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President Obama on Labor Day

Some key excerpts from President Obama’s Labor Day speech.

I believe this with every fiber of my being: America cannot have a strong, growing economy without a strong, growing middle class, and the chance for everybody, no matter how humble their beginnings, to join that middle class — (applause) — a middle class built on the idea that if you work hard, if you live up to your responsibilities, then you can get ahead; that you can enjoy some basic guarantees in life. A good job that pays a good wage. Health care that will be there when you get sick. (Applause.) A secure retirement even if you’re not rich. (Applause.) An education that will give your children a better life than we had. (Applause.) These are simple ideas. These are American ideas. These are union ideas. That’s what we’re fighting for. (Applause.)

I was thinking about this last week. I was thinking about this last week on the day I announced the end of our combat mission in Iraq. (Applause.) And I spent some time, as I often do, with our soldiers and our veterans. And this new generation of troops coming home from Iraq, they’ve earned their place alongside the greatest generation. (Applause.) Just like that greatest generation, they’ve got the skills, they’ve got the training, they’ve got the drive to move America’s economy forward once more. We’ve been investing in new care and new opportunities and a new commitment to our veterans, because we’ve got to serve them just the way they served us. (Applause.)

But, Milwaukee, they’re coming home to an economy hit by a recession deeper than anything we’ve seen since the 1930s. So the question is, how do we create the same kinds of middle-class opportunities for this generation as my grandparents’ generation came home to? How do we build our economy on that same strong, stable foundation for growth?

Now, anybody who thinks that we can move this economy forward with just a few folks at the top doing well, hoping that it’s going to trickle down to working people who are running faster and faster just to keep up, you’ll never see it. (Applause.) If that’s what you’re waiting for, you should stop waiting, because it’s never happened in our history. That’s not how America was built. It wasn’t built with a bunch of folks at the top doing well and everybody else scrambling. We didn’t become the most prosperous country in the world just by rewarding greed and recklessness. We didn’t come this far by letting the special interests run wild. We didn’t do it just by gambling and chasing paper profits on Wall Street. We built this country by making things, by producing goods we could sell. We did it with sweat and effort and innovation. (Applause.) We did it on the assembly line and at the construction site. (Applause.)

We did it by investing in the people who built this country from the ground up –- the workers, middle-class families, small business owners. We out-worked folks and we out-educated folks and we out-competed everybody else. That’s how we built America.

More:

You know, that’s why we passed financial reform to provide new accountability and tough oversight of Wall Street; stopping credit card companies from gouging you with hidden fees and unfair rate hikes. (Applause.) Ending taxpayer bailouts of Wall Street once and for all. They’re not happy with it, but it was the right thing to do. (Applause.)

That’s why we eliminated tens of billions of dollars in wasteful taxpayer subsidies, handouts to the big banks that were providing student loans. We took that money, tens of billions of dollars, and we’re going to go to make sure that your kids and your grandkids can get student loans and grants at a cheap rate and afford a college education. (Applause.) They’re not happy with it, but it was the right thing to do. (Applause.)
Yes, we’re using those savings to put a college education within reach for working families.

That’s why we passed health insurance reform to make coverage affordable. (Applause.) Reform that ends the indignity of insurance companies jacking up your premiums at will, denying you coverage just because you get sick; reform that gives you control, gives you the ability if your child is sick to be able to get an affordable insurance plan, making sure they can’t drop it.

That’s why we’re making it easier for workers to save for retirement, with new ways of saving your tax refunds, a simpler system for enrolling in plans like 401(k)s, and fighting to strengthen Social Security for the future. (Applause.) And if everybody is still talking about privatizing Social Security, they need to be clear: It will not happen on my watch. Not when I’m President of the United States of America. (Applause.)
That’s why — we’ve given tax cuts — except we give them to folks who need them. (Applause.) We’ve given them to small business owners. We’ve given them to clean energy companies. We’ve cut taxes for 95 percent of working Americans, just like I promised you during the campaign. You all got a tax cut. (Applause.)

And instead of giving tax breaks to companies that are shipping jobs overseas, we’re cutting taxes to companies that are putting our people to work right here in the United States of America. (Applause.)

Tags: Barack Obama, Jobs

Investing in Us

At a Labor Day event, President Obama proposed a measure to strengthen America’s network of roads, bridges, rail, and air travel.

– Rebuild 150,000 miles of roads and bridges while expanding capacity on some of them.

– Construct and maintain 4,000 miles of rail lines, both high-speed rail and commuter lines. The plan also would “invest in a long-overdue overhaul of the Amtrak passenger fleet.”

