Rebuild America with Good Jobs


Remarks by Richard L. Trumka, President of the AFL-CIO, Building the New Economy: Making It in America Conference October 29, 2009

Thank you. And thank you to our allies, the Alliance for American Manufacturing and the Campaign for America’s Future for sponsoring this important and timely meeting.

Over the next decade, America is poised to invest $2 trillion in infrastructure, health care and a greener economy. The big question is this: Are we going to just spend this money? Or will we invest it strategically in a new economy? We’re together in this room today because we’re committed to the latter. And this is exactly the group that needs to be talking and working together—unions and businesses, government, economists and progressive activists.

Our economic crisis has been so severe that it needs all of us to resolve it. Issues that once may have divided us now bring us together. We’re united against the common enemy of U.S. economic failure.

For decades, manufacturing provided U.S. workers a solid ladder into the middle class—with job security, decent paychecks, health care and retirement with dignity. Manufacturing built the middle class because workers built unions—unions strong enough to see to it that workers got a fair share of the wealth they created. But then the United States entered the world economy with policies designed to attack workers’ standard of living and without a strong manufacturing policy. Instead, we indulged in the illusion that the United States, a nation of 300 million, could live off of finance and money borrowed from our trading partners. The resulting financial bubble and economic crisis has pushed the world to the brink of global depression and revealed a U.S. economy in structural crisis.

But fortunately, this is a new day. We have national leaders as committed as we are to investing, not just in rescuing our economy from the brink of a second Great Depression—but in rebuilding it, restructuring it, making it work for us and for our country’s future. We need it.

In the past 10 years, more than 50,000 U.S. manufacturing facilities have closed and we’ve lost more than 5 million manufacturing jobs, including about 1 million professional and technical jobs. We’ve run up record trade deficits, driven by manufactured goods deficits. The 2008 goods trade deficit of $800 billion included $565 billion in manufactured goods. And China—a country that routinely violates international trade and human rights norms, and that has a strong industrial policy, linked with a trade and currency strategy—now accounts for 75 percent of our non-oil goods deficit. At the same time, affluent high-wage countries with manufacturing policies like Japan and Germany are running trade surpluses by selling high-end capital and consumer goods to many emerging markets.

Meanwhile, all of America has been rocked by job loss, home foreclosures, bankruptcy and loss of health care and retirement security. But the industrial Midwest has been crippled. The auto crisis of the past 18 months has left the state of Michigan with effective unemployment approaching 25 percent. We should be looking at the Midwest as an incredible resource of skilled autoworkers, machinists, steelworkers, industrial engineers, designers, scientists, technical capacity, innovation and facilities available for retooling. But our ongoing failure to invest in manufacturing means that the next innovation, the next best idea, the next process improvement, the next breakthrough may well be made in some other country, not ours.

Instead of paying workers to innovate and to make things we could export, the business of America has become finance. Wall Street and transnational corporations have been defining U.S. financial and trade policy to fit their will. Their push for short-term profits has undermined domestic manufacturing and helped drive it offshore in a global race to the bottom, where U.S. manufacturers compete with companies in affluent countries that benefit from national health care and mandatory employer funded retirement, and with companies around the world that take no responsibility at all for their employees’ health and retirement, and in countries that have no respect for workers’ rights or the environment so their labor and environmental costs are low.

This short-termism has pushed investment not into what America can produce and supply to build a prosperous and jobs-based economy, but into speculation, exotic financial gimmicks and dangerous gambles that failed and almost destroyed us. The result? The United States has ended up with 22 percent of our GDP tied to the financial sector—which makes nothing except credit pyramids and obscene wealth for a very, very few. Instead of exporting financial crisis, we can and should be exporting technology and world-class goods.

The one good thing about the economic collapse is that it lets us—quite frankly, it requires us—to think big, not tinker at the edges of recovery but rebuild and restructure our economy, with a revitalized manufacturing sector at its core.

