Florida’s trade is atypical of the patterns of the United States.  The state’s trade is heavily weighted toward emerging markets in the Americas.  Florida commerce is strong and is increasing in service sectors such as tourism, transportation and financial services.  Although influenced by fast-growing high-tech areas, the greatest growth of jobs is in sectors (food and beverage, home care, and retail clerks and cashiers) that perpetuate the state’s low-wage, low-skill workforce. The state, a safe haven for refugees and immigrants, has its own particular relation with the region that makes up its principal export market.  For these reasons, Florida and its labor force have a special interest in promoting fair trade as a means to provide greater political stability and improved living standards throughout the Americas.  Fair trade encourages the balanced development of foreign markets through its linkage of enforceable international labor and environmental standards as a condition for expanded access to the US market.

    Florida labor has its own particular view of international trade as it continues to feel the negative effects of job losses and the “chilling” of organizing and collective bargaining in its communities. During the last 12 to 18 months, large groups of workers throughout the state lost their jobs or were subtly told to keep unions out and wages under control for fear of losing their employment.  In a survey and individual interviews prepared for this report, union leaders cite free trade as the base cause for low wages and losses of good jobs in the state.  They resist the claim that jobs are merely being lost in “dying industries.” High-tech, high-skill jobs are being lost along with other traditional, well-paying occupations throughout the state.  Increasingly, Florida’s workers are finding that current free trade policies exacerbate the growing gap between the state’s haves and have-nots by exporting good jobs and creating low-paying, dead-end employment opportunities.

    Union leaders believe that state as well as federal programs need to stress development and job training strategies that defend and expand manufacturing and increase the earnings potential of low-paid service sector employees. Compared to other states, manufacturing employment related to exports is very low in relation to Florida’s gross domestic product.   The state could become a champion of fair trade practices as part of an effort to insure that its principle export markets will flourish.  According to recent studies and declarations of important international economists, this strategy would strengthen the state’s trading partners both politically and economically by promoting stable democracies with more consumers.  In addition, to permit Florida’s workers to benefit from the low-wage service sector employment generated by trade and integration, there is a definite need for a state minimum wage that provides a living wage for workers, especially those in sectors not covered by federal wage and hour legislation.
 

    Florida’s economy is the fourth fastest growing in the United States.  Its percentage job growth placed the state first among the ten most populous states in the nation. Many analysts, such as Doreen Hemlock in her recent series on NAFTA in the Sun-Sentinel, consider the new service and trade jobs to be “the backbone of South Florida’s economy.”  Florida’s trade-related tourism, international business and finance industries allow the state to maintain a positive balance of trade. Yet, this does not reflect a complete picture due to the great dichotomy between the state’s haves and have-nots.   Florida’s income distribution is skewed and continues to polarize despite the well-publicized benefits of international commerce. Thus, labor has a point when it questions whether free trade is not only important, but also good for the state of Florida and its trading partners.

    This report forms part of a project sponsored by the Summit of the Americas Center (SOAC) of Florida International University.  It provides a perspective on labor’s well-known position on the current trade negotiations with the desire to assist the state of Florida in preparing for the new challenges of the opening of the world’s markets.  To this end, the report views the effect of the world market opening on Florida as well as on the state’s main trading partners.

    As SOAC stated in its March 1997 report The Florida Connection, “the State of Florida is now a growing force in the global economy.  For Florida, a timely and smooth process of hemispheric market opening will be critical to employment generation and economic development. Thus, quality of life issues in Florida will be directly impacted by the movement toward hemispheric free trade through the Free Trade Area of the Americas (FTAA).”  Labor issues are economic issues that need to be addressed in this process.  Despite claims to the contrary, the FTAA negotiations are the place to discuss the social impact or consequences of trade decisions.  Our sense is that the negotiations in Miami have systematically excluded labor.
 

