Outten & Golden: Empowering Employees in the Workplace

Posts Tagged ‘investment’

Three Winning Ways to Create Jobs

Tuesday, October 21st, 2014

safe_image[1]With the election nearing, Americans still know what they want: job creation. Unemployment is still elevated near 6 percent, and underemployment – including people who have given up looking for work, or who are working part-time when they want to be full-time – was still above 13 percent at last count.

And America’s employment problems precede the recession. That’s important because it suggests that this problem isn’t going away on its own. Underemployment hasn’t dipped below 8 percent in the last 10 years. Consider the decades-long stagnation of middle-class wages and the fact that it often takes two incomes to make ends meet, the long-term decline of union membership, the decimation of manufacturing, and the fact that higher education is becoming more of an economic necessity while also being less affordable. The 21st century labor market leaves too many Americans out in the cold.

America needs jobs, and not just any jobs. We need living-wage jobs that provide stability and security through regular working hours, paid time off and career paths for those who want to climb higher. And the economy is not creating those jobs on its own.

The good news is that where there’s a will, there’s a way. Americans want jobs, and the federal government has the means to deliver. Over a trillion dollars in tax breaks each year and historically high Pentagon spending mean that America has the cash to pay for job creation – if we really want to.

Here are three winning ways we could invest our dollars in things that America actually needs, and create good jobs in the process:

? Get Real About Climate Change

Americans are warming up to the idea that climate change is real, and that it poses a threat. But that hasn’t translated to wanting to do something about it.

Of course, we must. From coastal damage from violent storms to disastrous effects on agriculture, climate change is already hurting us. Even the Pentagon is warning about potentially catastrophic consequences of climate change for national security.

Given our collective lack of economic security, perhaps it’s not a surprise that we only really pay attention to climate change when its devastating impacts are looping continuously on our TV screens. But what’s the nudge America needs to get real about climate change?

Maybe more awareness of the tremendous economic benefits that could result from serious action. A recent report from University of Massachusetts’ Political and Economic Research Institute (PERI) and the Center for American Progress (CAP) suggests that if America invested fully in battling climate change, we could achieve a 40 percent reduction in U.S. carbon dioxide emissions within 20 years, and create a net increase of 2.7 million jobs in the process.

The kind of investment that PERI and CAP propose – around $200 billion a year – could be truly transformational to the American economy. And while the proposed $200 billion a year is a big investment, it’s less than the government currently manages to shell out to defense contractors each year.

? Invest in Infrastructure

American ingenuity has taken many forms, and our infrastructure achievements have been some of the most spectacular in the world. From bringing the world the internet, to railroads and the interstate highway system, to hydropower dams like the Hoover Dam that both awe us and provide us with renewable energy, to feats of engineering and art like the Golden Gate and Brooklyn Bridges, our infrastructure has long made Americans proud.

But that infrastructure is crumbling. Major infrastructure investments in the 20th century have been left to a slow and steady decline. This year Congress came within hours of allowing the Highway Trust Fund, a major funding source for states’ road repairs, to dry up – along with 700,000 jobs.

Construction jobs are good jobs. They pay well, and they don’t require a lot of formal education, making them a critical stepping stone to the middle class for workers without a college degree.

Infrastructure is an investment that makes good economic sense for the times we’re in. As former National Economic Council Director Larry Summers has pointed out, infrastructure is a sensible investment for our times: it can’t be offshored, unemployment among construction workers remains high, and interest rates are at historical lows. As Summers asks, if not now, when?

? Believe the Children Are Our Future

Americans talk a good game about this one, but we don’t put our money where our mouth is. Only two percent of all federal spending is for education.

President Obama proposed a modest funding level of $750 million to invest in Preschool for All in two thirds of the states. Despite strong bipartisan support for public preschool among Americans, his proposal has seen no serious congressional consideration and is not likely to be included when Congress revisits fiscal year 2015 funding levels in December.

But it should be. Public preschool is about as winning a proposition as there is. Evidence shows that quality preschool contributes to better outcomes later in life, and not just in education and career outcomes. Preschool contributes to better health and lower criminal activity, and it makes a particularly big difference for children from disadvantaged backgrounds, making it a crucial tool in the battle against economic inequality.

It’s also worthwhile as a pure investment: for every dollar invested in preschool, society saves as much as $17 down the road. At that rate, the president’s requested $750 million, which is a tiny blip on the radar of federal spending, would save more than $12 billion in years to come.

From the job creation perspective, a strong publicly supported preschool system would require many teachers with a credential like an associate’s or bachelor’s degree, and middle-class wages to match.

Each of these proposals requires new uses for our tax dollars. We should remember that America’s greatest achievements didn’t come through austerity or tax cuts; they came through heroic levels of public investment. Making that investment will create jobs now and a strong legacy for the future. Now, that’s a win.

