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Posts Tagged ‘American Jobs’

White House: Insource Jobs, Decrease Inequality

Friday, January 13th, 2012
Credit: Joe Kekeris

Credit: Joe Kekeris

Is it patriotic to ship American jobs overseas? President Obama doesn’t think so. He’s right, of course. We live in a globally-connected world, but let’s face it: Home-grown corporations must first focus on their own backyards–a novel concept all to many, it seems.

Obama implicitly raised the question yesterday during his Insourcing American Jobs Forum which featured representatives from more than a dozen large and small businesses that have made decisions to bring jobs to the United States and to increase their investments here.

Pointing to the CEOs in the room, Obama said they ”take pride in hiring people here in America, not just because it’s increasingly the right thing to do for their bottom line, but also because it’s the right thing to do for their workers and for our communities and for our country.

I don’t want America to be a nation that’s primarily known for financial speculation and racking up debt buying stuff from other nations. I want us to be known for making and selling products all over the world stamped with three proud words: “Made in America.” And we can make that happen.

I don’t want the next generation of manufacturing jobs taking root in countries like China or Germany. I want them taking root in places like Michigan and Ohio and Virginia and North Carolina. And that’s a race that America can win. That’s the race businesses like these will help us win.

Lack of job creation in industries that pay solid middle-class wages is in part behind our nation’s rising inquality, and today White House Council of Economic Advisers Chairman Alan Krueger addressed the issue in detail.

TPM’s Sahil Kapur says Krueger blamed inequality on economic policies “tilted to favor top earners — including income tax reforms (presumably during the Bush era) and the ‘drastic cut in the estate tax.’ Central to the message is that inequalities in the system are “jeopardizing our tradition of equality of opportunity,” as Krueger put it.

“If we had a high degree of income mobility we would be less concerned about the degree of inequality in any given year. But we do not,” he argued. “Moreover, as inequality has increased, evidence suggests that year-to-year or generation-to-generation economic mobility has decreased.”

Applauding the White House Insourcing Forum, AFL-CIO President Richard Trumka makes clear the connection between job outsourcing and the nation’s escalating inequality–according to the Congressional Budget Office, the top 1 percent saw their incomes skyrocket by 275 percent between 1979 and 2007, compared with 18 percent for the bottom 20 percent. Says Trumka:

For too long, the 1 percent have sought and received tax breaks that actually created subsidies for corporations exporting good American jobs overseas.

America’s workers are not looking for handouts, they are looking for a chance to work hard and apply their best in the world skills in order to provide their families a middle class life.

This blog originally appeared in AFL-CIO Now on January 12, 2012. Reprinted with permission.

About the Author: Tula Connell- “I got my first union card while I worked my way through college as a banquet bartender for the Pfister Hotel in Milwaukee (we were represented by a hotel and restaurant local union—the names of the national unions were different then than they are now). With a background in journalism—covering bull roping in Texas and school boards in Virginia—I started working in the labor movement in 1991. Beginning as a writer for SEIU (and OPEIU member), I now blog under the title of AFL-CIO managing editor.”

The Antidote for Stupidity of Shipping Tax-Dollar-Financed Jobs Overseas

Wednesday, December 21st, 2011

Leo GerardAmid prolonged, painfully high unemployment, ABC News Anchor Diane Sawyer for the past year tirelessly advocated a simple solution—buy American-made products. She clearly explained the reasoning: every American dollar spent on an American-made product helps create an American job.

Defying Sawyer’s admonition to search for “Made in America” tags, California set a record for using government money to create jobs in China. The Golden State awarded a contract for the new Bay Bridge that created 3,000 jobs in China for five years—a period during which the state’s unemployment rate persisted at two percentage points above the nation’s already high average.

Now there’s an antidote for California’s stupidity. It is legislation called the Invest in American Jobs Act. Championed by U.S. Rep. Nick J. Rahall, (D-W.Va.) and Senators Sherrod Brown, (D-Ohio), Bob Casey, (D-Pa.), and Debbie Stabenow (D-Mich.), it would strengthen existing requirements for buying American products when federal tax dollars pay for construction of highway, bridge, public transit, rail, water systems and aviation infrastructure equipment.

To create 200,000 American jobs, Sawyer has challenged Americans to spend just $64 of their $700 in holiday purchases on American-made gifts. Imagine the American jobs that would be created if “Made in America” were stamped on every single part of all $59 billion in infrastructure projects the federal government funds in a typical year.