    Labor in Florida speaks through the state AFL-CIO Federation, with 455 affiliated local unions and councils from 43 national and international unions.  In all, over 320,000 active Florida workers and an additional 120,000 union retirees living in Florida are represented. The National Education Association’s 63,000 workers are in the process of joining this structure.  These workers hold much the same views as those expressed by the rest of the American labor movement.  The views of Florida’s labor leaders parallel the national and international consensus on trade and integration issues, which they refer to as “fair” as opposed to “free” trade.  In fact, the Americas have the most consistent and unified position among unions and social groups of any the world’s continents. Unions and their allies throughout the world seek to expand the benefits of trade, with verifiable and enforceable international labor and environmental standards as integral parts of any trade agreement.  Such an agreement will level the playing field and assure that the benefits of trade and integration will be shared by all the factors of production throughout the Americas.

    It is no surprise that in a survey of top labor leaders from throughout the state conducted for this report, the respondents saw trade as a negative, albeit important influence on the workers they represent.  Many of the leaders of the ten AFL-CIO Central Labor Councils and the State Federation who responded had recently experienced what they believed were the negative effects of trade and integration on jobs and working conditions. Follow-up interviews and the statements of many local union leaders revealed heartfelt opinions on specific trade-related hardships born by their members.  Good jobs continue to go overseas, and better working conditions and wages are denied Florida workers by employers who threaten to leave. These jobs include both high-tech and low-tech positions, from airline maintenance workers in Miami or Westinghouse workers in Escambia County to the hundreds of garment workers who have lost their jobs in the poorer counties upstate. The list is long and the examples much more recent than one would expect.  Like other states, Florida has been “de-industrializing” for quite some time. Yet, this is the frustrating current reality that shapes the responses of Florida’s labor leaders and the concerns of the communities they serve.  From labor’s perspective, international trade is not lifting Florida’s workers into productive employment, even in the service sector, much less creating well-paying industrial jobs.

    In a comprehensive 1995 survey by the FIU Institute for Public Opinion Research, 74.8% of those Florida residents submitting valid answers considered trade with Latin America to be important to the future of Florida’s economy.  Is labor bucking a trend here?  Not really, since the big question for labor is whether governments and businesses should take advantage of reduced tariffs and liberalized market access if they are not willing to respect fundamental worker rights, health and safety concerns, and environmental safeguards. This conditionality is the essence of the difference between free and fair trade. It is not protectionism. Unions and many representatives of civil society throughout the Americas believe that integration needs to shift from an emphasis on exports based on the exploitation of natural resources and low-paid workers to sustainable economic activity that roots capital locally and nationally and promotes human rights.  The US government has long favored such a linkage in principle, but labor rights were not included in the Uruguay Round of renegotiations of the General Agreement on Tariffs and Trade (GATT), which culminated in the creation of the World Trade Organization (WTO). Labor issues also have been systematically excluded from the hemispheric trade negotiations to form the FTAA.  Unions and civil society in general do not reject trade; they just want their issues to be part of the discussions.

    To appreciate the frustrations of state, national and international labor leaders with this issue, one need only turn to the recent 1999 Labor Report on the State of Florida released by FIU’s Center for Labor Research and Studies. Per capita income levels in Florida have been growing, although less rapidly than in the nation as a whole. Yet, for working people, trends in wages are more important than trends in income. Florida’s favorable income figures include retirement, investment and other non-wage forms of payment and unfortunately obscure the actual conditions of those working for a living. A disproportionate share of Florida’s population is composed of wealthy retirees living off pensions and investment income. Although median wages in the state have begun a recent rise, during the ten years since the peak of the last business cycle wages have actually fallen slightly. Of the eight states in the South Atlantic region, only West Virginia has lower median wages and a higher proportion of workers earning minimum salaries. The prosperity of the 1990s, often linked to the growth of international trade, has not been shared by Florida’s low-wage workers.  It has extended only marginally to the majority of the state’s workforce.

    The relationship between trade, wages and employment becomes clearer when one considers the atypical nature of Florida trade.  Most US trade is merchandise trade with high-wage, developed countries. In contrast, 48% of Florida’s exports, including tourism, go to Latin America.  Eight of Florida’s ten top markets are in Latin America.  Compared with US trade statistics, a disproportionate amount of Florida’s trade is in services and tourism directed at one particular region, the Americas. Florida is not a large merchandise exporter when judged against its gross state product.  Florida’s merchandise exports are less than 9% of the gross state product, a figure that leaves it far from the top ten states in a June 1999 study by the Progressive Policy Institute (PPI).

