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A Vision for Economic Renewal – An American Jobs Agenda

5:10 am in Uncategorized by Leo W. Gerard

"Renewal"

"Renewal" by Auntie P on flickr

Written with Leo Hindery Jr., chair of the Smart Globalization Initiative at the New America Foundation

America is facing a catastrophic jobs crisis. Not since the Great Depression has official unemployment hovered above nine percent – where it is today – for more than 20 months. Millions of American have given up looking for a job altogether. Even worse, real unemployment is more than 18%. Yet Washington overall has obviously yet to embrace a large-scale job creation agenda. Even if we reach consensus around the deficit – the only economic issue even getting any attention these days – it will do little to help the 29 million Americans who are unemployed in real terms. If we do not seriously tackle jobs, our country may never regain its competitive global edge.

We recently co-chaired a Task Force on Job Creation, seeking real solutions to the jobs crisis plaguing our country. This group of policy makers, economists, business and labor leaders developed a series of 15 immediate recommendations for reversing the crisis, outlined in a new report, “Vision for Economic Renewal: An American Jobs Agenda.” We found there are six vital policy areas that our government must address in order to create millions more jobs now: manufacturing, trade and globalization, U.S.-China trade, the infrastructure crisis, jobs in the green economy, and youth unemployment.

Washington is often a city of Chicken Littles, which makes ringing the alarm bell difficult. But once Washington wakes up from its deficit hangover, politicians will realize something that most Americans have known for months: The sky has already fallen. Read the rest of this entry →

On Labor Day, Work to Save the Middle Class

8:31 am in Uncategorized by Leo W. Gerard

This Labor Day feels gloomy. It’s a celebration of work when there is not enough of it, a day off when too many desperately seek a day on.

America has commemorated two Labor Days since this brutal recession began near the end of George Bush’s presidency in December of 2007. Now the relentless high unemployment, the ever-rising foreclosures, the unremitting wage and benefit take-backs have replaced American optimism and enthusiasm with fear and anger.

Happy Labor Day.

On this holiday, we can rant with Glenn Beck, kick the dog and hate the neighbor lucky enough to retain his job. Or we can do something different. We can join with our neighbors, employed and unemployed, our foreclosed-on children, our elderly parents fearing cuts in their Social Security lifeline and our fellow workers worrying that the furlough ax will strike them next. Together we can organize and mobilize and create a grassroots groundswell that gives government no choice but to respond to our needs, the needs of working people.

We can do what workers did during the Great Depression to provoke change, to create programs like Social Security and achieve recognition of rights like collective bargaining. These changes were sought by groups to benefit groups. In a civil society, people care for one another. And America is such a society – one where people routinely donate blood to aid anonymous strangers, children set up lemonade stands to contribute to Katrina victims and working families find a few bucks for United Way.  . . . Read the rest of this entry →

What’s Green, White and Blue? American Jobs

9:13 am in Uncategorized by Leo W. Gerard

Red, as in furiously red, defined the day last fall when a consortium of companies announced it wanted $450 million in U.S. stimulus money to build a wind farm in Texas, creating 2,000 jobs in China and 300 in America.

Now, nine months later, things have cooled down and turned around. In a deal with the United Steelworkers (USW), two Chinese companies have agreed to build as much of the wind turbines as possible in America, using American-made steel, and creating perhaps 1,000 American jobs.

The deal is a result of white collar Chinese executives negotiating with blue collar union officers to create green collar jobs in the U.S. The agreement defies stereotypes about unions as constantly combative, excessively expensive and environmentally challenged. The USW has a track record of engaging with enlightened CEOs for mutual benefit. It has a long green history. And it has worked to return off-shored jobs to the U.S.

The USW, like the Democrats in the House and Senate with their Make It in America program, is devoted to preserving and creating family-supporting, prosperity-generating manufacturing jobs in America. And if they’re green, all the better.

