Jobs – Where's the Urgency?

Remarks by AFL-CIO President Richard L. Trumka, Executive Council on Diplomacy, Army and Navy Club, Washington, DC
June 24, 2011

Thank you for the honor of inviting me to speak to you today. I'm delighted to be with you.

The relationship between the business community and working people can be difficult at times—tension is natural across the space between us—but I know that we share the same goals – for our economies to grow and our nations to prosper. We are all committed to that same end.

Yet I sometimes feel like shaking the world, and saying, "Wake up!"

Because I think, collectively, we're pretty much all headed in the wrong direction.

During the 2008 financial crisis, I'm told that everyone at the Treasury Department here in Washington was in a great panic—as they were right to be—proposing every idea under the sun to stop the financial panic. We understood that we had to stop the panic to save our economy for everybody.

Yet while we're still reeling from the effects of that crisis, today we see no similar sense of urgency concerning jobs, even though—after two years of recovery—America has 11 million jobs missing from our labor market, and one out of every five working age men in America is not working—they are either unemployed, or out of the labor market altogether.

Forgive me for being blunt. If you take one idea away from this luncheon, please take this: Our economies will not recover until our governments and global financial institutions begin to govern not just for the banks, but for the well-being of all of us.

We need shared sacrifice, truly and evenly shared. 

And we need to rebuild on a solid foundation—or as President Obama has said, on rock instead of sand. Otherwise, our economies will continue to suffer from a malaise that saps our strength and prevents robust growth. And ultimately, global investors will lose, as we all will lose.

Remember that in the years before the 2008 crisis, America borrowed nearly 6 percent of our GDP to pay for the things we consume as a nation but do not produce.  Our trade deficit and the way it was recycled into global debt markets by China and our other trading partners, drove the bubble economy.

And let's not forget that we're still feeling the pain of the continued deflation of a housing bubble of historic proportions.

But working people and lenders alike will hurt less, and our economies will recover more quickly, if our governments and international institutions review troubled balance sheets with a cold eye and re-structure debt in an orderly way, as soon as possible, wherever it's needed – whether we're talking about government debt in Greece or mortgage debt here in America.

What about austerity, you might ask? Won't that cure the same problem?

No. For one thing, rough-handled austerity is not "tough love".  It's not the hard-but-necessary path. It's cruel—it hurts people who had no part in creating the crisis. And when it goes too far, regular people who would much rather go to work and go about their lives – those regular people will swarm into the streets against it.

Plus, austerity simply isn't working—on an economic level, and it won't work.  It won't be good for workers and it won't be good for business.

Today, the economies in America and Europe remain in terrible shape and fundamentally weak, and so threaten the global economy because of massive and growing inequality, and a lack of jobs.

High unemployment—an amazing 205 million unemployed workers in the world—has worsened the growing imbalance between the wealthiest families and the rest of us, and those twin problems are the real threats to our long-term recovery. 

Here in the United States, unemployment is forcing millions of foreclosures, driving down home prices and destroying trillions of dollars of household wealth.

And yet our leaders in Washington want to cut federal spending further, which will eliminate more jobs and further depress household income.

Look at how well cost-cutting has worked in Greece! That country is more insolvent and more uncertain every day. Look past the riots, austerity there is pulling the country into a downward spiral, into a debt-trap.

It's not helping us here, either. This year, leading forecasters have downgraded annual growth predictions in the United States from 4 percent to below 2 percent. In other words, we're operating at stall speed. The slightest tremor will buckle this fragile and weak recovery and knock us back into recession.

Austerity will never kick our economies up to speed. Instead, it will kill jobs, stall growth and ruin our chances of recovery.

Rather than austerity, we need our governments to keep people in their homes and create jobs with large-scale public investment.

The conditions could not be more ripe for massive, sustained public spending. In the U.S. we have millions of unemployed construction and manufacturing workers and a $2.2 trillion deficit in basic infrastructure, and we need another $2 trillion to build the infrastructure of the future—a smart energy grid, nationwide broadband and high speed rail, among other improvements.

It's crazy not to do it.

We need to put people to work. That's the most important thing America can do to improve our housing market, and to provide a reliable market for private businesses, which have socked away more than $2 trillion in cash on their balance sheets.  Business needs customers.  Supply needs demand.

Long-term public investments will crowd in private investments. Those combined dollars, and the growth that will come from good jobs from a rebuilt manufacturing base will rebalance our economy and put the global economies on an upward cycle.

Don't misunderstand me. I believe that all our countries must have a plan to restore fiscal balance in the medium- to long-term.  And some countries have acute fiscal crises and must address them immediately.

Yet many countries – including the United States – have plenty of time to make aggressive public investments to strengthen the global recovery, restore balance to the global economy and build a sustainable basis for long-term growth. 

Unless we straighten out our priorities, we'll never leave behind the policies that got us into this crisis in the first place, and that, if left unchecked, will drag us back. 

That will be a catastrophe for all of us – for business as well as for workers.

Please join me and America's working people as we call for large-scale investments to create jobs, to rebuild our middle class and to lead us all forward.

Thank you, and God bless you. I look forward to hearing your thoughts and questions.

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