The FTC’s Enforcement of “Made in USA” is Notoriously Weak. It’s Time to Change That.

Elizabeth Brotherton-Bunch

Elizabeth Brotherton-Bunch Digital Media Director, Alliance for American Manufacturing

We cover a lot of ground here at the Alliance for American Manufacturing — Trade! Infrastructure! Tom Cruise! — but there’s nothing that gets us more excited than learning about an American-made product. Whether it’s a small piece of jewelry or a big piece of steel, we love highlighting the amazing workers and companies who manufacture their products in the United States.

After all, a lot of hard work — and often extra expense — goes into that “Made in USA” label. U.S. companies and workers must take care to ensure that “all or virtually all” of their products are made in the United States.

When something is labeled as “Made in USA,” many consumers recognize the effort that is behind it, along with the millions of jobs that American-made products support. The label can be a deciding factor when someone is deciding on what product to buy.

Made in USA means something.

And while nothing gets us more excited than a Made in USA product, nothing gets us more fired up than when a company knowingly mislabels its product as Made in USA. What’s worse is that these cheaters have been getting away with it.

It happens more than you think. In 2018, the Federal Trade Commission (FTC) caught some pretty brazen Made in USA cheats:

  • One company sold military-themed backpacks – including on military bases! – with an “American-made” label.  The FTC found that the vast majority of that company’s products were made in China or Mexico.
  • Another company made hockey pucks, and even positioned itself as “the all-American alternative to imported pucks.” All of the company’s pucks were imported from China.
  • A direct-to-consumer mattress firm advertised its mattresses as assembled in the United States. The mattresses were made in China.

But in all three of these blatant cases of Made in USA cheating, the FTC politely asked these bad actors to stop this deceitful behavior.

The cheaters paid zero fines — they kept every penny they made deliberately deceiving consumers. No notices to consumers were issued. The companies didn’t even have to admit any wrongdoing!

What’s the point in even having a strong “Made in USA” standard if it isn’t enforced?

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Household income growth was slower and less widespread in 2018 than in 2017

By David Cooper and Julia Wolfe

The state income data from the American Community Survey (ACS), released this morning by the Census Bureau, showed that in 2018, household incomes across the country rose—albeit more slowly, and in fewer states, than in the previous year. From 2017 to 2018, inflation-adjusted median household incomes grew in 33 states and the District of Columbia (14 of these changes were statistically significant.) This marks a decline from the broader growth seen between 2016 and 2017 when median household incomes grew in 40 states and the District of Columbia, with 24 of those changes being statistically significant.

The ACS data showed an increase of 0.2% in the inflation-adjusted median household income for the country as a whole—an increase of just $130 for a typical U.S. household and a slowdown in growth compared to the past three years: household incomes increased by 3.8% in 2015, 2.0% in 2016, and 2.5% in 2017. [i] Despite these increases, households in 23 states still had inflation-adjusted median incomes in 2018 below their 2007 pre-recession values, which makes this year’s slowdown particularly disappointing.

From 2017 to 2018, the largest percentage gains in household income occurred in Idaho, where the typical household experienced an increase of $2,085 in their annual income—an increase of 3.9%. Maryland remains the state with the highest median household income at $83,242, having experienced a slight increase (0.6%) from 2017 to 2018. The District of Columbia has the highest median household income in the country at $85,203—though comparing D.C. to states is problematic, since D.C. is a city, not a state. 

From 2017 to 2018, there were 17 states in which the median household income declined or was unchanged: Alaska (-0.8%), Iowa (-0.1%), Maine (-3.6%), Missouri (-0.7%), Nebraska (-3.0%), Nevada (-1.3%), New Hampshire (-0.2%), New Jersey (-0.4%), New Mexico (-1.5%), North Carolina (-0.3%), South Dakota (-2.8%), Rhode Island (-1.7%), Tennessee (-0.4%), Virginia (-1.0%), West Virginia (-1.0%), and Wyoming (-0.5%). Only one of these—Maine, where incomes declined by 3.6% after increasing by 3.8% in 2017—had a statistically significant drop. 31 states and the District of Columbia saw either a slowdown in their growth compared to last year, or experienced even steeper declines, reflecting the disappointing growth seen at the national level.

