News & Politics

United Steelworkers Report Offers Six Ways To Build A Progressive Economy

A new report spearheaded by the United Steelworkers and the New America Foundation lays out a commonsense plan for fixing the economy.

We all know the economy is a disaster. Globalization and free market capitalism have created long-term unemployment, a political climate poisoned against progressive taxation, and a general unwillingness to tackle the structural problems facing the United States. The Republican Party exists to further the interest of the mega-rich while much of the Democratic Party follows suit. Meanwhile, the standard of living of average Americans declines.

With the lack of real leadership from Washington, we need progressives to stand up and offer meaningful policy solutions to reshape the debate. Led by Leo Hindery, chair of the Smart Globalization Initiative at the New America Foundation and Leo W. Girard, president of the United Steelworkers, the Task Force on Job Creation has released a report providing an excellent framework for revitalizing the American economy.

Entitled “A Vision for Economic Renewal: An American Jobs Agenda,” the report argues, “Our national leadership is responsible for tackling such crises, and President Obama has shown a willingness to reform health care and regulate the financial services industries. Today our nation needs that same passion and commitment directed at job creation.” It then presents a six-point plan with short- and long-term policy proposals. By and large, these are sensible ideas that, should we follow them, would bring America back from the brink of disaster.

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1. Manufacturing

Noting, “Manufacturing is essential for our nation’s economic recovery and long-term health,” the report suggests three immediate goals. First, the government should focus on domestic procurement, buying goods with at least 75 percent of the content made within U.S. borders. Second, it would spur domestic manufacturing with a 10 percent investment tax credit for renovating manufacturing facilities. Third, it would require those bidding for government contracts to file Employment Impact Statements that would factor into winning those contracts. In the longer-term, it asks President Obama to create a new Works Progress Administration-like program that would directly employee Americans to rebuild the American economy, create a President’s Council on Manufacturing Policy, and promote research and development in new technologies.

These ideas strike at the heart of the economic crisis: national policy currently encourages cutting workforces and sending jobs overseas through corporate tax breaks for companies investing overseas rather than creating jobs in the U.S. We cannot put the economy back together again unless we have people making things in America. Manufacturing work has an essential role to play in any successful economic recovery package. Without it, we will continue with our rapidly growing income inequality problems. The report’s recommendations provide a valuable starting point for dealing with these problems.

2. Trade and Globalization

Rightfully noting globalization is undermining the American economy through the rapid acceleration of outsourcing American jobs and decimating labor and environmental standards around the world, the report urges President Obama to eliminate tax incentives that rewards corporations for outsourcing jobs overseas, promote producing military goods at home, enact temporary tariffs that would allow the nation to deal with trade deficits without violating trade agreements, and create a new division within the Justice Department to enforce trade agreements. Long-term goals include government promotion of vocational and technical training and developing strategies for technology-based planning that would provide national control for technologies key to future consumer needs.

Again, the report provides a fine road map for battling against the worst aspects of globalization while also encouraging business-friendly policies such as tax reforms that could convince them to keep jobs in the United States. Given the enormous military-industrial complex, the report’s emphasis on spurring domestic defense manufacturing makes a great deal of sense; no other sector could put so many people to work so quickly. I am nervous about embracing military spending as the solution to any crisis. But if our goal is to put Americans back to work, it is better to employ Americans in defense production than shipping the jobs overseas and leaving many young Americans with no choice other than joining the military. Reforming America’s relationship with globalization would be fraught with problems. No nation did more to promote it and no nation’s capitalists have benefited more. But if we are going to deal with its employment problem, redefining our relationship with globalization must happen.

3. U.S.-China Trade

The report paints China as a nation declaring war on the American way of life through its hostile economic policies and secretive political institutions. It seeks to undermine China’s growing influence in the world in several ways. First, the U.S. should place pressure on China to reform its currency devaluation, a major reason it has attracted so many manufacturing jobs. Second, China needs to respect intellectual property rights and engage in more transparent practices in trade policy. If China resists these demands, the report encourages the government to bring World Trade Organization suits against it.

This seems the most difficult part of the report to implement. American corporations are deeply enmeshed in China. They have little discomfort with its lack of democracy. Corporations find that dictatorial regimes are often better for business—no tricky labor unions, populist movements, or environmental regulations. Corporate investment in China has not resulted in greater freedom for the Chinese or American people. China’s devalued currency has led to massive corporate profits at the expense of American workers. Increased Chinese investment in the United States and its growing sphere of influence in the developing world make it a major threat to U.S. interests in coming years, but for these very reasons create a situation difficult for American policymakers to resist. However, recognizing the very real role the Chinese government has in undermining American employment is important and should be a major part of our foreign policy toward that nation.

