The Globalized Economy: Challenges to the Church in the U.S.

Encuentro Obispos y Empresarios
3-5 de octubre de 1996
Ciudad de México

Presentation prepared by the U.S. Catholic Conference
Office of International Justice and Peace

Introduction Globalization -- the acceleration of economic, political, and cultural linkages -- is transforming the lives and destinies of people throughout the world while causing much uncertainty and anxiety. In the last decade, the Catholic bishops of the United States have paid close attention to the gradual changes in the international economy and their impact on people. This modest paper explores the process of economic globalization and reflects some of the pastoral statements and themes of the U.S. bishops that may be relevant to aspects of the international economy. The paper addresses the process of economic globalization with the understanding that cultural and political globalization are closely related but worthy of separate papers.

It has been widely noted that, today, communications and transportation technologies allow us, for the first time in human history, to make anything anywhere on the face of the globe and sell it anywhere else. The U.S. industrial base has shifted from one focused on natural resources to one of increasing information and technology. Migration is on the rise, and the overall population of the world is growing, moving, and becoming older.

Economists disagree sharply over the impact of these global changes in U.S. society. Some describe globalization as webs of global commercial activity that will increasingly enrich the lives of all. Others argue these forces will be available only to a minority of the world's people who are producers, consumers, owners or shareholders in these activities. Others believe that global communications could bring together people who could collaborate on social justice projects. Few economists analyze the likely impact of globalization on the poor, but many agree that marginalization is inevitable and precautions must be taken to protect those who will not share in the gains from globalization.

U.S. Catholic Response: Economic Justice 

The U.S. Catholic bishops have focused on the moral and social justice aspects of those issues that are related to the globalized economy: trade, foreign aid, the international financial system, sustainable development, agriculture, labor, and migration. Their analysis often centers on how the structure of the economy affects these issues, using as a foundation the U.S. bishops' 1986 pastoral letter Economic Justice for All.

A core message of that pastoral is that the economy must exist for the person and economic life should be guided by solidarity and a clear priority for the least among us. Because the economy has moral dimensions, economic choices and institutions must be judged by how they protect or undermine the life and dignity of the human person. As individuals, all have the right to the basic necessities of life -- food, education, shelter, medical care, job security, productive work, just wages and working conditions, as well as the consequent duty to provide for our families and to contribute to society.

In the globalized economy, these rights appear to be much less secure. In a recent Labor Day reflection, the bishops pointed out that the power and productivity of the U.S. economy are leading not to one nation, but three nations living side by side:

One economy is prospering and coping well with the challenges of the global economy and the information age, growing more powerful and productive. In this economy, people are creating businesses, surfing the web, and managing their investment portfolios;

A second is being squeezed by declining real incomes, frightened by corporate downsizing and fearful about keeping their jobs and health care. In this economy, people wonder whether they can afford a good education for their kids and a decent retirement for themselves;

A third community lives on the margins of our economy. Families, often without fathers, jobs or a living income, are the signs of an economy that leaves millions behind. In this economy, people wonder whether they can pay the rent or afford food at the end of the month. (Labor Day Statement, Sept. 2, 1996)


These divisions within the U.S. economy are partly due to the international trading system, perhaps the most dynamic aspect of globalization that is fueling strong competition from firms trying to capture market shares. Trade policy is now a cornerstone of U.S. foreign policy and is becoming a central part of developing countries' economic development policies. The U.S. government, together with the industrialized nations and the multilateral institutions, believe that reduced barriers to trade and fewer taxes on imports will spark the economic growth that is so desperately needed in many parts of the world.

NAFTA/TLC was a major topic of discussion for the U.S. bishops several years ago. Although the bishops came to no firm policy on the agreement as such, they developed a set of criteria by which to evaluate trade policy and communicated those concerns to public officials. A just international trading system, they said, should serve the development needs of all people in a country and should not exacerbate inequality or injustice. These criteria are still relevant in today's international trading agreements. Given the prominence of international trade in the world economy, these criteria continue to inform our analysis and advocacy of upcoming international agreements and institutions such as the World Trade Organization:    

  • A just trading system should enhance the life and dignity of everyone, lessen economic injustice, reduce disparities in economies, build bridges of commerce and sustainable development between countries;   

  • The international trading system should respect the rights of workers, offer just wages and decent working conditions, and should not displace workers and/or communities;   

  • The trading system should address unemployment and underemployment;   

  • It should promote the type of development that increases self-reliance and participation in economic decision making;   

  • The international trading system should address the external debt; 
  • It should protect the right to migration, especially when conditions in home countries prevent people from providing for themselves and their families;   

  • Finally, trade should not harm the environment. The enforcement of a trading agreement should be strong enough to ensure that trade does not contribute to declining environmental quality and unjust treatment of workers.

