WASHINGTON – Americans must challenge and rethink three basic assumptions that have guided the country and the economy for the last 30 years and run both into the ditch, AFL-CIO President Richard Trumka says.
In a Sept. 30 speech at the Brookings Institution, a well-respected D.C. think tank, Trumka identified those assumptions as “the cult of the corporation, the faith in free trade, and the addiction to austerity.” Only the third is more recent, he noted.
Together the three produced a society where the rich have gotten richer, the middle class is endangered, the ranks of the poor are growing, income inequality is widening, and one in five children live in poverty, among other ills, Trumka said.
Trumka’s Brookings speech is one of a series he has given in recent months on the nation’s economic ills, ending each time by outlining the AFL-CIO’s 6-point program for creating jobs at a time of 9 percent official – and, he says, 15 percent real, unemployment.
The program includes investing in infrastructure and clean energy manufacturing, creating a national infrastructure development bank, aiding state and local governments so they don’t have to cut even more jobs – beyond the 500,000 already gone – and extending unemployment benefits.
President Obama has adopted some of labor’s ideas in his proposed American Jobs Act. But lawmakers of both parties have been distinctly cool to it, meaning workers and their allies have an uphill climb to help enact it. The three factors Trumka mentioned contribute to that coolness, he said.
“Right-wing populism is being fueled by the anger and frustration of working men who are watching their jobs disappear and their paychecks decline…Median real earnings of working men of all races aged 25 to 64 declined by 28 percent between 1969 and 2009. For men without college degrees, median earnings declined by 47 percent. Even college graduate men’s earnings declined by 12 percent. It’s only women’s entry into the workforce that has kept families from falling more desperately behind.
“In this era of remarkable technological innovations and productivity growth, Americans are working harder and smarter. But most families still are losing ground. The fault is not with working people-the problem is policies that just aren’t delivering.”
He laid much of the fault for that at the feet of corporations and their political allies, without naming names. But Trumka said U.S.-based multinational firms now use us as “a flag of convenience” while exporting jobs overseas and shuffling profits to foreign subsidiaries so they don’t have to pay U.S. taxes.
Then those same firms, he said, agitate for lower corporate taxes here, tax breaks, and other forms of government aid, including repression of workers’ rights.
They also campaign for “free trade” pacts, including those with South Korea, Colombia, and Panama lawmakers plan to consider this month, he said. Congress, by simple majorities, can pass laws to implement the pacts, which lack labor rights and which lawmakers can’t change. The pacts themselves do not come up for votes.
“U.S.-based global corporations simply no longer have the same interests as domestic businesses and as the American people. This is a fact about the new global economy, where capital is mobile but labor is not-and it should shape our government’s response when these same global firms demand lower taxes, less regulation and more free trade deals,” he said.
“America is our people first – from steelworkers to software writers. Our country’s resources are our infrastructure, our educational system, our natural resources – and the businesses whose operations are actually located here, whoever owns them, and whatever alphabet their corporate logos are written in. Public policy should be focused on improving our competitiveness as a nation, and not on improving the cash flows of global enterprises that are ultimately indifferent to our fate.
“So when we … reshape our economic policies, such as corporate tax rules, let’s remember to reward the companies that invest and produce in America,” he declared.
“It’s also time to have a 21st century, reality-based trade policy,” Trumka continued. “We can talk all we want about free trade, comparative advantage, and free markets. But our competitors, to their credit, are consciously pursuing national economic strategies, while we are borrowing almost half a trillion dollars every year from the rest of the world, just to buy the goods we used to make here.”
The corporations and their political allies are also pushing the “addiction to austerity,” arguing that because President Obama’s stimulus law did not cure the Great Recession, it failed and indiscriminate cuts of pro-worker programs, combined with tax cuts for the “job creators” are instead the answer.
That was the policy tried for the last decade before Obama, and it failed, Trumka noted. The proof was in the numbers. “The big brand name companies that employ a fifth of America’s workers cut their U.S. workforces by 2.9 million during the 2000s – while increasing employment overseas by 2.4 million. That’s a big switch from the 1990s, when they added jobs everywhere: 4.4 million in the U.S. and 2.7 million abroad.
“We have a massive jobs crisis caused by collapsing demand. Austerity will make it worse,” Trumka stated.