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As the U.S. Commerce Department released a report late last month showing corporate profits at a 60-year high, suddenly the big news was about how cheating surely must be rampant in social security disability.

Wait, what?

Also late last month, a Washington Post investigation showed that the 30 companies that make up the Dow Jones industrial average pay a dramatically smaller portion of their profits in taxes than they did a half century ago. Instead of discussing how that impacts government services, all of Washington is talking about slashing Social Security and Medicare.

It’s bait and switch.

CEOs and 1 percenters have elevated that old con to a whole new level. To them, bait is not a lure to a store but a taunt about the poor. “Look over there, a welfare queen!” they goad. “Look, someone not-quite-dirt-poor might get Medicaid,” they needle. Then they laugh all the way to their secret accounts in the Caymans as the 99 percent fight among themselves over how many pennies the government throws at the poor. The rich snicker as the vast majority of Americans are so distracted they don’t focus on record corporate profits, on record low corporate tax payments or on lobbyists buying tax breaks for corporations and loopholes for offshore accounts.

In defense of the 99 percent, it’s hard to concentrate on the big economic picture when household finances are so grim. The Commerce Department reported that in January personal income fell 3.6 percent. Overall, considering taxes and inflation, the decline was the largest in 57 years. (more…)

Americans love an underdog. Maybe it’s an artifact of the American Revolution, when a rag-tag rabble of farmers and frontiersmen defeated the disciplined and well-provisioned military of the most powerful nation on earth.

Even though the United States has usurped most powerful status, Americans still ally with Davids in contests with Goliaths. They love to see a top dog taken down a notch. They rooted for the perennial loser Red Sox in the 2004 World Series and reveled in the win by America’s unseasoned ice hockey team in the 1980 Winter Olympics.

That’s why the sudden surge of right-to-work (for less) legislation is so confounding. Right-to-work (for less) laws are perks for the wealthy, for the top dogs. These laws facilitate destruction of unions. The concerted action of a labor union is a tool that workers use to win fair wages, benefits and conditions from the powerful, from the likes of massive multi-national corporations. At a time of dwindling union membership, at a time when labor union participation is so small as to be nearly negligible, state legislatures across the country are taking up right-to-work (for less) laws that will further decimate union ranks. They’re kicking the underdog when it’s down.

Despite the derisive “big union boss” label that right wingers throw at labor leaders, unions are not the big dogs. Union representation in the United States has declined steadily since the 1950s, following federal legislation in 1947 impeding unionization. Just after World War II, about 35 percent of workers belonged to unions. And those who didn’t benefitted from the higher wages and good benefits that union workers negotiated because non-union employers felt compelled to provide competitive compensation. Last year, the percentage of U.S. workers in unions fell to 11.9, the lowest in more than 70 years.

As unions atrophied and the recession raged, the median income of working Americans declined.  Meanwhile, at the top, the big dogs who run corporations continued awarding themselves colossal compensation and bonus packages. Median compensation for executives quadrupled over the past four decades. Last year, most executives got big bumps, whether their companies did well or not. Now, income inequality is greater than at any time since the robber baron days of the 1920s.

Still, somehow, legislatures across the country are rooting for CEOs, the top dogs, and bashing unions. Lawmakers in Ohio, Wisconsin, Arizona, Oklahoma, Idaho, New Hampshire, Tennessee, and South Dakota have attacked public sector unions. Politicians in South Carolina, Minnesota, New Hampshire, even Michigan and West Virginia are pushing right-to-work (for less) legislation.

Republican-controlled Indiana actually passed it this year. The law forbids companies and unions from negotiating terms that require every worker benefitting from the contract to pay his or her share of the cost of bargaining it. In other words, these laws allow workers to refuse to pay union dues and simply freeload on those who do.

Right-to-work (for less) is great for CEOs. It enables them to pocket more of the profits because such laws weaken unions, ultimately resulting in lower pay and benefits for workers, both those who are in unions and those who are not. Oklahoma’s experience illustrates the sad fact that right-to-work (for less) guarantees lower pay for workers, while not ensuring them more jobs.   (more…)

Last week several groups, including the United Steelworkers, petitioned the federal government to whack the latest trade mole – illegally traded auto parts from China.

With President Obama announcing creation of a new trade enforcement unit in his State of the Union Address, the feds probably will investigate. But even if they whack down the auto parts mole, experience has shown a new mole will pop up.

