Thomas M. Conway

President’s Perspective

Tom Conway USW International President

Star-Spangled Knockoff

Image by Getty ImagesAn American flag made in China is not an American flag. It’s a knockoff.

New York Assemblyman Angelo Santabarbara wants a guarantee that flags flown at New York events and on New York poles are made in America. He introduced legislation last week to require that after learning millions of flags are imported annually.

Good for him. Because nothing symbolizes the weakened state of American manufacturing as much as a foreign-made U.S. flag.

America’s manufacturing sector has been decimated. NAFTA and China’s unfair trade practices are major culprits. That’s a sorry state of affairs for a superpower.

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GM intransigence forces 49,000 UAW members to strike

Mark Gruenberg

Mark Gruenberg Editor, Press Associates Union News

General Motors intransigence on reversing financial hits workers took during and after 2008 Great Recession forced 49,200 Auto Workers toiling for the largest Detroit-based car company to strike at midnight Sept. 15. The firm retaliated by yanking their health insurance, dumping the cost on UAW.

The old pacts between the Detroit 3 – GM, Ford and FiatChrysler – expired the day before, but the union kept talking, and workers kept toiling, at the other two car companies.

At GM plants nationwide, they walked off at the end of the four-to-midnight shift. GM “refuses to give even an inch” in last-minute weekend bargaining, union spokesman Brian Rothenberg said.

GM disputed that, saying it offered raises, a signing bonus and proposed to reopen – at some unspecified future time – two of the six U.S. auto plants it closed this year, one in Detroit and a partial reopening of another in Lordstown, Ohio. GM shifted their machines and jobs to Mexico.

It also announced on Sept. 17 that it would not pay health insurance any more for the workers. UAW stepped in and said it would, using its strike fund.

“Taking our health care is sickening,” the union said in introducing a video about Laura Prater, a hospitalized GM worker in Springhill, Tenn., who woke up the morning of Sept. 17 worrying about how she would pay the bill, rather than how she would get well after surgery.

“The company’s decision was made without any warning to the UAW, leaving more than 48,000 members and their families at risk of being suddenly uninsured,” the union said.

Prater’s Local 2164 union president, Jack Bowers, called GM’s decision pretty bad.  I mean, traditionally, they’ve not done that (paid the insurance costs),” Bowers told WKU, a public radio station. “We’ve got people out there that need insulin. That’s a lot of money for anybody. I think it’s kind of wrong. That’s the nicest word I can think of right now.”

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Manufacturing Rebounds in August

Matthew McMullan

Matthew McMullan Communications Manager, Alliance for American Manufacturing

So check it out, we’ve got another economic indicator out. And this one – unlike another recent one – is good!

The Federal Reserve said Tuesday that U.S. manufacturing output rose by 0.6% in August on the back of machinery and primary metals production. That may sound like only a little, but it beats a forecast returned by a poll of economists conducted by Reuters. From the story:

Motor vehicles and parts production fell 1.0% last month after increasing 0.5% in July. Excluding motor vehicles and parts, manufacturing output increased 0.6% in August after declining 0.5% in the prior month. Machinery output rebounded 1.6% after dropping 1.7% in July.

The jump in manufacturing output in August together with a 1.4% rebound in mining, lead to a 0.6% increase in industrial production last month. That was the largest gain in industrial output since August 2018 and followed a 0.1% dip July. Industrial production rose 0.4% on year-on-year basis in August.

Capacity utilization rates were up too. It’s a nice rebound in fortunes from the recently released ISM Manufacturing index, which signaled a further slowdown in economic activity.

So while its numbers aren’t astounding, manufacturing isn’t completely tanking. But the longer-term forecasts aren’t great, either. MarketWatch asked around, and those it spoke to said that the negative trend is likely to continue.

We’ve said it before and we’ve said it again: Infrastructure spending is the right way to turn this around.