– Rehabilitate or reconstruct 150 miles of airport runways and put in place a NextGen air-traffic control system. Among improvements would be use of a satellite-based surveillance system, which would be more accurate than ground-based radar.

This would mean hundreds of thousands of jobs in construction, an industry that currently has a 17% unemployment rate. So cue Republicans complaining about spending—never mind that this is an investment that could be largely covered up front just by eliminating a few tax loopholes that currently go to big oil companies.

But investment. Let’s think about that aspect of it. There’s the investment in jobs—hundreds of thousands of construction workers who have money to spend in their communities, who can afford to make purchases they’ve delayed for a couple years now, which in turn helps stores and service providers. Voila! Increased tax base not because people are paying a higher rate but because they are making more.

Then there’s what gets built. As much as I may think we need a less car-dependent culture, I don’t want to see bridges collapsing and cars plummeting hundreds of feet into rivers. We saw that in Minneapolis just a few years ago, and that wasn’t the only bridge collapse in the US in recent memory. Nor are all our bridges in good shape today. Some are disasters waiting to happen.

Then there’s rail. In the summer of 2008, with gas prices spiking, Amtrak was suddenly very popular. That year:

Amtrak set records in May, both for the number of passengers it carried and for ticket revenues — all the more remarkable because May is not usually a strong travel month.

But the railroad, and its suppliers, have shrunk so much, largely because of financial constraints, that they would have difficulty growing quickly to meet the demand.

So when people wanted the service, it was limited because of having been starved for resources for too many years. Gas prices will always fluctuate some over the course of the year, but in the long term, the direction is up. Strengthening Amtrak would be a major environmental plus, it would ease crowding on roads, and it would provide more transportation options—not just when gas prices spiked. Oh, and it would create jobs we need now.

President Obama’s bill is an investment in working people—in jobs and quality of life—an investment in American strength, and an investment in the future.

“The Only Surefire Ways…”

UC Berkeley economist Brad DeLong provides excerpts from Christina Romer’s speech this week, her last as Chair of the President’s Council of Economic Advisers, in which she said:

The only surefire ways for policymakers to substantially increase aggregate demand in the short run are for the government to spend more and tax less. In my view, we should be moving forward on both fronts….

…concern about the deficit cannot be an excuse for leaving unemployed workers to suffer. We have tools that would bring unemployment down without worsening our long-run fiscal outlook, if we can only find the will and the wisdom to use them….

Much of her speech details the ways in which the Great Recession has differed from prior U.S. recessions, something we examined back in January in a post titled “Do You Believe in Magic?”

Romer is returning to UC Berkeley to assume her former post as a professor of economics.

She has been perhaps the clearest advocate in the administration for the benefits of fiscal stimulus and the need for additional policy action. But her departure does not necessarily signal a pull back by the White House from pursuing a bolder focus on new initiatives to boost jobs and the economy.

To the contrary, as President Obama has recently said the administration is working on “additional measures” as part of “a full-scale effort, a full-scale attack” to get jobless workers back to work and sustain a real economic recovery.

The question of who is chosen to fill the Council of Economic Advisers (CEA) post may well be one of the critical components determining just how “full-scale” those “additional measures” will be.

In that context, yet another UC Berkeley economics professor comes to mind. Laura Tyson, a senior fellow with the Center for American Progress, and a member of the Economic Recovery Advisory Board, served as the Chair of CEA from 1993 to 1995 in the Clinton administration.

But the primary reason Tyson comes to mind is her Op-Ed in last Sunday’s New York Times, titled “Why We Need a Second Stimulus”:

OUR national debate about fiscal policy has become skewed, with far too much focus on the deficit and far too little on unemployment. There is too much worry about the size of government, and too little appreciation for how stimulus spending has helped stabilize the economy and how more of the right kind of government spending could boost job creation and economic growth. By focusing on the wrong things, we are in serious danger of failing to do the right things to help the economy recover from its worst labor market crisis since the Great Depression.

The primary cause of the labor market crisis is a collapse in private demand — the same problem that bedeviled the economy in the 1930s.
In the wake of the financial shocks at the end of 2008, spending by American households and businesses plummeted, and companies responded by curbing production and shedding workers. By late 2009, in response to unprecedented fiscal and monetary stimulus, household and business spending began to recover. But by the second quarter of this year, economic growth had slowed to 1.6 percent, according to a government estimate issued Friday. Clearly, the pace of recovery is far slower than what is needed to restore the millions of jobs that have been lost.
[...]
Under these circumstances, the economic case for additional government spending and tax relief is compelling.

The author is the winner of the 2010 CREDO Mobile/Netroots Nation award for Blog Activist of the Year.

