Dave Hodges

More About: Politics: General Activism

Constitution (Part 5): The Loss of the American Dream

The first four parts of this series have clearly demonstrated that the present set of free trade agreements (e.g., CAFTA, NAFTA) and regional governmental overlays (i.e., North American Union) are illegal and constitute an end run around our constitutional protections through the implementation of communitarian law which circumvents the legal processes of the United States. NAFTA'S Chapter 11 provision and its more stringent CAFTA counterpart hands the corporations the ability and the legal right to circumvent worker and consumer protections as well as escape the power of the American judicial system. Through CAFTA's CODEX, the pharmaceuticals have been given unprecedented power to tighten their monopolistic grip on American healthcare. I have previously alleged that many of our politicians (e.g., John McCain, Ted Kennedy, Jon Kyl) have been complicit in allowing the multinational corporations to use the power of government to obtain a greater monopolistic control over the United States economy; much to the detriment of the American middle class.

The American Dream, once a reality for most Americans, was based on the premise that if one worked productively, they could enjoy the fruits of their labor as evidenced by an ever-increasing economic life-style. This dream is dead and so are the economic hopes and dreams for millions of Americans unless we, the American citizenry, can quickly reverse the present economic and political trends.

These are very serious allegations. Are the deleterious effects of NAFTA and CAFTA quantifiable? Can these charges be substantiated with hard data?

Middle-class families are working harder and earning less today than they were at the beginning of the George W. Bush Administration. According to the Wall Street Journal, since the end of the recession of 2001, a lot of the growth in Gross Domestic Product, per person (i.e., productivity), has ended up in the laps of corporate profits, not wage increases. (1) The United Census Bureau states that the average household income has declined every year since Bush took office. In this time frame, median weekly earnings have fallen 0.9 percent since 2001. At the same time that families have seen their real earnings decline, the productivity of the American worker is up over 18 percent. American workers have never worked harder and more productively than over the past five years. Yet, they have received none of the benefits of their hard work. (2)

Inflation adjusted wages for workers possessing bachelor degrees fell over 5% from 2000-2004. (3) Overall employment growth has averaged just 42,000 per month under Bush. This is far lower than the approximately 150,000 jobs needed each month to keep up with population growth and this problem is exacerbated by the fact that 68% of the newly created jobs are being taken by foreign laborers. During past economic expansions, it was common to see monthly job gains of 300,000- 500,000. This is a very disturbing trend. (4) The manufacturing sector, often the source of jobs with good pay and benefits, has lost over three million jobs since the start of the Bush Administration. (5) Nearly half of the jobs created since 2001 were part-time and freelance positions without benefits. (6) This slow pace of private sector job creation is particularly troubling given that we are so deeply into the economic recovery.

Federal Reserve Chairman Ben Bernanke recently testified against rising income inequality: "to the extent that incomes and wealth are spreading apart, I think that is not a good trend." (7)

The American government has consistently looked the other way as America has suffered under the specter of illegal immigration for the past several decades and it is all in the covert name of providing cheap labor for the multinational corporations. Of course, Congress has taken the position of "No harm, no foul". The worn out argument put forth by Congress centers on the fact that the illegal immigrants are only taking jobs that no self-respecting American would want. Secondly, the proponents of the free trade agreements falsely state that illegal immigrants and their subsequent employment have no real impact on American wages. Harvard professor, George Borjas, a Cuban immigrant, strongly disagrees as he emphatically states that for every 10% rise in illegal immigrants; real wages are depressed by 3-4%. (8)

The Defenders of Free trade agreements stated that American manufacturing and industrial power stated: "Knowledge jobs in the new economy would provide employment in the future, and exports of high-tech services would pay for our imported consumption of old economy manufactures". The conclusions were misleading. One glance at the following data reveals a disturbing trend in which high paying American jobs are being exported to foreigners who will work for much less.


Management: Number of jobs moving overseas by 2015 288,281

Computer: Number of jobs moving overseas by 2015: 472,632

Office: Number of jobs moving overseas by 2015: 1,659,319

Source: Forrester Research, Inc. November, 2002 (9)


The above occupations represent our "Knowledge jobs" that the government said would compensate for the wholesale loss of manufacturing jobs to cheap-labor foreign markets when the Bill Clinton gang was engaged in the NAFTA hard-sell. These are your jobs and your children's future jobs. These jobs are gone forever and this disturbing trend shows no sign of abating. The following analysis of comparative salaries between American and Indian workers clearly demonstrates the rationale behind the trade agreements because it so dramatically exemplifies the furtherance of the corporate bottom line at the expense of the American worker.


1. Software Programmer, United States: $66,100 VS. Software Programmer, India: $10,000

2. Mechanical Engineer, United States: $55,600 VS. Mechanical Engineer, India: $5,900

3. Accountant, United States: $41,000 VS. Accountant, India:, $4,300

Source: Paàras Group, 2002; International Labour Organization (10)


United States manufacturing average hourly compensation is $21.33, in Mexico: $2.38 and China pays its workers less than $1 an hour. If your corporation was left unregulated by government, where would you locate your factories? In America, we have permitted our government to give the multinational corporations a freehand in allowing the wholesale displacement of American jobs on the front end. On the back end, we have allowed these same corporations to sell their products to the very Americans whose jobs have been displaced on a tariff-free basis.