4. Infrastructure Crisis

The report points to the nation’s crumbling infrastructure as a major source of potential jobs. Physical infrastructure such as bridges and roads are falling apart while the nation lags behind in building infrastructure for broadband service and other new technologies. The report urges policymakers to create a National Infrastructure Bank, which Senator John Kerry and Congresswoman Rosa DeLauro have proposed. This would be an independent institution dedicated to providing bonds and loans for infrastructure projects. In the longer term, the report suggests federal guarantees on municipal bonds for infrastructure and the creation of a White House Office of Infrastructure Investment.

I thought the I-35 bridge collapse in Minnesota would make Americans serious about rebuilding its infrastructure. Alas, Americans have short memories and the Tea Party-inspired anti-government fervor that has overtaken Washington and many state capitols undermined legislative action to invest in infrastructure. Perhaps it will take another deadly disaster to wake us up, but I’m skeptical. However, the report correctly identifies this as a both a national crisis and a way to stimulate employment. These are superb ideas. A nation with serious politicians would listen to these recommendations. Unfortunately, we live in the United States in 2011.

5. Jobs in the Green Economy

The report notes that “we lack a comprehensive policy of clean energy and economic development,” and that given the problems of limited fuel sources and climate change, the government needs to prioritize creating a green economy. It calls on the government to extend grants and expand tax credits and loan guarantees for renewable energy production. In the long run, it urges a sped up process for approving green energy manufacturing.

President Obama tried to center green jobs in the early months of his administration, but had to give it up in the face of Republican belligerence over every move he made. We do need heavy investment in green jobs, not only for the current economy, but also for the future stability of the Earth. That said, while I am supportive of speeding up the process of deciding on Environmental Impact Statements for green manufacturing, we need to make sure that green energy has a negligible negative effect on the land. Rushed regulatory agencies often make bad decisions. I’d like to be as sure as possible that a solar energy installation isn’t going to create localized pollution and that the chemicals used in the creation of solar panels are properly disposed. We need jobs, but also need safe and healthy human beings. The authors of the report know this, but it’s also important to slow down and build a green economy that is safe for the ecosystem and human bodies.

6. Youth Unemployment

Youth unemployment has skyrocketed during the economic crisis. The report explores connections between early unemployment and long-term poverty, noting, “young people who do not have a successful work experience by age 25 are at a greatly increased risk of lifelong poverty.” Even college graduates are in danger; those who have to take low-wage jobs early in their careers earn 30-40% less for life than average college graduates. The report urges the government to address this crisis by creating jobs programs for in-school youth, providing vouchers to stimulate demand for young workers, and extending the Work Opportunity Tax Credit.

I applaud the report for focusing on this serious problem. Millions of unemployed youth is a recipe for societal instability. During the Great Depression, young, unemployed men provided the shock troops for fascist regimes throughout Europe. In the United States, commentators of the day feared that the young and unemployed could take the U.S. toward either communism or fascism and fretted about both possibilities. Franklin Roosevelt, whose New Deal clearly inspired the report’s authors, recognized the potential destabilizing effects of angry young people with nothing to do and put them to work in the Civilian Conservation Corps, Works Progress Administration, and other federal agencies. If anything, I’d like to see the report call for even greater emphasis on employing the young through direct government employment.

Despite a few small quibbles, in particular over policy toward China and my hesitation about undermining regulatory agencies by pressuring them to speed up green infrastructure project approval, I find the Task Force on Job Creation report a compelling document that provides a clear roadmap for a rejuvenated American economy. Although nearly each of the recommended policies make a great deal of sense, many will prove difficult to enact in the poisoned atmosphere of Republican extremism. However, liberals need powerful voices pushing for sensible policies that steer this nation back to serving the masses rather than the fat-cat elite. The ideas in this report are a great start for any progressive politician or economist looking to get this nation on track.

I want to especially credit the Steelworkers for its involvement in this report. At its best, labor isn’t just fighting for the short-term interests of its members, but is at the forefront of a radical vision of social democracy that speaks truth about working-class lives to corporate and political power. Few if any American unions have done that so effectively over the past decade as the Steelworkers. This is leadership for the future, not only in this report, but also in labor and progressive politics more broadly.

Erik Loomis is a professor of labor and environmental history and a blogger at Lawyers, Guns and Money.