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Reposted from AAM

GM Strike Shows How The Economy STILL Doesn’t Work For The 99%

Liz Iacobucci NH Labor News

About 46,000 GM workers went out on strike yesterday. It’s another case study in how the economy still doesn’t work for the 99%. The company has had strong profits for years. It’s already paid out tens of billions of dollars to stockholders. But it wants worker concessions – even as it’s scheduled to pay investors another half-billion dollars this Friday.  

Here’s what’s on the table in GM contract negotiations, according to media reports:

  • Permanent jobs for the 7% of GM’s employees who are now working as temps. The UAW wants these jobs to be permanent – better jobs with better wages. (Right now, GM temps earn about 30% less than permanent workers.)
  • Reopening idled plants. Last winter, GM announced it would stop operations at four US factories – upending the lives of thousands of families just before Christmas. The Lordstown, Ohio plant was idled even though its workers had agreed to $118 million/year in concessions to keep it open. The union wants these factories reopened.
  • Capital investment. GM released a press statement touting its offer to make “$7 billion in investment at its US plants” – over the next four years – as somehow being a concession to the labor union. Once upon a time, corporate managers invested in their company’s future as a matter of routine prudence. (How can a corporation last, without it?) Now our economy is so upside-down that GM’s management wants special credit for investing in its own factories.

And here are some things that, in our opinion, should be on the table:

  • Stockholder dividends. Last year, GM paid out more than $2 billion in dividends to stockholders. But its profit-sharing with employees was only about one-quarter that amount. Who do you think was more responsible for the corporation’s 2018 profits?

    Stockholders get dividends just because they owned a share of stock on a particular day. They haven’t done anything to “earn” that money other than buy the stock. Yet GM gives stockholders four times as much profit-sharing through dividend payments as employees receive.

    This Friday, September 20, GM will pay another half-billion dollars to its stockholders. As of Saturday, GM will have paid a total of about $10.7 billion in dividends since 2015.

    Yet management wants to keep the idled plants closed, and keep 7% of its workforce as lower-paid, short-term hires.
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Wealth That Concentrates Kills

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

The weight of the wealth that sits at the top of America’s economic order isn’t just squeezing dollars out of the wallets of average Americans. That concentrated wealth is shearing years off of American lives.

The latest evidence for that squeeze on American wallets comes from the Census Bureau. Researchers there have just released results from their latest annual sampling of U.S. incomes. In 2018, the new Census stats show, incomes for typical American households saw a “marked slowdown.”

In effect, average Americans have spent this entire century on a treadmill getting nowhere fast. The nation’s median — most typical — households pocketed 2.3 percent fewer real dollars in 2018 than they earned in 2000.

The “vast majority” of American households, note Economic Policy Institute analysts Elise Gould and Julia Wolfe, “have still not fully recovered from the deep losses suffered in the Great Recession.”

America’s most affluent households have been having no such problem. Average top 5 percent incomes have increased 13 percent overall since 2000, to $416,520. The new Census Bureau figures, based on a sampling of U.S. households, tell us that top 5 percenters are now collecting 23.1 percent of the nation’s household income.

But these Census Bureau figures significantly understate just how much income America’s richest are annually grabbing, mainly because Census researchers “top code” high incomes to keep the identity of sampled deep pockets confidential. All incomes above fixed top-code levels get recorded at the top code. These levels have changed over the years, but the Census Bureau’s continuing reliance on top coding leaves us with figures that fudge the real extent of our inequality.

Analyses based on other data sources — like IRS tax return records — show that top 1 percenters alone are pulling down over 20 percent of America’s household income, essentially triple the top 1 percent income share of a half-century ago.

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The 2018 Poverty, Income, and health coverage results: a tale of three forces.

Jared Bernstein

Jared Bernstein Senior Fellow, Center on Budget and Policy Priorities

This morning, the Census Bureau released new data on health insurance coverage, poverty, and middle-class incomes. While the data are for last year, they shine an important light on key aspects of families’ living standards that we don’t get from the more up-to-date macro-indicators, like GDP and unemployment.

