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Citation: USA Today (Magazine) Sept 1996, v125, n2616, p22(2)
Author: Kennedy, Edward M.
Title: Can workers reclaim the American dream?(American
Thought)(Cover Story) by Edward M. Kennedy
------------------------------------------------------------------------
COPYRIGHT 1996 Society for the Advancement of Education
"The plight of millions of families has worsened in recent years because of
the growing specter of layoffs.... The cheers on Wall Street mock the tears
on Main Street."
Throughout the decades of the Cold War, the paramount national concern was
national security. Since the end of the Cold War, concern is exploding over
job, financial, health, and retirement security. No political party deserves
to prevail if it fails to address this issue and propose a plausible strategy
to end it.
The heart of the current crisis is the in and prosperity no longer benefit
all Americans fairly. The quarter-century after World War II was a golden era.
Hard wore paid off. As the economy grew, income rose for all. This no longer
is true. Superficial signs of prosperity abound--the stock market hitting
record highs, inflation consistently low, unemployment down--but the
prosperity is less than it seems. Americans are working harder and earning
less. Their standard of living is stagnant or sinking. They are worried about
losing their jobs and health insurance, affording their children's education.
caring for their elderly parents, and somehow stir] saving for their own
retirement. The rich are getting richer, but more and more families are left
out and left behind. The rising tide that once lilted all the boats now lifts
only the yachts.
Since 1973, real family income has fallen for 60% of the U.S. workforce. At
the same time, the incomes of the wealthiest five percent have risen by nearly
a third, and income for the top one percent almost has doubled. For the vast
majority of families, the American Dream today has a sign over it that says
"Only the Wealthy Need Apply."
The plight of millions of families has worsened in recent years because of
the growing specter of layoffs. Jobs no longer seem secure. In the past,
corporations reduced their workforces only when they were in trouble. Now,
profitable companies lay off good workers in an unseemly race for everfatter
profits and ever-higher stock prices. The cheers on Wall Street mock the tears
on Main Street.
The Republican Contract With America is largely defunct because it would
have made these situations worse. Its massive cuts in Medicare, education, Job
training, and other priorities would have exacerbated the insecurities of most
families, and the lavish tax breaks for the wealthy would have worsened the
income gap. In fact, half of all spending cuts in the vetoed Republican budget
plan came from programs benefiting the neediest 20% of families. Less than
one-tenth came from the top 20%. Two-thirds of the proposed Republican tax
breaks flowed to the top 20%, while the bottom 20% actually faced a tax
increase. Alone among the Republicans, Pat Buchanan has diagnosed the problem,
but his remedies of isolationism, protectionism, racism, and scapegoatism are
even more poisonous than the Contract With America.
Practical steps, not bigotry and demagoguery, are needed to deal with these
growing insecurities. In other times, Congresses have enacted restraints on
runaway free enterprise to end abuses and bolster the public interest. The
most obvious precedents are the anti-trust and child labor laws, the minimum
wage, Social Security, Medicare, and, Medicaid.
Solutions to the current crisis need not depend on class warfare or pit
workers against corporations. I favor incentives to make it more profitable
for employers to create jobs than to eliminate them; to share gains with
workers, rather than channel them solely to CEOs and stockholders; and to
provide reasonable training and reasonable health and retirement benefits.
These incentives can he paid for by closing loopholes in the tax code that
encourage firms to move jobs overseas or treat workers as disposable.
Action on four fronts is under way in Congress. Concerning health insurance,
it has passed the bipartisan Kassebaum-Kennedy bill to correct two flagrant
industry abuses-the excessive resort to exclusions for pre-existing conditions
and the loss of coverage when employees lose or change their jobs. The lesson
of the health reform debacle of 1994 is that a sharply divided Congress can
not make far-reaching changes in an election year Instead of repeating that
history, Republicans and Democrats have enacted the reforms that have broad
support and are long overdue.
