“The American dream is becoming the American nightmare for most workers,” said Andy Stern, president of the Service Employees International Union, or SEIU, at a Center for American Progress Action Fund event Tuesday on the state of the American worker in our troubled economy. Stern was joined by Anna Burger, international secretary-treasurer of the SEIU and chair of Change to Win, and CAP Action CEO and President John Podesta. The panelists outlined what Congress and the president can do to improve workers’ conditions, as well as the challenges they face.
For many, the American dream is the chance to get ahead, own a home, pursue activities that bring joy, be rewarded for one’s work, and especially the belief that their children and their children’s children will live a better life than they did. “That dream has endured, up until now,” Stern lamented.
The American dream is in jeopardy for many Americans, Stern argued. There are currently 27 million Americans unemployed or underemployed. That number is equal to the population of 18 states plus the District of Columbia. There are six workers for every single job, and 79 percent of all Americans say their children will be less successful at achieving the American dream than they have been.
“This is not our father’s or grandfather’s economy,” Stern explained. Throughout the middle part of the 20th century—a period when unions were stronger—American workers generated economic growth by increasing their productivity and they were rewarded with higher wages. But this link between greater productivity and higher wages has broken down. From 1980 to 2008, nationwide worker productivity grew by 75.0 percent while workers’ inflation-adjusted average wages increased by only 22.6 percent, which means that workers were compensated for only 30.2 percent of their productivity gains.
The American economy is transitioning from an industrial economy to a technology, financial, and service-based economy. Because of this change, a greater disconnect between employers and workers has emerged, with employers trying to capture fast profits and workers simply trying to hold onto their jobs.
This disconnect has led to more part-time jobs and rapid turnover, according to Stern. Nearly one in three workers does not have a full-time employer, and young workers entering the workforce will have had 9 to 12 jobs by the time they turn 35. Low-wage jobs are expected to grow rapidly, and 96 percent of new jobs will be in the service sector over the next 10 years, which includes home care, retail, and food preparation.
But the SEIU has a plan to help workers that focuses on jobs, workers’ rights, banks, and financial reform.
To create jobs and help jobless workers immediately, Burger argued, Congress needs to quickly get Americans back to work now—with aid to states, government jobs programs, assistance for small businesses, and extensions of unemployment insurance, or UI, and COBRA. Passage of the Unemployment Insurance Modernization Act would provide $7 billion in incentive funding for states to cover more than 500,000 jobless workers currently denied UI benefits, which would also stimulate the economy and protect the American workforce.
Burger explained that Congress must invest in America’s infrastructure, create green jobs, and pass health care reform to support longer-term job growth. She added that the health care bill is actually a jobs bill and an antideficit bill even though this has been ignored in the congressional debate. The reform will create roughly 1 million jobs in the health sector.
Burger urged Congress to pass the Employee Free Choice Act, which would level the playing field for workers who want to form unions as polls indicate they would like to do. Unions are a democratic right and a private-sector solution that raise wages, improve benefits, and promote greater income equality across the board. Stern and Burger reiterated that banks exploited Americans in the lead up to the economic crisis by taking on too much risk in favor of quick profits over long-term economic stability. When the government bailed out Wall Street, many expected the financial system to do the same thing for workers and small businesses. To hold banks accountable and ease the burden on the American worker, Congress should pressure banks to reduce borrowing costs, restore small business lending to save jobs and tax revenue, and stop charging abusive overdraft fees that destroy consumer spending. Also, Burger argued that if banks are “too big to fail,” they are simply too big.
Stern and Burger finally proposed several measures to reform the financial system so that it protects workers’ finances. The Consumer Financial Protection Agency—which is currently under consideration in Congress and would establish rules for protecting consumers from predatory lending and other practices—must become an independent and fully empowered agency. Banks and financial institutions should pay for these changes through fees on bank liabilities to repay TARP dollars, a financial speculators’ tax, and a tax on bank bonuses.
American workers have suffered from the economic downturn and face many challenges in the new century. But the right steps can help the U.S. economy retool and once again offer American workers economic security. “American workers understand that change is inevitable…and progress is optional,” said Stern. It’s time for Congress and the president to choose progress.