It is a great honor and a privilege to be invited to speak here at the City Club, and I really appreciate the opportunity. The City Club is also known as the “Citadel of Free Speech,” which is such a critical function in our democracy. I’m particularly glad to be here at a moment when another critical part of our democracy, the right to organize and bargain, is under attack.
For as long as my family has been in this country, we have been a part of the fight to build democratic institutions that give workers a voice. My two grandfathers, Nathan Fisher and Morris Rosen, came to America as immigrants at the end of the 19th century and found sweatshop jobs in the New York garment district: Nathan was a sewing machine operator; Morris was a fur worker. They were there when their unions first organized. They weren’t leaders or shop stewards, but always told me how their unions lifted them out of poverty, created a safer work environment, and provided them with dignity and a voice at work.
My mother was a school teacher in the early days of public employee collective bargaining, and her union helped upgrade the standards of her profession.
When I went to work for the telephone company as a customer service rep, I came in already appreciating the value of a union job. Not just in helping workers maintain a middle class standard of living, but equally -- or perhaps even more importantly -- unions give workers a voice to create a just and fair workplace.
It is interesting and revealing that SB5, the Bill the Ohio Senate passed on Wednesday, doesn’t simply restrict or eliminate public sector unions’ ability to bargain economic issues, but totally eliminates the ability of workers to utilize their unions to bargain for justice at work. For example, under SB5, Police will be banned from asking for bulletproof vests to protect themselves. Bus drivers will not be allowed to speak out for the need to replace worn tires, frayed windshield wipers, or squeaky brakes.
I’m here today to, hopefully, start a conversation about how we can have good jobs and strong communities in Ohio. I hope to have a discussion about how various issues in the news today—labor rights, the state budget crisis, and overall economic issues are interrelated. Out of understanding how we got to this moment, we can start to think about solutions that could unite Ohioans in a common endeavor to reverse the decline of our state.
In fact, for most of its 200 year history, Ohio and America grew together. Ohio was a place that people would move to in order to find good jobs and strong communities. A strong middle class with good union jobs supported the kinds of services that make a strong community . . . fire, police, schools, hospitals, libraries, parks, and more. In turn, these strong communities provided the market places where people bought the goods and services that led to good jobs.
During much of this time, the economy was growing, and the income of workers grew at the same time. In the three decades that followed the Second World War, productivity and median family income grew together, each at about 104%. Between 1948 and 1979, income distribution in America remained stable as a rising tide lifted all boats. During this period, Ohio and the nation embraced policies designed to create a middle class.
We established a minimum wage, we created Social Security (turning retirement from the most likely time in life to be poor, to the least likely), we encouraged unionization, we invested heavily in education (growing high school and college completion rates from 25% and 5 % in 1940, to 83% and 21% in 2000), we established a safety net, and we created and regulated financial products that led to growing home ownership and wealth building.
We created the world’s first middle class, and the good jobs and strong communities of Ohio were at the center of it—with people from all over the country and world moving to Ohio.
So, what happened?
The economy changed, particularly the manufacturing economy. Unions were attacked. Wages stagnated, jobs were moved outside of the U.S., and families struggled.
On top of these overall economic trends, politicians accelerated the problem. Elected officials, led by the Taft Administration in Ohio and the Bush Administration nationally, told us that cutting taxes, privatizing services, reducing unionization levels, reducing regulation of financial products and industry, and encouraging more international trade of manufactured goods would help bring back good jobs and strong communities.
It didn't work. In fact, it led to lower wages, fewer jobs, lower quality jobs, more debt, and fewer resources to support the public structures, services, and institutions that build strong communities. It did help enrich a lot of people though—people at the top.
While productivity increased around the same amount during this period as it had in the previous one, around 105%---average family income, instead of growing in tandem with productivity, only grew 31%. Between 2000 and 2005, the period of the Bush and Taft Administrations, median income actually declined by 2.3% despite a 16.6% increase in productivity.
Unlike during the previous 30 years when incomes grew together along with growth, between 1979 and 2007 the richest 10% accounted for 91% of average income growth, and the top 1% alone captured 37% of the growth in the economy
This “giant pool of money” as NPR called it, in the hands of a few, did what always has happened throughout human history to giant pools of money in the hands of a few---it went looking for a casino.
