Obama: Collective bargaining can close the income gap

WASHINGTON (PAI)-In a wide-ranging speech on the state of the economy, President Obama took sharp aim at income inequality, citing the growing gulf between the rich and the rest of us. And he declared that strengthening collective bargaining is one way to close that gap. But the president didn’t stop there. Since Republicans hate his solutions, he challenged them to come up with their own ideas to help the middle class.

 Obama’s speech yesterday was his most detailed ever on the ways income inequality harms individuals, hurts the economy and destroys trust in both institutions and the nation as a whole. It also ends upward mobility, he declared.

To solve the problem, President Obama laid out a “roadmap” of principles to close the income and wealth gap and pledged to keep fighting for them for the rest of his term.

And he said, to applause, that one part of that roadmap is “to ensure our collective bargaining laws function as they’re supposed to so unions have a level playing field to organize for a better deal for workers and better wages for the middle class.

“It’s time to pass the Paycheck Fairness Act so that women will have more tools to fight pay discrimination,” he added. “It’s time to pass the Employment Non-Discrimination Act so workers can’t be fired for who they are or who they love,” Obama added, also to applause for both. 

The Republican-run House has, since the president took office, reflexively opposed anything and everything he has proposed. That includes extending federal unemployment benefits, which are scheduled to end at the end of December. With joblessness still above 7 percent, Obama’s speech included demanding their extension.

“Christmastime is no time for Congress to tell more than 1 million Americans that they have lost their unemployment insurance, which is what will happen if Congress does not act before they leave on their holiday vacation,” he declared.

Overall, Obama said, “what drives me as a grandson, a son, a father-as an American-is to make sure that every striving, hardworking, optimistic kid in America has the same incredible chance that this country gave me,” he declared, to applause. “It has been the driving force behind everything we’ve done these past five years. And over the course of the next year, and for the rest of my presidency, that’s where you should expect my administration to focus all our efforts.

“Many of the ideas that can make the biggest difference in expanding opportunity I’ve presented before. But let me offer a few key principles, just a roadmap I believe should guide us in both our legislative agenda and our administrative efforts,” he said.

The principles include a relentless “growth agenda,” though Obama warned growth alone would not guarantee higher wages and incomes. In another part of the speech, he pointed out that when he graduated high school, the average CEO earned 20 times to 30 times the income that a median worker.

Now the CEO earns 270 times the median, and the wealthiest one percent of the U.S. controls half of all U.S. wealth, the president pointed out.

“But what’s also true is we can’t tackle inequality if the economic pie is shrinking or stagnant. The fact is if you’re a progressive and you want to help the middle class and the working poor, you’ve still got to be concerned about competitiveness and productivity and business confidence that spurs private sector investment. That’s why from day 1 we’ve worked to get the economy growing and help our businesses hire.” The result is eight million new jobs since the recession bottomed out, Obama stated.

“And now we’ve got to grow the economy even faster. We’ve got to keep working to make America a magnet for good, middle-class jobs” in factories, energy, infrastructure and technology “to replace the ones that we’ve lost in recent decades.”

Growing the economy will also require simplifying the corporate tax code and eliminating loopholes and dumping the across-the-board budget cuts, called sequestration, the GOP-run House imposed two years ago, he said. And it means concentrating on the “opportunity deficit,” not the budget deficit. The latter deficit is shrinking as the economy recovers, Obama noted.

Other steps in Obama’s roadmap include widening educational opportunity – from curbing rising college costs to increasing community college education to more extensive preschool – and raising the minimum wage. Earlier this year, the GOP-run House rejected a Democratic proposal to raise the minimum to $10.50 hourly.

“There are airport workers, and fast-food workers, and nurse assistants, and retail salespeople who work their tails off and are still living at or barely above poverty. And that’s why it’s well past the time to raise a minimum wage that in real terms right now is below where it was when Harry Truman was in office,” Obama said.

“This shouldn’t be an ideological question. It was Adam Smith, the father of free-market economics, who once said, ‘They who feed, clothe, and lodge the whole body of the people should have such a share of the produce of their own labor as to be themselves tolerably well fed, clothed, and lodged.’ And for those of you who don’t speak old-English, let me translate. It means if you work hard, you should make a decent living. If you work hard, you should be able to support a family.”

And the president directly took on the GOP, whose answer for his policies has been tax cuts for the rich and budget and benefit cuts for everyone else.

“Let me end by addressing the elephant in the room here, which is the seeming inability to get anything done in Washington these days,” Obama said. “I realize we are not going to resolve all of our political debates over the best ways to reduce inequality and increase upward mobility this year, or next year, or in the next five years. But it is important that we have a serious debate about these issues.

“The longer that current trends are allowed to continue, the more it will feed the cynicism and fear that many Americans are feeling right now-that they’ll never be able to repay the debt they took on to go to college, they’ll never be able to save enough to retire, they’ll never see their own children land a good job that supports a family.

“And that’s why, even as I will keep on offering my own ideas for expanding opportunity, I’ll also keep challenging and welcoming those who oppose my ideas to offer their own. If Republicans have concrete plans that will actually reduce inequality, build the middle class, provide more ladders of opportunity to the poor, let’s hear them. I want to know what they are.

“If you don’t think we should raise the minimum wage, let’s hear your idea to increase people’s earnings,” he challenged. “If you don’t think every child should have access to preschool, tell us what you’d do differently to give them a better shot.

“If you still don’t like Obamacare-and I know you don’t-even though it’s built on market-based ideas of choice and competition in the private sector, then you should explain how, exactly, you’d cut costs, and cover more people, and make insurance more secure. You owe it to the American people to tell us what you are for, not just what you’re against,” the president said in his dare to his foes.

Pro-worker economist Larry Mishel, head of the Economic Policy Institute, mostly praised Obama’s speech. Mishel also noted Obama said the income divide, despite popular perceptions, is one of class, not race. After calling for empowering workers, Mishel said Obama “followed this with recommendations to strengthen collective bargaining, achieve pay equity for women, rebuild manufacturing and raise the minimum wage. He noted the need to continue to combat racial discrimination while also asserting the increased prominence of class as a determinant of well being.

Photo: AP