A Call to Action on Jobs
March 02, 2010
AFL-CIO Executive Council statement
Today America is missing 11 million jobs—and millions more workers have either given up looking for jobs or are stuck in part-time work. At the same time, the party on Wall Street continues—producing speculation instead of investment, executive bonuses instead of jobs and sowing the seeds of another financial crisis even as we continue to suffer the consequences of the current one. This is the legacy of the failed deregulatory economic model of the past 30 years and the failed presidency of George W. Bush.
Mass unemployment is intolerable. Action is required. The AFL-CIO calls upon the entire labor movement—our affiliated unions, our state and local labor councils, the millions of members of Working America and our allies in communities and progressive movements across this country—to come together in a great effort to create and protect good jobs. The first step is to hold Wall Street accountable and ensure the big banks pay to replace the jobs they destroyed. This campaign for jobs must be carried out at every level—in Washington, D.C., in state capitols and city halls, in boardrooms and workplaces and in living rooms across this country.
Who is the target of our campaign? Politicians who vote to deny aid for the unemployed and against action to create jobs, politicians who offer half measures and caution while working people suffer, Wall Street firms that pay bonuses but won’t pay taxes, corporations that take the public’s money and use it to downsize and outsource jobs—and all those who stand in the way of an economy that works for all in the name of speculation that benefits the few.
What is the goal? Putting America back to work. Eleven million jobs. President Obama’s recovery package has created or saved more than 2 million jobs, but thanks to Republican opposition and Democratic caution, it simply did not do enough. There are now six job seekers for every job vacancy—double the ratio in the last recession. More Americans are suffering the pain of long-term unemployment than at any time since the Great Depression. And the Congressional Budget Office projects that if we do not act, unemployment will remain close to 10 percent for the remainder of this year and at historically high levels for years to come.
The economic consequences of the current jobs crisis—weak consumer spending, unemployment-driven foreclosures, deep cutbacks in essential state and local government services and the damage to communities—jeopardize a sustainable economic recovery and will leave long-lasting scars on both the labor force and our economic base.
The consequences for working people and their families—the lives put on hold, the homes lost, the communities threatened—are grim. Children in families touched by long-term unemployment are more likely to drop out of high school and less likely to go to college. Young workers entering the job market now are likely to have diminished earnings throughout their careers. Older workers who are dislocated risk never being able to regain the economic standing and dignity that come from having good jobs. The harm from this crisis to our society will be measured in more than dollars and cents.
The nation’s fiscal health is also jeopardized by this crisis. The weak economy and high unemployment are the second largest contributors to long-term federal deficit projections after the Bush tax cuts. So those who say we cannot create jobs out of concern about the deficit are simply offering excuses to do nothing.
To date, neither Congress nor the administration has proposed a jobs bill on the scale that is needed to close our jobs gap. This is a reality that must change and change fast. Our jobs campaign is about ending the complacency and obstruction that are preventing action, and challenging the speculation and greed that stand in the way of the investments that could create the jobs that we need today and an economy that will work tomorrow. We are going to press for the enactment of our five-point plan, for accountability for Wall Street and for a strategic approach to laying the foundations of a sustainable economy that works for all—that creates the good jobs we must have if the American Dream is to be a reality for our children and grandchildren.
Our Five-Point Plan
Take care of families hard hit by the downturn.
Extending current federal supplemental unemployment benefits programs is the first and highest priority. Instead of limping along with short-term measures, Congress should extend these programs through the end of 2010, along with additional food assistance and expansion of COBRA health care benefits. Without these benefits, the economy risks a downward spiral as families fall into bankruptcy and lose their health care and their homes to foreclosure.
America has at least $2.2 trillion in unmet infrastructure needs, even after the $130 billion in infrastructure spending included in last year’s American Recovery and Reinvestment Act. Prevailing wage protections must be maintained on this continuing and essential work to ensure the jobs that are created are good jobs and the projects are well built.
Infrastructure projects can also create substantial long-term employment in manufacturing, design and engineering if we act to see that the domestic U.S. supply chain produces the materials that will be needed—from wire, steel and pipes to high-speed trains and nuclear vessels. Preference for American-made products should continue to be the policy of the United States as it has been in the Recovery Act. Strong and properly enforced Buy America provisions are necessary to ensure that these federal, state and local dollars are spent in ways that create U.S. jobs and contribute to the development of U.S. industrial capacity throughout the infrastructure supply chain.
Help state and local governments meet pressing needs.
State and local governments and school districts are experiencing the worst fiscal crisis in decades, with state shortfalls in FY 2011 alone estimated to exceed $180 billion, and $588 billion over the next four years. At a time when states need to do more to help families that have been hit hard by recession, there are fewer resources to do so. State and local government layoffs threaten our national economic recovery—and decisions on 2011 state budgets are being made now. If action is not taken, the Center on Budget and Policy Priorities estimates state and local government cuts in 2011 will lead to the loss of 900,000 public-sector jobs. The total consequences including the indirect effects of these cuts in the private sector are likely to be well over 1 million lost jobs.
The next fiscal year promises to be the most difficult yet for state governments, but most of the state and local government aid in the recovery act has already been obligated. The jobs that have been saved and the services those workers provide are at risk. The federal government should temporarily extend the programs—Federal Medical Assistance Percentages (FMAP) and the Education Jobs Fund—that have been so effective in saving jobs and allowing vital services such as education, police, fire and highway maintenance to continue. Doing so will directly help with the creation and preservation of jobs. In addition, maintaining public services, including education and training, is critical to an economic environment in which private-sector job creation is possible.