    According to the US Department of Commerce, Florida jumps to eighth in the United States in     exports when tourism and financial transactions are included. This indicates that Florida’s positive balance of trade with Latin America is largely due to non-merchandise types of economic activity.  By itself, this fact would not be serious if it weren’t for the impact on jobs.  According to the 1999 PPI study, Florida ranks last in the United States--7.9%--in terms of manufacturing jobs dependent on trade.  Seen in the perspective of the growing national trade deficit, the positive effects of trade in Florida continue to pale.  The most recent trade statistics indicate an overall trade deficit with Latin America that seems to outweigh the significant increase in export earnings attributed to the state of Florida.  The most recent national balance of trade statistics showed a 96% increase in the trade deficit just with the NAFTA countries!  From 1993 to 1998, Florida had a net job loss of 13,841 due to NAFTA; according to an Economic Policy Institute report, the count is still rising. Good jobs leave Florida as companies are attracted by the low wages, few benefits, lack of environmental controls and inferior working conditions found throughout the Americas and the world.

    Under the current free trade scenario, Florida’s statistics parallel its Latin American partners by emphasizing the quantity but not the quality of jobs in safe and stable working environments. Using the 1996-2006 projections of the state’s Department of Labor and Employment, the largest growth in employment will be in service sectors at wages considered by national averages to be less than a living wage (currently almost $8  per hour for a family of four) and with few if any benefits.  This trend coincides with the well-publicized claims of fast-growing, well-paid technology-based professions. The overall contributions of such professions to the job market will be minimal, since they are expanding from a very small original job pool. Thus, while hundreds of computer professionals will find jobs in the future, tens of thousands of Florida workers will be in dead-end jobs in the food service, home care and retail sectors. Many of the large job increases which appear to be stimulated by international trade fall into categories not even covered by federal minimum wage legislation. These overlooked categories include, for example, “eating and drinking places,” fourth on the list of the industries gaining the most jobs in the next decade. When minimum- and subminimum-wage workers are added to other low-wage workers earning less than a living wage, fully 33.2% of Florida’s workers are at the level of working poor, compared to the national average of 28.6%.  These are precisely the low-wage jobs that labor believes are accentuated by international commerce in tourism and services.
 

    The question of who benefits from international trade, and trade’s relation to growth and development in the Americas, is part of an increasingly political debate.  This debate is sure to heat up as the FTAA discussions move from behind the closed doors of the negotiating groups, where they are being developed in relative secrecy.  Sometime before the year 2005, the groups’ proposals will face national and regional debates for approval in each country in the Americas. Under the current circumstances, winning such approval may not be easy.  At this point, the growing globalization of national economies, referred to as “neoliberalism” throughout the Americas, is associated with the deteriorating living conditions of the lower and middle classes as well as the hemisphere’s growing social deficits.  The resulting frustration and anxiety are entwined with rising populist political currents that have become the basis for an increasing number of successful political movements. Concern is growing over a possible protectionist backlash as social instability escalates and the terms of trade continue to deteriorate for Florida’s leading trading partners.

    Many government and business representatives throughout the Americas consider these “social” issues extraneous to the already complicated trade debate. Labor in particular is portrayed as a dinosaur in the new global economic framework. In response, Thea Lee, assistant director of public policy for the AFL-CIO, commented at a symposium at the beginning of this year: “I suspect that even the business folks in the room know that labor is an economic issue. Labor is about the price of the inputs of production; it's about the price of traded goods. If it's not an economic issue, what is everybody doing at the bargaining table?  Why does business fight unionization at the workplace if it's not an economic issue?”

    A recent monograph by Thomas Paley, assistant director of the AFL-CIO’s Public Policy Department, substantiates the fact that fair trade with core labor standards can produce important economic gains.  The introduction of across-the-board core labor standards through commercial agreements confers both static and dynamic economic efficiencies.  Freedom of association and collective bargaining provide greater wage income, leading to greater domestic consumption.  This is due to the higher propensity to consume out-of-wage income than profits. Dr. Paley presents empirical evidence that internationally recognized labor standards have a positive, statistically significant effect on country GDP growth rates in the five-year period after implementing improved rights of freedom of association.