  • In the debate about NAFTA, the loss of U.S. jobs, especially in rural areas, was a primary concern. We urged that NAFTA include effective commitments to help workers, their families and communities cope with the social and financial strains of dislocations and that it should address border concerns and needs. It is not clear how well the labor and environmental side agreements have fared.

Foreign Aid and International Finance

In its foreign aid program, the United States supports some development and humanitarian assistance for the poorest countries of the world. In 1995, about $4 billion, or a third of the total foreign aid budget, went to these areas. The percentage of the foreign aid budget going to human development is shrinking, however, and the Congress has cut funds for development and humanitarian assistance by 25 percent to 50 percent in the past two years while boosting assistance for U.S. firms seeking greater markets abroad for their exports.

The U.S. bishops want a U.S. foreign aid program that places higher priority on development and humanitarian assistance than on military and commercial assistance. In their 1991 statement, Putting Children and Families First they say:

We need a foreign aid program that gives greater priority to the basic needs of families and children in the developing countries than to the national security or competitive advantage of the U.S. or the military appetites of Third World governments. Development must be understood and promoted in terms of helping poor people improve the quality of their lives and build for their future, rather than merely increasing the quantity of their possessions and their nation's military arsenal. The scarce U.S. assistance that goes to developing countries is often used by governments to help pay off debts owed to the U.S., other industrialized countries, and to the multilateral institutions. Meanwhile, donor nations are putting more and more emphasis on export-led growth as a way to pay off the debt, which can have difficult consequences. For the heavily indebted low income countries, export-led growth often means they have to make a ". . . cruel choice whether to produce agricultural products for export in order to earn foreign exchange to pay debt, or to grow food to feed their own hungry people." (Food Policy in a Hungry World, 1989)

The bishops seek a more just global financial system that:

. . . [L]ooks at the human consequences of the massive external debt of the developing countries and realistically attempts to relieve it through a genuine sharing of responsibility among creditors and debtors. We cannot approach this problem as no more than a question of exchange rates, inflation, and debt service. This results in policies in the debtor countries that further punish children and others by reducing housing, education, transportation, and other public services. It also often deprives them of food in order to increase the export of agricultural products that will earn the foreign exchange required to pay external debts. (Putting Children and Families First, 1991)

The USCC strongly supports debt relief for the poorest countries and has devoted considerable advocacy efforts focused on the 1996 debt relief initiative led by the World Bank and the International Monetary Fund.

Sustainable development 

In communities throughout the U.S., the acceleration of trade, particularly in agricultural and manufacturing products, is having a major impact on the patterns of consumption, migration, distribution of wealth, and the environment. Sustainable development is, in our minds, a way to meet today's economic and social needs as well as those of future generations without damaging the environment. Sustainable development implies the notion of a shared future, an interrelatedness among peoples and nations and between people and their environment.

The bishops' 1991 statement, Renewing the Earth, reinforces this view:

Authentic development supports moderation and even austerity in the use of material resources. It invites the development of alternative visions of the good society and the use of economic models with richer standards of well-being than material productivity alone. Authentic development also requires affluent nations to seek ways to reduce and restructure their over consumption of natural resources. It entails encouraging the proper use of both agricultural and industrial technologies, so that development does not merely mean technological advancement for its own sake but rather that technology benefits people and enhances the land. In 1995, the bishops of the Appalachian region of the United Sates examined how that region has become an area of large scale unemployment and shrinking local business, of clear cutting of forests and destructive strip-mining, a dumping ground for out-of-state garbage and toxic radioactive materials. They proposed that local communities boost their capability to grow their own food using tools that are appropriate and can be easily made and replicated. They would protect their forests by not clear cutting, would ensure that property is rooted in the local community, and would support traditional culture over global culture. (At Home in the Web of Life, 1995)

In 1993, the USCC began an Environmental Justice Program, which designs environmental educational resources for parishes, hosts an annual conference for environmental scholars, and seeks to influence environmental public policy through advocacy on selected legislation. The Program has recently supported:

  • Protection of minority communities from environmental hazards;   

  • Improved protection of farm workers from pesticide exposure;   

  • Balancing the protection of private property with environmental regulations; and,  
  • Protecting renewable energy resources and expanding agricultural conservation. 

The program works with Protestant groups, both traditional and evangelical, and with Jewish organizations that are also committed to sustainable development and the environment.


