March 19, 2010 Volume 111 Number 6

Trumka calls new jobs bill ‘a Band-Aid on amputated limb’

Responding to continued high unemployment, Congress approved the final version of a “jobs” bill March 4.

AFL-CIO President Richard Trumka called it “a Band-Aid on an amputated limb.”

Under House Resolution 2847, the Hiring Incentives to Restore Employment (HIRE) Act, the federal government will pay the 6.2 percent employer portion of Social Security payroll taxes through the end of the year — whenever an employer hires someone who has been jobless more than 60 days. [They can’t use the new employee to replace an existing employee.] The employer also gets a $1,000 corporate income tax credit on their 2011 tax return if they continue to employ the new hire for 52 weeks. The estimated cost to the federal treasury of the two tax measures is $13 billion over a 10-year period.

The bill also extends the federal surface transportation programs through the end of 2010, and transfers about $19.5 billion to the Highway Trust Fund from the general treasury — interest the fund was owed on gas taxes the government collected. The funds transfer would be enough to maintain highway spending at last year’s level.

For advocates of infrastructure spending, the HIRE Act was a sad finale to a bill that, when it passed the House in December, contained $48 billion in new infrastructure spending and $26.7 billion in aid to the states.

Even that earlier version, titled the Jobs for Main Street Act, looked cheap next to the $700 billion bank bailout and the $800 billion stimulus act. [In fact, the Jobs For Main Street Act was supposed to spend unused bailout funds, suggesting that infrastructure jobs would be purchased with crumbs from the bankers’ table.]

But the House and Senate passed the bill back and forth, amending it each time. A new tax cut became the crux of the bill, and infrastructure was relegated to an afterthought.

Congressman Kurt Schrader, the only Oregon Democrat to vote against HR 2847’s final version, said three-fourths of the business owners he surveyed told him the new tax incentives won’t stimulate hiring: Businesses add employees only when there’s demand for their goods and services.

“Businesses aren’t going to hire new employees just because we give them a small tax cut,” Schrader said in a statement explaining his vote.

When Senate Majority Leader Harry Reid (D-Nev.) called the bill a first step, Trumka said he couldn’t agree more.

“We need 10 million jobs,” Trumka said, “and Wall Street and the rich — who have benefited for years from Bush’s economic policies — need to pay to rebuild the economy and middle class they destroyed.”

What might a real jobs bill look like? Congress might do well to heed the latest infrastructure “report card” of the American Society of Civil Engineers. America is failing to properly maintain basic infrastructure, the group said, and spent less in 2008 than at any time in over two decades.

“We are still driving on Eisenhower’s roads and sending our kids to Roosevelt’s schools,” the group’s president said in February.

According to the report card:

  • A third of America’s major roads are in poor or mediocre condition, and 45 percent of major urban highways are congested.
  • The nation’s 85,000 dams average over 50 years old.
  • 92 of the 257 locks in use on inland waterways are more than 60 years old, and 30 were built in the 1800s.
  • Contaminated sites await cleanup and redevelopment in 188 U.S. cities.
  • Aging pipes leak an estimated 7 billion gallons of drinking water a day.

“We are drinking water from pipes built when Teddy Roosevelt was president,” said Congressman Earl Blumenauer (D-Ore.), an infrastructure advocate. “My number one priority is to rebuild America,” Blumenauer told the Labor Press. “Roads, transit, sewer, rail, cleaning up toxic waste sites … these are labor-intensive projects that could provide family wage jobs in every community.”

At the March 5 quarterly meeting of the Oregon AFL-CIO, Secretary-Barbara Byrd said the AFL-CIO — and some congressmen — are advocating a stock transaction tax. A tax of just 0.25 percent on each stock trade could raise $150 billion, Byrd said, with half going to rebuild the country’s infrastructure and half used to drive down the national deficit.

“It would put one out of every three unemployed workers back to work,” Byrd said.

Since the recession started, Oregon has lost 148,600 jobs — 9 percent of payroll employment. The unemployment rate stands at 10.7 percent and underemployment is at nearly 21 percent.

To get back to a more normal 5 percent unemployment, the United States would have to create 583,000 jobs every month (accounting for population growth) for the next two years to fill the gap.

“We’re not even close to doing that,” Byrd said.

Byrd said that Congress must include Buy American provisions in any new stimulus funding and renewable energy subsidies it creates, and it must pass the Trade Reform, Accountability, Development and Employment (TRADE) Act, which would create a new U.S. trade agreement model that benefits America’s workers.

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