By Jane Birnbaum
Economy Code Red
Between January 2001, when President George W. Bush took office, and April 2003, the nation lost 2.7 million private-sector jobs. By April, unemployment was 6 percent. More than 10 million Americans are unable to find jobs, including some 1 million who have totally exhausted unemployment insurance benefits.
In 2001, Americans lost $175 billion in 401(k) savings, according to estimates by the Institute for America’s Future. More than 1.54 million bankruptcies were filed in the 12-month period ending in September 2002, the highest 12-month level in history—and the great majority were personal bankruptcies. And 2 million Americans lost their health insurance in 2001, according to the Kaiser Commission on Medicaid and the Uninsured and the U.S. Bureau of Labor Statistics. As the economy worsens, even workers with jobs are wondering how long they can keep them or if they will be able to afford a secure retirement.
Meanwhile, states are experiencing their worst financial crises since World War II, with cumulative three-year budget shortfalls exceeding $180 billion. More than half of the states already have imposed across-the-board budget cuts, and almost all are making plans to lay off workers and slash programs for health care, education and public safety.
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From America@work, April 2003. |
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The response by the Bush administration has been a slap in the face to U.S. workers. In February, Bush proposed a fiscal year 2004 budget featuring a $951 billion tax cut package over the next decade that will benefit primarily the richest Americans. By showering the wealthy with tax cuts, the Bush budget proposal will push the federal budget to a record deficit in fiscal year 2004 while destroying 750,000 more jobs over the next 10 years, according to the Economic Policy Institute.
Bush’s budget ignores workers desperately in need of jobs by offering a version of trickle-down economics that his father, President George H. W. Bush, once called “voodoo economics.” In a Feb. 11 public statement opposing the Bush tax cuts, 450 American economists, including 10 Nobel laureates, declared the Bush proposal would not help create jobs. Since that time, the administration has reduced its tax cut demands to $550 billion in the face of stiff congressional opposition.
Dwarfing the administration’s cuts in spending on workplace safety, after-school programs, road and bridge repair and low-income housing, Bush’s tax cuts for the rich rob the nation of its fiscal ability to protect the future of Social Security and Medicare and its capacity to invest in urgent needs in education, job training, homeland security, public safety and health care.
In just one example, the Bush budget offers no real relief for 41 million Americans younger than 65—80 percent of whom are in working families—who have no health care insurance.
Union activists are encouraged to use the following pages to educate members, the media and elected officials to ensure America’s priorities don’t shortchange working families. Distribute the handouts at meetings, rallies and other events; use them when talking with lawmakers, as talking points for the media and as background for op-ed placements or publication and website articles.
Just the Economic Facts
Between January 2001 and April 2003, the nation lost a net 2 million jobs and more than 2.7 million private-sector jobs. During that same time period, 2 million manufacturing jobs disappeared. The number of Americans who want jobs today but can’t find them—more than 10 million—will grow even larger, according to Economic Policy Institute economist Lawrence Mishel. The Bush proposal will do very little to expand jobs in 2003, Mishel says, and will actually cause the country to lose 750,000 jobs over the next 10 years.
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What Happens to Workers Who Join Together to Better Their Families’ Lives? | | | | | According to recent studies, 25 percent of employers whose workers try to organize a union fire at least one worker for union activity. Illegal firings for union activity have skyrocketed by 700 percent over the past 40 years, and represent only a fraction of tactics employers use to suppress workers’ freedom to form unions. Although the National Labor Relations Act prohibits discrimination against union supporters, the penalties are so weak and ineffective they fail to deter employers from engaging in such conduct. Employers intent on suppressing workers’ freedom to form unions also can easily drag out legal proceedings until long after union supporters have been fired or intimidated. But in a February 2003 Peter D. Hart Research poll of 1,602 adults conducted for the AFL-CIO, 75 percent say laws protecting the right to form or join unions are important. |
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Trade Unfair trade deals such as the North American Free Trade Agreement (NAFTA) are a central reason for the explosion of the U.S. trade deficit—the difference between what the nation exports and what it imports. Last year, the United States ran an all-time record trade deficit in goods and services of $435 billion, a jump of almost $47 billion since 2000 and a completely unsustainable 4 percent of gross domestic product. The monthly goods deficit in December was a staggering $48 billion, more than a third higher than the January figure, indicating a steady deterioration throughout 2002—if the December rate continues, next year’s trade deficit will be well more than half a trillion dollars. According to the AFL-CIO Industrial Union Council, rising trade deficits have cost 3 million actual and potential U.S. jobs since 1994. To maintain a domestic manufacturing base that ensures national security, the United States must address flawed trade policies that encourage U.S. manufacturers to scour the globe for the lowest wages, the weakest labor laws and the most vulnerable workers, and oppose new trade agreements such as the Free Trade Area of the Americas that harm the interests of America’s workers.
After the number of uninsured declined in 1999 and 2000, it climbed to 41.2 million in 2001, according to the U.S. Census Bureau. Of that 41.2 million, nearly 33 million were from working families and 8.5 million were children. Workers who still have job-based health insurance are in danger of finding it unaffordable as employers increasingly shift the growing costs of coverage to workers—between the spring of 2001 and spring of 2002, a single worker paid an average 27 percent more toward premiums and a family paid an average 16 percent more than the previous year, according to the Kaiser Family Foundation and Health Research and Education Trust.
The continually increasing cost of prescription drugs has created a crisis for retirees, most acutely for those who work in manufacturing where the number of retirees is growing and the number of active workers is shrinking. The cost of the 50 prescriptions most used by American seniors rose 7.8 percent between January 2001 and January 2002, according to Families USA. Congress must pass a Medicare drug benefit that does not force seniors to give up their trusted doctors to get decent drug coverage, as the Bush administration has proposed, and does not penalize workers whose employers offer benefits.
Because of corporate wrongdoing, the bust of the high-tech bubble and the recession, American stock markets lost approximately $6.6 trillion, or about 40 percent of their value, between the market peak in March 2000 and Jan. 31, 2003. Such stunning losses call for corporate governance reform, strengthened government oversight and the protection of Social Security. According to the U.S. Social Security Administration, Social Security was the only source of income for 18 percent of individuals and married couples with at least one spouse 65 or older in 2000. The Bush administration likely will borrow a minimum of $1.5 trillion from the Social Security Trust Fund before Bush’s 2001 tax cuts begin to expire in 2010, according to the Congressional Budget Office—without setting aside a single penny to strengthen and protect Social Security.
At a time when states are facing budget crises and their education funding is at risk, President George W. Bush’s 2004 fiscal year budget proposal for schools increases their problems by failing to keep pace with inflation and population growth. When all programs under the federal No Child Left Behind Act are added together, Bush’s budget provides $9 billion less than Congress authorized for 2004 and $199 million less than the amount needed to maintain purchasing power at the 2002 level, according to the AFT. While showering tax cuts on the rich, Bush’s budget proposes eliminating after-school programs for 500,000 children.
