and plant closing threats on workers' right to organize.

Bronfenbrenner has been tracking this issue for years, but even she was surprised by the results of her new study. "I knew employer opposition to organizing had been increasing over the years," she says. "But I was surprised that the actual percentage of plant closings had increased so dramatically. And I found that the threats themselves were much more prevalent than I had believed. This is illegal behavior, in most cases, and yet the penalties from the National Labor Relations Board are incredibly mild."

OMINOUS THREATS

Bronfenbrenner says the most dramatic example she found of a plant-closing threat was at ITT Automotive in Michigan. "The employer verbally threatened to close the facility, they threatened in writing, and they brought in a Mexican film crew to actually videotape the production line. Then, in the middle of the night, they took an entire assembly line and put it out in the parking lot on flatbed trucks with a big sign saying 'Mexico transfer jobs.' The penalty against the employer in that case was a posting basically saying 'we won't do it again.'"

The case of ITT Automotive points up what Bronfenbrenner says is the most controversial aspect of her study: Its connection to NAFTA. "The study was not supposed to say anything about NAFTA -- it was just about plant closings and how pervasive they were," says Bronfenbrenner.

But NAFTA kept popping up uninvited as Bronfenbrenner and her fellow researchers set about collecting information on plant closings and plant closing threats in 500 union organizing campaigns and 100 first contract campaigns conducted between January 1993 and December 1995. Mostly, the researchers relied on careful surveys and follow-up interviews with union organizers.

A few days after the House of Representatives approved NAFTA, General Motors was flying the flags of Mexico, Canada, and the U.S. over its offices in Warren Michigan.
Photo by ©Jim West, Impact Visuals

"NAFTA," says Bronfenbrenner, "has contributed to a climate of fear and uncertainty among workers which has emboldened management." Statistically, she says, "I can't compare the extent of plant-closing threats before and after NAFTA, because no one studied that before NAFTA. But what I can say is that 10 percent of the organizers we interviewed said that employers had clearly specified Mexico in their threat to close the plant -- they had mentioned NAFTA or put up maps of Mexico. And we specifically didn't ask people whether Mexico was mentioned, because we wanted to see if it would come up spontaneously. And it did."

"One thing that is absolutely clear," she adds, "is that we did know prior to NAFTA what the actual plant closing rate was: In the late 1980s, before NAFTA went into effect, about five percent of plants closed down within two years of a union certification vote. Now, NAFTA goes into effect, and the rate goes up to 15 percent. That's real."

Bronfenbrenner had a tight deadline for conducting the study: the NAFTA secretariat commissioned her to do it in May, and it was due in August. She and her team completed the extensive survey by the deadline, and the NAFTA secretariat then incorporated it into its larger report on "Plant Closings and Worker Rights." Last December, the Secretariat submitted the report, as the NAFTA side agreement requires, to the labor departments of all three nations. The Mexicans okayed it and the Canadians okayed it, both within the 45-day period allotted for review. But the U.S. Labor Department was mysteriously slow. Union observers -- and Bronfenbrenner -- speculated that the administration didn't want to see such damning evidence released while it was in the midst of a desperate campaign to expand NAFTA.

SUPPRESS IT, SAYS BUSINESS

Clinton's closest allies -- big business -- clearly hated the Bronfenbrenner report. The Labor Policy Association, an organization of "human resource executives," wrote a scathing letter of complaint about it to the Labor Department in February. "We find the study to be biased and misleading," they wrote, and that it "presents a highly distorted view of employer behavior" in organizing campaigns. In fact, they told the Labor Department, the study is so biased it should be suppressed: "We urge that the study not be referred to or released by the Labor Secretariat for the NAFTA labor side agreement."

Early this year, Bronfenbrenner decided to release her report to the press independently, fearing its conclusions would never be aired otherwise. At LPP press time, a half-year has passed since the U.S. Labor Department received the draft report. It is now expected to be released sometime in June. However, it's quite likely that this final report may not include some of Bronfenbrenner's more bruising findings.

--Laura McClure
 

Unsuppressed! The Bronfenbrenner Report's findings  

Based on data collected from more than 500 organizing campaigns and 1000 first-contract campaigns around the country between January 1993 and December 1995.

