Published bimonthly since 1986, Against the Current is a Solidarity sponsored analytical journal for the broad revolutionary left. The November/December issue features Jack Rasmus on "The Crisis Beneath the Bailout," Milton Fisk's analysis of the Obama and McCain health care plans, Malik Miah on how the financial crisis effects African Americans and Suzi Weissman's interview with Thomas Frank. International coverage includes Martin Hart-Landsberg on "The Realities of China Today" and Jeffery R. Webber on Bolivia following the August recall referendum as well as articles on France, Mexico and Argentina.


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International Viewpoint is the monthly English-language magazine of the Fourth International. IV is a window to radical alternatives world-wide, carrying reports, analysis and debates from all corners of the globe. Correspondents in over 50 countries report on popular struggles, and the debates that are shaping the left of tomorrow.

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Regroupment & Refoundation of a U.S. Left

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Magazine

The Post MFA Era and the Rise of China, Part 1

— Au Loong-Yu

THE AGREEMENT ON Textiles and Clothing expired in 2005, ending 30 years of a quota system under the Multi-Fibre Arrangement (MFA). Ending the Agreement signalled the World Trade Organization’s (WTO) promotion of free trade in this sector; but phasing in free trade here has proved to be far from frictionless.

Since January 2005, in the face of surging textile imports from China, the United States and European Union used the protectionist clause in China’s WTO accession agreement to restrain China’s imports. China threatened retaliation.

 Although the EU and China eventually reached an interim agreement, in practice deferring the abolition of quotas to 2007, the issue remains unsettled. [Legislation pending in the U.S. Senate would slap heavy tariffs on Chinese imports due to China’s alleged undervaluation of its currency — ed.]

While there are basic common interest between the ruling elites and business sector of these three countires, periodic friction can be expected. This essay will not spill too much ink on the current negotiations, but rather focuses on a wider picture: What is at stake for working people around the world with the free trade model as promoted by the WTO in general, and the phasing out of MFA in particular? How does the “rise of China” relate to this question? Is it a zero-sum game or a win-win situation for other developing countries? Should working people in both the developed and developing countries view these changes with apprehension?

China — The Biggest Winner?

The Multi-Fibre Arrangement was always regarded by developing countries as a protectionist attempt by the wealthier countries. In one of the few industrial sectors where developing countries have comparative advantages, the agreement set a quota system for texiles being imported. Although many developing countries had always pressed to eliminate the MFA, it is an irony of history that upon its phasing out, countries like Mauritius, faced with the prospect of China Seizing the lion’s share, called for the MFA’s extension.

On the one hand the quota system was protectionist for the developed countries; on the other it spread out textile production for exports across 200 countries. According to a WTO report, eliminating quotas will eliminate the weaker of the developing countries, leaving only 30 exporting textiles to the wealthier nations. China’s share may be as high as 50% (currently 16%), while India’s is projected at 15% (currently 4%). Mexico, The Philippines, and Indonesia will see textile exports halved, while Mexico will drop from 10% to 3%. Meanwhile over the past four years 350,000 U.S. garment and textile jobs were lost, with probably more than half the remaining 700,000 at risk.(1)

In order to save texile and garment jobs in developed as well as developing countries, the International Textile, Garment, and Leather Workers’ Federation (ITGLWF) also called for the MFA’s extension. In a press release, the ITGLWF said that since the elimination of the quota system in 31 Dec 2004, serious plant closures and jobs losses were reported in Kenya, Cambodia, Mauritius, Sri Lanka, Philippines, and Tunisia. When its call failed, the ITGLWF came close to endorsing the EU’s policy of using the clause in China’s WTO accession agreement to restrict Chinese exports.

Along with American conservatives, the AFL-CIO is even more aggressive in attacking China’s surges of cheap imports. The union federation holds China responsible for plant closures and job losses. In 2000 the AFL-CIO fought two losing battles: to stop the Clinton administration from granting Permanent Normal Trade Relations status to China and to make the improvement of workers’ rights as a condition of China’s WTO accession.

In 2004 the AFL-CIO, in holding China responsible for the disappearance of 2.5 million manufacturing jobs, called for the imposition on China of trade remedies (like raising tariffs). Recently it joined the Chinese Currency Coalition to press the Chinese government to revalue the yuan. It seems that the AFL-CIO conceives of protectionism as a good way to keep jobs. Ironically, when it comes to free trade promoted by the North American Free Trade Agreement (NAFTA) and the WTO, the AFL-CIO does not remain loyal to trade protectionism. It opposes NAFTA and the WTO in principle. But in regard to China it was content in trying to append a labor clause on free trade agreements.

To identify China as the main winner and the United States and EU as losers over the end of the MFA is far from true. First, foreign textile companies account for one quarter of all Chinese textile export earnings; they, not Chinese companies, directly benefit from expanding Chinese exports.

Second, Chinese companies do reap the remaining three- quarters of export earnings, but generally their average profit rates are low. The majority subcontract to foreign companies, tus they only earn a fraction of value added, often just 10%.(2) Importers like Wal-Mart and other brand names pocket the major share of profit.

Third, the more China exports textile products, the more it needs to import textile machines from developed countries; Germany is the top textile machine exporting country. In fact China has become the world’s biggest textile machine importer, and is one-and-a-half times higher in more than the second country — Turkey.(3) In the exchange of labour-intensive products (Chinese textile) for capital-intensive products (U.S. and EU machinery), the latter get most of the value added. Therefore, the rise of China as a textile products exporter benefits Chinese, U.S. and EU companies.

Even though textile manufacturers in developed countries may lose market share, by forcing open the capital goods market and services of developing countries, the benefits can be ten times the losses for U.S. capitalists as a whole. In wealthy countries textiles production is a sunset industry. Stopping China’s imports will not save jobs there — Wall-Mart will simply shift sourcing from China to India.

Here it must be noted that China itself is losing textile and garment jobs. Between 1996 and 2001, to be competitive enough to drive others out of business, Chinese textile and garment sectors shed 52.5% and 28% of jobs respectively, amounting to 3.3 million and 0.5 million jobs. Twenty- six million manufacturing jobs were lost in the same period, accounting for 40.5% of all manufacturing jobs(4) — an unheard-of decline over such a short time.

Those retaining jobs in Chinese textile and garment factories saw their wages cut while intensity of labor rose. In July 2005 3,000 textile workers in Guangzhou struck against wage cuts and were suppressed. However, neither the AFL-CIO nor the ITGLWF ever mention China job losses when calculating losses in textile and manufacturing. If we think in terms of classes rather than countries, it is obvious that Chinese, U.S. and EU companies are all winners, while workers in all lands are the losers, albeit to different degrees under different time frames.

Targeting China and letting the U.S. government off the hook, or worse supporting U.S. protectionism, cannot benefit American workers. There is no essential link between protecting the market from cheap imports and keeping jobs. What links exist are weak, never direct, and dependent on many factors that labor cannot control — employers, not employees, control investment decisions and distribution of profit that directly affect labor.

Even in the short-term, when protectionism produces positive side effects that may keep jobs in certain sectors, in the long run there is no basic correlation. In this era of globalization, the link between trade (protectionist or free trade) and job creation, or more generally, the link between growth and job creation, is weaker than ever. To argue otherwise only helps the ruling elite pit workers in all countries against each other. U.S. labor should first and foremost hold the U.S. ruling elite responsible for job losses.

The Global “Race to the Bottom”

Inside and outside the AFL-CIO are dissenting voices against the obviously flawed argument against China. However, in counterbalance to U.S. imperialism, some may leap to the other extreme, embracing the Chinese government as “defender of the interest of developing countries.” In differentiating from those who China bash, they tend to overemphasise engagement with China. Some activists even promote engagement with China’s official trade union, the ACFTU.