Billionaire investor Wilbur Ross has first-hand experience negotiating with unions, including the USW, to sustain U.S. manufacturing. He describes it positively. Here he is on PBS’ Charlie Rose on Aug. 2:

“I have found the leaders of big industrial unions, the steelworkers, the auto workers, they understand dynamics of industry at least as well as the senior management of the companies.”

Ross talked to Rose about dealing with the USW during the time when he was buying LTV Steel:

“We worked out a contract that took 32 job classifications down to five, changed work rules to make it more flexible and most important of all, we put in a blue collar bonus system. . .We became the most efficient steel company in America. We were making steel with less than one man hour per ton. The Chinese at the time were using six man hours per ton. We were actually exporting some steel to China.”

Ross accomplished that while paying among the highest wages for manufacturing workers in America.

The USW approached the Chinese companies that planned the $1.5 billion Texas wind farm, A-Power Energy Generation Systems Ltd. and Shenyang Power Group, the same way it did Ross. The meetings occurred with the help of U.S. Renewable Energy Group, a private equity firm that facilitates international financing and investment in renewable energy projects. Jinxiang Lu, chairman and chief executive of Shenyang Power, said talking to the union enabled him to see its “vision for win-win relationships between manufacturers and workers.”

For the USW, this deal means the Chinese firms will initially buy approximately 50,000 tons of steel manufactured in unionized American mills to fabricate towers and rebar for the 615 megawatt wind farm in Texas, will employ Americans at a wind turbine assembly plant to be built in Nevada, and will employ more American workers in green jobs at plants constructing the blades, towers and thousands of other wind turbine parts.

For the Chinese companies, the USW, the largest manufacturing union in America, will use its long list of industry contacts to help construct an American supply chain essential to amass the approximately 8,000 components in a wind turbine. The idea is to collaboratively create a solid manufacturing, assembly, component sourcing, and distribution system so that this team – the Chinese companies, U.S. Renewable Energy Group and the USW — will build many more wind farms after the first in Texas.

Additional wind farms mean more renewable energy freeing the U.S. from reliance on foreign oil. As U.S. Sen. Sherrod Brown, D-Ohio, says, there’s no point in replacing imported foreign oil with imported wind turbines. For energy and economic independence, green manufacturing capacity and green jobs must be in the U.S.

This deal does that. And there’s nothing unusual about foreign companies employing Americans. Many Americans, including USW members, already work in factories owned by many different foreign national companies, including German, Russian, Japanese, Mexican, and Brazilian, with names like Bridgestone-Firestone, Arcelor-Mittal, Rio Tinto, Grupo Mexico, Svenska Cellulosa AB (SCA) and Severstal.

In at least one other case, action by the USW forced the hand of a Chinese company to move jobs to the U.S. Tianjin Pipe, the world’s largest manufacturer of steel pipe, said it could not export profitably to the United States if tariffs rose above 20 percent. This was after the USW and seven steel manufacturers filed a petition with U.S. trade agencies in April of 2009 accusing China of illegally dumping and subsidizing the type of pipe used in the oil and gas industry. The union won that case this past April, and the U.S. Commerce Department imposed import duties ranging from 30 to 100 percent to give the domestic industry relief from the unfair trade practices. To continue selling in the U.S., Tianjin Pipe had no choice but to build an American pipe mill. Construction is expected to begin in Texas this fall on the $1 billion plant to employ 600 by 2010.

Although the USW is cooperating with A-Power and Shenyang Power, it will not back off its trade cases involving exported Chinese steel, pipe, tires, paper and other manufactured products. The stakes for U.S. jobs are just too high.

Back in 1990, when green was not as trendy, the USW recognized that the environment would be among the most important issues of the era and issued the report, “Our Children’s World.” Since then, it has steadily promoted green — became a founding member of the BlueGreen Alliance and Apollo Alliance, which promote renewable energy and renewable energy jobs.

Good, green American manufacturing jobs. Establishing American energy independence. It is win-win. And it’s getting a green light now.

Q&A with Veteran Labor Organizer Stewart J. Acuff

12:44 pm in Uncategorized by Leo W. Gerard

Leo W. Gerard: Stewart, you talk about power in a book you’ve written with economist Dr. Richard A. Levins. You called the manual, “Getting America Back to Work.” What’s the relationship between power and getting people back to work?

