Tech industry, unions at odds over 'stimulus' plan
WASHINGTON--As a presidential candidate in 2008, Barack Obama famously courted both labor unions and Silicon Valley firms. Now President Obama is finding that two groups that have been some of his most enthusiastic supporters are at loggerheads.
The tech sector sees President Obama's call for billions of dollars in targeted tax cuts and deficit spending on a new green economy as a generous windfall. So does the labor movement, which spent at least $385 million electing Democratic candidates, and is at odds with business over investment and procurement policies in the so-called "stimulus" package, including the "buy American" provision.
At the opening of the Good Jobs Green Jobs national conference here Wednesday, union leaders said high labor standards must be maintained in the government's nearly trillion-dollar attempt at economic recovery--which includes billions of dollars for broadband deployment and tens of billions of dollars for energy initiatives.
"If we extinguish workers' rights, the chances for a green economy are nonexistent," said Larry Cohen, president of the Communications Workers of America, the largest communications and media union that represents workers from AT&T, Embarq, Comcast, and many other companies. "We're not protectionists--we're people who believe in a sustainable economy. We can't just depend on markets, and if we do, we're likely to come up with answers that are at best incomplete."
On the other hand, many economists agree that higher union salaries can lead to fewer jobs (and higher unemployment). The Concise Encyclopedia of Economics says: "High union wages that exceed the competitive market rate are likely to cause job losses in the unionized sector of the economy."
More than 2,000 business, labor, and environmental advocates are participating in the conference, which lasts through the week, to shape the national dialogue on creating a "green" economy.
"This is the working-class and the progressive-movement's Davos," said Leo Gerard, the international president of the United Steelworkers.
A "green" economy will create new opportunities for labor, Gerard said, citing Gamesa, a Spanish windmill company with a branch in Pennsylvania.
"Gamesa is 100 percent union, and they make their windmills 100 percent union," he said. "In a windmill, you've got over 200 tons of steel, 20 tons of composite material, 250 cubic yards of cement...Every one of those is a green job, and one wind turbine can create enough energy for 500 to 600 homes."
For such projects to work as an economic stimulus in the United States, though, labor leaders said American jobs must be better protected. They pointed out that the "buy American" provision of the "stimulus" package, which would require manufactured goods used for projects funded by the legislation to be produced in the United States, is in line with long-standing procurement laws already in place.
"The economic philosophy of the right wing has allowed them to ignore that," Gerard said.
Regardless of its consistency with U.S. laws, he said, the controversy surrounding the bill has misdirected the dialogue about the economic package from its main objective: creating good jobs.
"This isn't about a trade war," Gerard said. "It's about making sure we're not putting our jobs out to bid for China."
The technology industry, which will play an integral part in developing smart grids, renewable-energy sources, and other "stimulative" efforts, sees the "buy American provision" very differently.
Dozens of companies and trade associations, including AT&T, Dow Chemical, Cisco Systems, IBM, Intel, Microsoft, the Computer and Communications Industry Association, and the Consumer Electronics Association, sent a letter Tuesday to Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) saying the provision "will harm American workers and companies across the entire U.S. economy, undermine U.S. global engagement, and result in mirror-image trade restrictions abroad that would put at risk huge amounts of American exports."
"Government procurement is part of the WTO agreement," CCIA president Ed Black has said separately. "U.S. companies have won nondiscriminatory access to supply products for other governments because of these provisions. Keeping that reciprocity is important to the current economy and the economic recovery we are all hoping to see."
He said his organization has additional concerns that the "buy America" provision could be extended to information technology and is particularly concerned that the provision could extend to health IT stimulus efforts.
Gerard said at Wednesday's conference that "there's a fairly high level of duplicity" in the discussion over the "buy American" provision.
"I didn't hear any of the high-tech firms yelling and screaming when China said they were investing $700 billion for Chinese jobs," he said, "when they refused to sign the WTO procurement policy. All of a sudden, because we want to do this in the United States, something's wrong."
"I resent the high-tech community, (which has) resisted all kinds of training programs so they can export cheap labor," he added.
Wednesday's conference preceded a rally on Capitol Hill at which union activists voiced their support for the Employee Free Choice Act, a controversial measure that would allow workers to unionize by signing a card rather than through secret ballot. Some members of the tech industry are opposed to this measure as well.
"Future job growth is likely to come from the technology industry, and innovation requires the flexibility for companies to hire and fire," CEA President Gary Shapiro told CNET News in November. "In the tech industry, unionization would be devastating, frankly."
"When it comes to workers, we can't just be another commodity thrown in a landfill," Cohen said when speaking about the Employee Free Choice Act. "We want good jobs, we want green jobs, we want union jobs, and we're going to take a stand."
