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Flat Brokeby Jon Jeter
It was dark still, and 2008 was drawing to a merciful close. I sat catatonic on the sofa, trying to regain my bearings and steel myself for the workday that lay ahead of me. The television newscasters droned on mindlessly about the weather and football scores, but then something caught my ear.
In Chicago, union organizers say management at a Republic Windows and Doors plant gave workers only three days notice that they were closing the plant, rather than the two months that is required by their labor agreement. Now the workers have taken over the plant, and are refusing to leave until they get the severance pay and benefits they are owed.
I turned up the sound and leaned forward as one of the workers appeared on my television screen.
"We have nothing to lose. We're broke, we're unemployed, and we refuse to move until this situation is resolved."
I rubbed my eyes in disbelief. Was I still asleep? Was I dreaming? Six years earlier almost to the day I sat with my Spanish teacher in the living room of my Buenos Aires apartment watching television during one of our early morning lessons. As the newly minted South America Bureau Chief for the Washington Post, I had arrived in Argentina a few weeks earlier. My Spanish was known to make people scream in frustration, but with my instructor providing narration, we looked on as the television news reporter stood outside a local shoe factory that had been occupied by cashiered plant workers. With the Argentine economy in free-fall, and no other jobs available, the workers chased off bosses who had tried to lock them out of the plant, and simply continued making shoes. The plant takeover was the latest in a wave of occupations by desperate Argentine workers who had lost their jobs in la crisis, as Argentines commonly referred to the worst recession they had known since the Great Depression.
One of the plant's employees spoke to the reporter on camera, and while I don't remember his precise words, I was struck by the desperation and the resolve in his voice, so much so that the plant takeovers that erupted in Argentina were one of the first stories I wrote for the Post from South America. Now, six years later, I was hearing another worker, in the country of my birth, strike that same blue note.
This awful brand of symmetry is what led me to write my first book, Flat Broke in the Free Market: How Globalization Fleeced Working People. Over the last quarter century, the grief and resignation articulated by workers in Chicago and Buenos Aires has become part of a template for the new world economy that has emerged as wealthy financiers have joined with an international parliament of hack politicians to rearrange the global marketplace. Around the world, in rich countries and poor, workers no longer make things, but sell them. Both nation-states and households borrow rather than save. Money that might've once been spent on education, healthcare, low-interest loans, or land reform to help the poor and working class get a leg up, is now pocketed by a relative handful of wealthy global investors. From Lusaka to Lisbon, Paraguay to Peoria, Boston to Bangladesh, the gap between the wealthy and everyone else has widened in the post-Cold War era. The global economy has produced both an epoch of technological marvels and industrial economies that are more primitive than ever.
Consider exactly how workers in cities as different as Buenos Aires and Chicago wound up in almost the same place. For most of the 20th century, Buenos Aires was regarded by its continental neighbors as the Paris of Latin America, a bookish, perhaps slightly snobbish city of cafes, theaters, and factories, lots of factories. The Argentine census reports a population that is 97 percent white, a figure which seems far too low for anyone who has ever lived there. And between 1948 and 1991, the unemployment rate never crept higher than five percent; the poverty rate never higher than four. If General Juan Peron was authoritarian, had a creepy resemblance to Bela Lugosi, and maybe even a creepier affection for his wife Eva's corpse, he most certainly created a self-sufficient country. Virtually everything Argentines needed, Argentine manufacturers made, bottled, assembled, and stitched together.
The election of Carlos Menem in 1989 changed all of that, and rather quickly. Menem's government strengthened the value of the currency, the peso, by pegging its value to the U.S. dollar. Beginning in 1991, any Argentine could walk into any bank and exchange one peso for one U.S. dollar. This destroyed inflation, but also Argentina's manufacturing sector, by making goods shipped into the country cheaper to buy, and goods shipped out of the country more expensive to buy. Additionally, Menem reduced the size of government by privatizing more than 300 state-owned services and industries, deregulating the financial sector, and lowering corporate taxes and state spending on education and social services. To raise cash, the government borrowed heavily from abroad. The good times rolled until they didn't. When I arrived in the country in November of 2002, it was at the height of the worst financial crisis in Argentine history. The once robust Argentine car industry had withered to 1965 production levels; the unemployment rate had soared to more than 22 percent; the number of Argentines living in poverty had eclipsed 56 percent.
Does any of this sound familiar?
With the largest black population in the U.S., Chicago looks nothing like Argentina, of course. As the Post's Midwestern Bureau Chief, I lived in Chicago for nearly two years before landing my first overseas assignment in 1999 as the southern Africa foreign correspondent, based in Johannesburg.
One of the stories I never quite found the time to write before I left for Chicago was on the "poverty industry" that was exploding in black and Latino neighborhoods as low-paying service-sector jobs replaced good-paying manufacturing jobs. Chief among these businesses that targeted working poor people were the "payday loan" shops that had sprouted like weeds in inner cities, offering quick loans at interest rates of up to 400 percent.
One of the first things I noticed when I touched down in Johannesburg was the proliferation of payday loan stores, known in South Africa as micro lenders. Typically in exchange for your ATM and pin number, micro lenders offered quick, small loans at interest rates of up to 400 percent to the working poor, which in South Africa is synonymous with black. At the time, micro lending was the fastest growing industry in the country, capitalizing on the material ambitions of black South Africans who had been denied middle-class dreams under the apartheid rule that ended in 1994. And, because South Africa's government had strengthened its currency, reduced tariffs, privatized industries, and limited public spending on job-creating programs like land reform, the unofficial unemployment rate was closing in on 40 percent when I arrived.
And so, a few months after I first arrived in South Africa, I got the front-page story I coveted on Chicago's growing market in exploiting the increasing number of poor working people 8,500 miles away.
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Jon Jeter was the Washington Post bureau chief for southern Africa from 1999 to 2003, and the Post's bureau chief for South America from 2003 to 2004. He now lives in Brooklyn.