Saturday, 26 March 2016 00:00

This Small Town Shows Why The Trans-Pacific Partnership Could Be A Disaster For American Workers

Written by Peter Cole | In These Times
Galesburg residents saw their jobs disappear after the passage of NAFTA. The Trans-Pacific Partnership won't be any different. Galesburg residents saw their jobs disappear after the passage of NAFTA. The Trans-Pacific Partnership won't be any different. (tfooq / Flickr)

Every time politicians look to pass a new free trade agreement like the Trans-Pacific Partnership (TPP), they reassure the American people that this time around, workers will be protected. But my research on and experiences in a small industrial town in Illinois—not to mention even a cursory glance at the broader data on the impact of such deals—reveals that “free trade” has been a nightmare for most of the American people.

And Galesburg, Illinois—which, oddly enough, has a long-standing history with President Obama—is a poster child for why free trade deals are a problem rather than a solution to the precarious reality experienced by most working- and middle-class Americans.

In 1994, President Bill Clinton worked largely with Republicans in Congress to pass the North American Free Trade Agreement (NAFTA) that drastically reduced tariffs and other “trade barriers” intended to spur greater cross-border trade and investment. However, as billionaire-turned-presidential candidate Ross Perot famously said at the time, “If this agreement is signed as it is currently drafted, the next thing you will hear will be a giant sucking sound as the remainder of our manufacturing jobs—what’s left after the two million that went to Asia in the 1980s—get pulled across our southern border.”

Sadly for American workers, Perot—and the Democratic Congressional majority who voted against the treaty—were right. Even President Obama has admitted that NAFTA resulted in massive job losses for American workers when corporations made the economically rational choice and moved production to Mexico, where the wages were much lower and governmental regulation of industry (think clean air and water) much less stringent.

Now, for the past few years and almost entirely in secret, the Obama Administration has been negotiating with a dozen other Pacific Rim nations to create a mammoth new “free trade” zone, named the TPP.  The Administration asserts that the TPP will “expand opportunity for American workers, farmers, ranchers, and businesses.”  According to this “logic,” further lowering trade barriers (already much lower than before the 1990s) will increase American exports and, hence, American jobs.

Of course, Obama claims that the TPP will be different than NAFTA: That all the corporations that could benefit from lower wages in another nation already have left and that this treaty’s labor and environmental provisions will be better enforced though details are shockingly absent. Logically, if the deal is so good, it begs the question as to why Obama will not share the details with the American people rather than insisting on secrecy and fast track authority.

The experience of a typical, small industrial town in western Illinois named Galesburg suggests cause for alarm. I started visiting Galesburg in 2000 after I was hired to teach U.S. History at a university in nearby Macomb. Within a few years, I started to meet people who had been laid off from the Maytag plant there; many of them had become students late in life as they tried to retrain after the Maytag plant shutdown. One such student was the son of a retired Maytag worker who was so angry and eloquent about the horrific impacts of NAFTA that he tried to convince me to write a book about the devastating impacts of this trade deal on America’s industrial economy. With his help, I conducted a series of interviews with former Maytag workers on the eve of its final closure.

Galesburg is home to a liberal arts college, Knox, and became an important railroad hub in the mid 19th century. Due to its proximity to Chicago (about 200 miles) and being a transportation center (first railroads and, with the later construction of interstate highways, trucking), Galesburg became a thriving industrial town in 20th century. A variety of factories located there. Butler employees built steel prefabricated buildings including grain silos. Outboard Motor Corporation built engines for boats. Admiral built refrigerators and, later, Maytag purchased this factory.

Many of these jobs became unionized in the post-World War II era, resulting in a thriving population of blue-collar workers with middle-class incomes. Even today, a short visit to Galesburg reveals the many fine houses built there, a clear marker of the town’s historic wealth.

Alas, the history of manufacturing in Galesburg reflects the fact that the capitalist desire to reduce costs in any locale is a powerful and inexorable one. Perhaps the first technique used by American employers was to play workers of different races, ethnicities, genders and nationalities against each other to lower wages. Then, Fredrick Winslow Taylor introduced “scientific management” to increase “efficiency” and maximize production. Corporations introduced automation to further increase productivity. In the late 20th century, a series of U.S. presidents promoted trade deals that facilitated the movement of manufacturing—i.e. millions of jobs—to other nations.

In 1992, Bill Clinton was elected president as a “New Democrat.” New, it seemed, meant Republican-lite, for many of his policies were taken from the Republican playbook: cuts to welfare, “don’t ask, don’t tell” and the Defense of Marriage Act (both anti-gay measures), harsher sentences for those convicted of drug crimes and a general expansion of prisons and punitive law enforcement. And NAFTA.

Whereas rank-and-file Democrats and most elected Democrats loudly opposed NAFTA, Clinton brokered a deal—largely with Republican votes—to get it through Congress in 1994. Representative Lane Evans, who represented the Galesburg area and considered quite liberal, voted against NAFTA. (Interestingly, then-Senator Joe Biden, a Democrat from Delaware, voted against NAFTA, too.)

J.B. Johnson, whose father and girlfriend’s parents had retired from Maytag, told me in 2005, “When Clinton signed in NAFTA, … that’s when I started thinking—you know we’re union up north here and I always had a funny feeling back of mind, there’s a good chance of them leaving.”