Stewart J. Acuff: A big part of the problem we have with this economy or the biggest problem is that most of the money has gone to the Financial Elite — and the power as well. To get America back to work we have to reinvest in our country and our workers. That necessarily means that the Financial Elite get less of the wealth generated by the economy and workers will get more. If you intend to take wealth from the richest people in the history of the world, you have to have enough power to do so.

Gerard: You say in the introduction that there are two kinds of power: “The first is lots of organized money. That is the kind of power the Financial Elite have used to bring the rest of us to our knees. The other source and form of power is lots of people: organized, mobilized, united, and taking action.” Do you really think that organized people can succeed in a wrangle with the financial elites?

Acuff: Absolutely! The economic history of the twentieth century is crystal clear. When unions were strong, working people had the lion’s share of income and the economy worked well. When unions were weakened, we have seen the Financial Elite take over and run the economy into the ground.

That’s why passing the Employees Free Choice Act is more important than ever. When we strengthen unions, we strengthen the economy.

Gerard: Now, Stewart, you sound like some kind of Socialist talking about the fact that at times in the nation’s history the financial elite received collectively as little as 9 percent of the total income earned by Americans but at other times – like right now and right before the Great Depression – the financial elite grabbed more than 23 percent of all income. I mean, aren’t you afraid the likes of Rush Limbaugh and Glenn Beck will accuse you of opposing just rewards earned by the barons of capitalism?

Acuff: Well, my friend, those aren’t just rewards. As my friend Jim Hightower said, members of the Financial Elite were born on third base and say they hit a triple. It’s beyond comprehension that the trading of phony financial instruments like derivatives produces rewards. What produces just rewards is manufacturing and producing goods and services that people need and want. The person who needs just rewards today is the hotel maid who cleans rooms for a living or the overstressed nurse who can’t get to all her patients or the skilled but out-of-work construction worker waiting for the chance to earn an honest day’s pay.

Gerard: Okay, but then you start talking about income tax rates. Are you really suggesting that the current maximum of 35 percent be raised to the 90 percent that it was during the 1950s? Would that not just enrage the financial elite?

Acuff: Yes, it would enrage the Financial Elite and Dr. Levins and I haven’t made that case in this book. Certainly the income tax rate for the richest among us is far too low. When Warren Buffet himself says he pays a lower percentage of his income in taxes than does his secretary, that’s a problem.

We wouldn’t need to rely on taxes to redistribute income if we had the right mix of union power and corporate power. Instead of a few massive fortunes, we would have millions of working people being productive and using fair wages to stimulate economic growth.

Gerard: Since the days of Reagan, Republicans have told us that taxes on the financial elite should be cut because they need all that money to “re-invest” in the system. That way, the GOP line goes, wealth will trickle down on the “little people.” This hasn’t really worked, has it?

Acuff: No! Not at all! Since the days of Reagan workers wages have stagnated and declined while our productivity has increased. Wealth does not trickle down. Have you seen any of the TARP billions trickling into your pocket lately? I sure haven’t. All I saw was obscene bonus payments to those who caused the mess in the first place.

Gerard: Halfway through the book, you suggest working people can have it all – family-supporting jobs, health insurance, even Social Security. Those on the radical right tell us daily that’s impossible because of the national debt. How can you justify such a vision?

Acuff: More income means more tax revenue, more economic growth and economic activity. We lift the economy from the bottom, not from the top.

Gerard: Then you have the audacity to quote some old economists claiming, “An efficient and humane society requires both halves of the mixed system – market and government.” We know, because the right-wing has told us repeatedly, that government is bad, that it should be shrunk and drowned in a bathtub. Where did you and Professor Levins come up with this new-fangled idea that government could help?

