Week In Review
A Weekly Column by Bill Onasch
February 2, 2009
The Two Faces Of Stimulus
On a “thank you” tour of Ohio shortly after his election victory Obama held a press conference at Cardinal Fasteners in Cleveland. The bolt maker was getting new orders from wind mill manufacturers and had just created two new “green jobs.” On the basis of this surge the company owner went so far as to invite Ohio’s unemployed to apply for opportunities in the new growth industry he was pioneering.
Last week Cardinal laid off about a fifth of their workforce. The problem wasn’t with the new green jobs. The bottom fell out of their core business–supplying manufacturers such as Caterpillar, who recently announced huge production cuts, and axed tens of thousands of construction and mining equipment jobs.
In response to this deepening gloom congress is debating, and the administration is constantly revising, a huge “stimulus package.” The House version runs 647 pages and the Senate’s will likely be longer.
The emergency stimulus adopted last year, consisting of sending out checks for several hundred dollars to most folks, did little to nudge the economy forward. More than half of the money was used to pay down bills, or was squirreled away in savings. The new plan, costing between 800 billion to a trillion dollars, hopes to use a combination of tax cuts and credits, along with massive government spending, to create new jobs and save existing ones.
Jobs will be counted as saved if it is deemed they would be lost if not for the stimulus. That’s the same approach they used with bank bailouts–things may still be bad but, trust us, they would have been much worse if we had done nothing. This leads to some arbitrary and controversial calls. Number estimates are imprecise and the very definition of “stimulus” has become quite elastic.
The Congressional Budget Office guesses the still fluid package would create or save between 1.2 million to 3.6 million jobs. That’s quite a spread and it’s hard to pin point how many would be “created” as opposed to “saved.” As the Los Angeles Times observes, “If you're one of the millions of Americans already out of work, a job created sounds better than a job saved.”
Most union officials want to see quick action to put their members to work on “pick and shovel” projects, such as roads, dams, sewers, whatever. They invoke the legend of WPA programs during the 1930s New Deal–only this time run by private sector bosses who will be sending them dues checkoff.
Such plans could play a role in reversing decades of infrastructure neglect and would provide temporary jobs. It would essentially be catching up on the irresponsible abandonment of even essential maintenance by “fiscally responsible” politicians over the past three decades. But, just as the WPA did not end the Great Depression, emergency infrastructure repairs will not contribute to a long run recovery.
Part of the package is dedicated to some emergency extensions of unemployment benefits about to expire for many. Every dollar is welcome when you’re jobless but these benefits average only 200 dollars a week–less than the minimum wage. It may keep beans and peanut butter on the table but will hardly give a bump to consumer spending.
There is also a line item that purports to help the unemployed maintain their healthcare. Of course, this doesn’t mean paying doctors, nurses, and hospitals for actual healthcare. It would first go to the health insurance robber barons--determined to keep as much for themselves as possible.
Under COBRA, laid off workers can continue the health coverage provided by their former employer for up to eighteen months–if they pay the full cost. On average that amounts to about a thousand dollars a month so few use this “benefit.” The administration proposes to give the insurance companies 65 percent of this. That still leaves a monthly payment of 350–coming out of the jobless worker’s average monthly unemployment benefit of around 850. That’s five hundred bucks a month left over for food, housing, transportation, clothing–doesn’t that sound stimulating?
The ultimate package will be far too big and complex to deal with adequately in the course of one column. We’ll say more in future articles and columns. We’ll also feature major coverage of the topic in our postings on the Daily Labor News Digest.
As we present fresh information and arguments they will clearly demonstrate that those calling the shots don’t have a clue about what is needed. As they vainly struggle to find a way for the system they serve to return to stable profitability they are squandering the reserves accumulated from our labor. Instead of “watching Obama’s back,” as many progressives are advocating, we need to come up with our own working class plan, along with a way to gain the power to implement it.
The Deadly Disease Of
Shortly after Gordon Brown was handed the British Prime Minister’s job by Tony Blair he spoke to a wary convention of the Trades Union Congress. One of his writers fashioned a brilliant soundbite that was cheered by all assembled–“a British job for every British worker.” By the time the Labor Party conference rolled around two weeks later it became refined to “British jobs for British workers.”