The fairy tale that, in opposition to U.S. hegemony, China is defender of developing countries, denies the most obvious fact: in the name of free trade, but at the expense of her workers and weaker developing countries, China exports immense quantities of goods at ever-lower prices.In doing so China has become a powerful engine in a global race, driving working people across the world to the bottom. Despite occasional squabbles over the spoils, China serves both the interests of her elites and those in the United States, EU and Japan.

Chinese Communist Party leader Deng Xiaoping laid out his program for a new course in March 1989, three months before the Tiananmen Square massacre, saying, “China cannot allow demonstrations to happen too easily,….or else foreign investment will stop flowing in. Our strict control over this aspect will not deter foreign investment. Quite the opposite, they will be more relaxed [in investing]”.(5) Foreign investors are in full agreement with Deng, at least in practice.

Recently The Economist drew the following balance sheet: “The integration of China’s 1.3 billion people will be as momentous for the world economy as the Black Death was for 14th century Europe, but to the opposite effect. The Black Death killed one-third of Europe’s population, wages rose and the return on capital and land fell. By contrast, China’s integration will bring down the wages of low-skilled workers and the prices of most consumer goods, and raise the global return on capital.”(6) (Emphasis added)

The logical conclusion for labor should be to simultaneously oppose the Chinese, U.S., EU and Japanese elites, rather than siding with any of them.

While the media mainly focus on negotiations between China, the United States and the EU, they largely ignore the fact that developing countries like Brazil are also announcing restrictions on China’s textile imports. For Mexico, China’s threat is more pronounced. In 2003 Mexican manufacturers complained that China had overtaken Mexico to become the No. 2 exporter to the United States.(7)

In order to join the WTO the Chinese government made huge concession to the United States and EU. These were concessions that many developing countries like India had previously resisted. Instead of the 10% domestic support in agriculture that developing countries are entitled to, China accepted 8.5%. Her tariff cut is much deeper than India’s.(8) In the current General Agreement on Trade in Services negotiations, the United States and EU are delighted that China was so forthcoming in opening up her services sectors.(9) China’s cutthroat competition also helps the United States and EU to press developing countries to follow China’s example.

China’s competitiveness lies in terribly low wages and effective state control over big and small things. State despotism denies workers and farmers the basic right of free association, robbing them of the elementary tools of self-defense. Governments in developing countries seldom take seriously labor rights as codified in laws. In their Export Processing Zones labor codes are generally not implemented. However, few are as complete in suppressing workers’ rights as China.

The Chinese government removed the right to strike from the constitution in 1982. She only allows the existence of the (fiercely pro-business) officially run trade union, the ACFTU.(10) The official press often admits that the ACFTU practically allows capitalists to set up “trade union branches” with no genuine membership, with plant managers as “chairpersons,” and no collective bargaining. When Western labor activists argue for engagement with the ACFTU, few have little idea that it is hardly a union in the proper sense of the word.

In addition, the government imposes countless measures to exert severe social control over working people, especially the peasants and migrant workers. For instance, the household registration system acts as a kind of social apartheid, which systemically discriminates against migrant workers by barring them from enjoying public provisions in the cities. They simply cannot survive in the cities outside factories and dormitories. This is an effective way to force them to accept starvation wages, appalling working conditions, and forced overtime.

In colluding with the government, employers squeeze the maximum labor within the shortest time possible. This effectiveness in exploitation, rather than low wages alone, makes China so competitive. While wages in Vietnam are lower than in China, U.S. garment buyers are abandoning Vietnam to source from China — because, we are told, while Vietnam manufacturers need four weeks to produce 100,000 pairs of trousers, Chinese companies only need one week.

Aspects of Dependent Development

One of the greatest recent events that will shape global capitalism for years to come is the integration of China into the world market. Economists told us: “the entry into the world economy of China, India and the former Soviet Union has in effect doubled the global labour force (China accounts for more than half of this increase)… China has almost 200 million underemployed workers in rural areas …It will continue to subdue wage growth and global inflation. Profit margins could also remain historically high for a period.”(11) This is indeed good news for business.

After 13 years of rapid marketization, China’s GDP now ranks sixth in the world; she is also the fourth biggest exporting country. In 2003 she produced half the world’s cameras and 30% of the world’s air conditioners and TVs. Since 2003 China has been the top foreign direct investment (FDI) inflow country. Although capital export is still small, it is rising quickly. When Larry Summers was with the World Bank, he projected that China’s GDP would surpass that of the US in 2010. He soon retreated from such gross exaggeration but others simply deferred the date to 2020.(12)

Nonetheless, and despite the neo-conservatives’ China bashing, China’s development is that of a dependent nature, and first and foremost dependent on the United States. While China ranked sixth in global GDP terms in 2002, it ranked 111 in per capita terms. China is the fourth biggest exporting country, but more than half of the amount is from foreign investors. Much of the profit made will sooner or later be repatriated. What is more, half of the exports contain imported capital goods and spare parts, which means that China is largely processing imported goods with little value added. For example, although China exports large quantities of electronic goods, only 15% of the value is domestically added.(13)

The United States can tolerate China’s huge trading export surplus because, apart from what has been said, China has used her dollar savings to buy a huge amount of U.S. bonds. China can produce high end products, but this must be qualified by the fact that the core technique has to rely on developed countries. Chips in computers and mobile phones, laser readers in DVDs, high quality steel for making cars, compressors in air conditioners, display tubes in televisions, etc. still largely depend on imports from developed countries.

As many as two-thirds of capital goods, 85% of chips, 80% of petrochemical equipment, 70% of numerical controlled machine tools, 100% of optical fabric manufacturing equipment and so forth, must be imported.(14) The Beijing Daily complained that although 70% of the world  DVDs are made in China, the country has to pay $18 for royalties for every set of DVD sold, and domestic producers can only pocket $1 profit.(15)

The huge inflow of FDI to China has also taken its toll on domestic producers, with foreign firms accounting for 31% of manufacturing output in 2003, up from 17% in 1997(16); in 1992 it was only 9.5%. In telecommunications the situation is more significant, with foreign capital accounting for 46.5% of output and 75.6% of export in 2000 respectively.(17) Once fiercely autarkic, China today is dependent on foreign capital and foreign markets. Any significant slow down of FDI and shrinking of foreign markets spells disaster for China.

Developmental Potential of Capitalist China

Every discussion about China must take into account that the country is full of contradictions. Huge in both size and population, China is fast developing new branches of industry.

Although far from overtaking the Japanese, U.S. or EU economies, by 2002 China was already the world top producer in 80 items, including color TV, washing machines, DVDs, cameras, refrigerators, air-conditioners, motor bikes, microwaves, PC monitors, tractors, bicycles.(18) China is also able to upgrade manufacturing quickly. For example, China developed IT products from scratch.

The rise of China, not only as a big country but also a country which is more and more export oriented, implies greater competition than ever. More factories in developing countries throughout Asia, or even as far away as Mexico, are closing down and moving China. This is resulting in millions of job losses. A tremendous restructuring of global division of labor among is under way.

Old supply chains in Asia gave way to a new supply chain. Up until the 1980s, there were three tiers: The Japanese used the analogy of a flock of flying geeseto describe the chain, with Japan the leading goose as the chief Asian investor, pocketing the largest share of value added; “the four dragons” (Hong Kong, Singapore, Taiwan and South Korea) as the middle tier; the chief Overeseas Emerging Markets producers for Japan; with the Association of South East Asian Nations (ASEAN) countries occupying the third tier. Despite the fact that the ASEAN countries got only a small part of the value added, at least these countires were able to partially industrialize their country within a relatively short period of time.

The rise of China greatly transforms the old order of this flock, putting at risk the weaker members. Given China’s manufacturing potential, it is probable that someday China can produce everything from low-end to high-end product. This poses a big competitive threat to ASEAN countries — or even Taiwan and Korea. The Japan external trade organization reported that for electronic products, China can now produce 20-30% cheaper than the ASEAN counterparts.(19)

The Economist tried to comfort developing countries with the remark that China is also importing in great quantity from Asia, and as such promotes economic growth there too. It is true. In fact ASEAN countries enjoy favorable balances of trade with China. So does Taiwan. When ASEAN countries are losing their U.S. market share to China, they are compensated with a growing share in China  market.