From tulips in Holland to the “bubble” described by Charles Dickens in the opening of Nicholas Nickleby, to the 2008 financial crisis—it found a speculative vehicle to gamble on. This Wall Street-led financial crisis, on top of the longer-term crisis of stagnating income, tore a gaping hole in the American economy. At the current rate of job growth, it will take 17 years to return to full employment.
The human toll on our unemployed and underemployed citizens is incalculable. Not just in simple economic terms, but also in personal and psychological costs. It has been well-documented that unemployment increases rates of depression, suicide, domestic violence, substance abuse, and child abuse. For young people, whose unemployment rate in 2010 was 19.6%---the highest in over 60 years --- the consequences may be long-lasting.
Peter Coy of Bloomberg-Businessweek wrote: “For people just starting their careers, the damage may be deep and long-lasting, potentially creating a kind of ‘lost generation.’ Studies suggest that an extended period of youthful joblessness can significantly depress lifetime income as people get stuck in jobs that are beneath their capabilities, or come to be seen by employers as damaged goods.” What kind of goods and services will this lost generation be able to buy? What kinds of communities will they be able to support?
When I was 22 years old and looking for a job in 1979, it was the beginning of the changes in the economy and was tough to find work. However, I was ultimately able to find a job as a service rep at the phone company, which provided a family wage. I got married, had two kids, bought a house, and contributed to a strong community in Cleveland Heights, Ohio, based on the union wages and benefits that I earned. My kids, 25 and 29, and many of their friends, don’t have these same opportunities that I have had.
However, these are not the only consequences of this current economic crisis. It is this huge hole in the economy that is the primary cause of the state budget crisis in Ohio, Wisconsin, and elsewhere. People without jobs don’t pay taxes. People without good jobs aren’t able to contribute much either.
In addition, we have also reduced taxes on wealthy individuals and corporations in states like Ohio.
For example, the 2005 Taft tax cuts in Ohio have led to the loss of $2 billion a year in revenue, according to the Ohio Department of Taxation. That is $4 billion over the biennial budget, or a full 50% of the 8 billion dollar ‘hole’ in the budget. That is roughly equal to the cost of firing around two-thirds of all state employees.
So what proposals are currently on the table in Ohio?
In Governor Kasich’s inaugural address, he talked about “not being selfish.” I agree with that. In times of crisis throughout our history, Americans have always believed in “shared sacrifice.” Most famously, during the two World Wars Americans united and all sacrificed for the common good of the nation.
However, those are not the kind of policies that are being introduced by the Kasich Administration. Instead of a balanced approach on the budget crisis like more than 30 other states have done, Kasich has articulated an ideologically motivated, radical “cuts-only” approach. Instead of working to RETAIN good jobs, he seeks to eliminate them by both destroying public sector collective bargaining and by weakening private sector labor rights.
It is not “shared sacrifice” to cut workers’ jobs, pay, and benefits, cut public services and investment, while taking any other ideas off the table. State workers have already made $200 million in concessions in their current contracts, mostly in the form of reduced wages from 10 unpaid furlough days. Getting $200 million in sacrifice from workers and then proposing to give away $135 million to wealthy individuals by eliminating the estate tax on the richest Ohioans is not what I’d call “shared sacrifice.”
One of the justifications for this “un-shared sacrifice” has been that public workers are somehow a new privileged class that enjoys a lifestyle and a way of life that other workers, particularly in the private sector, simply can't hope to enjoy. This viewpoint has been articulated by other governors, as well, like New Jersey’s Chris Christie who said:
"In Wisconsin and Ohio, they have decided there can no longer be two classes of citizens: one that receives rich health and pension benefits, and all the rest who are left to pay for them."
Or Indiana Gov. Mitch Daniels who called public unions "the privileged elite" during a speech in Ohio.
There’s a privileged elite alright, but it ain’t the person plowing snow, diving into our flooded rivers, teaching our kids to read, or running into burning buildings. Who are they?
