Leo W. Gerard
By Leo W. Gerard
USW International President
Like the clear results on a pH test strip, the vote in the U.S. Senate this week on the Creating American Jobs and Ending Off-Shoring Act showed Republicans’ true color: Red. Red for China.
Or Mexico. Or Indonesia. Or anywhere multi-national corporations get tax breaks for exporting American jobs. In this test of loyalty, every Republican in the Senate voted for corporate greed over American workers.
No fluke, this is a GOP pattern. The red party has consistently sided with giant corporations to the detriment of the American economy and American workers. In voting against health care reform, Republicans chose giant health insurance corporations over uninsured Americans. In opposing financial reform, Republicans embraced Wall Street over the taxpayers who bailed out the big banks and don’t want to do it again.
Republicans vainly attempted to rationalize those votes as opposing government regulation. There’s no regulation issue in the Creating American Jobs and Ending Off-Shoring Act.
That Act would have removed tax incentives the U.S. government gives corporations to close domestic factories, fire American workers and move production overseas. And, conversely, the Act would have instituted tax cuts for corporations that return foreign employment to U.S. soil.
Every Republican in the Senate voted against the Act. They voted to continue forcing Americans to give tax breaks to corporations that ship jobs overseas during the worst recession since the Great Depression. The GOP said it is right and proper for U.S. citizens to subsidize corporate killing of American manufacturing. And Republicans said it would be wrong to do the opposite — to use tax breaks to encourage corporations to restore off-shored jobs to the U.S.
Democrats, whose first priority is American workers, are pushing a 17-bill Make it in America plan. The Creating American Jobs and Ending Off-Shoring Act is part of that effort to bolster domestic industry and employment.
With joblessness stuck at 9.6 percent and with the U.S. trade deficit destroying or displacing 5.6 million jobs — 70 percent of them good-paying manufacturing jobs — in just one year – 2007, Democrats developed this plan to preserve American industry and jobs. Recent surveys of likely voters suggest the Democrats’ Make it in American program is exactly what Americans want and believe the country needs.
In a Wall Street Journal/NBC News poll released earlier this week, 86 percent of respondents cited corporate off-shoring of American jobs as the primary cause of the country’s continuing economic distress.
Similarly, a bi-partisan polling team that conducted a survey of likely voters for the Alliance for American Manufacturing in April found large majorities believe manufacturing strength is crucial to U.S. economic security and that the government should fortify American industry. These voters told the pollsters that they believe America no longer leads the world in manufacturing but could again with proper support.
That can-do-it attitude is realistic. Already some manufacturers are on-shoring. General Electric is moving production of its energy-efficient water heaters from China to the United States. Caterpillar and NCR, a technology company, are doing the same. A survey in June found 21 percent of North American manufacturers brought production into or closer to the United States in the previous three months and another 38 percent planned to research such a move.
Manufacturers gave USA Today numerous reasons for this repatriation. Chinese wages and shipping costs have risen. They cited poor quality foreign manufactured goods; theft of intellectual property; long product delivery times interfering with response to consumer demand, and benefits from providing engineers easy access to assembly lines.
The trade publication, Supply Chain Digest, quoted two experts in an August story about the on-shoring trend:
“George Stalk, a consultant at Boston Consulting Group, has led research efforts showing the inventory benefits for high margin, fashion-oriented goods from bringing production at least back to North America almost always trump the value of lower manufacturing costs in Asia. Those benefits come from both not losing sales from being out of stock and not getting stuck with obsolete inventory that a company can’t sell or must mark down dramatically.”
And, the story quoted Jeremy Leonard, a consultant for Manufacturers Alliance/MAPI:
“A lot of companies who have gone there to take advantage of cheap labor are starting to tell us that if you (calculate) total cost and don’t just look at wages, it’s actually not worth it.”
Democrats sought to nurture and expand the repatriation trend. But like numerous Make it in America bills passed by the U.S. House, the Creating American Jobs and Ending Off-Shoring Act died at the hands of Senate Republicans. Democrats had the majority with 53 votes for the measure, but Republicans, as they have all year, blocked passage by using a filibuster to require a super-majority of 60.
The next test for Republicans will occur Nov. 2. In the mid-term election, Americans red-in-the-face angry at the GOP for extending tax breaks to corporations for expatriating American jobs have the opportunity to show Republican politicians what it feels like to lose a job.
Leo W. Gerard also is a member of the AFL-CIO Executive Committee and chairs the labor federation’s Public Policy Committee. President Barack Obama recently appointed him to the President’s Advisory Committee on Trade Policy and Negotiations. He serves as co-chairman of the BlueGreen Alliance and on the boards of the Apollo Alliance, Campaign for America’s Future and the Economic Policy Institute. He is a member of the IMF and ICEM global labor federations and was instrumental in creating Workers Uniting, the first global union.