The notion that the rise of China need not be a zero-sum game for developing countries should be qualified by the fact that there are great differences among the latter. For smaller and weaker countries, their economic performances are at risk. We must also bear in mind the need to think in terms of social classes rather than national boundaries.

It is not so much that China’s rise as a major exporting country necessarily stops other developing countries from enjoying economic growth. Rather it necessarily implies a tremendous economic restructuring. The result implies downward pressure on jobs and wages in many countries, something that rarely bothers the business sector. For example, between 1985 and 2000, Korea and Taiwan saw their new value added in light industry as proportional to their GDP shrank from 14% to 4%(20), resulting in severe jobs relocations and downward pressure of wages.

Hong Kong’s manufacturing is close to leaving for Mainland China altogether, with the same downward social mobility for industrial workers. The next wave is the relocation of many service sector jobs. The relocation of manufacturing and service sector jobs from Taiwan, Korea and Hong Kong to Mainland China does not necessarily bring about a decrease in their economic growth or profit growth, but it necessarily means jobs losses and downward social mobility for workers.

In ASEAN countries, it seems that the scale of restructuring is less significant, but much more research needs to be done before conclusions can be made. What is more, it is less a matter of things as they are today, but more a matter of what will be coming in the next five to ten years.

[Part 2 of this essay will appear in our next issue.]

Notes

  1. “Trading down,” David Moberg, The Nation, posted 22 December 2004 (10 January 2005 issue).
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  2. Hong Kong Economic Journal, 17 Sept 2005.
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  3. Ming Pao, Hong Kong, 8 June 2005.
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  4. Wo Guo Zhong Chang Qi Shi Ye Wen Ti Yan Jiu. (Research on medium- and long-term unemployment problems in China). Jiang Xuan, 2004, Publishing House of the Renmin University of China, 79-181.
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  5. Deng Xiaoping wenxuan (Writings of Deng Xiaoping), vol III, People  Publishing House, Beijing, 1993, 286.
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  6. “The Dragon and the Eagle,” The Economist, 30 Sept 2005.
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  7. Some Mexican manufacturers, after traveling to China, were dispirited and had this to say:  hey [Chinese) have extremely aggressive tax incentives, low salaries, very aggressive worker training, and a supply chain that allows them to have immediate access to the latest technology. Business Week, 22 December 2003.
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  8. For instance, see  hina and the WTO: An Economic Balance sheet  by Daniel H. Rosen, Institute for International Economics web site.
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  9. Commerce Secretary Bo Xilai boasted that China has opened 62 percent of its service sectors, compared to 20-40 percent for developing countries in general. Hong Kong Economic Journal, 10 June 2005.
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  10. http://news.xinhuanet.com/focus/2004-09/27/content_2014769.htm.
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  11. “China and the World Economy,” The Economist, 28 July 2005.
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  12. China on the Brink, by Callum Henderson, 1999, McGraw-Hill, US, 37.
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  13. China Economic Review, Hong Kong, October 2005, vol 15, no.10, 35.
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  14. Quanqiuhua shidai de zhongguo zhizao (Chinese manufacturing in an age of globalisation), edited by Zhu gaofeng, published by Shehui kexue wenxian chubanshe, 2003, Beijing, 51.
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  15. Beijing Daily, 11 March 2005, quoted in Ming Pao, Hong Kong, 8 Sept 2005.
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  16. Jingji quanqiuhua qushixia de guojia jingji anquan yan jiu (Research on National Economic Security Under Economic Globalisation), by Chen shuxiong, Hunan People  Press, 2005, 132.
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  17. Higashi Asia Kokusai Bungyo To Chugoku, by Kimura Fukunari, 2002, Tokyo. Chinese version, 2004, Taipei, 26.
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  18. 2003 Zhongguo Guoji Diwei baogao (2003 China’s place in the world), published by Shanghai Far East Press, 2003, Shanghai, 75.
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  19. 1
  20. Higashi Asia Kokusai Bungyo To Chugoku, by Kimura Fukunari, 2002, Tokyo. Chinese edition, 2004, Taipei, 194.
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  21. The Five Great Myths About China and the World, by John Anderson and Hu zuliu, Chinese edition, 2003, Beijing, China Finance Press, 63-70.
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The Case of Northwest Airlines: Workers' Rights & Wrongs

— Peter Rachleff

FOUR YEARS AGO, WHEN asked by an academic journal to write about whether the strike was still a viable weapon in labor’s “arsenal,” my title was blunt: “Is the Strike Dead?”(1) As is my style, I introduced some historical material and offered an analysis of the anti-labor bias of the past 25 years, during which the number of “large” strikes (involving 1,000 or more workers) had declined from more than 400 per year to less than 30.(2)

I then offered some hope, some possibility, that workers would revitalize the strike or would find other tactics of comparable effectiveness. Having now seen what’s happened to mechanics, cleaners, custodians and flight attendants at Northwest Airlines in the past year, I must offer a revised analysis. Four years ago I suggested that workers had the right to strike in contemporary U.S. society only when their exercise of it would not have an economic impact. How disturbingly right I was and how dire our situation is.

David Harvey gives a profound insight in his A Brief History of Economic Neoliberalism that contemporary elites might embrace neoliberalism, but are not practicing it as it is constructed on a blackboard (or, today, I suppose, in a powerpoint presentation).(3) They may celebrate free market economics, free trade, reduced government, deregulation, and privatization; but at the end of the day, they seek first and foremost to solidify their power, their profits and their hegemony.

When the application of free-market principles yields the desired results, they are consistent neoliberals, but when they need the muscle of the state to protect and further their interests, either globally or domestically, they become supporters of government intervention and invokers of government authority. Under some circumstances they can even become practitioners of Keynesianism, advocates of deficit spending, as long as the bill is not put on their tab.

In 1980 the U.S. Congress passed the Staggers Act, which “deregulated” interstate transportation, following on the 1978 Airline Deregulation Act. Both were signed into law by President Carter, a Democrat. A year later, major collective bargaining agreements on the nation’s freight railroads began to run out, and a number of unions filed “Section 6” notices, calling for the negotiation of new contracts.

Thanks to the assistance, oversight, mediation and arbitration services provided by the federal government under the proviso of the Railway Labor Act, the clock kept ticking and the spring of 1991 dawned with “negotiations” still ongoing. That April, 235,000 workers on 11 major freight railroads struck, only to be ordered back to work 17 hours later by a “unanimous consent motion” from the U.S. Senate, brought to its floor by Orrin Hatch and Ted Kennedy, at the behest of President George H.W. Bush.

Bush-the-first invoked the Railway Labor Act and appointed a Presidential Emergency Board, which wrote new contracts for more than a dozen trades. Congress then enacted these contracts into law, making them binding. As a railroad engineer and union activist here in the Twin Cities remarked at the time: “Congress must have forgotten to deregulate labor when they passed that Staggers Act.”(4)

Labor Attacked at NWA

The Northwest Airlines labor conflict of 2005-2006 reveals just how significant government power has been in the eradication of a meaningful right to strike and, thereby, in undermining unions and attacking the workers they represent.

Corporate management has been greedy, irresponsible, self-interested, despicable and all those things that workers call them — and they have been ruthless, effective, and hard-hitting in implementing their strategies. But they could never have been as successful as they have been without a big assist from Uncle Sam.”(5)

In August 2005, some 4,400 mechanics, custodians, and cleaners, members of the Aircraft Mechanics Fraternal Association (AMFA), struck Northwest Airlines. Over the summer they had rejected a series of contract proposals that had called for the elimination of more than half their jobs, the slashing of their wages and benefits by more than 25%, and the radical rewriting of their job descriptions and work rules.

Over the course of 2005 NWA management had been preparing for this strike, setting up outsourcing arrangements with repair facilities from Central America to South Asia to the southern U.S., signing contracts with custodial and cleaning firms, and hiring and training mechanics who agreed to serve as strikebreakers.