Mole-by-mole trade enforcement isn’t the solution to America’s massive trade deficit. Although conservative candidates revel in ridiculing Western Europe, America could learn crucial economic lessons from Germany, which doesn’t rely on Whack-a-Mole and maintains trade surpluses, including one with China in auto parts.

The Steelworkers – along with the United Auto Workers, the Alliance for American Manufacturing and Campaign for America’s Future – explained why the federal government must smack down the latest trade problem that has raised its ugly head.

China and several other countries promote their auto parts manufacturers by providing subsidies and engaging in additional practices banned by the World Trade Organization (WTO). As a result, the United States imports more auto parts than it produces, a situation that kills manufacturers and manufacturing jobs here.  For example, over the past 11 years, as the U.S. auto parts trade deficit increased by 867 percent, the Unites States lost 45 percent of its auto parts jobs – a total of 419,000.

The reason the groups sought action against China specifically is that its exports of auto parts to the United States have increased faster in the past three years than any other country’s and China supports its auto parts industry in ways that violate its commitments to the WTO.

For example, China provided $27.5 billion in subsidies to its auto parts industry between 2001 and 2010. It’s fine with the WTO if countries subsidize industries that sell their products domestically.  But it forbids subsidies for exported products because that distorts the free market, wrongly destroying jobs and industries in the countries that buy those artificially low priced goods.

Beijing also aggressively limited import of American-made auto parts. This is hardly startling. In December, China imposed steep tariffs on imported American-made sports utility vehicles and other large cars. And the WTO affirmed last week that China violated its trade commitments by restricting export of key raw materials. Earlier, the WTO supported President Obama’s imposition of tariffs on tires imported from China because Beijing had violated international trade rules.

China has prospered by breaking the rules. Electronics manufacturing is a good example. In a story about Apple’s experience, The New York Times described how America lost these jobs to China. Worker wages, while achingly low in China, were not the lure. And they were not the issue for Apple, a company that makes $400,000 in profit for every worker. It was a combination of other factors including the Asian supply chain and Chinese subsidies. (more…)

On Nov. 1, the Economic Policy Institute presented New York Times columnist and Nobel laureate Paul Krugman with EPI’s first ever Distinguished Economist Award. EPI produced this video in which Krugman shares his vision for a decent society, discusses the radicalizing impact of the policy debates of the last decade, and reveals his philosophy on making society better for all.

America is being played.

The U.S. allowed China to join the club of trading partners in the World Trade Organization (WTO) in 2001 under the condition that China observe club rules.

Over the past decade, however, China has profited immeasurably by ignoring, flouting and circumventing the rules barring market-distorting practices. Among the most destructive of these violations is China’s deliberate undervaluing of its currency, which makes Chinese exports to the United States artificially cheap and U.S. exports to China artificially expensive.

This nurtures Chinese industry and poisons American manufacturing.

In the trade contest with China, the referees have been absent or silent or completely craven on the issue of currency undervaluation, even as it kills U.S. factories and jobs. American workers need a trade rule enforcer. With unemployment above 9 percent, the situation is desperate. American workers can’t be played anymore.

Just last week, the Economic Policy Institute (EPI), a non-partisan think tank, issued a report showing that the trade deficit with China cost the United States 2.8 million jobs since the WTO allowed China into the trading club. Every congressional district in the U.S. lost jobs as Chinese exports to the United States overwhelmed U.S. exports to China. (more…)

Washington politicians who want to cut Social Security while they reduce the deficit should give an eye to this recent Snapshot from the Economic Policy Institute (EPI). They’ll find there’s no fat to cut.

The average annual Social Security retirement benefit in 2009 was $13,406.40, slightly above the $10,289 federal poverty line for individuals 65 and older but less than the minimum wage.

That modest Social Security payment makes up a substantial share of income in most senior households. In the poorest 40 percent of 65-and-older households, Social Security payouts constitute more than 80 percent of total income. But even middle-income households count on Social Security. It provides the majority of income for more than 60 percent of senior households.

(more…)

By Terrance Heath
Online Producer, Campaign for America’s Future

“To whom much is given, much is required.” As he stood with the Congressional Progressive Caucus to present the People’s Budget, Democratic Minority Whip Hank Johnson echoed the words of John F. Kennedy as he compared the caucus’s budget to Rep. Paul Ryan’s budget. Kennedy borrowed those words from the Bible, Luke 12:48: “For unto whomsoever much is given, of him shall be much required. The People’s Budget stands in stark contrast to conservative budget proposals that turn the Kennedy/Luke quote on its head: “To whom much is given, not much is required.

