THESE DAYS, the type of drama unfolding at Power-One has become all too familiar. Kenneth Messina of the Commonwealth Corporation, a quasi-public agency that operates the state’s “rapid-response team,” which assists laid-off workers across Massachusetts, estimates that thousands of immigrant workers have faced similar situations. In the past 12 months alone, he says, as many as 304 manufacturers across the state have shut down. Of that number, more than 10 percent — or 32 companies — caved to foreign competition. That means they moved local production overseas. Or they downsized divisions. Or they simply could not keep up with competitors around the globe. Adds Messina, “We have seen skyrocketing numbers of layoffs and closings. We’re very busy.”
When it comes to measuring the impact of globalization, however, plant closures represent only “the most visible and dramatic consequence,” says Nancy DellaMattera of the UMass Lowell Labor Extension Program, which offers training services to workers. In Massachusetts, people need look no further than the General Electric plant in Lynn to identify the trend’s more subtle effects. GE chief executive officer Jack Welch — named “management revolutionary of the century” last year by Fortune magazine — has famously pursued an aggressive global strategy, candidly proclaiming that, ideally, he would have every plant he owned on a barge. That way, says DellaMattera, “GE could move its factories all over the globe,” anchoring them at whatever country happened to offer the lowest wages, lightest regulation, and least scrutiny at the time. Welsh and other business leaders argue that this movement of capital across borders doesn’t cost very many American workers their jobs; when NAFTA was being debated, business leaders actually argued that opening up the borders would result in more jobs here because US companies would export more goods. But that hasn’t happened.
Under the global visionary Welch (a native of Salem), GE has steadily shifted one division after another from Lynn to countries like Russia, South Korea, and Mexico. So while the local factory remains open, its workforce continues to shrink. In the late 1980s, the plant employed almost 10,000 workers. Today, that number hovers at 2700. The reduction, says 22-year plant veteran and union president Jeff Crosby, proves that American workers do suffer when companies move capital across borders. “The globalization drive,” he says, “has hit this plant very hard. Thousands of jobs have been wiped out.”
And the destruction of jobs, says Robert Naiman of the Washington, DC–based Center for Economic and Policy Research, “is not the real story, but the headline.” Naiman, who contributed to the “NAFTA at Seven” report, explains that the loss of manufacturing positions has meant declining living standards for American workers. Those displaced from production jobs — which tend to offer good wages, benefits, and full-time employment — are not “being displaced into equal jobs.” Instead, they’re moving into the service sector, where most new jobs currently arise. But these positions, Naiman notes, “are low-pay, low-benefit, often temporary.” He adds: “People are not getting the kinds of jobs to replace their old incomes.”
Moreover, those workers who still remain in manufacturing positions have experienced what DellaMattera calls “a destabilization of the work environment.” In essence, American workers have been pitted against their counterparts across the globe, in Singapore, Brazil, Korea, Malaysia. They know that companies operating on a global basis can ship their jobs elsewhere, DellaMattera says; they know that the federal minimum wage — $5.15 per hour, as compared to the state-mandated minimum of $6.75 per hour in Massachusetts — costs employers far more than the paltry amount they could pay workers in developing countries. “US workers,” she says, “cannot feel secure in their jobs anymore. They are being forced to compete with workers worldwide, and they cannot.”
Even defenders of the decades-old globalization process, such as Kenefick of Power-One, recognize that it has hurt low-wage assembly-line workers most. “There is a lot of truth to such a statement,” he says. “People who don’t have highly developed manufacturing skills will be at greater risk of losing their jobs” as multinational companies strive to contain costs in the global market. “The world has gotten smaller,” he concludes, “and that is the reality we all must contend with.”
Indeed. Labor experts predict more and more Power-One-style scenarios — in which plants close, jobs vanish, and workers are left without a safety net — unless the federal and state governments rein in big business. Government could raise the minimum wage, so that workers who lose their jobs would have a better chance of moving into a position that would replace their lost income. It could provide universal health-care coverage, or at least mandate decent severance packages. After all, says Naiman, “NAFTA did not fall from the sky. These changes [for US workers] did not fall from the sky. They are driven by policies” that subsidize the growth of global trade while failing to protect its victims.
And for Power-One workers in Allston, the lesson that they’ve learned — toil diligently for an honest wage, then get tossed aside — seems the antithesis of the American dream. As Ying puts it, “We worked so hard, yet we were treated like nothing, like non-people. It’s difficult to accept.”
Kristen Lombardi can be reached at klombardi[a]phx.com.