At the eleventh hour, President George W. Bush chose not to intervene, not to use his powers under the Railway Labor Act, but to let the strike unfold.  As the mechanics, custodians, and cleaners hit the bricks, NWA management implemented its plan, and its planes kept flying with almost no discernible disruption.

Other government agencies swooped into action or inaction, as called for by the airlines’ agenda. The Metropolitan Airports Commission, appointed by Minnesota’s governor, ruled that their own early 1970s regulation banning strikebreakers from MAC-controlled property did not apply, since the union could not prove that the scab mechanics, cleaners and custodians were “professional” strikebreakers who had provided their services in similar situations in the past.

The MAC and their police limited the strikers’ right to picket to ineffectual numbers in innocuous locations.  Local police limited picketing outside worksites to a merely symbolic presence, and, after some picket line confrontations, banned pickets and picket/protest signs from sites visible from the highway.

An administrative law judge employed by the Minnesota Department of Labor ruled that the strikers were ineligible for unemployment benefits, arguing that, despite precedents, management’s demands for a 50% job reduction and a 25% wage and benefit cut did not constitute an “effective lockout.”  (He would be overruled by a federal appellate judge almost a year later, by which time financial pressures had driven some strikers to return to work, while others had lost houses, cars and even marriages.)

Then there was the Federal Aviation Agency (FAA), which had its own internal labor issues bubbling. It dragged its feet in responding to mechanics’ complaints about the lack of appropriate oversight of the strikebreakers’ work and investigating a smattering of incidents, while it cracked down on whistleblowers in its own ranks and assured the public that it was “safe” to fly NWA.

Picking Off the Unions

So the AMFA strike dragged on.  It had its significant high points, such as the occasional blocking of scabs’ buses and worksite gates, substantial rallies, an effective food shelf, a spirited solidarity committee and, above all, the impressive maturation of a core group of activists from the striking union and the ranks of the other NWA unions which had chosen not to honor their picket lines. But on the whole, hamstrung by the strategic actions and inactions of the government, the strike was unable to dent the armor — or the pocketbook — of Northwest Airlines.

Meanwhile, NWA management took on one union at a time. One month into the AMFA strike they declared bankruptcy, and used the federal bankruptcy courts as leverage with these other unions. The bankruptcy laws allowed NWA to choose its court, and it picked the New York City district, long renowned for being sympathetic to corporate management in bankruptcy proceedings.

If these unions would not agree to the substantial concessions being demanded, management threatened, they would ask the bankruptcy judge to abrogate the collective bargaining agreement and impose management’s terms. These unions, having chosen not to support AMFA, now had the tragic unfolding of that union’s strike to watch as an object lesson.

Moreover, NWA unleashed a lobbying juggernaut in Washington, seeking (and ultimately gaining) a law allowing them to stretch out their overdue pension payments. Management claimed that the only other option was to walk away from $4 billion of their pension obligations, since they had been systematically underfunding those pensions for years and had already leveraged or hawked most of their assets.

Fearful of losing their pensions altogether, many of the unions, while in the midst of bargaining over the demanded concessions, sent not only their lobbyists but even rank-and-file members to Washington, D.C., to join NWA’s corporate lobbyists in working Congress and the Senate.  At a bargaining, organizational and ideological level, the unfolding of the bankruptcy process became a major weapon in management’s hands, and one union after another gave in.

The Bankruptcy Weapon

The bankruptcy process placed additional pressure on other workers, too. Like other major “legacy” carriers (large employers with outstanding benefit commitments to veteran workers and retirees), NWA had encouraged/spurred/supported the creation of “regional” carriers, Mesaba and Pinnacle, which flew smaller planes and paid significantly lower wages and benefits. While these regional carriers were totally dependent on the major carriers for all their business, they were termed “competitors,” and, like “double-breasted” construction companies, the compensation packages at these smaller companies were used as a hammer on the workers employed by NWA.

Mesaba soon followed NWA into bankruptcy court in the fall of 2005, demanding that the judge force their workers’ unions to renegotiate concessions or face the imposition of new, draconian terms. Mesaba also found a judge in Minnesota as generous as the judge NWA had found in New York City, as he allowed them to exclude the earnings and assets of Mesaba’s holding company, MAIR Holdings, which happened to be owned by Carl Pohlad, the richest man in Minnesota and the owner of the Minnesota Twins.

None of the profits that Pohlad had accumulated over the years from Mesaba’s relationship with NWA were to be considered in the bankruptcy process. The only “golden goose” (as Karl Marx might have said) to be plunked on the table was the workers, and their wages and benefits.

The Flight Attendants’ Struggle

Meanwhile, even as AMFA appeared tossed aside (though they remained a thorn in the side of NWA, rejecting yet another tentative agreement in late December 2005) and key unions like the pilots (ALPA) and the groundworkers and customer service staff (IAM) caved in, the flight attendants held out, as rank-and-file members twice rejected tentative agreements. Their story was quite complex and requires some explanation.

Conflict between flight attendants and NWA dates all the way back to the 1986 merger of NWA and Republic Airlines.  Work rules, seniority protections and job assignments were resolved in a contentious process that left flight attendants with skepticism about the quality of the representation they were receiving from the Teamsters Union, while women and queer union members felt especially disenfranchised by the gender and sexuality politics practiced by the Teamsters.

Seven years later the Teamsters, like other major unions at NWA, pushed their members to swallow a package of substantial concessions when NWA threatened bankruptcy. A militant network of flight attendants, organized into phone-tree and email networks called “contract action teams” (CAT), built an increasingly cohesive web of information and mobilization within the ranks. A few years later, on this base, Teamsters for a Democratic Union activists gained control of IBT Local 2000, which represented all of NWA flight attendants.

However, when James Hoffa, Jr., replaced Ron Carey as national president of the Teamsters, he placed the Local 2000 leadership under increasing pressure, insisting that his red-baiting, gay-bashing “personal representative” be present at all executive board meetings. This amounted to a virtual trusteeship which undermined the ability of the new leadership to build a program and a rank-and-file organization which could stand up to NWA management.

Many of the activist flight attendants watched with interest when mechanics, custodians and cleaners, frustrated with the quality of representation that they had received from the IAM (such as being asked to vote three times on the same concessionary package in 1993), decertified the IAM and reformed themselves as AMFA. These flight attendants urged the decertification of the Teamsters and reformation as a new, independent union, the Professional Flight Attendants Association (PFAA).

In 2002 they got their wish, and the PFAA became the bargaining agent for NWA’s 11,000 or so flight attendants. NWA management wasn’t happy and wasted little time showing their distaste for the new union.

Back in 1993, when the Teamsters, IAM and ALPA gave NWA major concessions, they received seats on the board of directors. The situation was immediately squirrelly, as the union’s representatives on the board quickly announced that their “fiduciary responsibilities” as board members required them to withhold “confidential” information from the very members of their unions!

Then, in 2002, after PFAA was certified as the legal bargaining agent for the flight attendants, NWA announced that the Teamsters would continue to hold the seat on the board and an invitation to sit at the table would not be extended to the PFAA. Management claimed that the 1993 deal had been with the Teamsters’ Union, not with their employees! NWA also announced that their dues checkoff agreement had been with the Teamsters and that, if the PFAA wanted the dues checkoff, they would have to make financial concessions.

The PFAA refused and, for the duration of their presence on the property, they relied on the voluntary collection and contribution of dues. This became a sore point within the union when it became apparent that some of the former Teamster officials were choosing not to pay dues to the PFAA! By the way, no appeals to the National Labor Relations Board, the National Mediation Board, the Federal Aviation Agency or any government agency resulted in pressure on NWA management to deal respectfully with PFAA.