    The discussion of the beneficial aspects of incorporating core labor standards into international commercial and financial negotiations has acquired more urgency after the years of economic turmoil following the Asian crises. The question of stronger civil society institutions has become part of international financial institutions’ quest for “good economic governance for development.” More and more, economic thinkers such as Jagdish Bagwati, Dani Rodrik and Robert Lawrence have come to understand the need to find some accommodation for a social dimension in trade.  Those who argue against the role of unions in promoting social and economic stability and productivity growth are behind the curve. For many of the most fervent foreign opponents of a social dimension, trade and growth are less a concern than the preservation of political power and economic privilege.

    Since the original Summit of the Americas in 1994, labor, environmental and other representatives of civil society have been active participants in the heated debate over making the all-important social dimension of trade and economic integration a part of commercial negotiations. Business views have been incorporated since the First Americas Business Forum in Denver, Colorado in 1995, but labor and its allies in civil society have been excluded. Labor has expressed its views on worker rights and environmental conditionality without making them a precondition for its formal participation in these discussions.  Labor’s specific demands have included a recognition of the social dimension of commerce through the formation of an FTAA (and a WTO) working group on trade, worker rights and the environment, as well as equal footing for the Labor Forum.  The rejection of these constructive positions assisted in creating the climate for the enormously successful People’s Summit at the Second Summit of the Americas in Santiago, Chile, leading in turn to the outlines of the Continental Social Alliance.  Inevitably, after so many years of seeking to build a responsible relationship within the framework of the negotiations, a new aggressive tone has emerged that can only be considered rejectionist. Worldwide, serious opposition to continued trade liberalization is coalescing around the upcoming Millennium Round of WTO negotiations.  There is precious little time for the resolution of these impasses before the well of good will for an integrated and prosperous trade zone for the Americas is poisoned.  Labor has been a key proponent of dialogue and not rejection.  But, its frustrations are beginning to take a toll as opinion (as evidenced by the survey of labor leaders for this report) begins to question the benefits of trade as part of a general concern about the economy in the new millennium.
 

    Despite the strength and the growth of the state’s economy, Florida and the FTAA negotiations would do well to heed the calls for improved labor rights and better employment opportunities throughout the Americas.  Excessive reliance on poorly paid and trained workers, restricted union activities, and the absence of social safety nets are key factors responsible for both the crisis as well as the inability of affected countries to deal with its social fallout. Keeping unions and other democratic representatives of civil society out of the trade discussions is not good business for Florida.  Such restrictions preserve traditional social systems along with the concentration of economic and political power.  These factors limit the expansion of Florida’s tourism and other service exports and weigh on any recuperation of Florida’s manufacturing prowess. Therefore, this report reaches the following conclusions:
 

1. Sending local manufacturing jobs overseas and turning a blind eye to the injustices committed in the name of free trade in the workplaces of the Americas will not support Florida’s economy in the long run. As a state, Florida should become a proponent of fair trade as a way to increase its special relations with the Americas.  Such a position also responds to the local population and its concern with issues of justice and opportunity for the state’s neighbors. Higher standards of living and rising demand in the Americas will benefit the transportation sector and other trade-related services that can absorb significant amounts of Florida’s workers.

2. To insure that all Florida workers participate in this trade-related expansion, the state should improve its own protections of worker rights and the process of collective bargaining.  Given the increased dependence in the short run on low-wage jobs, the state needs to extend a living wage through a state minimum salary. These steps would allow more of Florida’s workers to benefit from the growth in trade and integration.

3. Florida should re-examine its industrial development and job training strategies to promote a better climate for a greater number of productive, high-wage employers and employees.  A suggested objective would be to raise the amount of the state GDP provided by merchandise exports to exceed the national average.

4. The FIU Summit of the Americas Center can play an important role in encouraging  an informed dialogue on these issues between business and labor. With a greater understanding of the issues and their possible solutions, the gap between these segments of Florida’s society can be diminished.

    These efforts should form the basis of the new face of Florida trade: worker friendly, employment generating and in tune with the future of the emerging working- and middle-class consumers of the Americas.  They could also provide Florida’s trading partners in the Americas with a more viable approach toward their own trade and industrial development policies.

*Bruce A. Jay is the past AFL-CIO Solidarity Center Coordinator for the Americas and is currently associated with the Center for Labor Research and Studies at Florida International University.
 

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Last Update 10/04/99.