NOTE: The Quad City Federation of Labor has not endorsed anyone for the US Senate seat being contested in 2010 in Iowa. However, until we do, we welcome any candidates to post their statements concerning labor and job creation. Send your posts to quadcityfed@netexpress.net
Statement Concerning Comprehensive Jobs Preservation and Recovery Policy
I applaud the efforts of President Barack Obama and our Democratic Congress to move forward on generating new jobs for Iowans and every other American. However, many that are unemployed today simply cannot wait for the current measures to succeed. In addition, the chance for a stalled economy and increased unemployment looms. U.S. economist Nouriel Roubini, the first economist to forecast the global crash, predicts that 25% of the remaining U.S. jobs will to be outsourced in times to come, given current U.S. trade policies. This is of huge concern. There are approximately 135 million jobs remaining in the United States today. A 25-percent reduction in jobs at today’s level amounts to future job losses of 34 million.
The mathematics of job losses and requirements from different sources raises the barrier to recovery. Since the beginning of the recession in 2007, 7.5 million jobs have disappeared, on top of the 8 million people that were unemployed at the beginning of the recession. At the same time, the pool of potential workers in the U.S. continues to grow at about 1.25 million per year.
So, just to keep even over a ten-year horizon—given outsourcing (3.4 million per year) plus labor force growth (1.25 million per year)—the U.S. economy needs to generate about 4.65 million new fulltime jobs per year just to stay even. If we want to minimize personal disruption by getting back to pre-recession unemployment levels in two years, we have to generate an additional 3.65 million jobs per year. All told, that is a requirement of 8.3 million new jobs in each of the next two years, and currently we are producing NO new jobs. This is a Herculean task, and one that is being left unacknowledged and undone in Washington DC with our current Senator.
As painful as these aggregate numbers are, we must also look at long-term joblessness. Of the current 16 million jobless workers, 1 in 3 have been unemployed for at least 6 months—and at least 2 million have been unemployed for 12 months or more. Today, there is 1 vacancy for every 6 unemployed—the highest rate in 60 years. Four specific groups have it harder than most—African Americans, overall, are at a 15.7% rate. Young (under 35) African-American men are at a staggering 36.4% rate. Latinos, overall, are at a 13.1 % rate and persons with disabilities are at 14.1%. Men, overall, are at an 11.4% unemployment rate and blue -collar workers are at 50% higher rates than that of white-collar workers.
This is a national crisis of the magnitude of the Great Depression. It requires emergency action. To address this, I call for a national program to preserve existing jobs and to create new ones. First, we must change policy dramatically to keep the jobs that we have. The Bush Administration algorithm of free trade has failed—simply because free trade is not fair trade, nor is it without cost to America. The North American Free Trade Agreement (NAFTA) and the World Trade Organization (WTO) agreements were not developed with labor advocates, worker-safety advocates, environmentalists or human-rights advocates at the table. They were developed by individuals who believed that American workers were paid too much and that they could get services cheaper overseas. We need to address those deficiencies and begin focusing our efforts on FAIR TRADE internationally instead of on the last 3 decade’s failed concept of Free Trade. Because of this supposedly free trade approach, in Iowa and across America, we have seen many good-paying manufacturing jobs—such as 850 Electrolux jobs in Webster City—go overseas.
Not only are the jobs exported, but environmental, worker safety, and social justice problems are exported to other countries. And, thanks to Senator Charles Grassley’s opposition to Sen. Hollings’ amendment to end job-export subsidies—which failed to pass several years ago—American taxpayers actually subsidize the process by which jobs are exported. As your United States Senator, I will press for a number of solutions:
1. While this national emergency lasts, I will work for emergency legislation to prevent most of the exportation of jobs overseas. This emergency legislation will be in effect pending re-negotiation of international trade and tariff agreements, and will look at international trade through a “fair trade” matrix. It will look, particularly, at industries that affect national defense, but will also look at any job where the social impacts of the transfer are, on the balance, detrimental to American society, or which export societal problems from America to other nations. This includes U.S. trade-based job creation overseas that worsens global climate change through use of dirty fuels; that significantly impacts the environment negatively through the destruction of sensitive habitat or through destruction of land, water or air resources; that violates internationally-recognized human rights standards concerning slave, child or indentured labor; that prevents the right of workers to organize; or that creates worker-safety issues at a rate higher than U.S. worker-safety rates for similar employees. Where a detrimental situation exists, tariffs will be adjusted to keep predatory corporate executives from profiting by harming the interests of US workers. In doing so, my goal will be to reduce the overseas transfer of existing jobs by at least 75% within the next two years.