Democracy and Disagreement

Frankly, the flight attendants did not find union perfection within the PFAA. Like AMFA, which was in many ways their model, the PFAA practiced internal democracy and transparency that could/should be a model for the rest of the labor movement. All negotiations with management, for instance, were open to any rank-and-file members to witness. All union officers continued to work under the terms of the contracts they negotiated. The internal communications networks were revitalized.

But there were also disagreements among PFAA activists and between them and former Teamster proponents, and there was much disarray about how to deal with the worsening labor relations climate at the airline. Never good, after 9/11 it grew steadily worse, as revenues dropped and costs rose, and corporate management made no bones about its intent to squeeze labor costs as a way to maintain profitability.

When AMFA struck in August 2005, the PFAA leadership sent out a ballot to members, asking them if they wanted to honor AMFA’s picket lines. While many flight attendants had been vocal supporters of the strikers and PFAA leaders had spoken at strike rallies, the leadership provided no education, no argument, no rationale, no strategy, along with this ballot. In a close vote, it lost.

The collective decision to continue to work despite the AMFA strike hurt the strike (as the flight attendants would have been harder to replace and their absence would have crippled NWA’s schedule), hurt the PFAA activists who then had to make difficult “personal” choices about honoring or crossing picket lines (in the face of management threats, illegal threats, that they would be fired), and hurt the PFAA’s bargaining position with the company (who now felt they could push the union around at will).

The PFAA leadership mounted little response to the media barrage that NWA would be dissolved if the workers did not give the concessions demanded, that the pensions would be lost if Congress did not act, that there was no way for workers to resist — the line that dominated not just the local press, radio, and television, but also CNN and Fox News where it was viewed over and over by flight attendants on layovers.

Resistance Under Pressure

Over the next year, however, even as two key unions, ALPA and IAM, gave NWA the concessionary agreements the airline sought, as the striking mechanics, custodians and cleaners were replaced by a combination of strikebreakers and outsourcing arrangements, and as the PFAA leadership struggled to present a strategy that could inspire its members, the flight attendants remained a source of resistance to the corporate juggernaut.

Email networks spread messages of hope and resistance to a concessions package totaling $190 million per year, an estimated 40% cut in total compensation for each flight attendant, and a radical rewriting of work rules and job assignments which would disrupt most of their lives. Although many flight attendants had been intimidated by NWA’s crushing of the mechanics’ strike, others felt that, given the terms they were being asked to swallow, these jobs would not be worth keeping.  When the PFAA leadership brought a tentative agreement back to the membership in June, it was solidly voted down.

In the midst of the complex negotiations, bankruptcy hearings, and rumors of corporate plans to replace large numbers of unionized attendants with Asian-based attendants, first in Asia itself, then in trans-Pacific flights, and then in the continental United States, some attendants — many of them former Teamster officers, some with TDU credentials, some with pro-Hoffa track records — announced that they were seeking the decertification of the PFAA and its replacement by the Association of Flight Attendants (AFA), the country’s largest flight attendants’ union and part of the Communications Workers of America (CWA), and therefore the AFL-CIO.

The new dissident group counted on rank-and-file flight attendants’ assessment that AMFA’s independent status had been a factor in the labor movement’s failure to support their strike. When the National Mediation Board, under the rules of the National Railway Labor Act, conducted a representation election in July, the AFA won. They were now the official union for NWA’s dwindling cohort of flight attendants.

In a matter of weeks, under the leadership of Mollie Reiley, who had led IBT Local 2000 before the TDU upsurge, and Danny Campbell, who had led that upsurge and succeeded Reiley as president of the union in the late 1990s, now appointed interim president and vice-president of AFA-NWA by AFA national president Patricia Friend, the new union announced a tentative agreement with NWA.

It included some minor changes in how the $190 million in givebacks would be structured and some minor changes in contract language. In August, even as NWA management insisted that a rejection vote would lead to their imposition of their own contract terms, the membership voted this tentative agreement down.

Planning CHAOS

The very day the contract rejection vote was announced, NWA management made good on the threat, imposing the cuts and new language. AFA responded with a strike notice, as is required under the Railway Labor Act, adding that they intended to use their CHAOS (“Create Havoc Around Our System”) strategy. Rather than shut the airline down, particular flights would be targeted, crews would fail to show up, refuse to work or walk off the plane, disrupting the NWA schedule strategically without leaving large numbers of flight attendants vulnerable to replacement.

CHAOS has taken on legendary status in airline union discourse, although it has actually only been implemented once, on Alaska Airlines in the early 1990s. AFA leaders assigned a CHAOS director for the campaign, a coordinator for each major city, and began to organize committees and conduct training. Rank-and-file flight attendants responded with enthusiasm, and lime green CHAOS t-shirts appeared on informational picket lines at airports around the country.

But the AFA delayed implementing CHAOS. NWA returned to the bankruptcy court and asked Judge Gropper to enjoin AFA from CHAOS or any strike action. They argued that, because the airline was in bankruptcy, the union no longer had a right to strike. The union’s attorneys responded that, under the Railway Labor Act, since the company had resorted to “self help” by imposing its contract terms, the union was now free to resort to “self help” itself.

Management, labor, legal and media eyes watched closely as there was no precedent, there had never been a case that tested the right to strike during bankruptcy under the auspices of the Railway Labor Act. Judge Gropper ruled that bankruptcy made no difference, and that the employer’s use of “self help” freed the union to do so as well.

NWA immediately appealed Gropper’s decision, filing with Judge Victor Merrero of the U.S. District Court in New York. U.S. Attorney General Alberto Gonzalez and the U.S. Department of Justice filed an amicus brief in support of the company’s claims, as did lawyers representing every major airline in the country.

Inventing the Law

On September 14, 2006, Merrero issued first a preliminary injunction and then a temporary injunction against job action by AFA and its flight attendant members. He suggested that management and the union return to the bargaining table.  Citing the Railway Labor Act’s concern with the economic impact of disruptive strikes, Merrero argued that such action would damage Northwest Airlines, its stockholders and customers, and the overall economy. In other words, precisely because a strike might be effective, he was banning it.

Merrero relied on a creative, unprecedented interpretation of the Railway Labor Act. In its language, only the President of the United States has the authority to prohibit a strike because of its potential economic consequences.  In intervening, the President would then declare a cooling off period and appoint a Presidential Emergency Board, who would have the responsibility to craft a settlement which Congress would then have to enact into law.

That’s how the RLA works, and over the course of the last ninety years, presidents have invoked it many times. But George W. Bush, with his political capital shriveled by the Iraq War and other adventures, chose not to intervene. His Justice Department’s amicus brief flew under the media’s radar. And Judge Merrero was arrogating powers to himself (and the judicial branch) that were properly the purview of the President (and the executive branch).

In Merrero’s court order he admitted that he was not using power that was clearly his, but claimed that he was acting in accordance with “the intent” of the authors of the 1926 Railway Labor Act. The union’s attorneys announced that they would appeal his finding. This is an outrageous exercise of state power to deny a union and its members their rights. But AFA, its parent CWA, and its umbrella the AFL-CIO have been quite circumspect in their response.

Labor Needs Civil Rights!

In a recent book which deserves more attention, labor historian Nelson Lichtenstein argues that one of the reasons for the decline of the U.S. labor movement has been its inability to craft a “rights discourse” like that articulated by the civil rights and women’s movements in the 1960s and 1970s.

Labor issues have been constructed by employers, media, politicians and ideologues as pocketbook issues, while the motivation of protagonists have been constructed as material self-interest.(6) Recent AFL-CIO campaigns, such as “Voice at Work,” have been, at best, tepid. But here, in the case of the NWA flight attendants, we have government denial of a basic labor right in contravention of our existing laws and judicial precedents, let alone a popular sense of justice and morality.

This conflict could be the poster child of a revived labor movement. One need not be a visionary to imagine a civil disobedience movement initiated by flight attendants, resisting directly, peacefully, non-violently, Judge Merrero’s order in the name of the defense of working people’s basic right to strike. Such a movement might galvanize the passions, energies, and bodies of working women and men — flight attendants and other airline workers; auto workers who are rapidly losing their pensions, their health care benefits and their jobs; and other workers, inside and outside the labor movement, who feel that their rights are being taken away, who are looking for some inspiration, some strategy, some movement that can stand up to the anti-labor neoliberal agenda.

