America is experiencing an economic crisis greater than any since the Great Depression. Our nation is hemorrhaging jobs at the rate of more than half a million per month. Layoffs are occurring at an unprecedented rate—and the pain is felt in all corners of the country and among virtually every occupation. From teachers and public safety workers to basic and skilled trades and transportation workers, immunity from the crisis has not been granted.
For the past eight years, the Republicans have driven our country into debt—financial debt, public debt and individual debt. In addition, their bankrupt public policies promoted the interests of Wall Street over Main Street and created a national economic Ponzi scheme that has relied on the tax dollars and hard work of average Americans to line the pockets of corporate leaders and the wealthy. The continuing drive toward deregulation and “free markets” and the lack of respect for the dignity of work have resulted in the economic calamity we now face. This is true across the globe.
In November, America rejected John McCain and the Republican mantra that “the economy is fundamentally sound.” Americans saw firsthand the impact of stagnating wages, rising inequality and preferential policies for the rich and powerful. They felt the rising prices of energy, health care and education, among others. Retirement security is out of reach for far too many.
Turning our economy around will take time. The recovery package is but one component of a broader array of policies that must be enacted to restore our economic strength, create jobs and reclaim the American Dream.
The economic crisis has created unprecedented challenges for America’s manufacturing sector, especially against the backdrop of years of neglect and decline. Demand for manufactured products has declined dramatically, with January 2009 capacity utilization falling to 68 percent and financing for maintaining or expanding operations extremely hard to find. Manufacturing employment, which had declined by nearly 4 million jobs between January 2001 and the 2008 election, dropped by another 520,000 jobs between November and January. Virtually every part of the manufacturing sector has been devastated.
America’s economic and national security relies on a strong manufacturing sector. Millions of good, family-supportive jobs depend on manufacturing employment. The economic crisis provides an opportunity to change course and return to policies that have been the foundation of our nation’s strength.
The nation’s transportation infrastructure is also failing. The American Society of Civil Engineers reports a $2.2 trillion investment gap that is harming the economy and America’s competitiveness. Now is the time for our policy leaders to make these necessary investments and, in the process, put millions of Americans to work.
American taxpayers want their tax dollars used to put Americans back to work. The recently enacted economic recovery legislation will provide almost $800 billion in funding to help jump-start the economy—from needed transportation, school and other infrastructure projects to clean energy, from crucial funding for state and local governments to shoring up our social safety nets and investing in education and health care. We commend President Obama and Congress for their herculean efforts in enacting this important bill in a timely way.
Despite enormous lobbying by multinational corporations, the Chamber of Commerce and foreign governments, the final bill included strong Buy American provisions ensuring that iron, steel and manufactured products used in stimulus projects will be sourced domestically, to the maximum extent possible and consistent with our international obligations.
Ensuring the proper implementation of the Buy American provisions, as well as the most effective use of state and local funds, will require sustained vigilance. President Obama has promised that the expenditure of these funds will be a transparent process, and we commend him for his foresight. But every union must back up these efforts through grassroots activities. From teachers to building inspectors to sheet metal and transit workers and countless other occupations, union members will be on the front lines helping to rebuild our nation’s infrastructure and ensure that state and local governments can continue to provide vital public services. As they do so, we need their help in ensuring that contractors follow Congress’s mandate that American-made products be used wherever possible.
Many of the stimulus dollars will be spent at the state and local level, and we need to focus our efforts to ensure that funds are used to put America back to work strengthening our infrastructure and our manufacturing base at the same time. Not only do we need to ensure the enforcement of the federal Buy American provisions, but our state and local labor councils should work with affiliates and allies to establish comparable Buy America procurement preferences for state and local public expenditures. Moreover, with the $48 billion in transportation infrastructure investments included in the economic recovery legislation, transportation unions have vowed to ensure these investments – from the use of U.S. steel and iron to the procurement of U.S.-made equipment such as buses and locomotives – are fully compliant with Buy America requirements.
