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Q&A with labor and trade expert Harley Shaiken

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JANUARY 31, 2017

Editor’s Note: Answers have been edited for clarity and length.

Harley Shaiken, chair of the campus Center for Latin American Studies, researches labor rights and trade and is an advisor to leading members of the United States Congress on these topics. He has recently written about lessons he believes can be learned from the United States’ past 23 years under the North American Free Trade Agreement, or NAFTA. NAFTA eliminated most tariffs between Canada, Mexico and the United States and has been criticized as making it easier for businesses to export jobs across the border. President Donald Trump has said he plans to renegotiate or withdraw from the deal. Shaiken’s research, which found that improved rights for Mexican workers will benefit American workers as well, offers one take on where a renegotiation could go.

The Daily Californian: What led you to researching the impact of NAFTA?

Harley Shaiken: I think trade in general and NAFTA in particular have implications well beyond the international trade data. I actually began research before NAFTA, completely unrelated to it, looking at how and why companies were siting advanced manufacturing across the world, including Mexico, and how companies before NAFTA were siting very state-of-the-art factories in low-wage countries like Mexico. And it was that research that formed an important dimension of the NAFTA debate and really of the way that we look at dimensions of international trade since then.

DC: What would it look like to improve conditions for Mexican workers on both sides of the border?

Shaiken: I think what’s critical here is that Mexican workers and U.S. workers ought not to view themselves as the enemy. That is, it isn’t Mexican workers who are stealing jobs, not by any means. Rather, in Mexico today, it is very difficult to form an independent union. In the export sector, it’s virtually impossible. On the books, Mexico has got strong labor protections. In reality, those are not observed. So, the issue is not saying we don’t want to trade with Mexico. I think trade with Mexico is very important and potentially beneficial both to the United States and Mexico. What’s critical is the rules of the game for trade.

DC: What do you think about Trump’s decision to withdraw from the Trans-Pacific Partnership and talk of taxing Mexican imports?

Shaiken: I am appalled by many of the things that Trump has done in the last 10 days. I agree with, although perhaps for very different reasons, his decision to withdraw from the Trans-Pacific Partnership. As it was written, the games of trade would flow to the very top. Most people would be bypassed or even damaged by the structure of the trade agreement. But that is not the same as saying what you want to do is cut off the trade within the global economy. That’s both impossible and not particularly desirable. I think where I differ fundamentally with Trump is you need rules of the game that will result in a broadly shared prosperity. That really allows workers, communities and most people to share the gains of trade.

DC: Where can we see, as you have written, that depressed wages for Mexican workers set a competitive standard for U.S. workers?

Shaiken: You could have profitable companies and you can have more highly paid workers, which would be in everyone’s interest in the long term. In the short term, you can make a lot more money (paying) lower wages if you’re a firm. But the problem is that it creates a strong downward pressure on U.S. wages, and U.S. firms will go to their workers and say, “OK, you are at $30 (an hour) now, but unless you go to $20, this plant is going to Mexico.” But it doesn’t stop there. People work in that community. School teachers, nurses, people who work in restaurants, cashiers — they are going to see their wages go down if something as central as a major factory is threatened with closure. So where that puts us is not workers and communities on both sides of the border doing better, but rather the lowest standard becoming the new competitive standard. And I don’t think that’s an anyone’s interest. I think you can be very much for expanded trade, you can be very much for engaging in global local economy, but you need rules that ensure more than one percent benefit from it.

DC: Where do workers’ rights and union strength stand in the U.S. today?

Shaiken: Before this administration, unions were facing tough times in the U.S. It’s not a new phenomenon. We have had deterioration of labor law. We have had administrations beginning with Ronald Reagan that were very hostile to unions. And it’s taking a very sharp toll with this administration, it promises to become far worse. So it’s not as if workers are doing well in the U.S., and Mexico is pulling everything down, but the lack of labor rights in Mexico absolutely results in a downward pressure. There’s already very fierce pressure which has caused a stagnation and declining wages, and that has caused real troubles for labor in the United States.

DC: What would it take for the advancement of workers rights to be appealing to pursue? Why focus on raising wages?

Shaiken: Well, I think we’ve got to put this in context. Pew Research in Washington just came out with a survey that shows a majority of Americans have a very favorable impression of labor unions. So it’s not that people are hostile to unions. It is in many cases very difficult to join one. Why? Because employers pull out the stops, even violating the law, because the penalties are so light that the result ends up being that you can lose your job. And, because they are so much on the defensive in many areas, workers are fearful. So the key here is removing the fear.

DC: What would you hope to see happen if a NAFTA renegotiation process were to begin?

Shaiken: NAFTA is a complex, at times convoluted, agreement. It’s over a thousand pages. I think what’s critical here is that there are a lot of issues that need to be addressed, from dispute settlements to environmental standards. But the one issue that I think is particularly critical, and this will determine whether most ordinary people benefit or not, is labor standards on both sides of the border. That involves strong, enforceable language in the agreement.

DC: What would be any negative impacts of advancing labor rights in the export sector?

Shaiken: Everything can have a downside. The global economy is a very competitive place, but expanded wages can sometimes lower cost. How does that happen? Because it improves productivity and reduces turnover and creates more committed workers. You can have innovative, productive results.

Contact Aleah Jennings-Newhouse at [email protected] and follow her on Twitter at @ajn_dc.

JANUARY 31, 2017

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