Sadly, there is little indication that such a movement is on the horizon. Even as NWA’s economic health returns with two consecutive quarters of in-the-black performance, even as the price of oil drops, even as Mesaba workers present a united front in the midst of their bankruptcy crisis, and even as other airline workers question the necessity for the concessions they gave only months ago, the union leadership on the firing line waits — and waits.

Meanwhile, NWA flight attendants are working more inhumane schedules and earning less money for it, day in and day out, while waiting for the AFA’s lawyers to present their appeal to the federal appellate court.  AFA national president Pat Friend has stepped in and taken the leadership in negotiations with the company, but there has been no discernible or announced progress.

Email lists, websites and local CHAOS committees have knitted the flight attendants together, but they have been given nothing to do — but wait. Some activists have turned their attention to internal AFA elections, when offices filled by interim appointments will be up for popular selection. How much longer can rank-and-file attendants’ hope and resistance weather this waiting game?

This labor conflict is not only demonstrating the power of capital in the early 21st century, and corporate management’s discovery of bankruptcy as a new anti-labor tool, but it is also revealing the role of the government in enforcing this agenda and the inefficacy of the labor establishment in formulating a response to it.

Notes

  1. Peter Rachleff, “Is the Strike Dead?” New Labor Forum, 12:2 (Summer 2003).
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  2. “Work Stoppages Involving 1,000 Workers or More, 1947-2001,” http://www.bls.gov/news.release/wkstp.101.htm.
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  3. David Harvey, A Brief History of Economic Neoliberalism (London and New York: Verso, 2005).
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  4. Peter Rachleff, “Derailed – But Not Defeated,” Z Magazine, July-August 1991.
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  5. Peter Rachleff, “Where is Labor Going? The Northwest Airlines Strike,” Against the Current 119 (November/December 2005).
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  6. Nelson Lichtenstein, State of the Union:: A Century of American Labor (Princeton: Princeton University Press, 2002).
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New Challenges to Tenant Organizing in New York City

— Chloe Tribich

ON JUNE 16, 2006, 305 West 150th Street, a rundown 84-unit apartment building in the Harlem neighborhood of Manhattan, sold for $6.95 million. The City of New York has documented 274 housing maintenance code violations on this property, reflecting the presence of leaks, broken front door locks and exposed lead paint. The tenants are mostly poor and working class Latinos from Puerto Rico and the Dominican Republic; many depend on subsidies, such as Section 8, to pay rent.

Only 11 years earlier this same building sold for $700,000. The new $4 million mortgage — which includes a provision explicitly allowing for condominium conversion — would have seemed like a joke in 1995. The landlords formerly associated with the building —the Gutfreunds, Manny Stein and Jacob Finklestein — are career landlords known for poorly maintained buildings in Manhattan and the Bronx. The new owners are Rodney Propp and his partner Joseph Tahl, a former real estate lawyer who attributes his passion for his trade to a meeting with Donald Trump.(1)

This article discusses how the most recent surge in real estate prices has affected the multifamily housing market in New York City, and in particular, what has happened to landlords and tenants as building prices have increased. Although tenants in New York have fought for affordability and good conditions for over a century, it is only recently that slick developers like these have played a key role in controlling housing in poor neighborhoods. Is this an effect of the much-discussed “housing bubble?”

In the mainstream media, discussion of the bubble focuses on suburban homeowners: Does the increase in home prices signal a permanent age of easy cash as suburban home owners refinance their mortgages to go on vacation and pay off credit card debt? Is it true, as Chairman of the Federal Reserve Bernanke said, that the rapid increase in home prices does not constitute a bubble because it’s supported by high incomes and a growing population?(2)

But urban renters have at least as much at stake — their ability to pay rent and secure repairs from their landlord depends on the sale price and financing of the building they live in. But how exactly is the fate of tenants in buildings like 305 West 150th Street connected to broader real estate trends, and what sorts of struggles are needed to move us towards a truer vision of housing justice?

Background: NYC’s Housing Stock

New York City’s housing stock is unique in several important ways. First, despite a trend towards rent deregulation and gentrification, a majority of New York City residents continue to live in privately owned, rent-regulated apartment buildings. Second, New York has an extremely low vacancy rate (which never rises above 5%), a densely packed population constricted by natural geography (Manhattan is an island), and a relatively strong system of rent regulation. Equally important, th city has a history of tenant activism that has, over the course of the past century, forced some level of accountability from landlords, mortgage lenders and city officials.

New York City is similar to other U.S. cities in that poor and working-class residents have been pushed to the outer neighborhoods and suburbs as wealthier white residents settle in downtown areas. The effects of the dot com boom on the Bay Area are a dramatic example from the west coast. In New York, displaced residents are moving to the Bronx, the outer reaches of Queens and Brooklyn, and Yonkers.(3)

Like Chicago, Los Angeles and other cities, New York attracts large numbers of new immigrants, especially Latinos; its public education system is, at least in practice, racially segregated. So while the city has some characteristics that set it apart, it still carries important lessons for other urban areas.

Three Decades of Organizing

In the recent past, New York’s residents have confronted problems similar to those of tenants of buildings like 305 West 150th Street. What I describe below are some important examples of tenant activism from the past three decades rather than a comprehensive account.

In the 1970s, tenants in poor neighborhoods of color, especially in the Bronx, faced the policy of redlining — the red line bankers and insurers drew on maps to indicate neighborhoods with high perceived levels of risk where they would not do business. Redlining, combined with closing of fire stations, police stations and other public institutions, created an environment in which it was more profitable for a landlord to aggressively collect rent and withhold repairs for the short term than to establish a stable tenant population and invest in basic maintenance for the longer term.

After “milking the building,” as this practice was called, some landlords burned their properties to collect the insurance money. Tenants were forced to squat illegally in decrepit buildings, pay rent for poorly maintained apartments, move, or become homeless.

Community groups in the Bronx and other affected areas fought back locally and nationally — simultaneously targeting individual banks, local government and landlords and working with organizations throughout the country to pass the Community Reinvestment Act, a law which requires that banks reinvest in the communities they serve, ending banks’ ability to redline as policy.

In the 1980s, these same communities faced a different problem, one which more closely resembles the one that tenants confront today. As real estate prices climbed in traditionally “undesirable” neighborhoods, rents increased, but conditions rarely improved.

Landlords eager to increase income secured Major Capital Improvement (MCI) rent increases. These are permanent rent increases granted by New York State for some types of building improvements. The amount of the increase is based on the cost of the improvement. In order for a repair to qualify as an MCI, it must benefit all tenants and involve a new installation as opposed to a simple repair. For example, new windows installed throughout the building might qualify, but replacing glass panes on old windows does not.

In the 1980s, as today, tenants often complained that landlords were granted increases even though they did not meet MCI requirements, that landlords exaggerated costs of the improvements while refusing to ensure other basic building services, or that landlords did not complete the improvement according to a timeline. Even today, many community organizations convincingly maintain that the state rubber stamps MCI rent increase applications without evaluating their true legitimacy.

Finally, because MCI rent increases are permanent additions to each tenant’s rent, they threaten tenants without rent subsidies or with subsidies that do not cover increases. The increase also pushes rents towards the $2,000 threshold at which the state removes the building from rent stabilization, allowing the landlord to raise the rent at his own discretion.

The organization where I worked, the Northwest Bronx Community and Clergy Coalition, identified the Federal Home Loan Mortgage Corporation (Freddie Mac) as a major part of the problem. Freddie Mac lent large amounts of money to landlords who inflated their rent rolls based on anticipated rent increases and continuation of the real estate market boom. Many of these landlords counted on future MCI rent increases when they secured Freddie Mac loans.

