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U.S. Economy Needs Bailout for America’s Workers |
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With the nation facing “the most complex and dangerous economic crisis since the Great Depression,” Congress must act—and quickly—to pass an economic recovery program for working families on Main Street, AFL-CIO chief economist Ron Blackwell told a congressional hearing today.
Appearing before the House Education and Labor Committee less than three weeks after Congress approved a $750 billion bailout for Wall Street, Blackwell said:
Any economic recovery program should move with the same urgency in addressing the acute pain and anxiety of working families as shown in addressing the global credit crisis.
Blackwell and other economists testified that for any economic recovery to provide real relief to working families, it must include extended and expanded unemployment insurance (UI) benefits, fiscal aid for states, significant funds for job-creating infrastructure projects and an expanded food stamp program.
Such programs provide immediate relief for families and “a bigger bang for the buck,” said Jared Bernstein, director of the Living Standards Program at the Economic Policy Institute (EPI).
A dollar spent on the UI extension yields $1.64 in terms of Gross Domestic Product (GDP) growth….Food stamp expansion would resemble UI extension in that it would likely generate a large multiplier…$1.73…providing an effective macroeconomic stimulus and addressing a critical human need.
Bernstein said more than 2.2 million new jobless workers were added to the rolls this year and more than 10 million are out of work and looking for new jobs. Millions of “discouraged workers” are uncounted because they have given up the job search. More than 2 million have been out of work for longer than 27 months and the long-term jobless are growing, he said.
In October, many workers began exhausting their unemployment insurance benefits. By the end of this month, an estimated 775,000 workers will be left without a safety net, and a total of 1.1 million workers will be in the same straits by the end of the year.
As the unemployment numbers continued to grow this year—hitting a five-year high in September—the AFL-CIO and congressional Democrats fought for an second extension of UI benefits, as many workers were set to exhaust the extra weeks of benefits Congress approved in February.
The House approved an extension in early October, but that effort was blocked by Senate Republicans. The Bush administration threatened to veto the extension, claiming it would encourage jobless workers to stop looking for a new job. Said Dana Stevens, an unemployed worker from Thorofare, N.J.:
There is nothing enjoyable about being up at night worrying about how you are going to make ends meet. For anyone to suggest that receiving unemployment is like getting a free vacation is insulting and degrading to the millions like myself who are desperately trying to get back to work.
Those testifying said one of the best—and quickest—ways to put people back to work would be through repairing and rebuilding the nation’s infrastructure such as roads, bridges, schools and waterways. Many such planned projects are set to go, but just need funding.
Robert Pollin, a professor of economics at the University of Massachusetts-Amherst, said a $150 billion job-creation program will create 2.9 million jobs in the short term alone. He also said infrastructure investment produces a second wave of private-sector job creation within two years, pushing the 2.9 million new jobs up to 3.3 million new jobs in a two-year time frame.
The deepening economic crisis is hitting state coffers as well as working families’ pocket books. According to the Center on Budget and Policy Priorities, at least 29 states faced or are facing a combined $48 billion in budget shortfalls, and many are being forced to cut back on health care and other vital family services, along with laying off workers.
Employed workers also face economic difficulty from stagnant wages that have failed to keep pace with inflation and fallen behind.
Blackwell told the committee that one of the major reasons for wage stagnation is the imbalance of power between workers and employers. He noted that while restoring worker power is “beyond the scope” of an economic recovery package, it is vital for long-term worker recovery.
This imbalance is responsible for the stagnation of wages and the rupture of the crucial relation between wages and productivity that has served as the foundation of the American social contract. The stagnation of wages has motivated American workers to work more, save less and borrow imprudently against appreciating assets to maintain their living standards.
Correcting this imbalance requires sufficient demand from public and private investment to produce something close to full employment, a meaningful minimum wage and reforming our labor law to allow workers to freely associate with their fellow workers and form a union to bargain collectively….It is essential to restoring an American economy that is strong, sustainable and internationally competitive, but also one whose prosperity is broadly shared.
Said the committee chairman, Rep. George Miller (D-Calif.):
It is urgent that we prepare now to take the next steps to rescue the economy by creating jobs, providing immediate relief to the states and small businesses and by making real investments in energy, technology and education. We must have a plan that speaks directly to the needs of American families and workers today.
Blackwell’s testimony before the committee can be read here.
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I have been active in the Australian union movement for 30 years. i follow the AFL-CIO election alerts.
I have a new blog http://chriswhiteonline.org
It looks like the US and the world is heading for a depression. I post Immanuel Wallerstein’s arguments of long term economic cycles.
Although I post on Australian politics and workers’ rights, you will see that through the unions’ Your Rights at Work campaign we defeated PM Howard (in the Bush/Cheney camp).
But with the new Labor Rudd government we are facing great difficulties getting new rights at work.
I research the right to strike that was almost outlawed under Howard and worse mthan in the US, but where many restrictions are being kept by PM Rudd…under the influence of corporate lobbyists!
All the best. Obama will win.
Will there be a new era in workers’ rights?
The Employee Free Choice Act is a good start, but do not workers require stronger labour laws protecting their interests?
You cannot do a kindness too soon, for you never know how soon it will be too late.
The only constant is change.
