Discounting Lives to Maximize Profits

by WALTER BRASCH

Imitating Sgt. Schultz of “Hogan’s Heroes,” Walmart executives claimed they knew nothing-NOTHING-about working conditions in a garment factory in Bangladesh where 112 workers died and more than 150 were injured in a fire.

Tazreen Fashions made Walmart’s Faded Glory brand clothes, as well as clothes for Sears and other dozens of other major retailers. Walmart officials told the news media they had previously terminated Tazreen as a direct supplier because of concerns about fire hazards, but that another supplier had subcontracted the work to Tazreen. Walmart refused to identify the supplier. In an official statement, Walmart said that the fire was “extremely troubling to us, and we will continue to work with the apparel industry to improve fire safety education and training in Bangladesh.”

News reports indicate that survivors said fire extinguishers didn’t work, exit doors were locked, and there were no emergency exits. The AP reports that most fire extinguishers were not used, the workers having no knowledge of how to use them. According to the AP, most of the workers, about 70 percent of them women, were from the poorest sections of Bangladesh. More than 700 workers have died since 2005 from fires in the Bangladesh’s growing clothing manufacturing industry, according to the International Labor reporting Forum.

As with the Triangle Shirtwaist factory fire in New York in 1911, where 146 women, most of them recent Jewish and Italian immigrants working in sweatshop conditions, the workers at Tazreen were burned alive trying to get through the doors that never opened, died from smoke inhalation, or jumped to their deaths. Many of the dead in both fires were buried in unmarked graves, their bodies unrecognizable. The Triangle fire eventually led to improved safety conditions and the rise of the International Ladies Garment Workers Union to protect workers from management callousness.

Walmart has a fierce anti-union policy for its own stores and employees, but doesn’t say much about working conditions in companies that supply merchandise, nor does it actively oppose unions in other companies overseas. There is no organized representation for most of the workers in Bangladesh sweatshops. Most workers earn $8.50 to $12.50 for a 48 hour work week, with mandatory overtime that can push them to as many as 80 hours. They receive two or three days off in a month. If Americans wonder why their clothes may not be as good as American-made clothes produced in union shops, the answer could be that the workers in Bangladesh may be mentally and physically fatigued, and that multinational corporations pressure suppliers to cut costs on material and labor. Bangladesh, now competing with China, shipped about $18 billion worth of merchandise to American and European corporations last year.

About 40 percent of all merchandise sold by Walmart is produced by contracts with manufacturers (most overseas), where low wages, excessive work hours, and poor working conditions are accepted practice. Walmart doesn’t make public the names of the companies which produce those “low prices” merchandise. However, it is known that it has contracts with several Bangladesh companies, as well as more than 20,000 Chinese manufacturers.

With revenue of more than $447 billion a year and about a 25 percent profit, Walmart is the largest public company in income in the world. But with its “low prices” slogan comes significant risk.

Walmart and other corporations have pushed American suppliers to outsource their own merchandise to overseas suppliers. More than 3.3 million American jobs will have been outsourced by 2015, according to the U.S. Department of Labor. However, Goldman Sachs projects that as many as seven million jobs will have been lost by 2014. Most are in clothing and computer/electronics manufacturing, and in service centers where American customers call “help” lines and often get a heavily-accented representative who says his name is “Sam.” What most politicians, business people, and the public don’t understand is there is a direct correlation between the number of jobs outsourced and high unemployment in the U.S.

Walmart, which originally established a “Buy American” slogan before strutting its “lower prices” philosophy, now claims that over half its merchandise is made in America. This may or may not be accurate-Walmart doesn’t give specifics. But, if accurate, most of that is from its expanded grocery stores. Clothing, electronics, household goods, and thousands of other products are still made overseas-usually in conditions that are, at best, sweatshops; at worst, death traps. Every Congressional bill to ban the import of products produced in sweatshop conditions has been smothered in the committee process.

It’s possible that Walmart executives and upper management of the 2.2 million employee corporation that has eyes in almost every spot of the world did not know about working conditions in Tazreen-or any of the other sweatshops in Asia. It’s also possible they did know, but did a PR shuffle to explain their indifference. It really doesn’t matter.  