Manufacturing firms share in the pain felt throughout our economy. But they face many unique challenges. Over the past 20 years, many of our trading partners have built up their manufacturing sectors and relied on export-led growth models that have stimulated the enormous increases in worldwide capacity in key industries such as autos, steel, rubber and many others. The decline in worldwide demand, precipitated by the subprime mortgage crisis and failures in financial market regulation, leaves American industry prey to unfair trading practices. It may take years to return to prior consumption levels. During this period, America must engage other nations to eliminate overcapacity and to ensure fair trade. Access to our trade laws must be enhanced to ensure that our farmers, workers and businesses are able to survive.
During this period, America must strengthen its manufacturing and jobs base. The first step is to restore demand, building on the stimulus program. But America’s infrastructure deficit won’t be remedied with stimulus funds alone. We must do much more to rebuild our roads, bridges, airports and air traffic control system, mass transit and rail networks, and ports; to expand broadband deployment to all Americans; to refurbish and build new schools that fill the needs of our students and to revitalize and expand the electricity grid and energy-delivery network that are key to an economic revival. These projects need to be built with union labor and in compliance with important employee protections, and they need to use manufactured products produced here whenever possible.
Today, the automobile industry accounts for fully one-quarter of all American manufacturing jobs and output. The industry represents a complex integration of advanced manufacturing processes, technologies and materials, and is a critical driver of innovation across every manufacturing subsector. The survival and revitalization of the domestic automotive industry is just as important to the nation’s economy as is the health of financial companies like AIG and Citibank.
Restoring idle capacity will require that we also restore the confidence of business leaders and the financial markets that the demand will be sustained. Despite hundreds of billions of dollars of taxpayer funds used to bail out banks and financial firms, credit remains difficult to obtain and, when it can be found, is only offered at exorbitant rates. Working with the administration, Congress should develop plans to ensure that access to capital for the manufacturing sector is more readily available at acceptable rates.
It’s time to realign corporate and financial interests with national interests. All stakeholder concerns, not just the narrow interests of the privileged few, must be addressed if we are to succeed as a nation.
Building a foundation for a sustainable economic recovery also requires acknowledging that our national retirement security system is at risk. Dramatic declines in market values now match the precipitous declines of the Great Depression. Many single-employer pension plans that had been adequately funded now find themselves facing underfunded status, which requires enormous capital contributions. Although some steps have been taken to address these actuarial imbalances through revised funding plans, more must be done without jeopardizing the safety and security of the retirement obligations. This challenge must be addressed, or further investments in productive plant and equipment, as well as worker compensation, will be put at risk.
We also must recognize that innovation will be the foundation of economic growth, as it has been from the earliest days of our nation. The massive loss of skilled workers, engineers, designers and research and development represents a stunning loss of technical capacity for innovation and poses a critical challenge for the nation. This chain of innovation is critical to the nation because today more than three-quarters of all patents issued in the United States are the product of intellectual property developed in the manufacturing sector. The protection of these inputs is as important as the protection of the output, the intellectual property itself.
It is vital that we maintain the strength of our intellectual property protections to ensure that innovation, production and jobs can be maintained and increased here at home. Patent protection is a manufacturing and a jobs issue. We will continue to resist proposals to change the way damages for infringed patents are calculated, if those changes would undermine the ability of domestic manufacturers to continue to produce in America.
Rebuilding a robust real economy, with good jobs and a strong middle class, also will require attention to education, health care, pensions, climate change and many other issues. America must follow the lead of many of our competitors, which recognize that a strong economy requires a strong manufacturing base. Industrial policy and the development of plans to ensure economic success are the responsibility of national governments. These policies can be implemented without resorting to protectionism or beggar-thy-neighbor approaches. Indeed, America has led and can continue to lead the world in the development of new ideas and new products to better humankind. But we cannot succeed if we continue to neglect our own economic development and the future of manufacturing in this country.