America, What Happened?: Trade, Tax Policies Hasten Loss of Good Jobs

"The great American jobs machine has been sputtering as the weakest jobs recovery on record has taken its toll," according to the Economic Policy Institute in its comprehensive annual report, "The State of Working America, 2006-07."

  "Job growth five years into this recovery has not been strong enough to boost most workers' living standards despite overall economic expansion and impressive labor productivity gains."

  Job creation has been so poor that in 2005, 30 percent of the workforce was in nonstandard employment, essentially working as temps and private contractors, many working less than full time and without benefits, the EPI reported.

  Outsourcing has played a huge role, including rampant offshoring of well-paying jobs. About 2.7 million manufacturing jobs have been sent abroad since 2001, and another 850,000 white collar service sector jobs went offshore in the same period, according to Forrester Research. Jobs in every CWA sector have been affected or potentially can be sent overseas, including those of journalists and public workers.

  And the new jobs that supposedly are replacing them pay an average of 21 percent less, usually with lower health and retirement benefits, if any, according to EPI.

The labor movement has charged Congress with enacting trade deals and legislation that actually are hastening the outflow of well-paying jobs. The so-called American Jobs Creation Act of 2004 is one example. Intel, General Electric and Ford Motor Co., are just a few that exploited the law, which allowed companies for one year bring profits earned offshore back into the United States at a huge tax savings, with the intention that those profits be used to create jobs here.

Corporations paid only 5.25 percent on these "repatriated" profits, rather than the usually 35 percent. GE repatriated $1.2 billion and Intel — which just announced a 10,000-worker layoff — a whopping $6.2 billion.

"Congress should thank its lucky stars that federal truth-in-lending laws don't apply to names it accords to legislation, because almost every dispassionate analyst agrees that the American Jobs Creation Act didn't create jobs in the United States," wrote Alan Sloan in the Washington Post. He pointed out that though Ford announced in January that it was cutting up to 40,000 jobs here, it pocketed permanent tax savings of about $250 million.

"Our nation's trade policies have failed in almost every important dimension," says a strongly worded AFL-CIO Executive Council statement co-authored in March by CWA President Larry Cohen and USW President Leo Gerard. "They have utterly failed to ensure that American producers and workers are able to compete successfully in the global economy."

            Taking note of 2005's record-breaking trade deficit of $68 billion, the council statement blamed flawed trade agreements such as NAFTA and CAFTA, which lack worker job standards and workplace rights language, for much of the job loss and trade imbalance. The AFL-CIO called for a moratorium on all pending trade agreements until they can be rewritten to advance workers' interests and urged consideration of import surcharges to curb imports that threaten U.S. jobs.

            IUE-CWA President Jim Clark in September wrote to the Senate Finance Committee, which has scheduled hearings to review NAFTA, that in its first 12 years, NAFTA cost IUE-CWA 60,000 members due to jobs outsourced to Mexico.

            "As if NAFTA isn't detrimental enough to working families," Clark wrote, "the solution provided by Congress has been to sign more damaging 'free trade' agreements like… CAFTA, look the other way as China robs us blind through currency manipulation and completely fail to hold the executive branch accountable for lax oversight in areas of worker abuses, unfair trade practices and human trafficking."