The AFL-CIO Executive Council adopted several policy statements addressing wage growth and economic inequality, job outsourcing, Fast Track and trade, higher education and performers' rights at its winter meeting in Houston on Tuesday.
Noting that “the principle that all working people share in the wealth we create through rising wages has always been at the heart of our movement,” the council said that the current growing national conversation about economic inequality is “both an opportunity and a challenge for our movement.”
Economic inequality didn’t just happen, nor was it “an accident or an act of God,” said the council.
It was the predictable result of decisions made by people with power in America over the past generation. The key decision was to use the power of government to help corporate America push down wages by destroying workers’ bargaining power. Any serious effort to attack the structural causes of inequality must begin with restoring the individual and collective bargaining power of all workers.
Calling broad-based wage growth “the defining challenge of our time,” the council outlined a series of actions, including:
- Increases in the minimum wage;
- An end to the exclusion of tipped workers from the minimum wage laws, efforts to win paid sick days;
- Ending unequal pay for equal work; and
- Most importantly, the right to bargain collectively over wages.
But the council also stressed that raising wages “requires a more effective labor movement” and involvement of both traditional and nontraditional membership in the labor movement, such as Working America.
At the 2013 convention, we committed to creating stronger and more durable bonds with our allies at the local, state and national levels; and encouraging a progressive tendency in both political parties. Focusing on wages, quality jobs and a thriving middle class will help us achieve these goals.
“Most of all,” said the council, “raising wages is about the path to shared prosperity, a future worthy of our children and grandchildren, about a society in which we are truly in this together.”
Tax Incentives and Outsourcing U.S. Jobs
The Executive Council reiterated the labor movement’s longstanding position that there should be no tax incentives for outsourcing jobs and laid down a clear standard for what it means to end these incentives.
The labor movement stands for a simple and clear standard: The tax laws must not in any way encourage investment in foreign countries rather than the United States. That means the offshore profits of U.S. corporations must be taxed at the same rate and at the same time as their domestic profits. There is no economic or political justification for giving corporations a tax incentive to shift jobs and income overseas.
Corporations send jobs overseas for various reasons—sometimes for tax reasons, sometimes for other reasons. When corporations send jobs overseas for tax reasons, it’s because the U.S. taxes overseas corporate profits more lightly than domestic profits. That’s the tax incentive for outsourcing that exists in current law.
So the solution is clear: We have to tax all corporate profits the same way—whether they’re offshore profits or domestic profits. The council said doing this would generate $583 billion in tax revenue over 10 years.
This is the amount of tax revenue that could be made available to rebuild our economy and lay the foundations for long-term economic growth by investing in infrastructure, education, manufacturing and energy. And this is the benchmark against which any international tax reform proposal should be measured.
In addition to reforming the current system, the council called for opposing proposals for a “territorial tax system,” which would make the outsourcing problem worse by eliminating U.S. taxes on offshore profits. The council also insisted that reform proposals for a “minimum international tax” must provide the same tax rate—not different rates—for offshore profits and domestic profits.
Fast Track and Trade
Along with the Trans-Pacific Partnership Free Trade Agreement (TPP) and the Trans-Atlantic Trade and Investment Partnership (TTIP), the United States is currently in talks over three other important trade and globalization agreements with more likely to come. But, says the council,
Rather than slowing down, taking stock and measuring the impact of existing agreements and the domestic economic policies that can complement or exacerbate their effects, the U.S. Trade Representative is rushing full bore into these agreements—and seeking ‘Fast Track’ trade authority to do so.
The council called Fast Track:
an undemocratic, unaccountable process that has been used to shield agreements under negotiation from influence by the American public and to virtually ensure the passage of trade deals that displace jobs, suppress wages, shutter factories, devastate communities and decrease worker bargaining power—all while increasing corporate profits and corporate influence over our economy and other economies worldwide. Thus, Fast Track is a policy that will increase rather than reduce income inequality.
For more than 30 years, U.S trade agreements, including the North American Free Trade Agreement (NAFTA), have been based on a “corporate rights trade model” backed by powerful corporations that favor property over people. During that time, said the council:
Powerful people have made economic decisions in this country with the clear purpose of lowering the wages and diminishing the economic security of working people. Policymakers decided to engage with the global economy through trade deals whose real purpose was not trade, but putting downward pressure on wages. This choice has put the American Dream out of reach of too many hard-working Americans.
The corporate rights trade model has contributed to the loss of more than 60,000 factories since 2000 and more than 4 million jobs since NAFTA went into effect in 1994. U.S. trade policy has exacerbated the decoupling of wages and productivity that began in the 1970s and contributed to a declining share of the national income that accrues to workers, despite soaring corporate profits, which for many companies have reached record levels in the years since the Great Financial Meltdown.
“Our nation’s trade policies,” said the council, “have been a significant contributor to rising income inequality.” It’s time, said the council, “to chart a new course…that begins with ending Fast Track as we know it.”
The AFL-CIO is committed to being part of a growing, worldwide movement of labor unions and civil society pushing back against this corporate-rights trade model. Those who care about shared prosperity, reducing pollution, making health care affordable, addressing climate change and promoting equality and democratic governance see that at the heart of the corporate trade model is not trade but systematic attacks on workers’ rights, civil society’s ability to regulate corporate power and democracy itself. This is why unions globally continue to work with like-minded groups to change the course of globalization by changing the rules of trade—along with complementary domestic policy—so globalization becomes a constructive force for inclusive, sustainable growth.
Read the full statement here. It includes a detailed look at the labor movement’s issues with the TPP, TTIP and other trade agreements under negotiations.
Affordable Higher Education
State funding for post-secondary education is at its lowest level in a quarter of a century and financial aid has shifted from needs-based grants and scholarships to loans from which the federal government is making a hefty profit, leaving students with nearly $1.3 trillion in outstanding debt. In a statement addressing higher education, the council said:
We call on federal and state policymakers to make post-secondary training and education more accessible by ending the trend of disinvestment and increasing funding for public higher education, especially community and technical colleges.
Young working-class women and men, said the council, “want to prepare themselves for the future, but all too often find that future is one saddled with excessive debts.”
The council called on state and federal policymakers to restore higher education funding levels and increase funding and access to needs-based aid and to simplify the process for applying for aid. It said the Obama administration’s plans for higher education should focus increasing access for lower-income and first-generation students in any reforms, and “not reproduce a Race-to-the-Top system at the post-secondary level.”
The business community also needs to step up to invest in education, said the council.
Business complains of a “skills shortage” while attacking the collective bargaining structures that provide training, and refusing to compensate workers for the skills they have. Paying a decent wage is a vital ingredient in ensuring that workers continue to invest in their education and can help their children access educational opportunity. In addition, business needs to work together with the labor movement to meet workers’ need for training and education rather than blaming others for their short-sighted approaches.
Audiovisual Performers’ Rights
The Council also called on the Senate to ratify the WIPO Beijing Treaty on Audiovisual Performances, so that audiovisual performers, such as movie and television performers, will have equal protection under international law as audio performers.