Tags: Jobs, recovery, stimulus, unemployment

Paying for It

So, you’re asking, how do we pay for bridges and fire fighters and teachers and trains and health care for kids and sewers that don’t overflow all the time, without putting an unbearable tax burden on middle-class families or small businesses?

The answer is not hard and it’s been laid out a lot of times by a lot of people. Here’s James Surowiecki in the New Yorker:

Between 2002 and 2007, for instance, the bottom ninety-nine per cent of incomes grew 1.3 per cent a year in real terms—while the incomes of the top one per cent grew ten per cent a year. That one per cent accounted for two-thirds of all income growth in those years. People in the ninety-fifth to the ninety-ninth percentiles of income have represented a fairly constant share of the national income for twenty-five years now. But in that period the top one per cent has seen its share of national income double; in 2007, it captured twenty-three per cent of the nation’s total income. Even within the top one per cent, income is getting more concentrated: the top 0.1 per cent of earners have seen their share of national income triple over the same period. All by themselves, they now earn as much as the bottom hundred and twenty million people. So at the same time that the rich have been pulling away from the middle class, the very rich have been pulling away from the pretty rich, and the very, very rich have been pulling away from the very rich.

The current debate over taxes takes none of this into account. At the moment, we have a system of tax brackets well suited to nineteenth-century New Zealand. Our system sets the top bracket at three hundred and seventy-five thousand dollars, with a tax rate of thirty-five per cent. (People in the second-highest bracket, starting at a hundred and seventy-two thousand dollars for individuals, pay thirty-three per cent.) This means that someone making two hundred thousand dollars a year and someone making two hundred million dollars a year pay at similar tax rates. LeBron James and LeBron James’s dentist: same difference.

This makes no sense—there’s a yawning chasm between the professional and the plutocratic classes, and the tax system should reflect that. A better tax system would have more brackets, so that the super-rich pay higher rates. (The most obvious bracket to add would be a higher rate at a million dollars a year, but there’s no reason to stop there.) This would make the system fairer, since it would reflect the real stratification among high-income earners. A few extra brackets at the top could also bring in tens of billions of dollars in additional revenue.

Not to mention the fun of watching Republicans try to pretend they were somehow sticking up for the little guy by opposing added taxes on multimillionaires.

Tags: public services, taxes

Quick Takes on Another Sluggish Jobs Report

As former Chicago Mayor Richard J. Daley used to say, “on account of the time factor”… some quick links on the August jobs report.

Meteor Blades at Daily Kos:

Two positive things can be said about today’s jobs report from the Labor Department. First, it was significantly better than the one for August 2009, and June and July 2010 were not as bad as had been previously calculated. The stock market apparently loves the report since many experts were predicting far worse.

There were 60,000 jobs created if you leave out the Census. Overall: 54,000 jobs lost, with 121,000 government layoffs, including 114,000 Census workers. Private-sector jobs created: 67,000. Unemployment rate: a rise to 9.6 percent. Unemployment plus underemployment: a rise to 16.7 percent. Number of Americans officially unemployed: 14.9 million. Number unemployed, underemployed and so in despair they’ve given up looking: perhaps 16 million. The employment-population ratio: up a tenth of a point to 58.5 percent.

During the first eight months of 2010, fewer new private-sector jobs (763,000) have been created than were lost in January 2009 alone. At the current rate of new job creation, it will be mid-2017 before as many Americans are working as was the case 32 months ago when the Great Recession began.

Calculated Risk:

Nonfarm payrolls decreased by 54 thousand in August. The economy has gained 229 thousand jobs over the last year, and lost 7.6 million jobs since the recession started in December 2007.
[...]
This is another weak report, however the upwards revisions to June and July were a positive. The participation rate increased slightly – and that is good news – but the unemployment rate also increased.

Brad DeLong:

Not a Good Payroll Report

The nearly stagnant pool that is the private sector job market shows just how desperately the private sector needs a public jobs stimulus.

Tags: public jobs stimulus, unemployment

CEOs Lay Off Workers, Get Higher Pay

Anyone surprised by this news?

A new report concludes that chief executives of the 50 firms that have laid off the most workers since the onset of the economic crisis in 2008 took home 42 percent more pay in 2009 than their peers at other large U.S. companies.

The report, from the Institute of Policy Studies, found that the 50 layoff leaders received $12 million on average in 2009, compared with an average compensation of $8.5 million for chief executives of companies in Standard & Poor’s 500. Each of the 50 companies examined in the report laid off at least 3,000 workers between November 2008 and April 2010.

I guess the classic answer would be “it’s between the companies and their shareholders,” but the issue goes deeper than that. This is companies harming not just workers but the United States economy in search of the quickest, shortest-term profit. It’s coming out of fundamentally twisted priorities – priorities corporations have worked hard to sell us on for more than a generation now but which did not reign during the post-World War II years so often invoked as an American ideal.

