The Building Tradesman Newspaper

Friday, October 26, 2012

Trade unionists get it: trickle down theory is no way to run an economy

By The Building Tradesman

America’s building trades unions entered into the current election cycle knowing full well that the 2012 elections would pose a daunting challenge.  That challenge manifested itself four years ago when the bottom fell out of the U.S. construction industry due to an unprecedented economic crash that wiped out somewhere in the neighborhood of $12 trillion of the world’s wealth.

To the dismay of many notable political observers, President Obama is enjoying substantial support in key battleground states among our members, and the working class in general, in spite of 8 percent unemployment nationwide, and 12 percent within our industry.

Which begs the question: What gives?

First and foremost, I believe that the American public, including and especially a vast portion of our membership and working class Americans in general, have woken up to the modern conservative charade that was, and is, “trickle down” economics.

The financial disaster of 2007-2009, and the resulting devastation that it wreaked upon Middle Class America, had the illuminating effect of pulling back the curtain on modern conservative economic theory, which essentially entails a sacrosanct, selfish belief in “I got mine, screw everybody else.”

Our members can see a clear distinction between the philosophies and worldviews of the two candidates – Barack Obama and Mitt Romney.  They have seen what has happened to their industry, and what will continue to happen, if we are subjected to Mitt Romney’s worldview that encourages the erosion of community wage and benefit standards.

In fact, they lived it under George W. Bush.

Consider this: The average annual earnings for construction workers in the U.S. today is roughly $45,000 – which is not significantly higher than the average annual earnings for construction workers reported in 1995.

So, in that sense, the elections of 2012 have come to symbolize an opportunity for Middle Class America to strike a blow that will mortally wound the twin false assumptions of  “free markets” and “free trade” that sit at the heart of modern conservatism, and which have proven so disastrous to our ability to foster and maintain American economic superiority that serves as the underpinning of a stable and prosperous American middle class.

Step back and re-examine American history for a moment; especially in the immediate decades after World War II, when America and its government leaders aggressively supported and nourished our home industries, protected our market against unfair trade, built the world’s most advanced and admired infrastructure, manufactured the finest products, and led the world in technological innovation.

But then, starting in the 1970s, and at the behest of a rising cadre of conservative intellects and political activists, our nation reversed course and embraced a set of simplistic, attractive, yet disastrously false ideas –  including the unproven notions that consumption, rather than production, should drive our economy; that so-called “free trade” is always a win-win scenario for our nation; that all globalization is good; that the market is always right and government intervention or regulation in the economy always causes more harm than good; and that it didn’t matter that American factories were re-locating overseas because America was moving to the higher ground of a service-based economy.

As all of us in the labor movement knew then, and what the American electorate is finally coming to grips with now, is that it was all conceived and enacted with the expressed singular purpose of transferring wealth from Middle Class America to the Top 1 percent.

Therefore, the 2012 elections are shaping up not as a referendum on the first term of the Obama presidency, but rather as a rare opportunity to establish the beginnings of a new national discussion about where to take our nation as we move forward and away from the “trickle down” nightmare that has unduly burdened and damaged our nation for far too long.

In the case of America’s building trades unions, the chief overriding question that is on the minds of our members is this: Who has a plan to invest in, and re-build, America while protecting and enhancing community standards that benefit all of us: from the worker to the restaurant owner to the retail store owner?

And the answer to that question is clearly and undeniably: Barack Obama.

When the Building and Construction Trades Department endorsed President Obama’s re-election campaign earlier this year, we predicated our decision on the facts.

And those facts reflected the firm belief of all of our unions that his re-election would offer the continued, steady hand of a leader who navigated our nation through some very uncertain times when not just our nation, but the entire globe, was on the verge of economic collapse.

The results, and the trend lines, are hard to argue with.


  • The creation of roughly 4.8 million private sector jobs in the past 28 months.
  • The addition of nearly 200,000 jobs to the U.S. auto industry – which means that many of our own Building Trades members are back at work re-tooling and maintaining U.S. auto plants.
  • The creation of nearly 400,000 new American manufacturing jobs – which means that scores of our members are at work today building, modernizing and maintaining new manufacturing plants.  In fact, the Institute for Supply Management on October 1, said its index of factory activity, based on a survey of purchasing managers across the U.S., rose to 51.5 in September from 49.6 in August. It was the first time since May 2012 that the index crossed the 50-point threshold that indicates expansion.
  • And President Obama’s middle-class tax cuts have provided relief for 160 million Middle Class workers to help strengthen the economy.

