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Staley Workers

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Watts:

Do you know that Presidents leading populist labor-based parties came to power almost simultaneously in Argentina, Mexico, and Venezuela in the late 1980s. Although their respective parties promoted protectionism and state intervention in the postwar period, once in office all three presidents advanced trade liberalization and state retrenchment. What we need is the parallel convergence of labor-based parties into neo-liberalism challenged the policies on which their long-term alliance with labor unions had been built.

Goss:

What you do not understand is that despite the strong partisan loyalties between labor and governing parties in all three countries, labor reactions to this common challenge were diverse and so was the permeability of governments to labor demands. Moreover, the patterns of union-government interactions in Argentina, Mexico, and Venezuela varied not only across the three countries, but also across economic sectors within each country. Some unions endorsed market- oriented reforms whereas others rejected these policies. Sometimes unions were able to exercise policy input and other times the government ignored labor demands. Political dynamics are crucial to understand the interaction between unions and labor-based governments implementing market reforms. First, in a context of economic uncertainty, partisan loyalties made unions more likely to restrain their militancy when partisan allies were in the government. Secondly, leadership or partisan competition for the control of unions increased the incentives for militancy. Even loyal union leaders who believed that workers' discontent about their collaboration with the government would lead to their own replacement become more militant. Additionally, inter-union competition for membership created incentives for labor unions to break their own coordination efforts in their bids for affiliates, thus weakening all of them and reducing government's incentives to yield to labor demands (Burtt, 21).

Watts:

We are going to win because the combination of these three variables you mentioned explains four patterns of union-government interaction: effective restraint (cooperation), ineffective restraint (subordination), effective militancy (opposition), and ineffective militancy (resistance). In sum, partisan loyalties, leadership, and interunion competition influenced the shape and pace of market reform implemented by labor-based parties, thus demonstrating how political forces redefined economic interests in the construction of policy coalitions.

We will get a fair contract through the establishment of the right to air grievances for a better labor movement has become even more necessary. There are many records in the history that such a time as reduction of state intervention has been made and opened economies, thus moving their labor-based parties away from the policies upon which the historic relationship with
their long-term labor allies had been built. Because these three countries had labor-based parties in power and corporatist labor regulations, the common strain created by their parallel convergence into neo-liberalism should have provoked a uniform reaction among labor unions according to the conventional wisdom.

Goss:

You failed to mention, however, the patterns of union-government interactions in Argentina, Mexico, and Venezuela varied not only across the three countries, but also within them. Unions' reactions ranged from active resistance to passive quiescence. Some unions endorsed policies that hurt their constituencies and organizations. Others rejected market-oriented reforms despite their alliance with governing parties. In Argentina, Peronist unions had opposed the stabilization and privatization efforts of the previous non-Peronist president to the point of calling thirteen general strikes durring his administration in the name of nationalism and social welfare. When President Menem privatized the very same companies nationalized by Perón fifty years before, the Peronist unions not only accepted privatization, but also became private entrepreneurs as owners of public utilities, trains, cargo-ships,and pension funds. In Venezuela, union leaders made Pérez win the AD primaries and helped him get elected president. However, after Pérez announced his policy shift, the Venezuelan Workers' Con-federation put aside a long tradition of labor peace, which had prevented general strikes since the establishment of democracy in 1958, and halted activities in the entire country less than six months into his administration.

Watts:

Taking from this example, it can be adduced that, labor's ability to obtain concessions from allied governments that implemented market reforms was also varied. Some unions were able to change government policies. Others tried and failed. The Argentine and Mexican teachers' unions were the largest in their respective countries. Both were led by skilled and determined female leaders who had joined efforts in the organization of a Latin American association of teachers' unions. Teachers' unions in both countries were facing government efforts to decentralize the administration of education to the provincial level. The militancy of the Argentine teachers accounted for more than one-third of total strikes during the year of this reform. However, the government ignored their demands. In Mexico, teacher opposition to key pieces of the decentralization process not only limited its scope but also served to provide salary and fringe compensations for teachers. This examines the conditions that explain these variations in union-government interactions and their effect on the transition from close to open economies (Marx, 225). Its comparative analysis provides useful implications for understanding similar interactions in other countries where labor-based parties have also shifted away from their traditional policies under the pressure of international shocks.