This blog originally appeared in Ourfuture.org. October 21, 2014. Reprinted with permission. http://ourfuture.org/20141021/three-winning-ways-to-create-jobs

About the Author: Lindsay Koshgarian is research director for the National Priorities Project.

 

It’s Time To Mobilize Workers’ Capital

Friday, January 11th, 2013

jonathan-tasiniHere’s a riddle: what large entity has the theoretical access to deploy a few trillion dollars, quickly, if given the chance? If you answered the Chinese or US governments, thank you for playing and please try again another time. The answer: labor unions.

Piling up around the world is the largest and most accessible source of cheap capital you can imagine. No wasteful Wall Street brokerage fees. No fancy credit-default swaps. Just good, hard cash.

It is money accumulated in pension funds—workers deferred wages. Pension funds now own 73 per cent of stock issued by companies in the Fortune 1000.

Think about it: overnight, all those bridges, roads, schools, ports, climate-change energy projects—all of which are gasping for finance because governments are foolishly slashing budgets—could be underwritten by cheap capital.

Just increasing pension fund investments in green technologies and low-carbon projects from the current two to three per cent of portfolios to five per cent would pour US$300 billion over the next three years into such critical projects.

And that capital would come with a price tag, though not one motivated by personal greed: projects funded by pensions would need to be unionized and pay a living wage.

The idea to mobilize workers’ capital is hardly new. It has been actively talked about for at least two decades. But, with the exception of a few projects and a slew of corporate governance campaigns (primarily shareholder resolutions that rarely win but can bring pressure on issues such as out-of-control executive compensation), the power of the pension fund money has barely been used.

So, what’s holding us up?

To begin, the money isn’t simply at the sole beckon call of unions. Pension fund decisions are typically jointly reached by a board split equally between management and workers.

But, the legal “partnership” is a myth: the truth is that management usually holds the upper hand in dictating investment direction. While management board members are very comfortable with balance sheets, the typical union pension fund representative is woefully untrained, chosen often because of his or her long service and loyalty to the union.

And the pension fund investment options are almost always laid out, and controlled, by professional financial consultants who could not give a damn about anything but the rate of return—and their compensation.

Moreover, most of the legal regimes require that the assets be invested for the sole purpose of enhancing and protecting the benefits of retirees. That language has always been construed as a license to focus on a very conservative and unimaginative investment strategy—a strategy that union trustees have not challenged.

Looking inward, an honest analysis would admit that most unions have not been very interested in the idea of capital power. As long as the pension fund reported fair returns and retirees were happy, the average union leader considered that performance adequate.

But, two developments converged. The global financial crisis, triggered by the immoral (and, in my view, criminal) behaviour of virtually every international Wall Street-financial firm, wiped out trillions of dollars in wealth, and pension funds took massive hits. That made labor people pay attention.

And, coupled with the Global Financial Crisis, a number of forward-looking labor leaders, faced with declining numbers and an organizing environment that has grown increasingly hostile, began spending more time thinking about new strategies to put into play.

That all led to a renewed focus on workers capital.

There is some positive progress to report.

Sharan Burrow, the General Secretary of the International Trade Union Confederation, has made it her mission to jump-start this area.

She recently asked the right questions:

At what point did we allow our funds to become captive of the dominant market frame without question? Have we lost a perspective of the original labour rationale for bargaining for deferred wages into retirement income and/or advocating for the legislative/regulatory guarantees for dignified retirement incomes?

More recently, the Teachers Retirement System of the City of New York pledged $1 billion to infrastructure, in advancing a $10 billion goal for a new asset class of infrastructure that will help spur Hurricane Sandy recovery efforts and upgrade the city’s infrastructure. The initiative came directly out of the AFL-CIO’s commitment at the inaugural Clinton Global Initiative America meeting in 2011.

And on the West Coast of the US, a multi-state exchange between California, Oregon and Washington will jointly look for projects worth plowing money into.

All of this is a proverbial drop in the ocean, a speck of sand on the beach of capital pools waiting to be used. Global union federations and national unions need to create a planet-wide network of pension fund trustees who can be trained and act in unison when investment opportunities arise. Those trustees need to map joint campaigns.

Would it not be a delicious turn of events to basically fire the Wall Street financiers—the circle of people who destroyed the economic wellbeing of tens of millions of people—and, instead, watch bridges go up that not only buck up a city’s economic heartbeat but also provide the bulwark for a decent standard of living.

This post was originally posted on December 28, 2012 at WorkingLife. Reprinted with Permission.

About the Author: Jonathan Tasini is a strategist, organizer, activist, commentator and writer, primarily focusing his energies on the topics of work, labor and the economy. On June 11, 2009, he announced that he would challenge New York U.S. Senator Kirsten Gillibrand in the Democratic primary for the 2010 U.S. Senate special election in New York.[1] However, Tasini later decided to run instead for a seat in the House of Representatives in 2010.

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