Labor unions raise workers' wages, give them a voice on the job and protect them from financial and medical insecurity. They help turn a job into a good job. Good jobs create more jobs. Well-paid, secure workers spend money in their communities. They support local businesses, which can then grow and hire more workers.
This Labor Day is an especially good time to remind people of these well-established facts about unions. In the past year, corporate-backed politicians have mounted the most vicious anti-union attacks in memory. Government workers in Wisconsin and Ohio were stripped of their collective bargaining rights. Right-to-work laws to destroy unions are being pushed in New Hampshire, Michigan and Indiana.
The ultimate goal of these extremist politicians is to further concentrate wealth and power in the hands of a few. After all, it's those wealthy few who pay for their political campaigns, court them when they're in office and hire them when they retire from public life. And so giveaways and tax breaks for corporations are being underwritten by cuts to essential services like public education and health care in Michigan, Florida, Ohio and Wisconsin. Already, those states' economies are suffering, with unemployment on the rise.
The same destructive dynamic is at work in Washington, where wildly irresponsible lawmakers threatened to force the U.S. government into default in order to cut spending. Rep. John Mica was willing to partially shut down the Federal Aviation Administration in order to roll back a rule reform that gave airline and railroad workers a fairer process for choosing to join a union. Mica's recklessness resulted in furloughs for 4,000 FAA employees and layoffs for 70,000 construction and transportation workers.
Good government jobs do exactly what good union jobs do -- they stimulate the economy. It is nonsense to suggest that they don't. The current willingness to sacrifice government jobs at the state and federal level is, I'm afraid, a failure to learn from the lessons of the past.
President Herbert Hoover's austerity budget strangled our economy during the early days of the Great Depression. It was Franklin D. Roosevelt's massive stimulus that got the economy growing again. Roosevelt made enormous investments in people and infrastructure through programs like the Works Progress Administration.
From 1933 to 1937, the economy grew at the fastest pace in history. But in 1937, an anti-union Ohio Republican, Sen. Bob Taft, led conservatives in persuading Roosevelt to rein in spending.
The result: a fall in Gross Domestic Product. Fortunately, Roosevelt quickly realized his error and changed course. He increased spending, and the economy started growing again.
That government stimulus creates jobs and revitalizes economic growth is accepted as fact by businesspeople, financiers and even Martin Feldstein, Ronald Reagan's chief economist. Feldstein was among the first to call for stimulus spending after the financial crisis of 2008. Recently, Feldstein said Congress should limit tax breaks for corporations and wealthy individuals in order to raise revenue.
There's no doubt now that the initial $787 billion stimulus was too small. At the time, the Teamsters Union and others argued for a larger stimulus. President Obama's former top economic advisor, Larry Summers, is now admitting that the stimulus was too small to pull the economy out of its doldrums.
Another reason the stimulus didn't do as much as we'd hoped was that the economy was in much worse shape than we originally thought. Recently revised economic figures show that our Gross Domestic Product shrank by a staggering 7.8 percent in the six months following the global financial crisis in 2008.
Once the stimulus money began to flow in the middle of 2009, the U.S. economy began to grow again. Three million jobs were created. But this year stimulus dollars dried up for state and local governments, budgets were cut and jobs were lost. The loss of those government jobs clearly acted as a drag on the economy. For the past year, the private sector added 1.8 million jobs, while cities and towns cut 340,000 jobs.
I don't think anyone is happy with our economy right now. There are those who say the solution is to cut government spending and weaken unions. They couldn't be more wrong.