CNET News' Declan McCullagh contributed to this report.
Stephanie Condon is a staff writer for CNET News focused on the intersection of technology and politics. She is based in Washington, D.C. E-mail Stephanie. 
The best way to help this recession is to support American goods and labor. Anyone who's worried about retaliation from other countries just needs to take a look at our trade deficits, which was $711.6 billion in 2007. We also had a $53.5 billion global trade deficit in advanced technology products in 2007.
These high tech companies, with their constant requests to raise the cap on hiring foreign workers, are an affront to America.
They like to think they are leading innovation, but so far they've just led to the destruction of more middle class jobs.
Additionally, unions serve as cash cows for lawyers and lobbyist. My grandfathers plumber pipe fitter union canceled his medical insurance when a new board was elected, executives got raises, old retired people got the shaft.
Unions also cherish seniority over merit... which means a lazy senior worker can be kept on (at higher pay)while an industrious less-senior worker gets laid off, simply due to seniority.
There was once a time when unions were a necessary thing... in an era when opportunities were few, company owners were rapacious, and safety was never even considered, let alone enforced by law. That time has (thankfully) passed even before the last century did. Unions back then served a higher purpose. Nowadays, unions only exist for two reasons: money, and power - neither going to the worker mind, but instead to those who run the unions.
The only reason the word "green" is even being used by the union bosses involved is because it helps confuse the underlying issue: that is, how union bosses can retain the money and power that they have accrued after all these years. After all, steel-making damned sure isn't "green" - ask anyone who knows how much power a blast furnace eats and how many petrochemicals are used to add carbon, lubrication, cooling, and etc... Composites manufacturing isn't "green" - one look at the MSDS lists at any composites manufacturing plant will tell you just how toxic some of the chemicals on the premises can be. Cement? The raw materials (gravel, limestone, etc) have to come out of the ground somewhere...
Bah.
Unions weren't solely responsible for causing financial distress at Ford,GM, and Chrysler. There wasn't enough demand for the products that upper management had them producing.
I'm a union member and seniority means nothing... And if someone isn't producing they're fired without warning and without severance.....Please get your facts straight...Do some research.
Why are we still importing foreign workers??? We got a resume last week from a guy who got a free ride at LSU and now is competing for american jobs. His GPA was 3.2 and he got his fees waived. What the H E double hockey sticks is going on?
This stimulus package is the greatest boondoggle in living memory. It's proof that we would be led better by trained monkeys .
In a technology based field you need to have the flexibility to get rid of dead weight at will. Engineering & technology is not the same thing as manufacturing cars/steal/concrete.
I didn't stay with the IBEW long enough to find out, simply because it was always the guys at the front of the union hall, the local union leaders, that had all the jobs while the rest of us were left sitting in the hall, still looking for jobs.
Same thing is true with the CEP union.. the top boys collect full pay when the "workers" collect 1/4 pay...
As far as jobs.. When you're laid off you report to the hall. Your name goes on the bottom of the list- as fair as can be. This is the only way to get a job. You can't solicit your own work.
Local Union #3
Now, yes, that thing that you mentioned IS a little outrageous.... but it was put into the union agreements to make sure that companies could not 'push around' the union by threatening to move jobs overseas, fire workers, etc.
It isn't really necessary today and might be one of the reasons why unions today (especially the car unions) are willing to go on strike at the drop of a hat..... however, if we get rid of it and things get WORSE because the unions have lost one of the things that makes them able to convince people to go on strike for better wages, etc..... who will we have to blame then?
It is true that workers deserve fair compensation for their work, but many unions go overboard getting their members ridiculous benefits and wages. As an example, any company who allows their workers to "bank" sick days has been bullied by a union with nothing better to do than force unfair concessions from their employers.
Also, unions should not be allowed to spend their members dues on electing governments or lobbying since they cannot say they represent all of their workers political opinions. I would hate for my union to work getting a government elected whom I voted against. Unions have no business interfering with government. Just as religion and state should be separate, so should state and unions.
Unions drove the auto sector to bankruptcy, and now they want to do the same to the tech sector.
In your world, we'll only be able to buy products made in the good old USA. Except now that town uses Komsatsu earthmovers, Siemens power plants, Lenovo computers, Huaweii routers, etc. Not a penny for US companies right? Because we don't have open markets why should they!
Fortunately, you'll be able to buy $250 Nikes (their entry level model) made in South Carolina! And forget about upgrading that computer! You can't afford the $4000 price tag! But that's Ok it would have been built in Missouri if you had the money!
