Weekly Briefing

What will the presidential candidates do for North Carolina?

With the May 6 presidential primary right around the corner, many North Carolinians are asking a simple question: Which of the three remaining presidential candidates is most likely to do the most to help North Carolina (and other similarly situated American states) to construct a vibrant 21^st Century, post-NAFTA economy? A look at their records and recent statements on the matter is instructive.

A little background

Despite the fact that state leaders have done a reasonably good job of coping with a bad situation, there's no way to sugarcoat the reality: NAFTA (the North American Free Trade Agreement) and other such schemes have been terrible for North Carolina. One need only look at the data with respect to lost manufacturing jobs and falling incomes for working class families to understand the hard reality: many thousands of North Carolinians are worse off than they were 10 or 15 years ago.

According to the fantasies of the market fundamentalist right, these declines are the result of "high taxes" and burdensome government regulations that have somehow stifled the growth of new businesses. Nothing could be further from the truth. The reason North Carolina has lost thousands upon thousands of manufacturing jobs in textiles and furniture is simple: U.S. trade policy under both Presidents Clinton and Bush facilitated the rapid transfer of those jobs to other countries without doing anything of note to help people cope with the aftermath.

As the N.C. Budget and Tax Center reported back in 2005, NAFTA displaced 34,150 more jobs than it created in North Carolina (and a million more nationally) between 1993 and 2004. North Carolina's losses were higher (in total jobs lost) than 40 other states. As a percentage of total state employment, North Carolina lost more jobs than all but eight states. These trends appear to have continued in the last few years.

These jobs didn't go to Mexico and overseas because of the decisions of state leaders; North Carolina tax policy had nothing to with it. The jobs left because of federal policies (like NAFTA) that encouraged it. They left because national political leaders of both parties allowed companies that had been required to meet at least decent minimum standards for wages and benefits and environmental protection here to pick up their factories, lock stock and barrel, and transport them to countries with no such minimum standards.

What could have been done?

Some observers and analysts argue that while NAFTA may have sped things up, in the long run there is really very little that the U.S. could have done or can do to forestall the departure of manufacturing jobs for cheaper, less regulated countries. They argue that, like water, capital will find the lowest (or cheapest) ground.

This appears to be John McCain's position. McCain has repeatedly attacked both of his Democratic opponents for criticizing NAFTA. Recently, he has even managed to mix his support for NAFTA with the "war on terror" by claiming that opposition to NAFTA will somehow jeopardize Canadian participation in the fight with the Taliban in Afghanistan. In contrast, both Barack Obama and Hillary Clinton argue that government policy has a lot to do with the location of capital. They argue it is possible to re-negotiate the terms of agreements like NAFTA to require more of U.S. trading partners and to provide American workers with something closer to a level playing field. 

Whichever of these analyses of NAFTA and "free"/deregulated trade is more accurate, it's clear that there is one glaring area in which the U.S. government could have acted and has failed miserably - namely in how it has responded to the domestic impacts of such policies.

When it became apparent that NAFTA and its siblings would rapidly decimate vast segments of the American workforce, the United States government could and should have taken dramatic and forceful action. Had it acted with any measure of vision and foresight, the federal government would have pumped vast new resources into the field of worker training and re-training. Community Colleges - particularly in hard hit areas like North Carolina — and various transitional benefit programs would have seen significant funding increases.

Indeed, a truly visionary president would have launched a kind of domestic Marshall Plan to rebuild the American workforce in order to prepare Americans for the 21^st Century. Instead, of course, both Presidents Clinton and Bush offered relatively little. As a 2003 Workforce Alliance report put it,        

"Unfortunately, our federal government's investments in workforce development programs over the past two decades have failed to keep pace with this increasing demand for skilled workers. In fact, there are a range of workforce training programs-particularly those targeting low-income adults and youth-that have seen significant cuts in recent years, translating into lost opportunities both for these workers and for the businesses that want to hire them."

President Bush has done nothing to remedy this situation during his second term. This year, his proposed budget would makes matters even worse by imposing several new and counter-productive program cuts. The result, of course, is the absurd situation we have today in which America imports large numbers of skilled workers even as its own displaced manufacturing employees work two jobs at Wal-Mart and the local convenience store just to get by.

Grading the candidates

So, as they prepare for the May 6 final exam, how should North Carolinians grade the positions and performances of the candidates on these issues? Here is our take:

Hillary Clinton: If Senator Clinton wants to make her "experience" the centerpiece of her campaign and claim credit for all of the positives of the 1993-2001 era she must accept big demerits for her husband's abysmal performance on trade and its side effects. This is true even if, as she claims now, she secretly opposed some of his positions and currently favors renegotiating trade agreements. Similarly, while she gets some credit for raising the issue of worker training during last week's visit to North Carolina, most of her specific proposals were fairly familiar and uninspired. She even borrowed one silly idea from the Republican playbook: a 401(k) program that would supposedly provide an incentive for workers to save for their own dislocation and future training needs. Bottom line: Better than Clinton I, but a long way to go to show she really means what she says.

John McCain: While McCain deserves a tiny measure of credit for consistency (he has been a supporter of deregulated trade for decades and has seldom pandered to voters about bringing back lost jobs) he has done virtually nothing during his long career in Washington to indicate that he has any real interest in bringing the power of the federal government to bear on this issue. To the contrary, Senator McCain has, if anything, been a loyal foot soldier in the George W. Bush army - voting against even the modest pro-worker proposals of the last few years such as the Temporary Emergency Unemployment Compensation program and a proposal to provide loans to workers in job training or job assistance programs to help them avoid foreclosure. Bottom line: If you like Bush on trade and worker issues, you're almost sure to like McCain.

Barack Obama: Like Clinton and in contrast to McCain, Obama seems to favor a tougher stance on trade and has criticized NAFTA and other trade deregulation proposals - though, of course, it's only been since 2003 that he could actually vote on such matters. Unlike Clinton, he's not running on a record that so directly contradicts his current position. Obama also gets credit for speaking out strongly against policies that put the profits of multi-national corporations over the interests of workers and for promising to bring a dramatically different approach to how Washington grapples with these issues. Like Clinton however, there is little in Obama's specific programmatic proposals that indicates he is sure to bring about the kind a dramatic reversal in trade and worker training policy that is necessary. Bottom line: Obama needs to develop an ambitious policy agenda to match his promising rhetoric.                

Going forward

Over the next five weeks, presidential candidates will do their utmost to convince North Carolinians that they care passionately about our state. Unfortunately, when it comes to one of the seminal economic issues of our times - the disastrous meltdown of our state's manufacturing base - truly innovative and ambitious policies and rhetoric are hard to find. At such a critical time in the 2008 election cycle, now is the time for all of us to demand more. Let's hope the candidates respond.    

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This entry was posted on Tuesday, April 1st, 2008 at 10:25 am and is filed under Weekly Briefing. You can follow any responses to this entry through the RSS 2.0 feed.