In a joint statement (here) on 21 October, the ETUC and the AFL-CIO denounced the ‘double standards’ of European corporates that do not uphold freedom of association and overall workers’ rights for their employees working in the American south. The basis for the statement is an AFL-CIO report (here) that affirms multinationals ‘which boast top quality social dialogue in Western Europe,’ are actually exploiting labor rights weaknesses in the American south by relocating jobs formerly in Europe to these more weakly regulated southern States. As a result these companies are benefiting from weaker wage, tax, and union representation requirements, as compared with their situation in Europe. The report, authored by Cornell University Professor Lance Compa puts forward a number of explanations for the particularities of industrial relations in the Southern States, presents nine case studies of multinational corporates that set up in these States, and proposes a list of six recommendations for these corporates ‘so they can break the historical cycle of low wages, low labor standards, low social standards and other stains on the South,’ and eventually avoid a race to the bottom.
An opportunity ready for these companies to seize. Two phenomena are being criticized in this report. Firstly is the ‘double-standards’ of European multinationals, i.e. the gap between what they do and say in Europe and what they actually do when they set up in the southern US States. Secondly and concomitantly is the ‘race to the bottom’ in terms of employers’ practices being carried out in these Southern States. The American South has the weakest levels in terms of social indicators compared with the whole nation, with for instance a minimum hourly salary that on average is less than or equal to $7.36.
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