Second, it has raised the minimum wage, which was about to reach its lowest
level in 40 years. April 1, 1996, marked the fifth anniversary of the last
increase in the minimum wage. Raising it from the current level of $4.25 an
hour to $5.15 will boost the wages of 13,000,000 Americans. Pres. Clinton gave
the bill his full support, and Democrats in the Senate and House pressed the
issue despite opposition from the Republican majority. Ultimately, Bob Dole,
Speaker of the House Newt Gingrich, and the Republicans who professed to be
undergoing an election year conversion on the issue of worker insecurity
realized that public support for the increase was overwhelming, and they wound
up supporting the raise.
Third, the bipartisan job training consolidation and reform bill working its
way through a Senate-House conference can streamline and expand training for
both those who have lost their jobs and those who need to upgrade their
skills.
Fourth, Congress should use the pending immigration reform bills to end
anti-worker abuses in current law. Republicans and Democrats speak with one
voice in urging the strongest possible crackdown on illegal immigration, but
reforms in legal immigration are needed, too. It should be illegal for U.S.
firms to lay off American workers and replace them with cheap imported foreign
labor. Before U.S. fines hire foreign workers. they should make good-faith
efforts to recruit qualified Americans. If reasonable restrictions are not
enacted to protect U.S. jobs, we inevitably will fuel the drive to
Buchanan-type know-nothing changes that would slam the door unfairly against
all immigrants.
In addition, I favor several new steps to assist workers. I intend to
introduce legislation to create tax incentives for companies to treat their
workers well. The proposed plan will create a two-tier tax rate for firms and,
in doing so, align the incentives for treating workers well with the interests
of shareholders. If a company invests in education and training for its
employees, provides adequate health care and retirement benefits, and shares
profits with workers, the corporation should receive a tax reduction on the
earnings distributed to its shareholders as dividends. Under this plan, CEOs
who resist measures to treat workers fairly will feel the wrath of
shareholders.
Other countries are rewarded with tariff benefits if they qualify as "Most
Favored Nations." We should create a category of "Most Favored Companies" and
reward them when they treat their employees as assets. The Federal government
should give preference to such companies in awarding government contracts.
The anti-trust laws to place restraints on business mergers or acquisitions
that cause substantial layoffs for workers and serious dislocation for entire
communities should be amended. We should eliminate the tax deductions for
interest that favor debt over equity as a source of capital and acquisitions
and leveraged buyouts that cost American jobs and line the pockets of the
financier of the deals. The Department of Justice, Department of Labor,
Federal Trade Commission, and Securities and Exchange Commission should give
greater scrutiny to transactions and restructuring which could result in the
closing or major downsizing of companies, facilities, or plants that are of
the lifeblood of local communities.
More must be done to protect retirement security. The Republican budget
moved in exactly the wrong direction by allowing corporations to raid worker's
pension funds. Instead, we must encourage corporations to provide greater
pension coverage. Less than 50% of the private workforce is covered by private
pension plans. More than 68,000,000 employees have no private pension
coverage. Ironically, most of them work in small businesses that are driving
the economy--yet, their retirement needs are ignored. Like health care, good
pension coverage should be accessible, affordable, and portable.
As indicated above, these tax incentives and other measures can be paid for
y repealing the perverse incentives in the tax code that are contributing to
worker insecurity, especially the tax breaks that encourage companies to close
domestic plants,invest abroad, and move jobs overseas. It makes no sense to
encourage companies to uproot jobs in the U.S. and transfer them to foreign
countries.
We can save $50,000,000,000 or more over the next five years by repealing
corporate tax breaks for profits earned in foreign countries; tax exemptions
for companies that transfer title to goods on the high seas; price rigging
that minimizes U.S. income and maximizes income in foreign tax haves; sham
corporations that generate huge tax deductions for moving plants and jobs
overseas; and loopholes that allow billionaires to thumb their noses at Uncle
Sam, renounce their citizenship, and move to a foreign tax haven to evade
taxes on the massive wealth they have accumulated in the U.S.
The "Quiet Depression" facing American workers is the central economic,
social, and political issue of 1996. When the economy is wrong, nothing else
is right. Progress and opportunity for all are fundamental American values.
The need is obvious and urgent. What is unacceptable is to do nothing.
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