Caucus members underscored this contrast, with particular emphasis on the Bush-era tax cuts for the wealthy. The People’s Budget allows the Bush tax cuts for the wealthy to expire at the end of 2012, but extends marriage relief, credits, and incentives for children, families and education.

It also rescinds the upper-income tax cuts in the December 2010 tax “deal,” and incorporates the higher tax rates on millionaires from Rep. Jan Schakowsky’s Fairness in Taxation Act, and the progressive estate tax from the Responsible Estate Tax Act consponsored by Sens. Bernie Sanders, Tom Harkin, and Sheldon Whitehouse. (more…)

By Mike Hall
AFL-CIO Senior Writer

Workers at the top of the wage scale are more than four times more likely to have paid sick days than workers toiling near the bottom wage scale, says a new Economic Policy Institute (EPI) Economic Snapshot.

Just 19 percent of low-wage workers have paid sick days, compared with 86 percent of high-wage workers. These low-income workers are the ones who can least afford to lose pay when they are sick. Overall one in four workers have no paid sick days and when they become ill, are forced to go to work sick, or stay home without pay and risk losing their job.

Many of those low-wage workers are also in occupations most likely to have regular contact with the public—­food service and preparation, and personal care and service—according to a study earlier this year from the Institute for Women’s Policy Research (IWPR). And that, says Dr. Robert Drago, research director for IWPR, “raises serious public health concerns.”

The fewer the number of workers who are able to stay home when sick, the more likely it is that diseases will spread, increasing health care costs and causing needless economic losses. We saw this during the 2009 H1N1 influenza pandemic when workers without paid sick days were more likely to go to work while infected with H1N1.

Click here for more from IWPR.

Recent surveys show three-quarters of Americans say paid sick leave should be a “basic workers’ right” and Congress should pass legislation that guarantees workers paid sick leave. More than 160 countries provide paid sick leave, but not the United States.

San Francisco, Washington, D.C., and Milwaukee have passed laws requiring that employers provide paid sick days to workers. Similar laws are being considered in states and cities around the country.

EPI says law giving American workers that same benefit could increase productivity in the workforce through heightened worker loyalty, reduced turnover and reduced workplace illness.

For more information, visit the Center for Law and Social Policy (CLASP) and check out its one-stop-shop website for information on businesses, The National Partnership for Women and Families (NPWF) and  paid sick days.

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Re-Posted from the AFL-CIO Now Blog

By Leo W. Gerard
USW International President

Tragically, the government of Colombia exhibits the behavior of an addict. And, just as regrettably, the United States is co-dependent, so addicted to so called free trade that it plans to award Colombia an agreement based solely on promises.

Addicts always promise. They’ll stop, they pledge. Their co-dependents desperately want to believe, so they cooperate with the addicts’ demands.

Colombia, the most dangerous country in the world for trade unionists, has pledged to try to stop the murders to persuade Congress to approve a Free Trade Agreement (FTA). Promises, promises.

And the United States has agreed to accept those promises rather than demand performance before signing an FTA. American’s Wall Street banks and multi-national corporations crave another FTA so badly they will believe anything.

When the Colombia FTA was first proposed, Congress refused to approve it because so many trade unionists are assassinated each year by the Colombian military and paramilitary forces that the murders exceed the number of unionists killed in all other countries of the world combined. In 2007, the year that former President George W. Bush completed the agreement, 39 Colombian unionists were slain.

The Colombian government knew why Congress denied approval. It could have responded four years ago by protecting trade unionists and preserving their lives. It did not.

Instead, the murders increased. In 2008, 52 Colombian trade unionists were assassinated, one a week. In 2009, the number declined by 5 to 47, but it was back up to 52 last year. Six have been slain so far this year, including Hector Orozco and Gilardo Garcia, members of the agricultural union known as Association of Peasant Workers of Tolima, who were threatened by the Colombian military just before they were assassinated. Promises, promises.

In response to the concerns expressed by Congress about the murders, the newly-proposed FTA requires Bogota to improve safeguards for workers by April 22, and to develop a plan by May 20 to enhance the capacity of regional judicial offices because the murders of trade unionists go unpunished by the Colombian government – giving the killers an impunity rate of approximately 95 percent. And by mid-June, the Colombian government promises to increase penalties for threatening workers.