To further illustrate corporations' thirst for the cheapest labor possible, Bill Moyers on his show, Frontline (5/7/05) states that even the Indians are having trouble keeping their newly found occupations from being exported to other nations. Many of these jobs are headed to China, Russia, Vietnam, the Philippines, Malaysia, and the Czech Republic.

Corporations such as Exxon Mobil and Eli Lilly have never been more profitable. For example, Lee R. Raymond accepted a $69.7 million compensation package and $98 million pension payout to Exxon Mobil's former chief executive and chairman as he recently retired. However, as we have seen, real income for Americans is down. So, where is the wealth going? The answer would be visually apparent to Ray Charles.

Former Clinton Secretary of Labor and present graduate school professor at the University of California at Berkley, Robert Reich, states that 40% of the wealth of the United States is controlled by the upper one percent and this gap has dramatically widened since 1979. 1979 became a watershed year for corporate profits. The year, 1979, marked a bifurcation between the wealth of the top 5% as compared to the rest of the country. Since 1979, the income mobility of this country has increasingly become stagnant to the point of being nonexistent. Globalization has set the world's economic thermostat to the lowest level possible in terms of production and economic compensation for the workers. Advocates of globalization state that cheaper products are the result of this seemingly endless search for the cheapest labor possible. However, if one does not maintain an income needed to support a consumer lifestyle, access to cheap products is not an advantage for the majority of American workers. (11)

The fact remains that manufacturing jobs, in America, have all but disappeared. Unless one is a well-educated and a well-connected, graduated college professional, we are now being thrust into service economy jobs in restaurants, hotels and retail establishments because the once lucrative manufacturing jobs have departed to the third world. Service sector jobs traditionally pay far less than manufacturing jobs. Should we just acquiesce to the fact that the majority of our children will be working in service economy jobs and we should simply resign ourselves to the fact that our standard of living will be lower than the previous generation? Perhaps the development of the spirit of resignation to one's circumstances is prudent. However, acquiescence will not produce a livable wage. Ask yourself, what jobs are illegal migrants are taking? Are there really 20 million fruit pickers and landscapers in America? No, these illegal immigrants wait on your table, cook your food and change your sheets when you are on vacation. These hard-working immigrants will work for a fraction of what you and your children will work for. In short, the American worker is being squeezed from two sides. First, corporations are sending the once high-paying manufacturing jobs out of the country and second, our own service economy jobs are increasingly being taken by illegal immigrants because of the bargain basement prices that they will work for. And do you really think that the damage will be contained to lower-level service jobs? There is a growing body of evidence that degreed jobs are increasingly being obtained by foreign workers. For example, in the Las Vegas School District of Clark County, school district officials announced that it hired 51 Filipino teachers in a recent, well-publicized example of an employer turning to foreign workers. (12)

The American worker is about to be further squeezed by a third force who will prove far more devastating than either of the previous two causes of job and income loss. This third force will be comprised of the unlimited guest worker programs which will legally bring millions of workers into our country from Central America.

In short, the jobs that can be exported to cheaper labor markets are rapidly disappearing. Most service industry jobs are not exportable. Therefore, the corporations have used their political influence by getting the government to look the other way when it comes to the subject of curbing illegal immigration in order to keep the stream of cheap laborers flowing into America. However, the American people are waking up to the fact that we are under invasion and the very wage structure needed to support a middle class life-style is under attack. Therefore, the corporations needed a quick fix and a legal method for importing cheap foreign labor outside of the growing watchful eye of the American public. Voila, we now have the massive guest worker programs of John McCain and Ted Kennedy under the auspices of CAFTA. Meanwhile, in a feeble attempt to cover their tracks, Congress has engaged in the biggest insult to American intelligence by spending billions of dollars to construct a 700 mile wall along the 2000 mile Mexican border.

Isn't free trade inevitable and America simply needs to adjust to the omnipresence of globalization? The problem with this thinking is that Americans pay taxes, in American dollars, in support of American governmental officials to represent American interests. And with the construction of the CANAMEX corridors, Americans are now being forced to finance their own economic demise. Substitute the word corporate for American, in the previous two sentences, and we can get a clearer picture of what is really happening to the future of our children.

In part six of this series, I will expose how many of the farmers near Yuma, Arizona are being economically sacrificed to usher in a new Union Pacific railroad transportation system and transloading facility in support of CAFTA's CANAMEX transportation system which serves to increase the efficiency of the shipping of goods, services and people at the expense of the American taxpayer. "We will hang the last capitalist with the last rope that the capitalists sell to us." Very prophetic!

How long will it be until your children will become the new illegal immigrants being forced to covertly relocate to a foreign land in search of any job that they can obtain?


(1) Wall Street Journal, 3/27/06

(2) U.S. Census Bureau; Bureau of Labor Statistics; Joint Economic Committee Democrats, 6/06

(3) Los Angeles Times, 7/24/06

(4) Economic Policy Institute, The Boom That Wasn't, 12/19/05

(5) U.S. Department of Labor, Bureau of Labor Statistics, 7/7/06

(6) Los Angeles Times, 7/24/06

(7) Testimony of Ben Bernanke before the Senate Committee on Banking, Housing, and Urban Affairs, 7/19/06

(8) http://www.borjas.com/

(9) Forrester Research, Inc. November, 2002

(10) Paàras Group, 2002; International Labour Organization

(11) How Unequal Can We Get Before We Snap? http://www.robertreich.org/reich/biography.asp

(12) Degreed Jobs Are Not Safe From the Ravages of Immigration, Business Las Vegas, August 26 to September 1, 2005, Alana Roberts.

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