Shortly, I believe, we will have accomplished a key element in rebuilding our economy: health care reform. We simply can’t have a robust economy when health care costs are sucking it dry, leaving little room for other investments and threatening the health and learning ability of the next generation to enter the workforce.

Our next priority will be passing the Employee Free Choice Act, so every worker who chooses to do so can have the freedom to join a union and bargain collectively for a better life. This is a crucial piece of lifting living standards and building a stable middle class.

Meanwhile, we are fighting for trade law enforcement, new tax policies that support investment in manufacturing, and financial reform that will crack down on predatory lending, credit card trickery and mortgage rip-offs. The financial reform I am convinced we’ll win will address systemic risks that threaten the entire financial system, regulate the shadow markets like derivatives and hedge funds before they do further damage, and reform corporate governance and CEO compensation to protect working people who are long-term investors, not speculators.

The AFL-CIO, the Industrial Union Council, the entire union movement and our allies have been working on these priorities for a good long time. Now it is time for us—labor, management, government and our environmental allies like the Apollo Alliance and the Blue-Green Alliance—to draft a national economic policy and manufacturing plan that will allow us to prosper in the world economy.

All of our competitor nations have strategies and policies that bolster manufacturing and target key industries and technologies for development and domestic employment. Their factories are humming. In this way, at least, it’s time for us to begin thinking and acting like our competitors.

As we plan and decide how that $2 trillion is going to be invested, our goal must be to develop the best technology and industries that will convert our economy to a greener future fueled by good jobs here in America. If the best technology is elsewhere, let’s use our financial leverage to capture it and have it made here. Congress and the Obama administration must target resources to the industrial heartland, where we have the skilled workers, the engineering talent and the idled capacity.

Let’s look at some of the opportunities we have for investing $2 trillion to build the kind of economy we need:

Three decades ago, the United States led the world in energy technology. Today, we are home to only two of the 10 largest solar photo-voltaic producers, one of the top 10 advanced battery manufacturers and two of the top 10 wind turbine producers. Last year, less than half of the record 8,300 megawatts of wind turbines installed in the United States were made in this country. In 2008, the United States ran an overall green trade deficit of $8.9 billion, including a deficit of $6.4 billion in the critical category of renewable energy. Our immediate goal must be to convert this trade deficit into a trade surplus.

In new transit systems such as high-speed rail, the rest of the world leads the way and we have just one firm, Maglev Inc., that is engaged in one of those technologies. With the right investments in mass transit and high-speed rail, we should capture the best technology in the world and have those trains and rails made right here.

Earlier this week, President Obama announced the largest single energy grid modernization investment in U.S. history—an $8 billion public-private program expected to create tens of thousands of jobs while reducing energy consumption and costs for consumers in 49 states. And Vice President Biden announced a closed GM plant in Delaware will be reopened to build plug-in hybrid electric cars.

These are the kinds of opportunities we have to seize to create good green jobs and green products here in America. We have done this kind of big thinking and large-scale change before—and there is no reason to believe we can’t do it again. To win World War II, we turned America into the biggest defense producer and industrial power the world has seen—and we can do it again. We need that same sense of wartime urgency.

How large are the stakes? If we fail to act, I do not believe we can remain a middle-class society for long. If we fail to act, I cannot imagine how we will make the technological change that is our only hope of addressing the threat of climate change.

If we do act, we can and we will leave our children the kind of country we want them to have. We need to dedicate ourselves to do it together. We are joined here today by congressional leaders. We have friends like Ron Bloom in the administration, with the mission of reviving manufacturing.

My challenge to these fine public servants on behalf of the labor movement is this: Our country needs action to redress decades of policies that destroyed manufacturing. We need you to think big and bold. We are ready to work with you every step of the way, but we need your leadership to make a national manufacturing strategy a reality, a strategy that uses the tools of trade— tax and currency policy, workforce training, health care reform, and the freedom to form unions—to rebuild the ladder to the middle class.

For too long we have had no strategy as a nation other than making Wall Street rich by shuttering Main Street. That didn’t work. This will.

Thank you, and I look forward to taking the next steps with you.