The government of Colombia could have completed all of those steps four years ago. It didn’t bother.

To this point, Congress has taken the moral high ground by refusing to approve the trade deal. It said, basically, as long as Colombia continued to countenance the slaughter of its community and labor leaders, Afro-Colombians and indigenous people, America would not give it special treatment for trade purposes.

In addition, Congress recognized the FTA’s potential to devastate Colombian farmers. The FTA would speed forced displacement of Afro-Colombians and indigenous people by encouraging increased exploitation of their land by business interests, such as palm oil companies, half of which are owned by paramilitary groups. Expelling these farmers from their land would further swell Colombia’s internally-displaced population – the largest in the world at 4.3 million.

Making matters worse for Colombian farmers, the main U.S. beneficiaries of the FTA would be big agricultural companies which would be permitted to dump cheap, subsidized food stuffs into Colombia duty-free. This would result in farmers’ impoverishment and land loss because small growers would not be able to compete with the low-cost American produce.  In Haiti and Mexico, domestic food production was wiped out by similar free trade agreements. It’s likely that Colombia would follow the path of Mexico, where, as the ability to grow legitimate crops became economically impossible, farmers turned more and more to producing illicit drugs. Colombia already produces as much as 80 percent of the world’s cocaine.

Business groups, like the U.S. Chamber of Commerce, protested the refusal by Congress to approve the FTA, contending that increasing American exports and jobs was more important than protecting Colombian lives and human rights.

The Chamber’s position is not only depraved, it’s based on flawed calculations of exports and jobs. Just like the North American Free Trade Agreement (NAFTA) and granting China entrance to the World Trade Organization (WTO), the Colombia FTA will cost America jobs and exacerbate the U.S. trade deficit.

Previous projections by the Chamber and the U.S. International Trade Commission (ITC) that NAFTA and China’s WTO membership would improve the U.S. economy proved catastrophically off base.

When the U.S. signed NAFTA in 1993, it had a $1.7 billion trade surplus with Mexico. After the agreement, that surplus quickly morphed into a deficit, which ballooned to $64.7 billion in 2008. These annual deficits cost the U.S. 560,000 jobs between 1993 and 2004.

Similarly, the ITC predicted that the tariff reductions China offered when it entered the WTO would result in a trade deficit of $1 billion a year. Instead, between the years of 2001 and 2008, the actual result was deficits of $185 billion, and the loss or displacement of 2.3 million American jobs.

The U.S. already runs a trade deficit with Colombia. It was $1.86 billion in 2009. The Economic Policy Institute calculates that the proposed FTA with Colombia would nearly double that trade deficit by 2015, which would cost the United States another 55,000 jobs.

Frankly, the EPI calculation, which factors in effects on trade like currency manipulation, is far more credible than the ITC and Chamber reports, which ignore these issues.

Bogota wants the FTA because it believes the deal will be good for Colombian business interests. One immediate bonus, for example, is that the FTA would eliminate tariffs on 80 percent of Colombia’s exports to the U.S.

To get what it wants, the Colombian government is willing to say anything. Just like an addict. Promises, promises. The Colombian government’s past performance shows its pledges to protect workers from assassination are empty.

America must reject the role of co-dependent. It must demand the proof of performance before rewarding the government of Colombia with an FTA.

Without proof of performance, the government of Colombia will get away with murder.  It will export more of its goods – crude oil, coffee, fruit and flowers — to the U.S.  And unwitting Americans will buy more blood red Colombian roses.

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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.

By Mike Hall
AFL-CIO Senior Writer

Here’s more evidence that the past decade has been very, very good for the health insurance industry and more insight into why Big Insurance fought so hard to derail health care reform, especially the new law’s requirement that companies actually spend premium dollars on health care.

Family health insurance premiums more than doubled between 1999 and 2009, far outpacing the growth in workers’ earnings and overall inflation, reports the Economic Policy Institute (EPI). Those premium dollars fueled nearly annual levels of record profits along with outrageous CEO salaries and extravagant executive perks and bonuses.

While insurers raised their premiums by a staggering 131 percent, inflation for the decade was just 28 percent, while workers barely outpaced inflation with hourly earnings increasing just 38 percent. According to the EPI’s Economic Snapshot released today:

Since health insurance premiums are often shared between workers and their employers, this disproportionate rise in the cost of health insurance helps illustrate why it is increasingly difficult for both employers and their workers to afford. (more…)