Leo W. Gerard - United Steelworkers

Three
U.S. paper
mills – owned
by three different
companies in Montana,
Michigan and Wisconsin and
employing more than 1,100
United Steelworker brothers
and sisters – closed in the past
18 months while the USW awaited
action on its second unfair trade case
against Chinese paper manufacturers.
These laid-off USW members are
among 2.1 million manufacturing workers
of all kinds who have lost their jobs
since the Bush Recession began in
December of 2007.
Few occupations were spared, not
even those servicing the death industry.
Workers at a small casket parts
company from northern Indiana lost
their jobs in January when the factory
closed, citing a decision by one
of its major customers to buy cheaper
Chinese handles.
While unemployment in the United
States climbed in the last quarter of
2009 to 10 percent, India’s top three
outsourcing companies hired 16,700
workers, then in January ramped up
to add more as global corporations,
mainly from the United States, sent
more work offshore.
Also in January, GE announced it
would buy a
stake in China’s
Shenyang Turbo Machinery
Corp., which designs and manufactures
turbo-machinery equipment like compressors.
Again, a foreign country will
get the jobs.
Of the 7.6 million total jobs lost
during the recession, 28 percent of them
have been in manufacturing.
Political ramifications
The obstructionist Republicans, who
have opposed every attempt the Obama
administration has made to aid the middle
class, contended that Massachusetts
voters sent a signal to Washington that
they had rejected Democratic ideals
when they elected a Republican in
January to fill the late Sen. Edward
Kennedy’s seat.
The fact is that polls show
the opposite is true. Voters felt
Democrats had not gone far
enough – especially on health
insurance reform. The polls also
show the most pressing concern
of voters was jobs.
Far from neglecting this issue,
President Obama insisted at
the outset of his administration on
passage of the $787 billion stimulus
bill designed to save or create
3.5 million jobs. In December, he
conducted a jobs summit at the White
House.
Obama also sought help in preserving
and reviving American manufacturing
from Ron Bloom, a former special
assistant to International President Leo
W. Gerard. First Obama appointed
Bloom to the team assigned to save the
U.S. auto companies. Then, on Labor
Day, Obama chose Bloom to lead the
effort to renew manufacturing.
In December, Bloom issued a
report, A Framework for Revitalizing
American Manufacturing. Immediately
implementing the recommendations
contained in that report – from enforcing
international trade law to creating
a National Infrastructure Bank – would
move the country back toward a stable
and job-creating economy based on
manufacturing.
To prevent further Democratic
losses in the fall elections, Obama
THE GAP IN THE LABOR MARKET
Payroll employment (thousands)
143000
141000
139000
137000
135000
133000
131000
129000
127000
125000
Oct-04
Source: EPI
Jobs needed to keep up
with population growth
Payroll employment
Oct-05
2.8 million
8.1 million
Oct-06 Oct-07 Oct-08 Oct-09
10.9 million
To fill the gap in two years,
we need 583,000 jobs every
month between now and then.
Oct-10
Oct-11
must not only accomplish that, he must
also re-connect with the apprehensive
unemployed and persuade them that
revitalizing American manufacturing is
the correct path to economic security,
for them and the United States.
PRODUCTION JOBS
PAY BETTER THAN
SERVICE JOBS
Average weekly wage of private sector jobs, 2009
Service-providing: $610
Goods-producing: $810
Service jobs pay on average 75 cents for
every dollar paid by a production job.
Retail jobs pay 50 cents.
AFL-CIO Political Director Karen
Ackerman put it this way: “A massive
reinvestment in creating jobs will be the
decisive factor in the 2010 elections.”
In recessions past, as Americans
cracked open their wallets and began
buying again, unemployment decreased.
The cycle is simple: People buy, store
shelves and warehouses empty, orders
are placed and factories recall workers
to meet those demands. Those workers,
earning paychecks once again, resume
spending. So supplies diminish once
more and must be replenished with new
factory orders.
It could be different this time,
though. That’s because when those orders
are placed, the workers filling them
are more likely to be overseas, in places
like China or India – not in the United
States. So U.S. spending stimulates
foreign economies.
Richard McCormack, editor and
publisher of Manufacturing and Technology
News, described this phenomenon
in a chapter of the book, Manufacturing
A Better Future for America.
“Even more alarming is the fact that
without an industrial base, an increase
in consumer demand, which historically
pulled the country out of recession, will
not put Americans back to work. Any
additional consumer spending will only
help workers making products
overseas,” he wrote in the chapter
entitled The Plight of American Manufacturing.
McCormack notes that 40,000 U.S.
manufacturing plants closed during the
seven years ending in 2008. And there’s
no outlook for revival
on the horizon, not in
high-tech or traditional
manufacturing.
McCormack cites
two examples. Worldwide
in 2008, 80
major chemical plants
costing more than $1
billion were under
construction or in
planning. None was in
the United States. The
year before, in 2007,
only two percent of
new semiconductor
fabrication plants
were built in the
United States.
The very week the Democrats lost
the Massachusetts Senate seat, the
Obama administration renewed its focus
on jobs and the economy – taking a cue
from former President Bill Clinton’s
successful 1992 campaign mantra: “It’s
the economy, stupid.”
Just three days after the loss, Obama
conducted a town hall meeting on the
economy in recession-battered Ohio.
The economy and jobs were also a major
theme in the President’s State of the
Union address the following week.
Obama’s proposals for jobs creation,
including providing additional capital
for small business and increasing
exports, are all addressed in Bloom’s
report.
The report acknowledges the recent
downturn “has been particularly painful
for manufacturing companies, their
workers and the communities that rely
on them.”
It is essentially an upbeat, forwardlooking
document that says, “Many
sectors of American manufacturing have
the potential to enjoy significant growth
and success. With the right policies,
America can foster successful industries
like biotechnology, wind power, nanotechnology,
aerospace, next-generation
automobiles, and perhaps more importantly
the industries of the future that
we do not even know about today.
Source: Institute for America’s Future
“Although the talent and hard work
of America’s entrepreneurs, innovators
and workers will drive these businesses,
there is a critical role for sound government
policy.”
Do what it takes
The government must do what it
takes to promote a vibrant and thriving
manufacturing sector by creating a
competitive business climate, the report
says. And it specifies ways the Obama
administration has begun to do that
and plans to do more, with programs it
placed in the 2010 budget and policies it
intends to implement.
Among the goals it specifies that
are crucial to Steelworkers is this one:
“Improve the business climate, especially
for manufacturing. . . We need
legal, tax and regulatory regimes that
promote American manufacturing and
do not place an undue burden on those
who wish to manufacture products in
America.”
Achieving another of the goals
would be greatly appreciated by Steelworkers
whose factories – like those
paper plants that closed in Montana,
Michigan and Wisconsin – are threatened
by unfair foreign competition:
“Ensure market access and a level
playing field. We must be sure that those
who wish to sell the goods that they
make in the U.S. into other countries
have the market access they need and
that those who sell domestically do not
face unfair competition from advantaged
foreign producers.”
Democrats now must ensure the
reports’ goals are implemented.
THE U.S.-CHINA
TRADE RELATIONSHIP
$350
325
300
275
250
225
200
175
150
125
100
75
50
25
0
2000
U.S.-China trade in goods
(in billions), 2000-2008
2001
2002
U.S. IMPORTS
2003
2004
2005
U.S. EXPORTS
2006
2007
2008
Source: U.S. Department of Commerce, Bureau of Economic Analysis
4 USW@Work • Winter 2010
USW@Work • Winter 2010 5