So it would be great to stop this exact practice. But it would be better to change the economy to work for all of us and for the nation.

Working America on Hardball

Working America’s Karen Nussbaum and Dan Heck were on Hardball last night, talking about what we’re hearing, our efforts to organize working people, and mobilizing jobless workers to vote.

Visit msnbc.com for breaking news, world news, and news about the economy

Tags: Working America

Low-Wage Jobs are Coming Home

NPR:

For years, Americans have had their phone calls about credit card bills and broken cell phones handled by people in the Philippines or India. But American firms are starting to bring call centers back to the U.S. — and this time around, they are hiring more people to work in their own homes.

Ten years ago, it made a lot of sense to outsource these jobs overseas. But that’s changing. Increasingly, companies that want to outsource their customer service jobs are happy with these domestic arrangements.

High inflation and double-digit annual raises in some sectors are pushing up the cost of labor in India. At the same time wages in the U.S. are falling and companies are rethinking the trade-offs associated with outsourcing.

But:

Experts say outsourcing is still accelerating for jobs in IT services and manufacturing. Phil Fersht, an outsourcing analyst, says even before the recession started, companies were starting to realize that offshoring wasn’t the best option for other services.

In other words, the wage scale in the US has fallen so far that it’s cheaper to hire folks at home to do the lowest paying jobs. The better paying jobs, like IT and manufacturing, are still going overseas.

In fact, US labor is so cheap now, that outsourcing companies in India are outsourcing jobs to the US. From FT.com:

Pramod Bhasin, the chief executive of Genpact, said his company expected to treble its workforce in the US over the next two years, from about 1,500 employees now.

“We need to be very aware [of what’s available] as people [in the US] are open to working at home and working at lower salaries than they were used to,” said Mr Bhasin. “We can hire some seasoned executives with experience in the US for less money.”

I trust I don’t have to underscore the irony inherent in that last story.

Finally, if unemployed folks find jobs, those jobs are likely to be lower paying. From the New York Times:

For years, long before the recession began, job growth had become increasingly polarized in this country. High-paid occupations that require significant amounts of education and training grew rapidly alongside low-wage, service-type jobs that do not, according to David Autor, a labor economist at the Massachusetts Institute of Technology.

The growth of these low-wage jobs began in the 1980s, accelerated in the 1990s and began to really take off in the 2000s. Losing out in the shuffle, Dr. Autor said, were jobs that he described as “middle-skill, middle-wage” — entry-level white-collar positions, like office and administrative support work, and certain blue-collar jobs, like assembly line workers and machine operators.

and

A new analysis by the National Employment Law Project, a liberal advocacy group, takes a different approach, identifying industries that have experienced job growth in 2010 and examining their median wages. It is a blunter measurement because it focuses on whole industries, within which there is often great diversity in income. Economists also cautioned that it was still too early to know exactly which sectors would eventually lead the way in a sustained recovery.

Nevertheless, the law project analysis offers a snapshot of where the employment growth has been so far. It found that job expansion to this point had been skewed toward industries with median wages that are low to middling, with a disproportionate share of job growth happening in industries whose median wages fell below $15 an hour.

Given that our entire economy revolves around consumer spending, it’s difficult to imagine how an abundance of low paying jobs will provide “recovery.” If this is the wave of the future, more foreclosures and bankruptcies await.

Tags: Jobs, outsourcing

COBRA Costs Increasing, Leaving Families with Hard Choices

From HuffPo:

Terminated workers are paying an average of $429 a month this year for individual HMO coverage, compared to $399 for the same coverage in 2009, according to a survey conducted by Aon Consulting. COBRA coverage for an entire family now costs an average of $1,251, up from $1,171 per month at this time last year. With COBRA costs on the rise and the average unemployment check totaling less than $300 a week, a growing number of jobless Americans are no longer able to afford their health insurance plans.

Families are having to choose between having health insurance or keeping a roof over their head and food on the table. A family who has a member with medical needs is between a rock and a hard place.

John Zern, executive vice president and Health & Benefits Practice director with Aon Consulting, said the costs of COBRA are rising because so many people are using the system.

In an effort to spread the misery around:

Current employees should also expect to see their plans become more expensive in the next couple of years as employers shift the costs over to them. The Aon survey found that 65 percent percent of employers plan to increase cost-sharing in 2011 for deductibles, co-pays and out-of-pocket maximums, and 57 percent of companies polled said they will ask employees to contribute more for the overall cost of health care next year.

Tags: COBRA, Health Care, unemployment