The sweatshops allow the corporations to sell the cheap merchandise that results in higher return on investment for American corporations that rely upon American consumers who want cheap merchandise, and don’t seem to care where it comes from or how it’s produced.

But, even those Americans who do care, and would pay higher prices for merchandise produced by workers in unionized American manufacturing plants, usually don’t have a choice. It’s hard to find “Made in America” labels on clothes and numerous other products sold by major retailers that have largely ignored sweatshop conditions in order to maximize profit.

[Walter Brasch’s latest book is Before the First Snow, which looks at working conditions. Assisting on this column was Rosemary R. Brasch]

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Walter M. Brasch, Ph.D.

Latest Book: Before the First Snow: Stories from the Revolution

(www.greeleyandstone.com)

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Fact Checking the Corbett Jobs Record…and Some Unsolicited Advice

By Stephen Herzenberg, Third and State

The Corbett administration has a new summary of Pennsylvania’s recent job performance. Today’s news that Pennsylvania’s unemployment rate is as high as the national unemployment rate underscores, however, that the state’s recent jobs record is not  good. Let’s take a closer look.

PA vs. U.S.: The Corbett jobs summary notes that Pennsylvania’s unemployment rate is below the national rate – and it was when the summary was first released. This was not a new trend: the Pennsylvania rate was a point or a point-and-a-half below the national rate for most of the four years before Governor Corbett took office. A year ago, the gap between the Pennsylvania and U.S. unemployment rate was still statistically significant. (See Table A.) But the gap between the two rates – the “Pennsylvania advantage” – has been shrinking steadily since 2010 until the Pennsylvania rate finally climbed to the U.S. level in August 2012, both equaling 8.1%.

Private-sector Job Growth: While the administration touts private-sector job growth in 2011, the numbers reflect a national trend, rather than a unique Pennsylvania story. 

The U.S. economy has had 30 consecutive months of private-sector job growth. In fact, Pennsylvania’s rank for the percent growth in private-sector job growth has fallen from 8th in 2010 to 36th in the 12 months ending in July 2012. One of the reasons that Pennsylvania’s private-sector job-growth ranking is down is the deeper cuts in public employment in Pennsylvania compared to other states. Deep cuts to Pennsylvania public schools and colleges led to a loss of 14,000 education jobs alone in 2011.

These layoffs impact the classroom and Main Street too. Unemployed teachers, like unemployed factory workers, don’t have money to spend, which affects the broader economy. 

Manufacturing Job Growth: Manufacturing jobs growth improved in 2011, but again reflects national trends. In fact, Pennsylvania’s manufacturing job growth since early 2010 is slightly below half the national increase. (See The State of Working Pennsylvania 2012.) 

New Hires in Marcellus Shale: Not this one again. The administration is touting natural gas industry growth by citing the number of new hires. As we’ve explained repeatedly, new hires are not new jobs (most new hires replace people who quit or are fired). In fact, the number of new hires is basically a meaningless number. Statewide there were 580,400 new hires during the 2nd quarter in Pennsylvania, while total non-farm employment rose between the 1st and 2nd quarter by less than 300 jobs. In other words, the only reason to cite new hires is to make the job gain seem substantially larger than it really is. 

The gas industry has led to some job growth in Pennsylvania, just not on the scale claimed by the industry. Between the 4th quarter of 2008 and the 4th quarter of 2011, employment in the core Marcellus Shale industries grew by 18,000. That gain was largely wiped out by the loss of 14,000 education jobs in just one year. Even using the most generous estimates, employment in the Marcellus Shale in direct and ancillary industries in the 4th quarter of 2011 (as published by the Pennsylvania Department of Labor and industry) was 238,400 – about 4.2% of total state employment.

Here’s the unsolicited advice: Twenty months into Governor Corbett’s first term, there is still time for the Governor to pursue policies that will improve Pennsylvania’s job performance. There are multiple options that have strong bipartisan and business support. For example, investing in transportation infrastructure as recommended by the Governor’s own transportation commission. 