Acuff: It’s not a new idea. It says right in the ECON 101 text that Dr. Levins used in his classes that "markets without government is just one hand clapping." From the destruction of 2 trillion dollars of America’s wealth by Wall Street to the incessant pouring of oil from BP’s hole in the bottom of the Gulf, we know that capitalism must be regulated and constrained for the sake of everyone.

Gerard: Which brings us to organized labor. You quote President Kennedy saying, “Those who would destroy or further limit the rights of organized labor – those who would cripple collective bargaining or prevent organization – do a disservice to the cause of democracy.” Isn’t that exactly what has happened since the days of Kennedy, a slow destruction of the labor movement with corporations, union-busters and sometimes government regulators all working together to rob labor unions of the power they built between the 1930s and 1950s?

Acuff: Yes, you’re absolutely right. The results are the mal-distribution of wealth and power and massive recession, a shrinking middle class, a starved consumer demand, and a weaker America.

Gerard: The book was written and published before the explosion on the Deepwater Horizon rig that was drilling for BP in the Gulf of Mexico. Is it somewhat prophetic, then, that you discuss the need to move from a fossil fuel-based economy to one that creates jobs with renewable energy sources?

Acuff: I can’t speak to prophecy though I am a huge fan or both Isaiah and Jeremiah. We’ve long known that America needs to generate its own free energy from free resources like the wind that never stops blowing on Great Plains, the sun that never stops shining in the deserts of Arizona, and incessant pull of the ocean’s tide.

Gerard: I was glad to see the chapter discussing the importance of maintaining and supporting manufacturing in America. For those still unconvinced, why is that so important?

Acuff: Well, we don’t need to maintain just current manufacturing capacity. We need to increase manufacturing capacity. That is how to generate wealth. We create wealth by making things that other people want to buy and that is the best way to build a sound economy.

Gerard:
You sound a little bit like a preacher at the end where you state the four values that Americans can believe in. Do you think America can organize around those values and take on the financial elite?

Acuff: Yes, I do! I think what we need is a reinforcement of fundamental human values. We’re all in this together; there is a common good; we are our sisters’ and brothers’ keepers, and workers win and have always won by exercising collective power against the individual power of the Financial Elite.

***

Stewart Acuff is chief of staff for the Utility Workers Union of America. He has organized for 30 years, beginning in 1982 with the SEIU. In 1990, he became president of the Atlanta AFL-CIO. There he led the campaign to organize the 1996 Olympics. A decade later, he went to work for the national AFL-CIO, serving as organizing director from 2001 to 2008. He led the AFL-CIO campaign to pass the Employee Free Choice Act.

***

Dr. Richard Levins is professor emeritus of applied economics at the University of Minnesota. He is an award-winning author of books about policy and market power.

American Wind Turbines Sound Like Freedom

8:05 pm in Uncategorized by Leo W. Gerard

The sound that American wind turbines produce as their giant, breeze-propelled blades whip around is a distinctive: Neh-neh-neh-neh-neh-neh.

The anticipation is that those energy-generating, whirling arms would create a whooshing sound. And maybe they do in some countries. But here, in America, they echo the almost melodic taunt of a schoolyard victor — Neh-neh-neh-neh-neh-neh: You can’t get me.

That’s because American wind turbines are the manifestation of freedom from foreign oil. The more American wind turbines, the fewer barrels of oil America must import to meet its energy needs. And American-built wind turbines help propel the nation out of the worst economic crisis since the Great Depression by generating good-paying American jobs.

President Obama talked about the ugly results of the nation’s refusal to solve its dependency problem – its guzzling of 20 percent of the world’s oil while controlling less than two percent of the world’s reserves. America’s combination of oil addiction and lack of adequate oil resources enslaves the nation to foreign sources, often foreign sources hostile to America. A generation ago, former President Jimmy Carter warned of the consequences of this abusive relationship as Iran held 52 Americans hostages and long lines formed at gasoline stations during a season of shortages.

Carter installed on the White House roof a symbol of the solution — solar panels. His successor there, Ronald Reagan, pulled them down. And the nation went on its merry way forgetting the once-empty gasoline stations and ignoring its ever-increasing foreign dependency – even as the Exxon Valdez mucked Prince William Sound two months after Reagan left office.