If the landlord did not secure the rent increase as planned, he dipped into another pot of money to service his mortgage debt. Building maintenance funds — as opposed to his own profit — were usually the first to be rerouted towards the mortgage debt.

By targeting Freddie Mac’s top officials and stockholders with street actions and conducting detailed research on the effected buildings, this campaign accomplished changes in Freddie Mac’s lending policies and physical improvements in buildings, especially those with active tenants associations.(4)

Current Struggles

Today, tenants confront a similar situation in which well known banks such as Washington Mutual lend hundreds of millions to high end developers to purchase dilapidated rent stabilized apartment buildings. These new landlords, many of whom approach property ownership as a short-term investment rather than a career, have become more common as the current housing bubble has inflated.

The University Neighborhood Housing Program, a Bronx-based non-profit that works to create well maintained affordable housing, has conducted research on the local housing market. UNHP found that from 1996 to 2001 there was a 123.6% increase in real sale price per unit of multifamily buildings in the Bronx. By contrast there was only a 64.4% increase between 1985 and 1999.(5)

My own experience as a tenant organizer in New York City over the past five years is that dilapidated buildings usually carry large bank loans that push landlords to cut maintenance expenses to pay their mortgage debt. There are different ways to evaluate the character of a building’s debt. One is to divide the sale price by the rent roll; another is to calculate the sale price per unit in a particular area over time, and compare that to changes in landlords’ net operating income in the same area.

According to the UNHP study, housing in the Bronx is becoming more speculative by most of these measures. In other words, building sale prices — and by extension the loans that the landlords receive — are increasing faster than rent rolls. These speculative mortgage lending practices are compounded by the following government failures:

* NYC’s Department of Housing (HPD) is extremely cautious about removing buildings from the hands of even the most negligent landlords. HPD often chooses to “work with” landlords to encourage repairs through soft mechanisms such as voluntary repair agreements between the landlord and HPD, rather than aggressively seeking penalties in housing court.

* Government bank regulators very rarely consider the physical condition of a bank’s collateral—i.e. the apartment buildings the bank lends against—when evaluating the financial health and safety of the institution.

* The very landlord-friendly New York State government maintains control over New York City’s rent laws, preventing the City from enacting tighter restrictions on rent increases, including reform of the MCI rent increase approval process.

Confronting these problems effectively requires a broad program with specific long- and short-term demands, a willingness to engage in multiple and creative strategies, a commitment to connect with other issue campaigns, and initiative from those most effected by these problems, not only from paid organizing staff.

Unfortunately, the severity of the housing crisis and the prevailing political climate has often resulted in reactive, short-term organizing as opposed to broader movement building. With this in mind, tenants and their allies can and should claim significant recent victories — such as increased quantities of sympathetic coverage in mainstream media and competition among local politicians for the title of “pro-tenant” — while planning for the future with a critical and evaluative eye.

552 Academy Street

The above-cited 305 W. 150th Street is one example of a building where lack of government enforcement combined with speculative lending for poor housing conditions and the threat of displacement. 552 Academy Street, located in the Inwood neighborhood of Manhattan, is another. It was sold for $5.565 million in April 2005 and suffers from structural deficiencies so severe that tenants were temporarily evacuated when a floor collapsed in June 2006.

A large majority of the tenants of 552 Academy Street are first- or second-generation immigrants from the Dominican Republic. Many have lived in same apartment for over 20 years, know their neighbors well, and are deeply attached to their building and their block. When the current landlord tried to relocate tenants to newly renovated apartments about 40 blocks away, tenants insisted they would rather endure the inconvenience of major rehab work and service interruptions rather than leave their apartments.

In summer 2005, the 552 Academy Street tenants organized with ACORN and Housing Here and Now, the housing coalition where I currently work. This effort involved a press conference in the building, followed two weeks later by an interfaith vigil in which faith- based and secular leaders committed support to the tenants’ fight and reflected on the meaning of housing justice. The summer of action culminated in a protest in the lobby of the luxury residence of the then-landlord Gadi Zamir in Battery Park City.

These actions drew support from several other organizations involved with Housing Here and Now, demonstrating the city-wide nature of the problem. To avoid negative press attention, Citibank — the mortgage lender — entered into negotiations over a repair plan for 552 Academy Street and their multifamily lending policy in general. Gadi Zamir eventually sold the building.

Since summer 2005, significant repair work has been completed by a new landlord, including the installation of a new stoop and structural stabilization of the building. However, the challenge of maintaining affordability while securing high quality maintenance remains. Many tenants are frustrated at the slow progress of repairs, and will likely soon be confronted with the Major Capital Improvement rent increases.

The successes of 552 Academy Street depended partly on the force of the citywide coalition behind it. Paid staff were able to spend time researching the history of the building, its ownership and financing, and recruiting other organizations to join in street actions. Professional media consultants worked on securing sympathetic press attention. However, grassroots-initiated actions, such as the persistent coordinated resistance to the landlord’s efforts to relocate tenants, were key to victories.

Tenant unity — whether or not with the involvement of groups like Housing Here and Now and ACORN — will be crucial to the outcome of this story.

The Pinnacle Group

Another current organizing effort is being waged by tenants of the Pinnacle Group LLC. This realty group that has gained notoriety for purchasing over 400 buildings in the past several years — some of which were acquired from abusive landlords (including Baruch Singer) and in poor condition — and aggressively displacing rent-stabilized tenants. The company has filed eviction proceedings against approximately one of every four of its tenants.

Pinnacle has managed to leverage top dollar for these buildings.  A package of 11 west Harlem properties, for example, secured them a $35 million mortgage from Wells Fargo. In response, Harlem Pinnacle residents formed Buyers and Renters United to Save Harlem (BRUSH). This organization is unique because it lacks paid staff and is completely tenant-driven.

BRUSH has worked in concert with several other local community groups to hold tenants’ rights forums, reach out to Pinnacle tenants and enlist the services of pro-tenant lawyers. As a result of these organizing efforts, New State Attorney General Elliot Spitzer has subpoenaed Pinnacle’s records, the issue has received ongoing coverage in the Daily News and was the subject of a major New York Times article. Several local politicians have publicly denounced Pinnacle’s tactics.

New York’s tenants face enormous obstacles. With the threat of unaffordable rents looming larger and larger on the horizon, it takes guts to complain about a leaky ceiling or a cracked window.

The 552 Academy Street tenants were able to force the sale of their building to a new landlord and win major commitments for repairs; one year later, however, maintenance issues are painfully present and the tenants will likely face a serious fight to maintain affordable rents. The Pinnacle tenants managed to organize independently and without the help of paid staff, yet they have not evolved into a movement that addresses abuses other than those committed by their own landlord.

Tenants today are faced with the job of building a movement that is both capable of winning short-term demands and providing a broad program that inspires in uninspiring moments. For this to occur, there must be real movement at the grassroots — not only from paid organizers. The above examples of tenant organizing offer glimmers of hope but also illuminate the very long way left to go.

Notes

  1. http://www.findarticles.com/p/articles/mi_m3601/is_26_47/ai_71018150.
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  2. http://economistsview.typepad.com/economistsview/2005/08/bernanke_and_bu.html.
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  3. The Bronx’s housing stock, for example, is 71.6% rent regulated or subsidized, compared to 67.6% for Manhattan. This and other facts in this section are taken from the NYC Dept. of Housing’s 2005 Housing and Vacancy Survey, the most recent one available. This HVS indicates that 58.5% of all NYC’s housing units are rent regulated or government subsidized. The vacancy rate is 3.1%.
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  4. http://comm-org.wisc.edu/papers2003/groarke.htm#.
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  5. http://unhp.org/pdf/bubble.pdf.
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George Bush's Unending War and Israel

— Michael Warschawski

[The following is a brief excerpt from “Israel and the Global Non-Ending War of George Bush,” News from Within, September 2006, published by the Alternative Information Center (AIC). Michael Warschawski is a co-founder and co-chair of the AIC. Subscriptions to NFW ($40 per year, $25 for students) can be ordered from News from Within, PO Box 31417, Jerusalem 91313, Israel.]