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Senate Republicans approve corporatist Scalia as Labor Secretary

Mark Gruenberg

Mark Gruenberg Editor, Press Associates Union News

Talk about greasing the skids for a Trumpite: The GOP-run Senate committee that deals with workers’ issues OKd Donald Trump’s nomination of right-wing corporate lawyer Eugene Scalia as by a 12-11 party-line vote on Sept. 24. The full Senate followed, also totally on party lines, 53-44 on Sept. 26.

The lickety-split confirmation process for Scalia, son of the late right-wing U.S. Supreme Court justice, came over strenuous objections from both the panel’s Democrats and workers and their allies. Nevertheless, he will be in the Secretary’s chair.

“We’ve seen this awful nominee for the Secretary of Labor’s job who spent his career busting unions,” Sen. Sherrod Brown, D-Ohio, told a nearby outdoor rally of workers protesting Trump’s edicts against federal workers and their unions.

But corporate interests from A to Z supported Scalia, who previously made a name by leading business lobbying to kill the Occupational Safety and Health Administration’s ergonomic rules and for defending Seaworld, whose killer whale drowned its female trainer.

And Scalia was also Walmart’s lawyer when the monster vicious anti-worker retailer sued to overturn a Maryland law a decade ago saying that any firm with more than 10,000 workers in the state had to devote at least 8% of payroll to health insurance for its workers. Two of the only three – including unionized Safeway stores – did so. Walmart didn’t. Scalia and Walmart won in court.

“Last week’s hearing confirmed my worst fears,” said Sen. Patty Murray, D-Wash., the panel’s top Democrat. “Scalia will be a yes-man for President Trump’s anti-worker agenda, not a champion for working families, that he will let companies off the hook, not hold them account-able, that . . . he will be a Secretary of Corporate Interests, not a Secretary of Labor.”

Scalia “dodged seemingly every opportunity to take a strong stand as a champion for the workers and families the Department of Labor serves,” she added. But “he didn’t shy away from defending his record helping corporate clients hack away at the rules meant to protect workers and families or hesitate to praise President Trump and the so-called ‘virtually unprecedented benefits’ workers are seeing under this administration’s anti-worker agenda.”

“He has fought against workers seeking the wages they were cheated out of, people with disabilities seeking a job opportunity, employees seeking a safer work environment, families seeking reliable advice as they plan for retirement, and even survivors seeking justice for workplace harassment and assault. In other words, the very people we need the Secretary of Labor to fight for,” Murray said.                             

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The News Media’s Blind Spots Covering the Working Class

Christopher R. Martin Center for Working-Class Studies

At midnight on Sept. 15, 49,000 UAW-GM workers walked out on strike at locations across the country, a day after their 2015 collective bargaining contract with General Motors expired and the union declined to extend the provisions of the agreement.

In a statement, UAW Vice President Terry Dittes said “While we are fighting for better wages, affordable quality health care, and job security, GM refuses to put hard-working Americans ahead of their record profits of $35 billion in North America over the last three years. We are united in our efforts to get an agreement our members and their families deserve.”

The President promised then punted on saving the GM jobs, and never seemed to imagine that the UAW would later be leading the fight. Given their news coverage from earlier this year, neither did the New York Times imagine the UAW would take on GM.

While the auto industry is increasingly profitable, autoworkers have been suffering. Ground zero of that story is the iconic GM Lordstown plant in northeastern Ohio, which lost the discontinued Chevy Cruze and was shuttered when GM moved production of the revived Chevy Blazer to a Mexican assembly plant.

Beyond its regular reporting, the New York Times committed an amazing level of resources to the story of the Lordstown closing, producing an episode of The Daily podcast on July 5, an episode of The Weekly (on FX and Hulu) on July 7, and an earlier New York Times Magazine interactive piece with photos and text (May 1, 2019).

