Globalization Hurting Vermont

By James Haslam, Vermont Workers Center Director

It's become all-too-common that good jobs are leaving Vermont and getting shipped out of the country. Back in September, officials from Stanley Works announced they were shutting down their plant in Shaftsbury after 183 years. In what Stanley corporate officials from their Connecticut headquarters term "restructuring", 160 jobs were shipped to plants in Mexico, China and South Carolina. In the search for higher profits they are saying bye-bye to all their now unemployed workers and to the plant they bought in 1916 and which will be silent for the first time since 1817.

Companies like Stanley are leaving because of recent free trade agreements that have made it too enticing for them to stay put. Business leaders and policymakers always assure us of the positive effects average citizens will experience due to the "free trade" legislation such as NAFTA (North American Free Trade Agreement), the recent Permanent Normal Trade Relations with China (PNTR) trade bill and the coming plans of Free Trade Area of the Americas (FTAA). The reality of these trade agreements have been much different.

In fact, globalization and "free trade" is hurting most American working families, which means, its hurting most Vermonters. "Free trade" policies simply allow corporations to freely access cheaper labor markets. Manufacturing facilities are moved to poorer nations - which have miniscule wages, often terrible working conditions and far fewer environmental regulations.

The newest proposal of FTAA is the planned extension of NAFTA, or otherwise known as "NAFTA on steroids". The plan is to extend NAFTA to include every country in the Western Hemisphere other than Cuba. Not only does it include this geographic extension it will also allow corporations to reach into vast areas of public policy. Cheerleaders and pundits in the corporate media will tell us how great these deals are for us, because that is what they are paid to do. But if we are to really measure what the impact of this new trade deal, we have to look at where globalization is already taking us.

Another example of a longtime Vermont employer 'going global' is currently happening at Fairbanks Scale of St. Johnsbury. Last February, they eliminated over ten percent of their workers as a result of finding cheaper labor overseas. The company, which has been well-known for years for its high quality industrial scales, has recently begun shipping in pre-cut steel kits from China and switched to Malaysian produced plastic for some of their scales. When Fairbanks was considering replacing some steel with plastic, workers wanted to produce the plastic locally. But, the company said it would not make business sense. In Vermont, companies have to consider federal and state environmental standards, in addition to paying semi-adequate wages, both of which are of relatively little concern in Malaysia.

In 1999, Black Diamond Sportswear in Barre laid off almost half of its workforce due to the favorable overseas labor force. When the company decided that to remain competitive they had to have all their garments sown by contractors twenty-five Vermonters lost their jobs. Owner Gary Guggemos explained, "Due to foreign imports it wasn't cost effective to have the sowing done in Vermont. With the less expensive labor in the Orient it wasn't in our interests."

Bijur Lubricating Corporation in Bennington learned about this cheap labor market years ago. In the late seventies Bijur had about 230 workers in manufacturing, but in the early eighties they opened up a plant in China and soon after another in Ireland. There are currently only nineteen workers in Bennington, eight of which work in the warehouse handling all the goods coming in from the overseas plants.

Bijur is not the only company in Bennington which has found it more profitable to move jobs to poorer countries. As a result of NAFTA, in 1994 Johnson Controls Inc. laid-off 331workers when they packed up and moved shop to Mexico. And jobs are still being sent to Mexico. Tensolite, a company in Essex Junction which assembles fiber optic cables, will be shutting their doors on over 150 employees this winter as they too shift production south of the border.

Capital City Press, with locations in Montpelier and Barre, is Vermont's last large-scale book printer. While there has been no evidence of layoffs from using foreign labor, that is where much of the new work is headed. Once again, the company has begun using more and more contractors from cheaper labor markets, in this case Manila. Dan Brush, who is the union president at Capital City, says that there are other alternatives than panning the globe for the cheapest labor that can be had. "If companies keep a long-time workforce which is unionized and well-trained there are tremendous efficiency advantages over contracting work out to the lowest bidder where the quality will suffer. The company would benefit more from the higher productivity."

As these high paying jobs leave Vermont they are being replaced with low-wage, often part-time service sector jobs. According to a report by the Vermont Department of Employment and Training the three fastest growing occupational titles through 2005 will be waitstaff, retail sales and cashiers. In addition to being low-paying, these positions unfortunately also often come without any benefits.

The results of globalization are actually quite clear. Wall Street gains. Vermont loses. Corporate profits rise. Workers suffer. Vermont loses because the families are finding it harder and harder to make ends meet. On top of the loss of jobs, the corporate flight to the South suppresses wages here within the companies that stay. And not only are the workers here suffering, the workers they are being replaced with suffer as they are subjected to the often horrible health and safety conditions. The jobs usually are only moved to countries where the political situations are such that the workers must work for ridiculously low pay while they often endure terrible "sweatshop" working conditions. Often these political conditions result directly from US Imperialism, which includes; interference by the US government, international financial institutions, multinational corporations themselves, and of course, the lovely foreign trade agreements.

Brush commented, "US corporations are exploiting the workers in these countries. What they are doing is really heartless. We must work in solidarity with workers there. If US companies are in these countries we must help them organize. We must understand that we both have the same interests."

The sad part is that most of these businesses are not leaving because they are losing money, in fact, operations like Stanley Works were highly profitable. As citizens and consumers we cannot let employers simply "pull-out" - leaving families, communities and local economies ruined in their wake. We must fight to retain good paying jobs here in Vermont. It is time that we demand that the products we buy are made by workers who get treated fairly. Whether the goods are made in St. Johnsbury or Jakarta, the workers should have safe workplaces and receive living wages.

We must also stop FTAA from becoming implemented. This April 20-22, the third Summit of the Americas meeting will be taking place in Quebec City (the previous two Summits were held in Miami (1994) and Santiago (1998)). Here leaders from all thirty-four nations in the Western Hemisphere (except Cuba) will gather to discuss amongst other things, the proposed FTAA agreement. As thousands of delegates, media and corporate representatives gather to attend this event, thousands of others from around the world will be coming to protest it (this is planned to be the largest security and police operation in Canadian history.) With NAFTA we saw US employers bolt across the border hurting workers here while their Mexican counterparts saw their productivity rise as wages plummeted. We must not let this happen again. It is time for the people to come before the profits.

If you would like to join other Vermonters going to Quebec City for these events on April 21st or if you have any questions, you can contact The Vermont Workers' Center at 802-229-0009 or email: info [at] workerscenter [dot] org