The Rostrum
By ROBERTA LYNCH

Unrestrained corporate power

IT HAS become increasingly difficult to open a magazine without encountering a lament from one corporate spokesman or another about the "restrictions" placed on free enterprise today.

Nor is this complaint limited to rhetoric: business is taking its campaign against all forms of regulation nto the legislatures and the courts. The current fierce assault on the Occupational Safety and Health Administration as a costly, bureaucratic nitpicker is but one example of this activist strategy.

Ironically, at the same moment that this corporate chorus is bewailing its lack of freedoms, an issue has begun to emerge that demonstrates with stark clarity the extent to which corporate power remains at the heart of our economic and social arrangements.

The problem of plant closings is becoming epidemic in our society. Every year a growing number of workers are left jobless — with little warning or recompense — as industries move on to sunnier climes. These moves are invariably effected without the slightest input from employees, their unions, or local or national governments.

Moreover, corporate decisions to relocate are increasingly based not on the profitability of a particular operation but on the complex growth strategies of large-scale conglomerates that are not located in the area and whose concern for a community's future is negligible.

While Youngstown, Ohio, has become the most prominent symbol of this industrial exodus, nearly every Northern state, including Illinois, has been affected. A recent study by the Illinois Public Action Council shows that our state had a net loss of 150,000 jobs over the last decade. And in recent years, the closing of companies such as Zenith in Chicago, Hiram Walker in Peoria, Westclox in LaSalle and Obear-Nester Glass in East St. Louis have cast a pall over the employment picture.

The economic stability of many of our cities has been undermined, and the cumulative effect on our country of such unfettered corporate mobility has been disastrous. These costs are never tabulated on the business balance sheets.

Several years after the first plant shutdown in the Mahoning Valley area of Ohio, only 35-40 percent of the affected workers had found new jobs. What happened to the rest? Statistics are beginning to emerge that tell part of the story.

What we do know is that physical and mental health problems increase drastically among this population; one major study of workers affected by plant closings shows a suicide rate 30 percent above the national average.

Beyond the individual, communities as a whole have been drastically altered by the loss of a given industry. Tax revenues drop sharply. Young people begin to move away from the area. And there is a ripple effect on many local businesses.

In an attempt to provide minimal protection for workers and their communities, a number of states are now considering legislation to require some measure of corporate responsibility in the event of a plant closing.

In Illinois, the Employer Relocation Act, introduced by Rep. Miriam Balanoff (D., Chicago), would require that companies give one year advance notice before closing down, guarantee severance pay, and contribute to a special community fund for job retraining or development.

The industry response to such proposals has been strident. Lester Brann of the Illinois State Chamber of Commerce argued that enacting such legislation would send out a signal that Illinois is unfriendly to business. Not surprisingly, the same kind of objections are heard in every state where similar measures have been introduced.

If business has its way, we will simply continue the present unhealthy competition among states that has led to sacrificing workers' rights and instituting regressive taxation in a desperate attempt to seduce industry from one region to another.

A far more fruitful approach, both in terms of the specific protections for employees and in terms of evolving a more rational economic development policy for our country, would be the joint passage of these laws in dozens of states and the eventual passage of a similar measure at the federal level.

Most essential is that we look beyond the immediate problem of aiding displaced workers. We must look at the underlying issue of the exodus of capital beyond our borders. As complicated as this problem is, we can begin to address it by altering present federal policies which actually encourage this movement.

Necessary changes include: subjecting all foreign profits of American-based corporations to federal income tax; treating taxes paid to foreign governments as an expense rather than a tax credit; disallowing plant shutdowns, moving and relocation expenses as tax deductions unless stringent conditions regarding workers and communities are met; and refusing write-offs for abandoned plant and equipment.

Corporate propaganda notwithstanding, the United States is almost alone among the developed nations in its failure to apply any limitations on the movement of industry. Far from being hamstrung by governmental regulation, big business in this country is exercising unrestrained power over decisions that will determine the course of our development for decades to come.

Roberta Lynch is active in the New American Movement and has worked in local independent politics in Chicago.

July 1980/Illinois Issues/35