I have watched The Weekly episode on Lordstown several times, listened to The Daily podcast many more times, and re-read the multimedia piece. I’ve also gone back to review the Times’ 1992-1993 editorials and opinions on NAFTA, the trade deal that eventually caught up with Lordstown and many other manufacturing plants.

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Trump's Economy Revealed

Robert Reich

Robert Reich Former U.S. Secretary of Labor, Professor at Berkeley

Donald Trump and his enablers are hoping that a strong economy will help the American people look past the damage they are doing to the country. That’s why Trump is constantly crowing about job numbers and the stock market in order to paint a rosy picture of the economy.

But when you look closer, the numbers reveal a very different story about Trump’s economy:

1. Wages are still stuck. The median annual earnings of full-time wage and salaried workers in 1979, in today’s dollars, was $43,680. The median earnings in 2018 was $45,708. So much for the $4,000 pay raise Trump and Republicans in Congress promised when they cut taxes for the wealthy and corporations. 

2. Percent of people with jobs is low. While the unemployment rate is low, employment is not nearly as good as it may look when you consider how many people have given up looking for jobs. The labor-force participation rate – the percent of working-age Americans with jobs – is the lowest it’s been since the late 1970s, when wives and mothers first began streaming into paid work to prop up family incomes.

3. Many people are working part-time jobs. Nearly 4 million Americans are stuck in part-time jobs, unable to find full-time jobs. Many of these part-time gigs are either freelance or contract, offering fewer rights and benefits. In turn, this has increased economic insecurity for millions of families.

4. A growing number of college graduates are overqualified for their current jobs. One in 10 college grads are underemployed, which is much higher than 20 years ago. At the same time, the cost of college has skyrocketed, with students going deeper into debt to pay for their education: 45 million Americans now owe 1.6 trillion in student debt.

5. The cost of health care continues to increase. Since 2008, average family premiums have soared 55 percent, which is twice as fast as workers’ earnings and three times as fast as inflation. Prescription drug prices also continue to rise – jumping almost 11 percent in the first half of 2019 alone.

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House panel approves pro-worker labor law rewrite

Mark Gruenberg

Mark Gruenberg Editor, Press Associates Union News

By a party-line 26-21 vote after an all-day work session, the Democratic-run House Education and Labor Committee passed the Protect the Right to Organize (Pro) Act, the most-comprehensive pro-worker rewrite of U.S. labor law in decades. All the Democrats voted for it and all the Republicans voted against it.

The measure, co-written by top lawmakers and union legislative representatives, would restore many of the freedoms and protections workers gained under the original National Labor Relations Act of 1935.

The Pro Act, formally titled HR2474, is also expected to pass the Democratic-run House, though the exact date for debate has not been set. The Republican-run Senate is another matter. Majority Leader Mitch McConnell, R-Kent., lumps it with other House-approved measures – including federal elections reform – as “socialism.”

And corporate contributors to congressional Republicans can be expected to mount a large and expensive lobbying campaign against it, just as they spent millions of dollars a decade ago to destroy an attempt to rewrite labor law with legislation called the Employee Free Choice Act.

The Pro Act would undo much of the damage done to worker rights by the GOP-passed Taft-Hartley Act of 1947, court decisions, NLRB rulings and other Republican-crafted legislation.

It would also counter a key assumption of the NLRA: That bosses break labor law unintentionally, so penalties should be light.

Eighty-four years of experience shows that’s wrong. The Pro Act recognizes that with high fines for labor law breaking – including fines directed at CEOs and boards of directors, immediate restoration of illegally fired workers to their jobs, and swift court injunctions.

And the Pro Act would remedy two big problems in labor law. The GOP created one in the Taft-Hartley law. It legalized the process under which workers may enjoy the benefits of union membership without joining or paying dues.