Agriculture is a global enterprise, with agricultural products now accounting for ten percent of world trade. Farms are no longer run by small families but instead managed by large corporations that have the capital, technology, markets, and political connections to reach the economies of scale that bring in large profits and force out their competitors. In the United States, farmers make up only one percent of today's population. The top five U.S. grain companies now control 96 percent of all wheat exports and 95 percent of all corn exports. The U.S. bishops commented on the trend toward concentration of land and wealth by large companies in a 1989 statement, Food Policy in a Hungry World:

The accumulation of economic power that comes with the consolidation of land ownership and the concentration of management, marketing, and distribution through corporate integration of various stages of the food system can threaten the common good and erode accountability to the public. Since then, the bishops have encouraged widespread ownership and diversity in size and style of farming in order to preserve rural communities and ensure that more people have access to food.

In the United States, a movement called Community Supported Agriculture encourages communities to purchase their produce from local farmers. CSA programs, which the USCC supports, also educate people living in cities about where their food comes from, link farming to land use and urban sprawl, and discourage the transport of food long distances.

The global environmental impact of agriculture is increasingly recognized by all. We know that agriculture is a lead cause of soil erosion, chemical pollution, other damaging practices. Our farmers must be encouraged to utilize sustainable farming practices that allow the earth to regenerate itself and avoid harming the environment.


Employment is one of the foundations of a just economy, a basic right and an essential part of self-realization and the fulfillment of material needs. But people living in the United States feel more insecurity than ever about their jobs. Major corporations are downsizing at a phenomenal rate, and to remain competitive in the new global economy, corporations are looking for the cheapest way to produce their goods, often by cutting wages and benefits, relocating, and shifting their priorities.

Although U.S. workers feel less secure about their futures, statistics show rising employment and economic growth. Over the past two decades, there was a 36 percent increase in real per capita GDP, yet the wages of eighty percent of all workers decreased by fourteen percent per hour. Over the same time period, household incomes declined slightly. The entry of women into the workforce offset a large part of the drop in wages for men. It now takes two people to earn almost the same amount of money a U.S. male wage earner made by himself 25 years ago.

The USCC response to the issue of worker insecurity has included support for legislative remedies, public advocacy on certain issues, and providing funding for efforts to protect wages and worker rights. In recent periods, the USCC has been significantly involved in:    

  • Supporting an increase in the minimum wage.    

  • Establishing the earned income tax credit, a tax refund for families whose income falls below the poverty line. Each year, in partnership with Catholic Charities-USA and other church agencies, USCC distributes materials about the program to low-income people. 
  • Supporting the Family and Medical Leave Act, which permits employees to take 12 weeks of leave from work for family or personal medical emergencies without losing their job.  
  • Requiring manufacturing plants to give workers at least sixty days notice before a plant closes.    

  • Sponsoring an ongoing church-labor dialogue involving Catholic labor leaders and bishops on current labor issues. Meetings are held twice a year, chaired by the president of the major labor confederations, the AFL-CIO, and the chairmen of the bishops' committees on international and domestic policy.   

  • Opposing current labor laws that permit the permanent replacement of workers on strike.    

  • Supporting a campaign to promote "a living wage," one higher than the minimum wage required by federal law but more appropriate for the region. The USCC's Campaign for Human Development and other organizations help fund local living wage campaigns.  
  • Supporting a campaign to raise awareness of the growing gap between the rich and poor.

Currently in planning is a USCC effort to focus on labor conditions and working standards in sweatshops located in the U.S. and abroad with the intention of educating consumers about the products they buy. In recent years, government officials and Congressional members have sponsored both legislative and voluntary codes of conduct. The USCC supports corporate codes of conduct to ensure that workers are able to exercise their rights.


In the globalized economy, more people than ever are moving across national borders, most in search of better livelihoods. But the experience of migrant workers in the U.S. shows that jobs are scarce and economic success relatively uncommon. Discrimination and hostility are on the rise. Fears among U.S. citizens about their economic future is one of the factors contributing to the most restrictive U.S. immigration policy seen in seventy years.

When the state of California passed Proposition 187, many were outraged that the bill eliminated medical care, schooling, and other benefits for undocumented immigrants. But compared to legislation introduced last year in Congress, Proposition 187 seems mild. The welfare bill, signed into law by President Clinton in August 1996, denies benefits to legal immigrants, and the immigration bill, not yet signed into law, makes it difficult for legal immigrants to use the remaining benefits to which they are entitled. A so-called "English-only bill," would even eliminate bilingual education. These bills clearly discriminate against low-income immigrants. When they are implemented, their effect is to separate families, husbands and wives, mothers and children.


The challenge that globalization presents to the US church is that of finding the way that the church can stand with and advocate for the poor, for the marginalized, and for others who are unlikely to share in the benefits of globalization. As economic policies and relationships change, the bishops will continue to press for greater economic justice, a responsible foreign aid program, better stewardship of the environment, and fair treatment of immigrants and workers.