Here’s what Obama said about that wasted opportunity:

“And for decades, we have failed to act with the sense of urgency that this challenge requires. Time and again, the path forward has been blocked – not only by oil industry lobbyists, but also by a lack of political courage and candor.

The consequences of our inaction are now in plain sight. Countries like China are investing in clean energy jobs and industries that should be right here in America. Each day, we send nearly $1 billion of our wealth to foreign countries for their oil. And today, as we look to the Gulf, we see an entire way of life being threatened by a menacing cloud of black crude.”

The explosion of the Deep Water Horizon oil rig in the Gulf of Mexico, the deaths of 11 workers, the uncontrolled gushing of more than 50,000 barrels of oil a day into the sea, and the mucking of brown pelicans and four states’ coastlines have given Obama the ability to take up Carter’s righteous clean energy campaign. And Obama accepted the challenge:

“The tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now. Now is the moment for this generation to embark on a national mission to unleash America’s innovation and seize control of our own destiny.”

The president noted that wind turbines are being built in retrofitted factories that were once abandoned right here in America. That happened in Pennsylvania. The wind turbine manufacturer Gamesa converted defunct mills into centers for wind turbine construction. And it cooperated with the United Steelworkers (USW) to provide good-paying union jobs.

That is the potential President Obama sees – independence from foreign sources and resurgence of America’s economy. It is the potential that the USW and the American Wind Energy Association (AWEA) pictured when they agreed earlier this month to work together to accelerate development and deployment of wind energy production in the U.S.

Like the Steelworkers, the national trade association of America’s wind industry believes the U.S. must move toward renewable energy sources and must construct them itself. U.S. Sen. Sherrod Brown of Ohio explained it simply when the USW and AWEA announced their partnership:

“We can’t replace our dependence on foreign oil with a dependence on Chinese-made wind turbines. It’s critical that American manufacturers have the resources to develop and deploy wind energy components. Clean energy will help America regain its leadership in manufacturing. We need to ensure American workers and manufacturers are building the clean energy components that will be used around the world.”

Obama called on Americans to “seriously tackle our addiction to fossil fuels.” But like any rehab program, success won’t come easily. Oil companies will continue to lobby against it. Swayed by their money, some politicians will oppose the legislation essential to encourage it.

But symbolic solar panels must remain on the White House roof this time. Renewable energy, as Obama said, enables America to shape its own destiny

The President urged the nation to free itself from its oil dependency now:

“As we recover from this recession, the transition to clean energy has the potential to grow our economy and create millions of jobs – but only if we accelerate that transition. Only if we seize the moment.”

This is the time for wind turbines. For solar. For hydro. This is the moment to hear increasing numbers of rotor blades whipping up the sound of independence.

Carpe diem.

Hell if D.C. Didn’t Offshore $849 Million in Stimulus for Windmills Already

8:53 am in Uncategorized by Leo W. Gerard

It turns out a Texas windmill farm developer’s request last month for nearly half a billion in stimulus funds to create 2,000 jobs in China doesn’t rank first on the audacity scale.

Shockingly for American taxpayers, and sadly for the staggering 10.2 percent of Americans who are unemployed, it doesn’t even rank second.

That’s because Washington already has doled out hundreds of millions in stimulus funds to foreign renewable energy firms. Of the $1.05 billion in clean energy grants awarded by D.C., $849 million — 84 percent — went to foreign wind companies, according to an analysis by Russ Choma of the Investigative Reporting Workshop. He wrote:

“The cash grants were given for the installation of 1,763 megawatts of capacity – 1,566 installed by foreign companies. Using the Renewable Energy Policy Project’s own numbers, as many as 4,500 manufacturing jobs may have been created overseas.”

A strong, broad Buy American clause in the stimulus bill could have prevented the off-shoring of U.S. tax dollars intended to create jobs for unemployed Americans. My union, the United Steelworkers, and the AFL-CIO pushed hard for that language, and polls showed 86 percent of Americans supported it. Republicans and lobbyists for multi-national corporations that wanted to spend U.S. tax money overseas opposed Buy American provisions.