As the economic recovery that began over a decade ago persisted through 2018, poverty once again fell, by half-a-percentage point, from 12.3 percent to 11.8 percent. Other results from the report show that anti-poverty and income support programs lifted millions of people out of poverty, including 27 million through Social Security alone. Though the real median household income—the income of the household right in the middle of the income scale—increased slightly less than 1 percent last year, the increase was not statistically significant. Median earnings of full-time men and women workers both rose significantly, by over 3 percent for each (for reasons discussed below, sometimes earnings rise significantly but income does not).

Health coverage, however, significantly deteriorated last year, as the share of the uninsured rose for the first time since 2009, from 7.9 percent to 8.5 percent. In total, 27.5 million lacked coverage in 2018, an increase of 1.9 million over 2017. This result is partially driven by actions of the Trump administration to undermine the Affordable Care Act (note that Medicaid coverage was down by 0.7 percentage points), and in this regard, it should be taken as a powerful signal of the impact of conservative policy on U.S. health coverage.

Taken together, the poverty, income, and health coverage results tell a tale of three powerful forces: the strong economy, effective anti-poverty programs, and the Trump administration’s ongoing attack on affordable health coverage. A strong labor market is an essential asset for working-age families, and the data are clear that poor people respond to the opportunities associated with a labor market closing in on full employment. Anti-poverty programs are lifting millions of economically vulnerable persons, including seniors and children, out of poverty. But while a strong labor market and a responsive safety net help to solve a lot of problems, the history of both U.S. and other countries shows that it takes national health care policy to ensure families have access to affordable coverage. The ACA was and is playing that role, but efforts to undermine its effectiveness are evident in the Census data.

Poverty, Income, Inequality

The Census provides two measures of poverty: the official poverty measure (OPM) and the Supplement Poverty Measure (SPM). The latter is a more accurate metric as it uses an updated and more realistic income threshold to determine poverty status, and it counts important benefits that the OPM leaves out. While the two measures often track each other, year-to-year, that wasn’t the case last year, as the SPM rose an insignificant one-tenth of a percent, from 13.0 to 13.1 percent, while the OPM fell a significant half-a-percent, from 12.3 to 11.8 percent. Because the SPM has a higher income threshold than the OPM, 4.4 million more people were poor by that more accurate measure.

Because it counts anti-poverty policies that the official measure leaves out, one particularly useful characteristic of the SPM data is that it breaks out the millions of people lifted out of poverty by specific anti-poverty programs. For example, refundable tax credits, such as the Earned Income Tax Credit and the Child Tax Credit lifted about 8 million people out of poverty in 2018; SNAP (food stamps) lifted 3 million more out each, and Social Security was the most powerful poverty reducer, lifting 27 million out of poverty in 2018, 18 million of whom were elderly (65 and older).

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Union Matters

An Invitation to Sunny Miami. What Could Be Bad?

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

If a billionaire “invites” you somewhere, you’d better go. Or be prepared to suffer the consequences. This past May, hedge fund kingpin Carl Icahn announced in a letter to his New York-based staff of about 50 that he would be moving his business operations to Florida. But the 83-year-old Icahn assured his staffers they had no reason to worry: “My employees have always been very important to the company, so I’d like to invite you all to join me in Miami.” Those who go south, his letter added, would get a $50,000 relocation benefit “once you have established your permanent residence in Florida.” Those who stay put, the letter continued, can file for state unemployment benefits, a $450 weekly maximum that “you can receive for a total of 26 weeks.” What about severance from Icahn Enterprises? The New York Post reported last week that the two dozen employees who have chosen not to uproot their families and follow Icahn to Florida “will be let go without any severance” when the billionaire shutters his New York offices this coming March. Bloomberg currently puts Carl Icahn’s net worth at $20.5 billion.

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Health Care Should Not Be A Bargaining Weapon

Health Care Should Not Be A Bargaining Weapon