2. I will shift the overseas profits paradigm that is driving more and more jobs overseas. Today, profits from American firms made overseas remain tax-free as long as they remain overseas. Over the years, this profit pool has turned into an enemy of U.S. economic growth because it funds the development of new overseas plants that are used to further outsource American jobs. I will propose that the tax be reversed. If the profits are repatriated to the U.S. for the purpose of building American plants, American research and American development, then these profits will be tax free. If these profits are not used in this fashion, they will be taxed—either while remaining overseas or as repatriated to America.
3. I will promote policies to immediately boost the economic standing of those Americans suffering the economic toll of these predatory policies. They are the consumers that must drive the economy to resurgence. I will seek an immediate significant increase in the national minimum wage. As a policy, the minimum wage is precisely the opposite of the trickle-down economic policies that we have become addicted to. Money injected into the BASE of the economic pyramid strengthens our foundations. Because of the condition of those receiving a minimum wage, it is income that will likely be spent and will thus quickly create more circulation of money within the U.S. economy than nearly any other policy. Buffering the minimum wage increase with emergency trade protections will help focus benefit on the huge number of blue-collar workers that need employment immediately.
4. I will seek a revised formula for unemployment compensation that more fully reflects the social-safety-net nature of the program. Because of this, a broader definition of the payroll tax that supports the program is needed. Specifically, state standards for unemployment compensation payouts need to be reviewed and readjusted to better reflect the long-term “personal sustainment” purpose of unemployment compensation during this huge economic crisis. In these unusual times, unemployment compensation needs to be made available to part-time, temporary, and self-employed workers.
5. I will advocate a second stimulus package oriented toward infrastructure and the support of renewable energy, energy conservation and twenty-first century competitive technologies. Because of the emergency trade legislation enacted—which will act as a lever for jobs preservation and growth—the stimulus package will be smaller than it would otherwise need to be in order to get the economy rolling. However, there may be very short window before the economy is in danger of a second dip. As the first stimulus package dwindles, a second wave of impacts is possible. This includes accelerating job loss as manufacturers driven by competitive pressure increase outsourcing, and expiring loan covenants creates the long-forecasted commercial property melt-down. Promoting infrastructure projects is a traditional way to increase blue-collar unemployment where the economic pain is the worst today. A strong “buy American” provision will be included in any stimulus package.
6. I will focus stimulus funds into small business entrepreneurship in a very significant way in order to rebuild our economic jobs foundation from the bottom. Small businesses have historically been the bastion of innovation and job growth in our society. This balance between large and small companies needs to be realigned if America is to thrive. Individuals from segments of the population with unemployment above national norms in this economic crisis will be given special incentives to break the unemployment cycle.
7. I will advocate an emergency expansion of student aid for higher education and trade schools in order to soak up some of the unemployed until the job market improves. This is very much akin to an intellectual infrastructure project, where we invest in minds that can make America stronger. The money would be targeted directly at tuition grants for students and will serve to augment the Pell Grant dollars that have been massively underfunded for the last 3 decades. This “direct grant” approach is necessary to insure that the funds do not go to extraneous overhead at the schools—but will instead DIRECTLY benefit workers/students.
8. I will include special provisions to accelerate hiring for disadvantaged classes of workers that are significantly above national unemployment averages.
FOR IMMEDIATE RELEASE: Monday, December 20, 2009 Contact: Keith Dinsmore 573-230-5360 keith@krauseforiowa.com