That’s what Rahall, Brown, Casey and Stabenow want. Unless American-manufactured components aren’t available or would be outrageously more expensive, these lawmakers believe American tax dollars should buy American jobs while financing American infrastructure. So they propose to expand the existing “Buy American” requirements and close loopholes that allow governors like California’s Arnold Schwarzenegger to circumvent the rules.

Schwarzenegger contended that California would save $400 million on the $5.1 billion Bay Bridge if it hired a Chinese firm to build steel decking and a 52-story tall support tower and ship them 6,500 miles to San Francisco.

This turned out to be a “you get what you pay for” lesson for California. The state should have been forewarned by years of publicity about problems with Chinese-manufactured products. For example, toxic drywall imported from China sickened American homeowners, corroded pipes and resulted in hundreds of millions in successful damage claims against the Chinese firms that fabricated it. Or there was the tainted blood thinner Heparin from China that killed at least 81 Americans.

In the case of the Bay Bridge, inspectors failed up to 65 percent of welds on the bridge parts manufactured at the Shanghai plant – welds done workers paid $12 a day for laboring from 7 a.m. to 11 p.m. As a result, the state of California and the two American companies it hired to arrange the work, including one ironically named American Bridge, had to send 250 engineers, inspectors and other experts to Chinato monitor the construction. That created American jobs, but imagine the extra cost.

In addition, the faulty construction delayed delivery by 15 months. Delays are costly. For example, when the California Department of Transportation (Caltrans) received only one bid to perform the work, the agency said advertising the job again could delay the project by 18 months and add $200 million to the cost. Using Caltrans’ calculation, the 15-month delay added $167 million in extra costs.

The price tag on the bridge has risen now to $7.2 billion. The problems in China don’t explain all of that. But there’s no doubt that the $400 million that Schwarzenegger claimed would be saved by shipping the work and the jobs to China has long been overrun by hundreds of millions in extra costs. Organizations like the Alliance for American Manufacturing and the National Steel Bridge Alliance warned of potential problems from circumventing “Buy American” regulations. California ignored them.

Also, Schwarzenegger’s estimate that $400 million would be saved failed to account for the wages American workers lost, the taxes they would have paid, or the multiplier effect on the economy when workers spend their wages in their hometowns. In addition, Schwarzenegger’s estimate failed to account for the downside of hiring Chinese workers with American tax dollars, or in this case, bridge toll receipts. That includes unemployment compensation, Medicare fees and other costs borne by governments for joblessness.

The Investigative Reporting Workshop at the American University School of Communication included a story about the Bay Bridge project by two-time Pulitzer Prize winning investigative reporters Donald L. Bartlett and James B. Steele in a series called What Went Wrong: the Betrayal of the American Dream.

In their report about California sending the bridge work to China, Bartlett and Steel quote Tom Hickman, vice president of Oregon Iron Works in Clackamas, Ore., one of the American companies that tried to form a consortium to perform the Bay Bridge work. Here’s what Hickman said about the jobs California denied American workers and the work California denied his America company:

“These jobs are living-wage jobs and family-wage jobs. They provide health and welfare benefits, 401(k)s and pensions. Our facilities meet all of the environmental requirements, and it just is a very, very difficult thing to compete with the Chinese when you are really competing with the Chinese government (which subsidizes Chinese industry).”

Caltrans argued that no American company had the facilities to perform the work. Hickman said the consortium could have done it. But if government agencies like Caltrans continue to ignore the real costs of shipping work to China, American factories will continue to close. America lost 55,000 manufacturers over the past decade. If that doesn’t stop, at some point, America will forfeit the capacity to perform this kind of work.

That would be tragic. It would undermine American strength. Rahall, Brown, Casey and Stabenow are right. American tax dollars should buy American-made products and jobs.

And Diane Sawyer is right. Americans should buy American. Here’s a link to her list of American-made gifts and a link to a list by American Rights at Work.

This is the antidote for lost factories and jobs.

This blog originally appeared in Working in These Times on December 20, 2011. Reprinted with permission.

About the Author: Leo Gerard is a steelworker and a Canadian and American labor leader. He was elected president of the United Steelworkers in 2001, and is the second head of union. He is also vice president of AFL-CIO.

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