Congress adopted weak, limited Buy American language. Now D.C. exports stimulus dollars to create jobs in foreign countries.

Some of the foreign wind firms that got stimulus funds have American subsidiaries. But most of them shipped major components for wind farms to the U.S. That means American stimulus dollars employed foreign workers. One Spanish company, Iberdrola S.A., got $545 million from U.S. taxpayers.

Sen. Charles E. Schumer, a Democrat from New York, denounced the request to use U.S. tax dollars to create jobs in China and demanded the Obama administration deny funding. But it’s too late for the $849 million in stimulus dollars already given away to foreign wind companies. American tax dollars, meant to create jobs and nurture a green energy industry in the U.S., are gone with the wind.

Lavishing stimulus funds on foreign businesses is tragic for another reason: Those overseas companies are competitors to fledgling U.S. firms that were supposed to get the money. President Obama has said he wants the U.S. to be “the world’s leading exporter of renewable energy.” That’s not going to happen if the U.S. pays European and Chinese manufacturers to import wind turbines.

Congress set aside at least $3 billion in the stimulus bill for renewable energy projects. That investment would have two benefits. Growth in renewable energy – from sources such as windmills and solar cells – could reduce dangerous pollution from burning fossil fuels. In addition, the Blue Green Alliance estimated in its report, “Building the Clean Energy Assembly Line,” that U.S. manufacturers could create 850,000 jobs if Congress adopted a national standard requiring 25 percent of electricity to be generated with renewable sources by 2025.

The key, obviously, is that the wind turbines and solar cells constructed to meet that standard couldn’t be imported for the jobs to be created in the U.S. The U.S. industry, however, needs the kind of help foreign governments give their clean energy manufacturers. The Blue Green Alliance report notes:

“Without new policies promoting domestic manufacturing, an unnecessarily large portion of these jobs will remain overseas.”

Keith Bradsher of the New York Times in a July 13 story described China’s policy to protect and promote its renewable energy industries: “China is shielding its clean energy sector while it grows to a point where it can take on the world.” That includes, Bradsher recounted, a competition last spring where China disqualified all foreign bidders on technicalities for 25 contracts to supply wind turbines. Beijing then awarded the contracts to seven Chinese companies, including some that had never built a turbine.

There’s no reason except a desire to shoot itself in the foot for the U.S. not to protect and promote its own renewable energy industries. “The Building the Clean Energy Assembly Line” report provides recommendations for Congress to cultivate American renewable energy industries, including long-term investment tax credits, adopting a national standard requiring a minimum percentage of electricity be generated through renewable energy, passing cap and trade legislation, and providing low-interest financing.

After the Texas windmill incident, I wrote Sen. Schumer asking for bold action to support U.S. clean energy manufacturing. In the letter copied to all members of Congress, I told him we must expand and accelerate the availability of incentives for manufacturing wind turbines and other clean energy technologies – here, in the U.S. One important way to do that is for Congress to extend to the manufacture of components like turbines the funding incentives that are now provided for production of clean energy.

Clearly, another method would be to Buy American. When constructing a wind farm in Texas, why would taxpayers give their money to support importing the turbines from China or Spain when there are perfectly good turbine manufacturers here in the U.S.?

The Texas windmill farm developer announced this week that its Chinese partner plans to construct a $50 million turbine factory in the U.S., according to a story in the New York Times. But that facility won’t supply the turbines for the project that the partnership wants $436 million in stimulus funds to support. Those would come from China. So, in the end, it still means nearly half a billion in U.S. tax dollars would create 2,000 turbine-building jobs in China.

When China passed its $600 billion economic stimulus bill this summer, it adopted “Buy China” provisions. Obviously, as far as wind turbines were concerned, it was implementing a “Buy China” policy before that.

Is the U.S. going to continue thwarting itself and tilting at windmills or is it going to adopt and enforce a robust Buy American policy and build some?