Trumka, Panelists Urge Economic Boosts For Workers, Middle Class

WASHINGTON –Disputing the pundits and the economic numbers that say the Great Recession has been over for years, AFL-CIO President Richard Trumka and a panel of pro-worker experts proposed a range of economic boosts for workers and the middle class.

The speakers aired their plans at a June 20 forum co-sponsored by the federation and the Friedrich Ebert Foundation, a progressive pro-worker group that also studies U.S.-German and U.S.-European relations.

The speakers agreed the European emphasis on budget-cutting and austerity – which has produced double-digit unemployment in the 27-nation European Economic Community (the Common Market) and an economic collapse in Greece – is the wrong way to go.  But the U.S. backslid into pro-austerity plans, too, Trumka and the others said.

Ironically, the main driver of European budget-cutting is German Chancellor Angela Merkel. Germany’s economy and workers never really suffered from the crash because of joint labor-management-government policies to cushion the recession’s impact. 

 “Our responsibility is to take policy ideas and put them into practice” to help workers, said Trumka.  “The Great Recession and the financial crisis were the worst economic events since the Great Depression – and they’re not over.”

 That hasn’t stopped lawmakers – Trumka didn’t name names, but he meant the House GOP majority – from imposing budget cuts.  “That’s hurt working people who have lost their jobs and lost their homes and will suffer for decades to come.  And in Europe, they’ve lost confidence in democracy itself,” he said.

But workers’ problems, Trumka said, began long before the recession hit.  Destruction of middle-class jobs and worker rights have been “a core policy” and “wage suppression has been at the center of the U.S. economy since the 1970s,” he explained.

Washington insiders don’t get it, but go outside D.C. and workers do, he said.  “Regular people are sick of that game” of budget-cutting and conclusions the economy is recovering – especially since the “game” benefits the 1 percent.

 “We cannot afford more efforts to find common ground between democracy and plutocracy,” Trumka warned.

To finally create an economy that works for workers and the middle class, politicians should enact measures to create a “shared prosperity,” he said.  “Working people are ready to pound the pavement” for politicians who promise to do so, he claimed.  “Do we want our global economy to be a plantation or a community?” Trumka asked.

Thomas Palley, the AFL-CIO’s former chief economist and now a consultant to the federation, challenged the basic assumption that the U.S. has a free market economy at all.   Government has such a large role in defining the rules of the economy – and who benefits – that it is not a pure “free market” that the Right and its economists trumpet, he said.

As proof, he cited the Obama administration’s 2009 stimulus law, which labor always maintained was both inadequate and too heavily weighted to business tax cuts.  Had the law – even with those holes – and easy monetary policy not existed, “We would have had a second Great Recession,” Palley said.  Palley, Trumka and other panelists then listed measures – many of which the AFL-CIO already promotes – to create shared prosperity.  They include:

    • Collective action to force wage hikes for the lowest-paid.  “In America, millions are finding a constructive outlet for our anger and dissatisfaction.  Look at the growth of solidarity among fast food workers, among day laborers, taxi workers, TV writers, college graduates, Wal-Mart workers, domestic workers, hotel workers and so many more,” said Trumka.

   • Full employment “where everyone has access to a good job with decent conditions in an economy where wages rise with productivity.”

   • Investment in “public goods:” Infrastructure, clean energy, “world-class schools” and planet-wide access “to the basics of modern life – from clean water to Internet access.”

   • “We all have a voice, on the job and at the polling place.  And a voice on the job means the right to bargain together, as a union, with our employers.

   • “Fourth, in a community we all pay our fair share in taxes.

   • “And perhaps most importantly, in a global community, these principles apply everywhere. There should be no room in a global community for tax havens, or little principalities where dictators and hereditary monarchs torture workers who demand a living wage, or huge global economic powers that build the wealth of their national elites on impoverished and silenced workers,” he warned, without naming names.

   • Palley called for further boosts for consumer demand, which makes up two-thirds of U.S. economic output.  Instead, the budget-cutters “blame workers’ – whose wages have dropped – “and justify attacking unions and reducing the minimum wage,” he said. “Full employment, facilitating unions, increasing the minimum wage, erasing unfair (foreign) competition through currency manipulation can restore the balance” between the 1 percent of the rest of the country, Palley said.  “Every several generations, the U.S. needs to recalibrate our economic and political power to correct our problems.”

“If we hold to these principles, we can create a new global New Deal that ushers in a new day of shared prosperity and democracy.  And that would be a legacy of the crisis worth defending,” Trumka concluded.