What WTO means for working families—Viewpoints | EPI

Opinion pieces and speeches by EPI staff and associates.


What WTO means for working families

by John Burbank and Robert E. Scott

This week, Seattle is ground zero in the battle for control of the global economy. Labor unions, environmentalists and citizen-action groups are in the streets to protest proposals to expand the unilateral decision-making power of the World Trade Organization (WTO). The participants in WTO’s forum must begin to address the imbalance between multinational corporate power and the economic security of families across the nation and here in Washington.

The restructuring of the world economy highlights the fact that between 1980 and 1996, the volume of world trade nearly tripled, and foreign direct investment in low- and middle-income countries increased more than fivefold, according to the World Bank. With the advent of new technologies, falling transportation and communication costs, and recent WTO rulings, international trade and investment will continue to accelerate in the future. Indeed, the WTO acts as the legal arbitrator to encourage the unimpeded flow of capital to maximize profit for global corporations.

Globalization has contributed to the creation of vast new sources of wealth in companies like Microsoft and Boeing, which have been critical to the growth of Washington’s economy. However, multinational companies have also moved thousands of factories out of our country. As a result, millions of high-wage manufacturing jobs have been lost in the U.S. in the past two decades.

The WTO encourages the movement of capital around the world, regardless of the social costs and long-term economic implications. Our own experiences in the early days of this century show that an unregulated market is a tremendous threat to economic stability and prosperity. But the WTO enables private capital to avoid and legally undermine national and state-level labor, environmental and social policy, just when these policies are needed to ensure that the developing global economy results in rising living standards for all workers and communities.

Our political leaders must balance the elimination of trade barriers with the rights of citizens to fundamental environmental and worker standards.

Here in Seattle this summer, Vice President Al Gore acknowledged that “when it comes to trade, labor rights and environmental protection are not second-class issues any longer” and that we need to include “labor and environmental protections in those agreements.”

These issues should be our top priority in all future trade negotiations, and especially in the WTO. We must hold this administration to its word here in Seattle.

But the effects of trade on our communities cannot be solved through international agreements alone. In the face of the increasing dominance and mobility of corporate capital, nations and states need to build community capital — that is, universally shared policies for which all citizens pay and from which all citizens benefit — to ensure a basic level of economic security and quality of life for our citizens.

In building community capital in the context of the global marketplace, we need the following:

  • Easily accessible and affordable worker training, re-training, and education. One result of the movement of corporate capital is that individual workers are left more and more on their own. We must give workers the tools to maintain their earning ability even while moving from job to job and company to company.
  • Systems to make sure workers and their families have health-care coverage, including when they are caught between jobs or in job-training programs.
  • Quality child care for our children that enables their teachers to earn livable wages and commit themselves to this work, while making it possible for parents to maintain their productive roles in our economy.
  • Paid family leave so that we can care for our families and excel as productive workers, that is, so we can balance work and family.
  • Reinforcement of our systems for Medicare, Social Security, pensions, and other retirement necessities, and universalized systems for pension portability.

Public policy can fill in the gaps corporate capital creates when companies move overseas or simply cut benefits for their work force. Capital may be global and mobile, but, as citizens and family and community members, we aren’t. So we need to build our countervailing community capital.

The creation and enjoyment of wealth cannot be a monopoly for powerful corporations who step around the citizens of our democracy. Our job is to tune up the engine of wealth creation by developing our own social and community capital, to make sure we can maintain and enhance the economic security of
Washington state families.


John Burbank is executive director of the Washington-state based Economic Opportunity Institute.

Robert E. Scott is an international trade economist at the Economic Policy Institute in Washington, D.C.