Demand grows for federal jobs program

A few days ago, retired auto worker, Frank Hammer, read a union-baiting article in the Dayton Daily News headlined “GM Now A Federal Jobs Program.”

He was angry enough to write a letter to the editor of the Ohio newspaper: “With the 21,000 auto workers losing their jobs at GM as a result of bankruptcy restructuring, union workers and non-union workers alike will need a Federal jobs program if only to sustain a tax-base for the communities in which they reside.”

In a phone interview from his home in Detroit, Hammer told the World, “I wrote the letter to the Dayton paper right after I read their article. I said to myself, ‘I’ve got to respond to this.’”

Hammer, a former president of the United Autoworkers Local 909 in Warren, Michigan. He is the former president of United Autoworkers Local 909 in Warren Michigan representing workers at GM's Powertrain plant. He is also a former member of the UAW International Executive Board. He organized a caravan of active and retired UAW members to Washington D.C. last December to appeal to Congress to help the auto companies stave off bankruptcy. In an appeal to join that caravan, he warned UAW workers that the auto companies would use bankruptcy to destroy 70 years of UAW union representation.

Hammer also said it is clear that the federal government must intervene directly to create jobs. “On the day that President Obama announced the plan for the auto industry, he likened the situation for all the auto towns to a hurricane.”

When a natural hurricane hits a community, he said, “the entire nation responds. We need the do the same here in my view. The collapse of the auto-industry is a drier version of New Orleans after Hurricane Katrina.” Dozens of cities and towns dependent on the auto industry, starting with Detroit, “have been hit by a hurricane that came from Wall Street and caused this collapse.”

The challenge for Obama, he added, is to demonstrate that his administration will act decisively and with sufficient stimulus funds to help reverse the collapse unlike his predecessor, George W. Bush, who left Katrina victims trapped on the roofs of their flooded houses in New Orleans.

“In the short-term, a federal jobs program is absolutely necessary,” Hammer said. “It is necessary to take charge of this issue of global warming to refashion what used to be the auto industry into a transportation industry.”

He added, “Look at the debacle in Washington D.C. with the collision of the two Metro trains. There were calls two years ago to replace those rail passenger cars. And here we are in Detroit with empty factories sitting idle.”

He added, “We should not only be replacing worn out equipment on existing subway systems, we should be building new ones in cities, like Detroit, that have no metro rail systems.”

Hammer spoke as reports showed a continued rise in unemployment despite the infusion of funds from Obama’s $787 billion economic stimulus package. White House economic advisers had hoped that stimulus would help hold the nation’s jobless rate below eight percent. But the official jobless rate is now 9.4 percent and expected to climb above 10 percent. In several states it is above 12 percent. For African Americans, Latinos and other nationally and racially oppressed, the rate is closer to 20 percent. The official jobless rate does not count workers who are so discouraged they have given up the search for a job.

There were worrisome signs of a “jobless recovery” in which bank and corporate profits surge but millions of workers continue to lose their jobs, homes, health care and education for their children. The U.S. Treasury Department’s Comptroller of the Currency released a report June 26 that banks raked in $9.8 billion in profits during the first quarter of 2009 fueled by trading in “derivatives” the opaque investment product blamed by many economists for pushing the nation into the current crisis. Obama is pushing his financial regulatory reform package that includes measures to impose regulations on derivatives to make them far more transparent.

Financial analysts at Bloomberg.com commented that “Bets on mortgage-linked securities using credit derivatives brought insurer American International Group, Inc (AIG) to the brink of bankruptcy when the value of the contracts plunged and it couldn’t meet collateral calls.” AIG, deemed “too big to fail” received more than $175 billion in taxpayer bailouts.

But so far, the bailouts seem to be helping the banks but have not translated into more jobs. There are calls for another stimulus package this time with funds earmarked to bail out “Main Street” not “Wall Street.”

Oregon Gov. Ted Kulongoski warning of a “jobs emergency” with unemployment well over 12 percent in the Beaver State, called in May for a direct government jobs program. “President Roosevelt gave hope to millions of unemployed Americans when he created the Civilian Conservation Corps (CCC) and other jobs programs,” Kulongoski said. “We need to take that same kind of immediate action in Oregon.”

He proposed borrowing $90 million from the state’s Unemployment Insurance Trust Fund to create 12,000 temporary jobs paying $8.40 to $10.00 an hour. It would have employed some of the 90,000 jobless workers in Oregon working at the Oregon Food Bank, building park trails, clearing brush from fire-prone forests and restoring wetlands.

Unfortunately, the Oregon legislature bowed to strong corporate opposition to the jobs plan and failed to approve the bill before adjourning this week. That puts all the more pressure on the federal government to shift toward direct jobs programs like the CCC. “The Governor had hoped that Oregon would take the lead creating direct jobs on the ground,” said his media spokesperson. “Unfortunately time ran out without the legislature passing it.”