Labor's Turnabout on Trade

Traditionally supporters of freer trade, many of labor's most liberal leaders have made a startling turnabout and put their powerful clout behind openly protectionist legislation in Congress. The recent converts include the electrical workers, the rubber workers and the machinists. Their feelings were vented at length and with loudness at last week's AFL-CIO convention. The Amalgamated Clothing Workers passed out pamphlets showing a man wearing imported clothes and headlined: HOW TO DRESS FOR A DEPRESSION. Banners strung up at Bal Harbour's Hotel Americana urged union members to

SAVE AMERICA, BUY AMERICA. Scores of delegates lined up at a telegraph booth to send wires supporting the proposed Foreign Trade and Investment Act of 1972. That bill would cut back tax advantages for U.S. corporations with plants overseas and set up a commission to draft a quota system aimed at keeping at 1965-69 levels any imports that start to win a sizable share of the U.S. market. As for President Nixon's 10% surcharge on foreign goods. United Steelworkers President I.W. Abel has called it "only a baby step in the right direction."

Export of Jobs. Labor's principal target is the American multinational corporation. Union leaders argue that the main reason corporate giants now expand overseas is not to develop new markets outside the U.S., but to take advantage of cheap labor and manufacture goods that are eventually sold in the U.S. Since the technology and management expertise that U.S.-owned companies have abroad are equivalent to that in U.S. plants, say union men, the effect is to deprive American workers of their normal productivity edge--and increasingly of their jobs. "Foreign competition as we knew it over the years does not exist any longer," said AFL-CIO President George Meany. "We are not competing with foreign private enterprise in these foreign countries. We are competing with franchises that are owned and operated by big business here in America."

Delegates from several unions bitterly told stories of "runaway" plants that backed up Meany's contentions. These included RCA's TV plant that moved from Memphis to Taiwan, as well as Bendix of York, Pa., and Kollsmann Industries' Wisconsin TV-tuner operation, both of which relocated in Mexico. AFL-CIO economists cite Bureau of Labor Statistics figures showing that the number of U.S. workers that theoretically would be required to produce all goods imported into the U.S. has increased by at least 700,000 (to 2.5 million) since 1966. The implication is that if imports were held down domestic employment would jump.

First Victims. The figures are somewhat misleading because they include the products of "real" foreign competitors like Volkswagen and Sony as well as those of U.S.-owned subsidiaries. Moreover, labor leaders do not dwell on the fact that export-related jobs in the U.S. increased by 200,000 during the same period. The trouble with most of labor's remedies is that they would penalize all foreign competitors and thus invite widespread retaliation against U.S. exporters. The employees of these export firms could well be the first victims of any trade war.

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