In addition, the U.S. Department of Labor has commenced with several important initiatives that are designed to confront some of the most ghastly business practices conducted by “low road” contractors in the U.S. construction industry.  Davis-Bacon Act prevailing wage enforcements are on the rise; new initiatives are being put into place to stem the practice of falsely misclassifying workers as “independent contractors;” and new rules and regulations have been proposed that will stem the abuse of the federal H2B visa program that has far too easily allowed unscrupulous employers to import skilled craft workers to take the jobs of American workers and drive down the wages of others.

And speaking of Davis-Bacon, Mitt Romney has promised to work for its repeal “on Day One,” yet his running mate, Paul Ryan has been a consistent supporter of Davis-Bacon (along with dozens of other Republicans) while serving in the U.S. House of Representatives.  He has always understood that prevailing wage standards are common sense public policy that simply support local standards.  It’s a notion that supersedes (or at least should supersede) partisan political gamesmanship.  But, unfortunately, Mitt Romney does not see it that way.

And just as disappointing is the fact that the Romney/Ryan ticket has no specific plan to invest in America or invest in the re-building of America’s critical infrastructure.  In fact, the budget that was authored by Paul Ryan, would actually cut infrastructure investments.

The Ryan budget, which he authored as Chairman of the Budget Committee in the U.S. House of Representatives, proposes spending 25 percent less than the White House’s proposed budget does on transportation programs – just $78 billion per year.

If there is one singular issue upon which voters of all political persuasions can agree, it is that America’s national infrastructure is famously in disrepair.

Infrastructure spending creates jobs in construction and other sectors – every $1 billion in federal highway expenditures in 2007 supported as many as 30,000 jobs. And national infrastructure does more than move people – it moves stuff. While freight infrastructure – rail, inland waterways, and ports – may seem mundane in comparison to wide-open highways, advanced high-speed rail, or a modernized electrical grid, the intricate system of moving products and goods of vital importance to our economy.  And, like so many other examples of infrastructure failure and decay, America’s freight infrastructure is in trouble.

Yes, we can all agree on the need to tackle our long-term financial and budgetary problems, but we need to do so in a reasonable approach that involves shared sacrifice among all segments of our society, while also endeavoring to protect and maintain the fundamentals of Medicare and Social Security.  Yet, at the same time we must also maintain a fixed eye towards the future and the need to make the necessary investments in our infrastructure and human capital so that we maintain a competitive edge in the global economy.

What we cannot afford is a worldview like the one Paul Ryan expressed in a recent profile in the New Yorker magazine, in which he opined that, “We think government should do what it does really well, but that it has limits, and obviously within those limits are things like infrastructure, interstate highways, and airports.”

President Obama, on the other hand, has offered a full-throated and aggressive plan to not only invest in the re-building of our infrastructure, but also to invest in upgrading the skills of the American workforce.  And with the draw-down that is now occurring from our overseas military conflicts, the savings that will soon be realized could easily be directed towards these types of domestic priorities.

By investing in our infrastructure and human capital, we will make it attractive and competitive for American business to thrive, which will enable the job-creation we so desperately need.  And as we put more people back to work, we will see a spike in tax revenues which will make the deficit issue easier to handle.

And this brings me to another point.  While the presidential election is of critical importance to America’s building trades unions, we see something else at stake in this election.  And it centers upon our collective belief that for America to succeed in the 21st century, we must endeavor to cultivate a new political discourse among reasonable men and women from both political parties.  Such a discourse is akin to the new “value-centric” approach taken by America’s building trades unions in its dealings with construction end-users and contractors; whereby the dialogue is focused upon relegating the extreme measures of labor-management conflict and struggle of yesteryear to the dustbin of history, and instead focusing on cooperative innovation.

We seek the same outcome for our politics, as well.

Because, for our part, America’s building trades unions have always made it a priority to engage with reasonable voices from all political persuasions in discussions about the way we move both our industry and our nation forward, and in so doing create avenues whereby business and labor can both prosper and achieve.

That is why, during this election season, our unions are not only feverishly working on behalf of Democrats like Sherrod Brown, Elizabeth Warren, Carol Shea-Porter, Jay Nixon and Christie Vilsack, but we are also working diligently on behalf of Republicans like Jon Runyan, Michael Grimm, Mario Diaz-Balart, and Judy Biggert.

Hopefully, the achievement of a less partisan environment that will enable honest and open-minded men and women to tackle the great issues of our time will be the most prominent outcome conveyed by this year’s elections.