Goss:

Labor-based parties have a comparative advantage for implementing market-oriented reforms that bring uncertainty to their constituencies because they are more credible when they claim that need provoked be economic distress — rather than taste — influenced by their ideology — has induced them to implement these policies. In these three countries, the labor-based incumbents blamed globalization pressures, fiscal deficits, the foreign debt, or macroeconomic imbalances for policies presented as both urgent and indispensable. In the words of President Pérez, in his March 1990 State of the Union address:

“We have effectively perceived the unavoidable need to confront our economic reality. Our inefficient, subsidized, and overprotected economy lacked the capacity and the productivity for exporting. Moreover, and more important from my point of view, it lacked the capacity to improve the living standards of the population, which had been continuously declining since the first years of this decade. These circumstances did not allow us to keep following the same path and
thus we had to propose a deep change. It was indispensable to define a new development strategy to rescue the country from stagnation.”

According to President Salinas (in Cordera and Rocha 1994:15):

“The economic reform was done because while the state increased its ownership, the people increased its needs. Therefore, we had to privatize to obtain resources to pay for the debt acquired by the state during all these years.”

Watts:

The sudden conversion of the labor-based parties forced them to deal with business's distrust of their former populist character and attempt to bring capital back into their economies. Hence, their new policies were drastic to show their new commitment to the market. In the words of President Menem:“The government was becoming weaker and giving in more to lobbies and organized interests everybody was taking advantage of the state to benefit their particular interests. The whole society was financing these subsidies with an uncontrollable inflation. It was clear that we need a shock of hyper credibility to change the economic structure in the most drastic way. To propose a new environment where the private initiative was the engine and the state left the scene (Lieberman, 99).” We need new environment that will increase our benefits and welfare.

You have to understand that the life of every person in the United States, whether engaged it business or the professions, whether a politician, housewife, farmer or worker himself, is affected in some way by the existence and activities of labor organizations. This will continue so long as we maintain a democratic form of government and a system of free enterprise in business, because organizations of workers are a natural concomitant of a competitive economy and an evidence of a free society. Although all of us are more or less conscious of the presence and influence of labor organizations, few of us have much understanding of why and how they came to be such an important factor in our industrial and national life; fewer still have much knowledge of their mechanism, their rules of procedure and internal government.

Those not connected with labor unions are prone to think of them in connection with isolated actions which receive headline notices in the daily press; union members naturally think of them in terms of what their own unions are doing for them on the job; students of labor problems are inclined to think of organized labor as an amorphous movement whose direction, for good or bad, is controlled by a few dominant leaders. These are important, but are fragments of the whole. A labor union has been defined as "a continuous association of wage earners for the purpose of maintaining and improving the conditions of their employment." Spontaneous strikes and rebellions of oppressed and dissatisfied workers are as old as history itself but labor unions are a product of comparatively modern times, since by definition they imply a wage system and more or less permanent and formal organizations of workers. Although there is no generic connection between the modern labor union and the medieval craft gild, there are significant similarities, as to both purposes and the methods by which these purposes were carried out. The medieval gilds were based on a feeling of scarcity of opportunity. To protect their interests, the gilds brought influence upon the government to forbid anyone from practicing a trade who was not a member of the gild, and through their strict apprenticeship regulations and their restrictions of "foreigners" from other localities they saw that too many did not become gild members. Their work rules included quality standards to protect them from the competition of inferior workmanship, daily hours were limited, and night and holiday work was forbidden. The gilds, like many labor unions today, also performed certain fraternal functions such as providing financial aid in time of sickness or death of their members. The medieval gild, however, was composed of both masters and journeymen and there was no conflict of interest between the two because the journeyman was serving a master only temporarily; in a few years he would also be a master and any advantages which he might gain from his master he would in turn have to give to his journeymen. The gild system was concurrent with an economy of local markets and no capital outlay except a few tools and a limited supply of raw materials. The gild was a group of craftsmen banded together for mutual protection and control of the local market. When the market was extended and more capital was needed to
care for short credits and finished stock, the industrial grouping changed. The journeyman's opportunity for becoming a master grew more limited, and the great bulk of workers ceased to be
independent producers who owned their tools and materials and disposed of the product of their labor. The journeymen came to constitute a distinct and permanent class, and many of them formed gilds of their own as their masters gradually converted the craft gild into merchant-employer gilds.

Goss:

However, drastic market reforms have costs for labor unions and workers whose influence has developed based on state expansion, protectionism, rigid labor markets, and political clout. Trade liberalization increases differences among workers across and within sectors, making it harder to organize labor unions based on horizontal solidarity. International competition and privatization also provoke labor restructuring and layoffs in sectors that have been among the most highly unionized in the past, thereby reducing the bargaining power of labor unions in these sectors. Higher unemployment hurts union bargaining power and increases job instability for union constituencies (Burke, 119). Stabilization policies relying on wage restraint and international competition further reduce unions' wage-bargaining power.  All these effects are more acute in previously subsidized sectors, such as the public and the manufacturing sectors that have enjoyed high levels of protection and constituted the core of populist coalitions pursuing import substitution industrialization. (Masters, 118).

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