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How Will The Global Economy Protect the "Primordial Rights of Every Man?"

By William Bole

Our Sunday Visitor

December, 1998

 
     For much of the past decade, global capital seemed invincible as it trotted from New York to Bangkok and all financial points in between. Then came the Asian contagion, the collapse of markets in Southeast Asia that has spread to Tokyo, Moscow, Sao Paolo and other financial capitals.

     The turmoil has triggered worries about the free flow of capital and the need for international control mechanisms. The buzz phrase is "global financial architecture."  The common blueprint calls for sheltering of investors and creditors from the most intemperate financial climates. The Federal Reserve Board illustrated this compassion recently when it rode to the rescue of Long-Term Capital Management, an elite mutual or "hedge" fund.

     So far, however, the architects have yet to sketch in specific plans to shield other inhabitants of the global economic village, namely workers.  In his own language, Pope John Paul II has appealed for a global financial architecture, though with a fuller design. Speaking last year to the Pontifical 
Academy of Social Sciences, the Pope called for a "balanced, well-regulated world market," one that protects the "primordial right of every man to have work through which he can earn a living for himself and his family."

     Words like this run afoul of mainstream economics, which doesn't normally include wage and work standards in the rules of the financial game. "What the Pope is saying is that we need a global architecture that goes beyond finance," said Robert A. Senser, a retired U.S. labor attache who edits a bi-weekly electronic report, Human Rights for Workers.

     At 78, Senser is one layman who is busy applying Catholic social principles to the global workplace. In his view, bankers and investors "can take care of themselves. They'll fall back on their last million." But in the global economy, "you have to look out for people who can't protect themselves as easily."
     Some international leaders, including President Clinton, have begun uttering what Senser considers the two magic words, "labor standards."

     Meantime, a few well-known apparel companies are looking to lift standards in their own industry, which is deeply entangled with Third World sweatshops. Last month, a group of nine manufacturers and human rights organizations reached an agreement to curtail the sweatshop trade. The companies, including Nike, Reebok, and Liz Claiborne, aren't notably 
inspired by papal principles. They're animated more by bad publicity -- especially in this season of shopping -- over shirts, slacks, and tennis shoes made with sweatshop labor.

     Under the new agreement, factories that produce goods for American companies could not use forced labor or require employees to work more than 60 hours a week. The pact also forbids hiring children under 14 years old. However, the agreement does not require that workers receive a "living 
wage," and it lets companies do business in countries, such as China, which repress labor rights. With that in mind, labor unions have rejected the agreement. Unions also say the monitoring system proposed under the agreement 
is flawed.

     Senser, who worked for the AFL-CIO's Asia policy arm after retiring from the Foreign Service in 1983, finds himself agreeing both with supporters and critics who say the code of conduct doesn't go far enough. "It's a step forward, but there are miles and miles still to go," said Senser, a product of the Chicago Catholic social-action movement who runs the 
labor-rights Internet site (www.senser.com) from his home in Reston, Virginia.

     For Senser, the breakthrough lies in the initiative taken by industry leaders, especially Liz Claiborne, Inc. "It's a dream world if you think human rights groups are going to solve this problem," he said, citing the private sector's indispensable role.

     Making sure products are "sweatshop free" isn't as simple as the slogan suggests. "The problem is so great, so deeply rooted, so chaotic, that any effort to control it is enormously difficult," said Senser. For example, Wal-Mart might only work with factories that use no child labor. But those factories might secretly contract out to others that make the product more cheaply - with child labor. "In some places, the subcontracting process is so fluid, so loose, so filled with temptation, that it's fair to say that a large company in the 
United States might not know what's happening" in offshore factories, Senser noted.

     "It's not impossible," he said of the task of monitoring production. "But it takes more concerted commitment and energy than it's been given until now." Senser urges trade unions, including the Union of Needletrades, Industrial and Textile Employees, to hang tough and bargain for a stronger agreement limiting sweatshop labor. UNITE belonged to the task force, called the Apparel Industry Partnership, which began work on an anti-sweatshop code of conduct two years ago, under White House sponsorship.

     Organized labor broke with other members of the partnership, including the Lawyers Committee for Human Rights, in rejecting the agreement made public in November. (So did some leaders of industry who concluded, from the 
other end, that the agreement went too far.)

     At the center of contention is a living wage, that is, enough to meet a family's basic needs. The agreement requires only that companies pay workers the minimum required by local law, or the prevailing industry wage, whichever is higher.
     Senser doesn't quibble with industry's argument that there is no "objective formula" for setting a living wage across the global workplace. Nevertheless, he believes industry can and should make a commitment to at least gradually lifting wages above the bare, legal minimum set by governments of developing nations (which often don't enforce the laws).

     "It's surprising how small the labor costs are," Senser explained. He took, as an example, a Phillips Van Heusen shirt that retails for $15. The labor share of that price tag is six or seven cents. (Van Heusen is a signer of the apparel agreement.) "We're talking about peanuts," said Senser. "Of course," he added with a fast dose of capitalist reality, "that's how profits are made, a few pennies here, a few pennies there. When you multiply that by the volume of world 
trade, it adds up to billions, and that's what Wall Street lives on."

     Which leads back to the question of financial markets and international trade rules. In principle, Senser has no objection to guarding investors from the worst calamities, though he suspects the U.S. Overseas Private Investment Council went overboard when it insured investment firms against losses in the Socialist Republic of Vietnam.

     "It's Wall Street protectionism at work in an especially risky corner of the world," he wrote in his May 14 bulletin of Human Rights for Workers. At any rate, he would like to see the global safety net extended to workers. 
That would include their right to unionize.

     A parishioner of St. Thomas A Becket Church in Reston, Virginia, Senser wrote for the now-defunct Catholic monthly, Work, from the late 1940s to the early 1960s.
     His 31 years in the Foreign Service included stints in Germany, Belgium, Algeria, and, fortuitously, Vietnam -- where he met his wife, Dzung. The Sensers include four grown children; two sons, Tony and Thuy, helped launch the web site three years ago.
     These days, Senser is pursuing what Popes Paul VI and John Paul II have termed the "global common good."

"Globalization is a blessing from God. It opens up tremendous opportunities for producing wealth," said Senser. But, echoing John Paul's message to the Pontifical Academy of Social Sciences, he added that this global gift has yet to be shared with the full family of God.



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