The nine biggest banks that will get 250B now give out pay raises to their management of 3% and more, while the American people are loosing their jobs, benefits and dignity, all the American people are getting is the shaft.
The government wants to give a $600.00 stimulus check to the American people, WOW. Let’s stop the waste at the CEO’s, the banks and actually help the American people. Look at the waste below that is just going to get worse as time goes on. We are told to unplug our transformers for our electronics to save power, our losses are only paper losses and do not worry. We watch our savings go down the toilet, our jobs go overseas, and our health benefits go away, with food and prescriptions going through the roof. When the CEO’s are collecting millions for just working weeks, 10’s of millions in bonuses and hundreds of millions for ripping off the American people.
Has anyone seen any help for the middle class? All this money is going to the super rich; the people because of their greed, who placed us in this, position now, and blame everyone else. Let’s not forget 250B to the 9 Bankers who put us in this position in the first place.
I’m in favor of an amendment giving $85,000,000,000 to the American people placed in harms way because of the CEO’s, banks and our government, in a “We Deserve It Dividend”. 40B from the original 700B, 2B from the 250B they want to give to the banks and 25B from AIG because they are wasting the money now on facials for the executives and overseas hunting trips.
To make the math simple, let’s assume there are 200,000,000
bonafide U.S. Citizens 18+.
Our population is about 301,000,000 +/- counting every man, woman
and child. So 200,000,000 might be a fair stab at adults 18 and up…
So divide 200 million adults 18+ into $85 billion that equals
$425,000.00. My plan is to give $425,000 to every American citizen 18+ as a We Deserve It Dividend.
Of course, it would NOT be tax free. So let’s assume a tax rate of 30%.
Every individual 18+ has to pay $127,500.00 in taxes. That sends $25,500,000,000 right back to Uncle Sam.
But it means that every adult 18+ has $297,500.00 in their pocket.
A husband and wife have $595,000.00.
Pay off your mortgage - housing crisis solved and banking problem being solved.
Pay off Credit Card Debt.
Repay college loans – this will make more money available to loan out.
Have the college tuition to go to school.
Put away money for college - it’ll be there.
Save in a bank - create money to loan to entrepreneurs.
Buy a new American car - create jobs.
Invest in the market - capital drives growth.
People would retire creating new jobs for the young and the unemployed. What would you do with $297,500.00 to $595,000.00 in your family?
Help parents and family.
Enable Deadbeat Dads to come clean - or else.
Let’s not forget the help to the States that would be provided, welfare almost gone, unemployment compensation almost done, food stamps almost gone.
People would give money to charity.
How would this help charities, one big chance to refill there bank, with less going out to help the less fortunate.
Remember this is for every adult US Citizen 18+ including the folks who lost their jobs at Lehman Brothers and every other company that is cutting back and of course, for those serving in our Armed Forces.
Look at the numbers and the benefits to the different companies, wouldn’t this end so many problems and benefit the American people with a good start to help the American economy from the American People.
As this 700B plan comes to light there is one ceo getting 13m for three weeks work, another ceo 430+m and this is just the beginning of the theft of the 700B. What will follow in the coming weeks and months?
Here it is
#1. “The CEO PAY/BONUS for running a company in to the ground.”
Countrywide 361.7M Wachovia 16M
Fannie Mae 20M AIG 25.4M
Freddie Mac 20M Merrill Lynch 66M
Bear Stearns 70M WaMu 36M
Lehman Brothers 213M CiTi 41.5M
#2, Reports that AIG’s executives, after the bailout spent roughly $440,000 for rooms, banquets and spa services
#3 another 250B for the Banks, I cannot wait to see what the 9 banking CEO’s will steal now. Who really believes the banks will help the people who need it before the money is given to the CEO’s for their golden parachutes? Did we just put 250Bin the hands of the nine banks that screwed the American people, “AM I the only one who sees this as wrong?”
#4, AIG is at it again $86,000.00 for four executives to kill partridges in a pear tree, Christmas is here early for the privileged again after the buyout. Let’s hope they don’t start shooting at the American people, OR “have they?”
If we’re going to do a $700 billion bailout, let’s bail out every adult
U S Citizen 18+!
As for Wall Street – Firmer Action. CEO pay and bonus will be stockholder voted.
Let the private sector bargain hunters cut it up and clean it up.
Here’s my rationale. We the American people deserve it and Wall Street, the banks and the government doesn’t.
Sure it’s a crazy idea that will “work.”
But can you imagine the Coast-To-Coast relief of the American people who played by the rules and were placed in jeopardy by others!
How do you spell Economic Relief?
I trust my fellow adult Americans to know how to use the $59.5 Billion
“We Deserve the Dividend” more than on Wall Street, Banking or in Washington DC.
And remember, the plan only really costs $59.5 Billion because
$25.5 Billion is returned instantly in taxes to Uncle Sam.
Let’s see if the legislatures can pass this amendment for the American people as fast as the passed the 700B for the thieves who but us here in the first place because of their greed.
Senate
http://www.senate.gov/general/contact_information/senators_cfm.cfm?OrderBy=state&Sort=ASC
House of Representatives
http://www.house.gov/
Yea. The best solution I have heard to date. Why can’t we all have a nest egg. This government is so lopsided , and sooooo greedy.