In manufacturing and workforce development, the administration is also saying some of the right things. But talk is cheap: we need actual investment in skills and innovation if our job performance is going to improve relative to other states and the nation.

The Manufacturing Jobs Score by President Since 1948

By Stephen Herzenberg, Third and State

After former President Bill Clinton claimed the “jobs score” was better in Democratic presidential administrations than in Republican ones, Colin Gordon of the University of Iowa and I did some research to see how presidential administrations scored on manufacturing job creation since Harry Truman. Our findings are published on AlterNet this morning.

We thought it was important to do this analysis because manufacturing jobs are typically family-supporting jobs – in other words, good jobs. Manufacturing also plays a critical role in the growth of overall living standards, a point on which there is bipartisan consensus.

What’s the punchline? Democratic administrations (seven since 1948) on average add around a million manufacturing jobs every four years. Republican administrations (nine since 1948) lose about a million manufacturing jobs every four years.

We think these findings will be especially salient in battleground states such as Pennsylvania where voters in manufacturing-intensive regions make up a large share of swing voters.

For more, read our full piece on AlterNet.

Marcellus Shale, Unemployment and Industrial Diversity

A blog post from Mark Price, originally published on Third and State.

Capitolwire has a recent story (paywall) about the impact of the Marcellus Shale on Pennsylvania’s unemployment rate. There is no question that oil and gas extraction is creating jobs in Pennsylvania and thus helping reduce unemployment. But it remains an open question precisely how big the impact is given how small employment in that sector is relative to an economy that employs 5.8 million people.

Table 1 below lists the 25 counties that experienced an increase in the number of Marcellus wells drilled between 2009 and 2010. For each county, I also report the change in the number of unemployed workers in that same period as well as the change in employment overall and within key sectors of the economy. It is clear from this data that the biggest impact of Marcellus activity is being felt in Bradford, Tioga, Lycoming and Susquehanna counties.

Listed in Table 2 is the share of employment that Natural Resources and Mining, Construction and Manufacturing represent of total nonfarm employment in these same 25 counties. On average in 2010, Natural Resources and Mining represented 3% of total employment in these counties, construction 4% and manufacturing 16%. Manufacturing in most of these counties is far and away the most important sector.

The emergence of Marcellus Shale gas drilling is a positive to the extent that it diversifies these economies, but it also poses an important challenge – shale gas is a finite resource. When the supply of natural gas is exhausted, will employment in the region simply shrink or will new employers in new sectors emerge to provide good jobs and high wages?

Don’t get me wrong: this is a very good challenge to have! But it is not a challenge to just shrug your shoulders at. Leaders in these regions need to make sure that resources are invested in education and training as well as made available to entrepreneurs.

There is always a danger that Marcellus Shale extraction may crowd out rather than seed new industries. Policymakers in Harrisburg and elected officials in these regions should make efforts to ensure that some of the good economic fortune represented by Marcellus Shale gas is reinvested in the seed corn necessary to increase the economic diversity of these communities. A drilling tax is the most sensible way to generate the funds needed to pay for these investments.

Pennsylvania’s June Jobs Report More Cause for Concern

A blog post from Mark Price, originally published on Third and State.

Pennsylvania’s unemployment rate rose to 7.6% in June from 7.4% in May, according to a report Thursday from the state Department of Labor and Industry. Overall, the seasonally adjusted number of nonfarm jobs in Pennsylvania was down 2,600 in June to 5,676,900.

I issued the following statement on the new jobs report:

“The June jobs report continues to raise concerns that Pennsylvania, like the rest of the nation, has hit a bump in the road to economic recovery.

“This is a disappointing report across the board, with the labor force dropping, employment falling and the unemployment rate rising slightly. While the economy is still growing, that growth has been slower than expected and has translated into much less job creation than we need at a time of high unemployment.

“One of the few bright spots was the addition of 2,000 jobs in the manufacturing sector. In a recent survey, the Philadelphia Federal Reserve Board found some modest growth in manufacturing payrolls. Hopefully, that will translate into more job gains in this crucial sector.