The Pro Act would stop employers from constant anti-union harangues in mandatory captive audience meetings and “would ban what I would call ‘right to freeload’ laws,” Rep. Andy Levin, D-Mich., a former AFL-CIO deputy organizing director, said.

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Trump’s labor board wants to deprive graduate student workers of their basic right to form unions

Celine McNicholas

Celine McNicholas Director of Government Affairs | Labor Counsel, EPI

The Trump-appointed National Labor Relations Board proposed a rule last week that would rob graduate teaching assistants and other student employees of the rights to organize and collectively bargain. This is just the most recent example of the board’s attack on working people. Last month, the board determined that misclassifying workers as independent contractors does not violate the National Labor Relations Act (NLRA). Before that, the General Counsel’s office released a deeply flawed memo that found that Uber drivers were not employees under the NLRA.

The trend with the Trump board seems to be to take a statute which broadly protects private sector workers and whittle away at its scope. At a time when worker advocates are demanding more workers have the right to a union and collective bargaining, the Trump board’s graduate teaching assistant proposal demonstrates a fundamental lack of understanding of the modern workforce.

Had the Trump board considered any data or conducted any meaningful analysis of the academic workplace in developing the proposed rule, it would have discovered that the last several decades have seen significant changes in labor conditions. Universities have increasingly relied on graduate teaching assistants and contingent faculty, with the growth in graduate assistant positions and non-tenure track positions outpacing the increase in tenured and tenure-track positions between the Fall of 2005 and Fall 2015.

These positions have dramatically lower compensation than faculty. The average salary of a graduate teaching assistant during the 2015-2016 school year was $35,810. Individuals who are working while enrolled in graduate school deserve livable wages. One way to address this issue is through collective bargaining—the very right the Trump board seeks to rob from these workers.

Further, in spite of the majority’s insistence that collective bargaining will harm “academic freedom,” there is a wealth of evidence to the contrary. Public universities have had graduate student worker unions for 50 years. In 2016, more than 64,000 graduate student employees were unionized at 28 institutions of higher education in the public sector. The colleges and universities with union represented student employees have not reported a loss of “academic freedom” as the Trump board suggests.

In reality, union-represented graduate student employees at public universities have reported that they enjoy higher levels of personal and professional support than that reported by non-union represented students. Unionized and nonunionized student employees report similar perceptions of academic freedom. However, union-represented graduate student workers did report receiving higher pay than non-union represented graduate student workers. Perhaps this is one reason why there have been so many successful organizing campaigns on campuses across the country the last few years. Student employees at several private universities have unionized and won better working conditions–better pay, better health care, better child care. The Trump board’s proposal would rob student employees of these gains.

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The GM Strike: A Century of Context

Sam Pizzigati

Sam Pizzigati Editor, Too Much online magazine

Wars end with treaties. In the middle of the 20th century, the “class war” that finished off America’s original plutocracy ended with the “Treaty of Detroit.”

Fortune, the business magazine, came up with that catchy turn of phrase back in 1950 to describe the landmark collective bargaining agreement that the United Auto Workers union had just reached with General Motors. What made the pact so historic? America’s most powerful corporation was essentially agreeing to “share the wealth.”

In exchange for labor peace, notes historian Nelson Lichtenstein, GM guaranteed auto workers what amounted to “a 20 percent increase in their standard of living” over five years, along with a new health care benefit and a standard $125 monthly pension, the equivalent of about $16,000 annually in today’s dollars.

This “Treaty of Detroit” would help energize a huge postwar shift in the distribution of U.S. income and wealth. In the quarter-century after 1945, the real incomes of average Americans would double, in the process manufacturing the first mass middle class the world ever seen.

Now UAW workers are once again making headlines, demanding just as they did decades ago that General Motors share the wealth with the workers who toil to create it. And GM is sitting on plenty of wealth. Since 2015, the company has posted $35 billion in North American profits alone. But GM workers today find themselves struggling in a far different — and more difficult — political and economic environment than their UAW forbears.