* Over 50% of all employers threatened to close all or part of the plant during the organizing drive.

* 62% of employers in "mobile" industries -- including manufacturing and transportation -- threatened to close the plant.

* In those campaigns where the union won the organizing drive, 18% of employers threatened to close the plant rather than bargain a first contract with the union.

* 12% of employers followed through on threats made during the organizing campaign and actually shut down all or part of the plant before a first contract was reached. Another 4% of employers closed down the plant before a second agreement was reached. Employers are three times more likely to shut down the plant within two years of an organizing drive than they were in the late 1980s, before NAFTA.

* Plant closing threats work: Among employers who made threats, unions won only 33% of elections. Among employers who didn't threaten, unions had a 47% win rate. (Overall, among public sector employees, whose jobs are less mobile, the union win rate is over 85%. But in the more mobile private sector, unions have won less than half of elections in the past decade.)

* In more than 10% of the campaigns where employers did threaten shutdown, they explicitly said they'd move to Mexico if workers organized.

We have our ways: How companies threaten workers with plant closing

 * One company forced employees to attend a meeting where managers described the average wage of a Mexican auto worker, the average wage of their U.S. counterparts, and how much the company stood to gain from moving to Mexico. They also presented an overhead visual with a large red arrow pointing from Michigan to the company's plant near Mexico City. Other companies just posted maps with arrows pointing south.

* At another "captive audience" meeting during ACTWU's campaign at the Tultex plant in Virginia, the company showed a videotape that showed former ACTWU plants in New Jersey with boarded windows and padlocked gates, implying the plants had all shut down in the aftermath of violent strikes which are inevitable when a union comes in. The company had the same video shown on local cable.

* In a union campaign in the Texas Rio Grande Valley, the company posted yard signs in the community that said "Keep jobs in the valley. Vote no." The company also hung a banner across the plant that warned, "Wear the union label. Unemployed."

* During one organizing drive, the plant manager's son, who was also part of the bargaining unit, claimed that he had overheard a phone conversation in which his father was discussing plans to close the plant and move it to Mexico if the union was certified.

A NAFTA Index

Courtesy of Public Citizen's Global Trade Watch

In NAFTA denial

Number of jobs Allied Signal Chair Lawrence Bossidy predicted in 1993 his company would relocate to Mexico under NAFTA: 0

Number of Allied Signal workers laid off since NAFTA's passage due to "shift in production to Mexico," according to the U.S. Labor Department: 798

Number of U.S. jobs created by Mattel due to NAFTA: 0

Number of U.S. workers Mattel laid off due to NAFTA, according to the U.S. Department of Labor: 520

NAFTA in Real Life ... For the U.S.:

U.S. trade surplus with Mexico in 1993, before NAFTA: +$1.7 billion

U.S. trade deficit with Mexico in 1996, after NAFTA: -$16.8 billion

Number of U.S. workers certified by the U.S. Department of Labor as having been laid off due to NAFTA in one narrow NAFTA retraining program: 121,937

Number of workers laid off in Pocahontas, Arkansas' Brown Group shoe manufacturer due to "increased imports from Canada" under NAFTA, according to the U.S. Labor Department: 2400

Population of Pocahontas, Arkansas: 6151

Approximate chances a laid off U.S. worker will not find an equal or higher paying job: 2 to 1

Median annual pay drop of a worker who is hired after being laid off in the early 1990s: $4420

Percentage of Americans who say their views toward free trade are more favorable than a year ago as the result of what they know about NAFTA and GATT: 27

... For Mexico:

Percentage of Mexican citizens considered "extremely poor" in 1993: 31

Percentage of Mexican citizens considered "extremely poor" in 1995: 50

Percentage increase in Mexican Maquiladora workers' wages over the last two years: 50

Inflation over that same period: 100+

Percentage of Mexicans who say they are living in an economic crisis today: 95

Percentage of Mexicans who believe their country has had little or no success with NAFTA: 67

For a copy of the complete index, with references: Public Citizen, 215 Pennsylvania Ave. SE, Washington, D.C. 20003. 

Back to LP Press July 1997 Index
Labor Party Press Current Issue
Labor Party Press Archives
Labor Party Home Page