Most of the shoe workers in Asia are teenagers and unmarried young women from ages 17 to 30. The average worker produces 4.3 pairs of shoes a day (Brookes and Madden, Internet.), and only gets the minimum wage of $2.50 a day in Indonesia. The daily livable wage in Indonesia is between $4.00 to 4.50, yet Nike still pays minimum wage to the workers who make the shoes that sell for over $100. Certain conditions in Vietnam are even worse. Workers only make an average of 20 cents per hour, or $1.60 a day, when the cost of eating three simple meals is $2.10 (Nguyen, e-mail) plus other expenses such as shelter.
About sixty to seventy percent of Nike's overseas workers rent a room in the Nike dormitories. The rooms are all identical, one-story barrack like buildings which face each other in rows. The rooms are three meters by three meters, which are made of concrete walls and floors, where two or three young women live. Along with the small area to live in, a large number of people all use the same toilet and laundry facilities because the rooms are not equipped with these .
The 30 to 40 percent of the workers that cannot fit in the dormitories live in very small run-down rooms, with someone else to keep the cost down. They do not own a mattress or a bed, so they sleep on the concrete or dirt floor.
Renting a room in Indonesia costs at least $6.00 a month. Clothing has to be purchased, and every now and then the workers have to buy a bar of soap and toothpaste. To stretch the paycheck, something has to be cut. Despite the constant hunger, it is usually the food (Herbert, e-mail).
Many Nike shoe makers have complained about forced overtime. A quota is set for each worker, and if they don't reach it, they have to work unpaid overtime hours to make up for their slow work. Some workers complained that that the quota is set even higher whenever they reach it. This unfair system gives a new meaning to the Nike slogan "There is no finishing line" (Brookes and Madden, Internet).
Two factories operated a policy of employing workers with a training wage for the maximum of a 120 days, then laying them off to save money on fringe benefits and permanent employees. The long hours are just as unfair as well. Vietnam's labor laws say that the maximum number of overtime hours a year is 200. Nike workers are forced to work 500+ hours per year. If the workers refuse to work these long and hard hours, they are punished and receive a warning. Three warnings and they are fired (Brookes and Madden, Internet).
Many Asians think business is a lot like war. Nike's labor practices promote poverty, poor nutrition, frequent headaches, general fatigue, and neglect for the children of the workers (Nike: Nothing Has Changed, Internet). Many people may think that the factories are in bad shape. When actually Nike's factories are very well lit and clean because you can't make quality shoes in a rundown shack.
Nike and several other sporting goods giants announced a campaign to stop the production of soccer balls made by Pakistani children who work 10 hours a day and only earning pennies for it. Child welfare organizations estimate that 7,000 to 10,000 Pakistani children under the age of fourteen stitch soccer balls in their homes and small shops. Nike has taken drastic measures to stop child labor by making plans to build fifteen "stitching centers" over the next three years to put an end to the homemade soccer balls. (Newberry, "Companies kick out child-made soccer balls).
Not only are the wages low, but Nike workers have to put up with sexual and physical abuse. Several cases of abuse include: workers being locked inside a cage and placed before the entire compound for display (Chan, "Boot Camp at the Shoe Factory); workers being hit over the head by supervisors for poor workmanship; workers forced to kneel with their hands in the air for 15 minutes; workers having their mouths taped for talking; workers called dogs; workers cussed at; workers beaten over the head for poor sewing; workers hit in the face with rubber soles because the manager made a mistake in color; workers being shot with rubber bullets; workers forced to stand in the hot sun for extended periods while writing their mistakes again and again, like schoolchildren (Herbert, e-mail).
Women workers have complained about frequent sexual harassment from foreign supervisors. Even in broad daylight, in front of many other workers, these supervisors try to rub, touch, or grab female workers in their chests and buttocks (Nguyen, e-mail). Workers have also reported that the prettiest girls in each section are chosen by the managers as administrative assistants. The decision only has to do with looks, not how well the person works. The administrative assistants are sometimes sexually harassed and even molested by the managers and supervisors (Connor and Atkinson, "Labour conditions in the sport shoe industry").
" Nike spends between $250-$280 million dollars a year on athletic endorsements. Nike's total annual payroll at six Indonesian factories is less than what Nike pays superstar Michael Jordan per year. A pair of Nike's top-of the-line running shoe, the Air Max shoe retails for $140. Nike admits that the direct labor cost to produce the shoe is about $3.50, which doesn't account for Nike's marketing or distribution costs. "
Let's BUY AMERICAN and our economic problems will be gone. Imagine if we didn't have a trade deficit. An extra $700 billion spent in this country. End of the unemployment problem. In turn, a new larger workforce injects that income back into our U.S. economy. Makes too much sense.
- by galeso February 5, 2009 2:19 PM PST
- What, there was not enough demand for the over priced union build cars?
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(29 Comments)Shocking!