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The American economy is not working for
American workers, and voters know it.
A bursting housing bubble last year triggered a global
financial crisis that is dragging the U.S. into another recession. Employers
have shed 605,000 jobs since the beginning of the year, real wages are falling,
gas and food prices are skyrocketing and millions of families are threatened
with losing their homes.
Today’s economic crisis brings to an end a seven-year business
expansion that, for the first time on record, left family incomes below their
pre-recession levels. Nationally, real median family income for 2007 was still
$2,000 below its 2000 peak level. In Pennsylvania, its worse. Family income
was $2,344 lower in 2007. This is the first time on record that working
families’ incomes were lower after an economic recovery than before it. This is
also the first expansion on record in which manufacturing employment never
recovered to its pre-recession level.
This recession is particularly painful, however, coming at the end
of a generation long stagnation of wages and rising economic insecurity. We
live in a country that generates $14 trillion a year in income yet, for too many
working families, it is difficult to survive without working longer hours and
sending more family members to work.
However, America’s wealthiest families are benefiting as never
before even as the vast majority of American workers are left behind. Almost all
the gains from a two-thirds increase in productivity since 1980 have accrued to
corporate profits and CEO pay. Today only 20 percent of American workers have a
real defined-benefit pension plan compared with 40 percent in 1980. And, over
45 million Americans still have no health insurance. Despite this, CEO
compensation and benefits have increased drastically. In 1980, average CEO pay
was 20 times average worker pay. Today, on average, CEOs earn 411 times what
workers take home. The result is America today has the most unequal
distribution of income and wealth of any developed country and we are more
unequal today than at any time since the 1920s.
Clearly we are in an economic crisis. The question is “why?”
Simply put, we are in a financial crisis because our country cannot prosper
unless and until middle class workers prosper. For decades, workers’ real wages
have been slowly falling, as workers’ lost the right to organize and good jobs
were sent out of the country. About 70% of America’s economy is consumer
driven. But, instead of paying working people good wages and benefits, George
Bush and Alan Greenspan hide falling wages by cutting taxes and telling the
banks to borrow money from Asia and the Middle East to lend to working people –
money they couldn’t pay back because their wages were stagnant.
But there is no such thing as a low wage consumer economy. Lending
people money rather than paying them good wages will (and has) hit a wall and is
the reason why we have a financial crisis and a weak economy.
We need an economy that provides good jobs by promoting investment
in productive activity like building new roads and bridges and solving the
energy and environment problems. We need an economy where workers can organize
and turn bad jobs into good jobs. Only when the average American has a good
job, with health care and retirement security, can our economy be stable and
healthy.
Recent polls show that 60 percent of likely voters view the economy
as the most important issue in the upcoming election. This is far more than any
other issue. Americans clearly understand the economic challenges that working
families face and see the need to change the direction of economic policy in our
country. To win the support of the American people, candidates for office need
to show that they understand the economic struggles of working families, share
the values of American workers and have a credible plan for adopting policies
that make a real difference in the lives of working families.
America is still the richest country in history and Americans know
that together we can produce a strong, sustainable and internationally
competitive economy that works for ALL Americans. The upcoming election will
determine whether we can begin to turn around America and restore the American
Dream.
Richard Trumka is Secretary Treasurer of the 10 million member American
Federation of Labor – Congress of Industrial Organizations.
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