Sure enough, shortly after the passage of NAFTA, as Johnson, Perot, and many others predicted, Galesburg heard that giant sucking sound: Maytag announced it would move to Mexico. Though it took the company another decade to completely shut down its Galesburg facility, Maytag’s announcement sent shockwaves through the town. As Carol Marshall, another Maytag worker who I interviewed in 2005 on the eve of the final shutdown, said, “Both my parents worked at Maytag, my grandfather, my aunt, my uncle.  I used to joke that it kept our family off the welfare rolls.”  For years afterwards, locals referred to Maytag’s announcement as “ten eleven.”

Understandably, the nearly 2,000 workers employed there suspected they never would find as good of a job. The rest of the community also feared the worst as those good-paying Maytag jobs helped the economy of the entire community, county and surrounding areas.

The effects of Maytag’s departure were immediate and glaring. Unemployment increased drastically. House construction dropped to nearly zero and the real estate market froze. Population declined.  Erin Nelson, another Maytag worker I interviewed, particularly lamented that she immediately lost her health insurance though her children qualified for state assistance; she complained to me, understandably so, “Who can afford antibiotics that are $70 for 28 pills?” Ten years on, the povery level has increased to 19 percent, and Galesburg has seen about 15 percent of its population leave since 2000.

Galesburg also happens to have a surprisingly deep and long connection to President Obama. In fact, Galesburg was “name-checked” in the speech that launched his national political career. At the 2004 Democratic National Convention, Obama famously declared that Americans have “more work to do, for the workers I met in Galesburg, Illinois, who are losing their union jobs at the Maytag plant that's moving to Mexico, and now they're having to compete with their own children for jobs that pay seven bucks an hour.” He had visited the town some months earlier, not long before the last refrigerator rolled off the assembly line.

Less than a year later, he gave a speech at Knox College and said something similar: “Here in Galesburg, you know what this new challenge is. You've seen it. You see it when you drive by the old Maytag plant around lunchtime and no one walks out anymore. I saw it during the campaign when I met the union guys who use to work at the plant and now wonder what they're gonna do at 55-years-old without a pension or health care; when I met the man who's son needs a new liver but doesn't know if he can afford when the kid gets to the top of the transplant list.”

Even then, perhaps surprisingly, Obama gave hints that his “solution” would be more of what Clinton had to offer: embracing corporate-driven globalization. In his 2005 speech at Knox, Obama lauded Thomas Friedman, New York Times columnist and globalization’s pied-piper. Technology had changed the world, he said: “Today, accounting firms are emailing your tax returns to workers in India who will figure them out and send them back as fast as any worker in Indiana could.” It was unclear why that was deemed a good thing for those Knox graduates.

Fast forward to 2013, when Obama returned to Galesburg to champion, yet again, another of his efforts to renew America’s middle class. He acknowledged that the town had suffered (without overtly invoking NAFTA), “What had swept through a lot of towns throughout the Midwest and Northeast had happened in Galesburg, where people were left high and dry.” As a result, the “tax base had declined, unemployment had soared, a lot of folks out of work; the jobs that replaced them generally were jobs that paid a much lower wage.”

All true. Some residents found work in the modestly expanding railroad industry (Burlington Northern Santa Fe still maintains a large operation), others at a John Deere factory 50 miles north in Moline. However, most laid off from Maytag who found work had jobs that were far less lucrative or without benefits; many found no work whatsoever. Alas, it was not clear what Obama’s solution was to their plight—the plight of millions of other Americans, too.

Now, in 2015, it seems we now know what Obama’s solution is and it does not seem much different from Clinton’s and his Republican allies: just substitute TPP for NAFTA. How TPP will help Galesburg residents find good-paying jobs with benefits is not clear. What is clear is that Obama still thinks that the U.S. government must make it even easier for corporations to move production and capital around the world while American workers drop further and further behind.

A little over 10 years on from the last refrigerator rolling off the line, Galesburg has not entirely collapsed; that’s a testament to the resiliency of people with their backs to the wall. But, their town is not the same. Simply put, no “free trade” deal can replace a factory that employed upwards of 2,000 people and everyone knows it.

Obviously, this problem is much bigger than Galesburg. While Obama claims that he wants to rebuild the middle class by bringing manufacturing back to the United States, he’s only being half truthful. The reality is that America still could lose millions more manufacturing jobs if TPP is signed.

David Simon’s working stiff from season two of his hit television show The Wire, Frank Sobotka, identified the ultimate issue: “You know what the problem is? We used to make shit in this country, build shit. Now we just put our hands in another guy’s pocket.” The former president of the Galesburg Maytag machinists union, Dave Bevard, said something similar to The Atlantic's Chad Broughton last year: “I don’t know of an economy that can survive on the principle of ‘You mow my lawn, and I’ll wash your dishes.’ We’re great because we make things.”

Obama actually said similar during his 2013 visit to Galesburg: “But we can do more… I know there’s an old site right here in Galesburg, over on Monmouth Boulevard—let’s put some folks to work!” Indeed, let’s.

In 2005, on his second visit to Galesburg, Obama claimed, “Ten or 20 years down the road, that old Maytag plant could re-open its doors as an Ethanol refinery that turns corn into fuel.”  Leaving aside that corn-based ethanol proved a dead-end, undoubtedly the people of Galesburg still hope he is right—that Galesburg’s former productive capacity can be restored.

Yet I can imagine my friend and former student, the son of a Maytag worker and a combat veteran of the first Gulf War, screaming obscenities about the big lie that is TPP. And, my research on the effects of NAFTA on Galesburg echoes that suspicion. Other than vague promises about “unlocking opportunity,” I find it hard to believe that TPP will do anything to assist the people of Galesburg or other towns like it. They—we—are still waiting for the benefits of “free trade.” Obama has not yet made it clear how TPP will help the people of Galesburg or any American worker.

Link to original article from In These Times

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