THE PRESENT U.S. strategy, defined by the neo-cons at the end of the 1980s, is no longer a strategy of stabilizing world order and building a “new Middle East” through multilateral negotiations, but imposing the “American age,” i.e. U.S. total hegemony, by a global non-ending preemptive war. The Israeli war against the Palestinian people and against Lebanon is part of this global war; indeed, it is the United States’ most advanced and important front.

Under the cover of “fighting Muslim terrorism” and “protecting Israel’s existence,” the Israeli army is trying – with limited success – to impose the new American hegemony in the whole Middle East. For, according to the neo-con strategists, behind Hamas and Hezbollah stand Syria and Iran, the medium-term objectives of this offensive...

The reaction of the Arab leaders to the Israeli aggression was in harmony with the White House’s response, denouncing Hezbollah adventurism and de facto justifying the Israeli aggression. Thus, the growing gap between those regimes and their peoples’ public opinion…Their dependency on Washington and fear of U.S. retaliations, pressures and air strikes are so high that these regimes prefer to please the White House rather than their citizens, at the risk of provoking unrest and destabilization.

As a result, the new American Era will be more and more an era of permanent-state-of-exception and latent civil war where most countries of the post-colonial world, the regimes, the slaves of U.S. empire, will have to impose by force the demands and the orders of the White House.

This trend is not limited to the post-colonial countries; even powerful Europe is clearly threatened by such a process of vassalization, though obviously in a less brutal way. [Following the invasion of Iraq] Europe has re-aligned with the U.S. global war, and has been accepted as a junior partner in the new American world-order. The U.S.-French Security Council resolution [for cease-fire in Lebanon] is a clear example of this new alignment of the European Union’s support of U.S. hegemony…

The Impact on Israeli Protest

The fact that there is very little international pressure on the Israeli government has a direct impact on the lack of emergence of an antiwar movement in Israel. The antiwar and anti-occupation movement in Israel was always composed of two layers, as it is or was in other countries in the world. On the forefront of the mobilizations are those organizations and individuals who are motivated by moral values and political principles that fueled their antiwar sentiment and identification with the victims of oppression, militarism or colonialism…

These most radical parts of the broad “peace movement” are reacting, protesting and mobilizing from the start. [On the other hand] the mainstream peace movement always takes some time to discover that what seemed in the beginning a just and clean war, is neither just nor clean. In Israel, two elements usually fuel the opposition to war: its costs, especially in terms of human lives, and the fear of a crisis with the outside world. [But] these two elements do not work in the present context…

The international pressure that had been so effective in the 1980s and beginning of the nineties in changing Israeli war and occupation policies, has been replaced with a new pressure. The visit of the U.S. Secretary of State’s visit to Israel (in July) was intended to convince Israel NOT to stop its offensive, and to promise to Ehud Olmert that any call for a cease-fire will be vetoed by the United States. The same week, British Prime Minister Tony Blair rejected an initiative for a cease-fire, and declared that Israel must continue its offensive in order to neutralize Hezbollah.

One of the characteristics of the new millennium is the cheap price of human blood compared to the rising price of oil....

In the last 10 years, what is known as the international community has drastically changed, and the Israeli spokespersons are well aware of these changes when they state in almost every TV show, half with astonishment half with arrogance: “this time the world (sic) is with us!”

In Israel “the world” is, first and foremost the White House. The White House of 2006 is not the White House of George Bush senior, who, in 1991, didn’t hesitate to suspend financial assistance to Israel, in order to oblige its government to declare a freeze of settlements activities.

“The world is with us,” claim the Israeli leaders, and they are right. “We are fighting an American war,” shout a few thousand antiwar demonstrators in the streets of Tel Aviv, and they are right too.

They are the usual contingent of activists, motivated by strong antiwar principles, by a strong rejection of the global non-ending war of  George W. Bush, outraged by massacres and destructions of civilian infrastructure and convinced that the Palestinian issue is the key for any just and lasting solution in the Middle East: The Women’s Coalition for a Just Peace, the draft resisters of Yesh Gvul, the Jewish-Arab Ta’ayush movement, Gush Shalom, the Alternative Information Center, Women in Black, Anarchists Against the Wall, and, of course, the Palestinian population of Israel and its political parties, mobilized in its own towns and villages but ready to join forces with Israeli Jews in the streets of Tel Aviv.

These thousands of Israelis and Palestinians are Israel’s voice of sanity and moral decency. But will they be heard by the hundreds of thousands who have been victim of an extraordinarily successful propaganda campaign that, in an Orwellian way, succeeded in transforming the oppressed into an aggressor and the most powerful state in the Middle East into a state fighting for its existence against an imaginary global threat named terror?

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Creating A Giant Ghetto in Gaza

— Uri Avnery

IS IT POSSIBLE to force a whole people to submit to foreign occupation by starving it?

That is, certainly, an interesting question. So interesting, indeed, that the governments of Israel and the United States, in close cooperation with Europe, are now engaged in a rigorous scientific experiment in order to obtain a definitive answer.

The laboratory for the experiment is the Gaza Strip, and the guinea pigs are the million and a quarter Palestinians living there.

IN ORDER TO meet the required scientific standards, it was necessary first of all to prepare the laboratory.

That was done in the following way: First, Ariel Sharon uprooted the Israeli settlements that were stuck there. After all, you can’t conduct a proper experiment with pets roaming around the laboratory. It was done with “determination and sensitivity,” tears flowed like water, the soldiers kissed and embraced the evicted settlers, and again it was shown that the Israeli army is the most-most in the world.

With the laboratory cleaned, the next phase could begin: all entrances and exits were hermetically sealed, in order to eliminate disturbing influences from the world outside. That was done without difficulty.

Successive Israeli governments have prevented the building of a harbor in Gaza, and the Israeli navy sees to it that no ship approaches the shore. The splendid international airport, built during the Oslo days, was bombed and shut down. The entire Strip was closed off by a highly effective fence, and only a few crossings remained, all but one controlled by the Israeli army.

There remained a sole connection with the outside world: the Rafah border crossing to Egypt. It could not just be sealed off, because that would have exposed the Egyptian regime as a collaborator with Israel.

A sophisticated solution was found: to all appearances the Israeli army left the crossing and turned it over to an international supervision team. Its members are nice guys, full of good intentions, but in practice they are totally dependent on the Israeli army, which oversees the crossing from a nearby control room. The international supervisors live in an Israeli kibbutz and can reach the crossing only with Israeli consent.

So everything was ready for the experiment.

So Much for Democracy

The signal for its beginning was given after the Palestinians had held spotlessly democratic elections, under the supervision of former President Jimmy Carter. George Bush was enthusiastic: his vision of bringing democracy to the Middle East was coming true.
But the Palestinians flunked the test. Instead of electing “good Arabs,” devotees of the United States, they voted for very bad Arabs, devotees of Allah. Bush felt insulted. But the Israeli government was ecstatic: after the Hamas victory, the Americans and Europeans were ready to take part in the experiment. It could start.

The United States and the European Union announced the stoppage of all donations to the Palestinian Authority, since it was “controlled by terrorists.” Simultaneously, the Israeli government cut off the flow of money.

To understand the significance of this: according to the “Paris Protocol” (the economic annex of the Oslo agreement) the Palestinian economy is part of the Israeli customs system. This means that Israel collects the duties for all the goods that pass through Israel to the Palestinian territories — actually, there is no other route.

After deducting a fat commission, Israel is obligated to turn the money over to the Palestinian Authority. When the Israeli government refuses to pass on this money, which belongs to the Palestinians, it is, simply put, robbery in broad daylight. But when one robs “terrorists,” who is going to complain?

The Palestinian Authority — both in the West Bank and the Gaza Strip — needs this money like air for breathing. This fact also requires some explanation: when Jordan occupied the West Bank and Eg