In 1950, the U.S. labor movement was beginning a third decade of sustained and significant growth. By the mid 1950s, over one out of every three workers in the nation carried a union card. Last year, by contrast, only 6.4 percent of American private-sector workers belonged to a union.

The executives who run General Motors are operating in a different environment, too. In the 1950s, the U.S. tax code subjected the nation’s rich to consistently steep tax rates. Individual income over $200,000 faced a 91 percent federal income tax throughout the decade. In 1950, GM’s top executive, Charlie Wilson, paid 73 percent of his $586,100 total income in taxes.

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Teamsters Say Taxpayer Dollars Shouldn’t Go to Chinese Companies to Build Transit

Elizabeth Brotherton-Bunch

Elizabeth Brotherton-Bunch Digital Media Director, Alliance for American Manufacturing

The International Brotherhood of Teamsters weighed in on the National Defense Authorization Act (NDAA) last week, sending the chairpersons and ranking members of the Senate and House Armed Services Committees a letter outlining their priorities for the legislation.

First thing on the list? Make sure that the final legislation includes language from the Senate version of the bill that would prohibit “the use of tax dollars from supporting Chinese rail car and bus companies.” Here’s General President James P. Hoffa with more:

“As the proud representatives of American workers who both manufacture and operate thousands of American-made buses, we believe that American companies must be allowed to compete on an even playing field, free from Chinese interference into our transit system and manufacturing base.”

The Teamsters’ support for banning both rail cars and buses is significant. The Senate’s version of the NDAA included language prohibiting China’s state-owned, controlled or subsidized companies from receiving taxpayer dollars to build rail cars and buses, but the House version of the bill only applies to rail cars.

If Congress moves forth with the House version, it would be a huge oversight, to say the least. As we’ve discussed in this space before, there’s widespread bipartisan economic and national security concern about China’s role in building both.

First, there’s the threat to 750 companies and 90,000 jobs up and down the transportation supply chain, as China is aiming to dominate rail car and bus manufacturing via its “Made in China 2025” plan. China heavily subsidizes its state-owned and controlled companies, allowing them to severely underbid on government contracts to build these systems. The point isn’t to make money — China’s ultimate goal is to put competitors out of business and monopolize the global industry.

If you don’t think that’s realistic, just look at what has happened to the pharmaceutical industry.

“When you can subsidize, when you can wholly own an enterprise like China does, you can create a wholly unlevel playing field,” Sen. Tammy Baldwin (D-Wis.) recently told the New York Times. “We’re used to that unlevel playing field existing between the U.S. and China, but now it’s happening in our own backyard.”

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What’s luck got to do with it? When it comes to money, quite a bit

Pedro da Costa

Pedro da Costa Communications Director, EPI

The notion that hard work is all that’s needed to achieve a prosperous or even comfortable living in the United States has come under increasing scrutiny in recent years as stagnant wages for most workers have led to talk about the demise of the American Dream.

Randy Schutt, a long-time progressive activist and researcher, has created a simple model to help illustrate just how much dumb luck, mere chance and circumstance, can play a role in who becomes wealthy and who remains poor.

The project, intended to illustrate certain nuances about economic inequality to students and researchers, is called “The Chancy Islands: A Land of Equally Capable People But With Unequal Luck.

His imaginary archipelago includes places like Rugged Island and Mercy Island, the first unforgiving, the latter much less so, and everything in between—Flat Island, Combo Island, Parity Island, etc.

“We’re always told that if you work hard and persist through adversity that you can rise above your humble (or horrible) circumstances and become wealthy. But that isn’t true,” Schutt said. “Most people are so beaten down by our economic system that they have to be lucky just to get by. And they have to be very lucky to do well and extremely well to get super rich.”

The statistics bear our Schutt’s narrative. Economic mobility, defined as the chance that someone born in the bottom fifth of the income distribution can sweat their way to the top fifth, is extremely low in the United States (around 7.5%)—and actually much lower than other rich nations, because of a much weaker social safety net.

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