Some of the relief needs to be long term. The federal government should also provide additional, flexible counter-cyclical relief to state and local governments and put automatic stabilizers into programs like Medicaid to avoid future deep cuts in services just as the economy is weakening. Finally, it makes no sense for states to bear the burden of Medicaid expenditures for those eligible for Medicare. All medical care for the Medicare eligible should be consolidated under the Medicare system.
We know job losses are contributing to rising child poverty, hunger and homelessness. Children brought up in these circumstances will have a diminished chance to realize the American Dream. Putting Americans to work and protecting services like Medicaid and public education is a step towards protecting our children’s and our nation’s future.
Put people back to work doing work that needs to be done.
National economic policy must prioritize the preservation of good public jobs that provide vital services and capacity for building strong communities. In addition, expansion of vital services in targeted areas can reduce unemployment and provide infrastructure for economic growth.
While tens of millions look for work, there is plenty of work to be done. The federal government should explore new avenues for putting the unemployed back to work quickly in good jobs, including in distressed communities facing severe unemployment. Of course, these initiatives must be designed so they maintain existing wage and benefit standards and do not displace existing jobs or simply exchange one group of unemployed workers for another.
In addition, we should provide more funding to maintain current jobs and prepare workers who need assistance in retooling their skills. The federal government should expand existing programs to provide additional incentives for job creation and training in needed areas such as nursing, engineering and math and science instruction. In addition, we should expand access to college and provide income support for workers who are committed to improving their own skills and acquiring education, including through joint labor-management apprenticeship programs. Education and skill development are absolutely essential to America’s ability to compete and thrive in a dynamic global economy. At every life stage, workers should have the opportunity to fulfill their potential.
Ease the credit crunch for small- and medium-sized businesses.
Banks are not lending to small business. The bank bailout helped Wall Street restore profits when it should have been helping Main Street create jobs. We should establish a fund to lend TARP money to small- and medium-sized businesses at commercial rates, managed by the community banks left out of the Wall Street bailout, with the banks taking first-dollar risk. If small business can get credit, small business will create jobs. We applaud President Obama’s support for providing credit to small business, but urge that the mechanism dedicate funds solely to small business lending and not be given to banks for their general use.
Banks that receive TARP money should have to account for their use of those funds as recommended by the Congressional Oversight Panel and the special inspector general. They should be putting those funds to work to ease credit and help stimulate growth, and there should be appropriate consequences if they use the funds for purposes other than supporting lending by healthy institutions to the real economy.
Making Wall Street Pay
In the short term, economic recovery requires jobs be funded at least in part by borrowing in order for the spending to really stimulate the economy. But in the medium to long term, we need to pay back the money we spend today and have the tax base to address our long-term infrastructure deficit.
It is only fair to ask Wall Street to pay for repairing the economy. That’s why we support a four-part package of measures to ensure that the government has the funds to pay back what we have to spend to create jobs. These measures have the additional benefits of moving the financial sector back to its proper role as the servant, not the master, of the real economy—a creator of jobs rather than a destroyer of jobs.
First, we strongly support President Obama’s proposal to impose fees on Wall Street banks to pay back the cost of the bank bailout.
Second, we support the imposition of a special levy on Wall Street bonuses, as proposed in the United Kingdom.
Third, we support taxing the income of hedge fund and private equity managers, the wealthiest people in the country, at ordinary income rates, by closing the carried interest loophole.
Fourth and most important, the AFL-CIO joins the International Trade Union Confederation in supporting a financial speculation tax, and we call upon the Obama administration to support the proposals for an internationally coordinated adoption of such a tax by the world’s major financial market countries. Such a tax would levy a small fee on all financial market transactions, including derivatives, futures and options. This tax would have no impact on real investors, would discourage financial speculation and would produce significant amounts of ongoing revenue—on the order of $100 billion to $300 billion annually.
The Long-Term Vision—Good, Sustainable Jobs
The steps we take to create jobs now must be part of our fight for the long-term strength of the U.S. economy. In addition, any jobs we create must be good jobs. Taxes that incentivize long-term investment are part of that fight. So is the focus on infrastructure of all kinds—such as transportation, energy, education and universal broadband Internet access. We must also recognize that at the core of our nation’s economic crisis is the long-term decline of our manufacturing sector, so any effective strategy for long-term economic revival must include a strategy for rebuilding a 21st century manufacturing sector. Such a strategy necessarily will involve addressing structural barriers such as Chinese currency manipulation and U.S. tax practices that subsidize the export of jobs. We must also leverage stimulus spending to ensure that the end result is enhanced U.S. supply chains in key areas such as energy technology. Tax policy and sourcing policy must work to ensure that we move forward on the vital infrastructure we need while building the long-term competitiveness of our manufacturing sector. Finally, our fight is for good jobs that sustain families and provide workers the freedom to form unions and bargain collectively. Enacting the Employee Free Choice Act is key to realizing that goal.
The Plan for Action
In addition to our five-point plan for job creation, we have a five-point plan for mobilizing union members, communities and allies.
- We will act as one as a labor movement—the AFL-CIO, our member unions, our state and local bodies, our retirees and the members of our community affiliate Working America.
- Our goal will be to restore good jobs for all Americans—and we seek to join with all those inside and outside the union movement who share that goal.
- We seek bold action from Washngton, from state capitols and from local government, and we will hold our elected officials accountable for what they do or don’t do.
- We will hold the private sector accountable—the Wall Street banks that caused the crisis and companies that destroy jobs—and we will stand with anyone in the business community that is working to create good jobs.
- We will be in the street wherever the fight for jobs is being fought.