THE BLOG

Give Labor a Fair Shake

08/30/2012 08:42 am ET | Updated Oct 30, 2012

Labor Day 2012 offers little for labor to cheer about. Unemployment remains stubbornly high over 8 percent, 11 million home owners are under water, and average income is declining - at least for working people. Medium real earnings for full time adult workers have actually declined over the last decade. During that stretch, the GNP grew 110 percent, but almost all of the gains went to the top 1 percent of the population. The gap between rich and poor is greater today than it has been since the 1920s. History teaches us that this situation can portend social upheaval.

Much of this decline is a result of intense foreign competition, especially in the manufacturing sector. Another significant portion of our economic malaise is attributable to the housing crisis, and the resulting loss of construction jobs. We can't blame that one on the Chinese. We did that to ourselves.

Labor unions once were a force for improving the lot of working people, but they have marginalized themselves, focusing too much on political goals, and not enough on helping their members become more productive and competitive. Unions are still locked in the anti-business mindset of the past. Most workers today are looking for opportunity, not combat.

Now the question is - how do we turn this thing around?

The first and most obvious task is to hike the growth rate with a fiscal fix that stimulates growth in the near term while laying out a long-term plan to reduce the debt. This will involve both cuts in entitlement programs and tax increases. Any member of Congress who objects to either of these things should be ostracized. We could create a "Hall of Shame" for the extremists of left and right who are more concerned about ideology than our country.

Growth also depends on expanding our export sector. It is a fact of life that 96 percent of consumers are not here. We also need a serious commitment to applying international trade laws to China.

We also need a wholesale overhaul of our tax code, but that will take time. In the short term, we should make further reductions in the payroll tax which is the big tax issue for low income working people. Many people are hurting, and they need help now.

While millions of working people are suffering, our major corporations are flush with cash generated by unprecedented profits. Business and government should be looking at employee benefit plans that share corporate profits - when there are profits to be shared.

Finally, the greatest impediment to the long-term unemployed today is a lack of advanced skills. Workers with advanced degrees and skills are generally doing well. But millions of displaced blue collar workers are left out. Congress should create a nationwide training program, based on real workplace needs, and provide financial assistance to unemployed workers who participate in it.

Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute. Jerry is available for speaking engagements.