“If we don’t see stronger job growth in the fall, we can expect pressure to build for another round of intervention by national policy makers in the Federal Reserve and in Congress.”

Obama To Visit Pittsburgh Friday

White House spokesman Jay Carney announced this afternoon the President will visit Carnegie Mellon University in Pittsburgh next week:

On Friday, the President will travel to Carnegie Mellon University in Pittsburgh, Pennsylvania to highlight the importance of manufacturing to the United States economy, as well as key steps that government, industry, and universities will take together to create new industries and new jobs.  The President will discuss the need to focus on cross-cutting technologies that will enhance the global competitiveness of U.S. manufacturing and speed ideas from the drawing board to the manufacturing floor.

White House Dodges Question on Restoring Manufacturing Jobs

A senior White House official conducted a conference call this morning concerning the President’s address later this morning on exports.  Trade policies were discussed and I asked about the loss of manufacturing jobs in the U.S. and how can we, as a nation, begin making things again.  The response was disappointing.  Instead of speaking to how we can take specific steps to regain the massive losses in export of manufactured goods the official simply stated the U.S. remains the world’s leading exporter.

Unfortunately our massive decades long trade deficits say we import more than we export.  This has led to a weak dollar and millions of lost manufacturing jobs.  From a USA Today report:

Fifty years ago, a third of U.S. employees worked in factories, making everything from clothing to lipstick to cars. Today, a little more than one-tenth of the nation’s 131 million workers are employed by manufacturing firms. Four-fifths are in services.

The decline in manufacturing jobs has swiftly accelerated since the beginning of 2000. Since then, more than 1.9 million factory jobs have been cut – about 10% of the sector’s workforce. During the same period, the number of jobs outside manufacturing has risen close to 2%.

Working at Wal-Mart or Target instead of Bethlehem Steel isn’t paying the bills for millions of Americans and hundreds of thousands of Pennsylvanians.  In my question I quoted German Prime Minister Angela Merkel who was asked recently by a British government person why Germany’s exports are so healthy.  Her response was simple:  “we still make things.”  America doesn’t.  Simply because we remain a top exporter doesn’t mean we don’t have problems.  The loss of millions of manufacturing jobs still hurts and the cursory non answer to my question may be a symptom of the underlying problem:  we aren’t doing enough to restore manufacturing in America.

China is cleaning our clock and they are doing because they are manipulating their currency.  When there are huge trade imbalances between countries economics dictates that the exporter’s currency shifts opposite that of the importer to achieve a new balance.  In other words China’s products should be becoming more expensive in the U.S. due to currency fluctuation.  China is preventing this by manipulating its currency to keep its goods cheap.  That is destroying American manufacturing.

Unfortunately we cannot pressure China into ceasing this action because they are our banker.  China has been financing our budget deficits and they, quite frankly, own us.  Quite frankly we are becoming a Chinese colony.  This is how colonial masters treat their states and we can do nothing about it because we are powerless economically.  Restoring our own manufacturing base can shift this equation back into some sort of balance.  My question as to how this Administration will do so went unanswered.

Blue Green Alliance Report Shows Green Technologies Will Revitalize U.S. Manufacturing

( – promoted by John Morgan)

The BlueGreen Alliance (coalition of labor and environmental organizations) held a press conference on Thursday to call on Congress to pass comprehensive clean energy and climate change legislation that creates jobs building the clean energy assembly line in the United States.

At the union hall of the International Union of Operating Engineers (IUOE) Local 542 in Wilkes-Barre Joe Padavan, President of the United Steelworkers (USW) Local 15253, Michael Mazza, Vice-President of the International Union of Operating Engineers (IUOE) Local 542, PA State Representative Eddie Day Pashinski, and Jason Brady, Pennsylvania BGA Field Organizer, spoke about the steps our elected leaders should take to create tens of thousands of manufacturing jobs in Pennsylvania.  The report showed that with a Federal Renewable Electricity Standard of 25% by 2025 more than 850,000 manufacturing jobs, including over 42,000 jobs in Pennsylvania, could be created.

The report is available at:

http://www.bluegreenalliance.o…