Such a pledge didn’t appear to cost Brown much. Eighteen months ago the UK economy was booming, there was a labor shortage, and employers were searching across Europe for workers, especially skilled ones, to relocate in Britain.
Today the “New Labor”-led economy, along with most of Europe, has followed America in to collapse. There have been some impressive responses by workers in a number of countries. Just this past week there were mass strikes and demonstrations, aimed at employers and government, that shut down France. In Ireland, workers at the historic Waterford Crystal plant, stealing a page from the Republic Windows playbook, occupied the plant to prevent it being dismantled. Even in Russia, thousands in the streets of Vladivostok demanded relief from the repressive Putin regime.
But some British unions are carrying out actions at oil refineries, power plants, and chemical factories against “foreign” workers. They want Brown to give the foreigners--in the country legally--the boot and honor his pledge that British jobs are reserved for them.
Here in the USA there’s a less dramatic resurgence of xenophobia. The stimulus package not only contains “Buy American” provisions–hitting Canada perhaps most of all–but further crackdowns on immigrant workers as well. The Federation for American Immigration Reform, the most mainstream of the anti-immigrant groups, is crowing about their victory of getting E-Verify–a seriously flawed program requiring employers to check the legal status of new workers–inserted in to the stimulus. In Greeley, Colorado the local sheriff has seized confidential tax returns of hard working immigrants paying their fair share, with the hope of building “identity fraud” charges that can lead first to prison, then deportation.
During times of economic crisis the bosses always escalate their campaign to focus worker discontent on scapegoats within our own class. It’s a chump’s game. For solidarity to work it must include us all.
That’s why the very first session of the April 3-4 New Crises, New Agendas conference is entitled Class Solidarity Leaves No One Behind.
Another Alarming Report--and
a Glimpse of Hope
Climate researcher Susan Solomon, reporting on the results of an international team published by the National Academy of Sciences, said last Monday, “People have imagined that if we stopped emitting carbon dioxide the climate would go back to normal in 100 years, 200 years; that's not true.” Their findings indicate irreversible damage is under way that will persist for at least a thousand years.
This damage is serious but not yet catastrophic. Right now carbon dioxide is present in the atmosphere at a rate of 385 ppm. Should it exceed 450–as it will without drastic countermeasures--we can expect soaring temperatures to inevitably turn much of Europe and North America in to dust bowls and rising sea levels to submerge present coastlines.
Technology and conservation methods are available to stop us short of the 450 disaster line. Implementing them would be costly but a new report shows they are affordable. The World Wildlife Fund worked with ten large corporations, as well as nonprofit groups, in estimating the cost of rapid reduction of CO2 emissions over the next decade–enough to keep global warming in the 2 degree centigrade range. They reckon this could be done with annual global expenditures of about 448 billion–less than what’s been spent on the Iraq war, for example.
¶ With the assistance of Oakland cops, SEIU Gauleiters finally evicted the last United Healthcare Workers West (UHW) members from the building they had paid for. The Stern Gang’s trusteeship removed the elected officers, fired their staff, and seized control of bank accounts and all other assets. But this is hardly the end of the story. The ousted UHW leadership has formed a new union, the National Union of Healthcare Workers, and vows to take back their purloined members–and more. They have launched a new website which you can view by clicking here. The headline of a Los Angeles Times article sums the situation up well–Breakaway union could prompt war of attrition with SEIU. Stay tuned.
¶ This Saturday, February 7, there will be a labor history tour, sponsored by the Minneapolis Labor Review, commemorating the 75th anniversary of the coal yard workers strike. That brief, militant, and victorious action was a prelude to the Minneapolis general drivers strikes in the spring and summer of that year that many consider to be labor’s turning point in the Great Depression. The tour will be led by David Riehle, a UTU local officer and labor historian. Get more information with a click here. By the way, Dave will also be a featured speaker at our April conference in Kansas City.
That’s all for this week.
New Crises, New Agendas
Save Jobs, Save the Planet
Kansas City, April 3-4 Click for conference site
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