They are people like top hedge fund manager John Paulson who in 2010 -- after our tax dollars bailed out Wall Street -- earns $2.4 million AN HOUR! And because of a tax loophole that has still not been closed, pays taxes at a 15% rate . . . far below the rate of taxation paid by a firefighter, nurse, or a teacher in Ohio.
In fact, the top 25 hedge fund managers made $25 billion last year . . . that is the equivalent to the cost of 658,000 teachers who teach 13 million students.
Yet, these Governors are calling the teachers a “privileged elite”? Personally, I think that 658,000 teachers bring a lot more value to our country than 25 hedge fund managers.
According to the current issue of The Atlantic, “none other than former five-term Federal Reserve Chairman Alan Greenspan…preeminent defender of the free market” has stated that: The U.S. had “fundamentally two separate types of economy” with high income individuals, banks and major corporations experiencing a “significant recovery” and the rest of the economy, including small business and “a significant amount of the labor force” was stuck and still struggling.
Demonizing public workers and having a radical budget-cutting agenda at a time when income inequality in America is accelerating is not my idea of shared sacrifice. Yet, Governor Kasich, in his inaugural address said, presumably about public employees:
“The last gasp of air in the coal mine, I want mine. And they forget that we are all in this together. Don't be selfish.”
It was an interesting choice of metaphor. Coal mine collapses, like the recent economic crisis, are often talked about like they are “natural” disasters. In fact, both recent mine collapses in West Virginia or in Chile and the 2008 economic meltdown are UN-natural disasters, a direct result of greed by small numbers of mine operators, hedge fund managers, and the true members of a "privileged class."
So, what should we do?
We need good jobs and strong communities to return Ohio to being the kind of state that people move to. We need to address the state budget crisis by dialog, compromise, creativity, and shared sacrifice. A coalition of community groups, faith groups, and labor, “One Ohio Now” has been encouraging an open dialog on all budget options, not just cuts.
We will need to make cuts, but if we truly believe in shared sacrifice to get ourselves out of this mess, we should also look at ideas like: restoring state tax rates on incomes over $200,000 as they were during the Voinovich Administration, slashing special-interest tax breaks, such as the cap on sales tax paid by wealthy buyers of time-shares in jet aircraft; or reinstating a state corporate income tax, which was phased out, doing little for Ohio's economy and leaving us as one of only six states in the country that does not tax corporate profits.
We need to work together--business, government, and labor--to put our unemployed and underemployed back to work in good jobs so that they can support middle class communities. We need to create millions of sustainable jobs across the country, including in Ohio. We cannot afford to wait 17 years to return our nation or our state to full employment. We need investment in infrastructure, alternative energy, and broadband to make high-speed Internet affordable and widely available to all Americans.
State government has to unite our communities, our businesses, and unions to work together, to grow and retain good jobs. Programs like the Recovery Act funded workforce development have supported training programs in the health care, weatherization, and SmartGrid maintenance and implementation. More than 25,000 Ohio jobs have been created or retained with Recovery Act funds. Another example would be the work my union, the Communications Workers of America, did with AT&T and the Strickland Administration to bring new telecom investment to Ohio, creating hundred of new jobs in both broadband and wireless services.
Ohio faces a wide range of problems that affect our jobs, communities, schools, health, and happiness. We can't look at these issues separately and expect everyone to work together. My union has joined with some other unions, community, faith, civil rights, and other groups to form a broad coalition: Stand Up Ohio for Good Jobs and Strong Communities, which aims to make those links and help build a positive future for all of us.
So what can people listening do? I have three simple suggestions:
1. Join over 115,000 other Ohioans and sign up as a fan on our Facebook page, Stand Up for Ohio, where you'll be kept apprised of the latest news and events. It also has been a great place for dialog: Republicans, Democrats, and Independents. Tea party activists, union members, and community activists are discussing their views of the events of the day. Everyone is welcome to join and participate.
2. If you are so inclined, call 1-888-218-5931 and tell your representative that you want good jobs and strong communities. That means a balanced approached to the budget crisis and retaining good union jobs, not destroying them, including “No” on
SB-5.
3. Attend one of the Stand Up for Good Jobs and Strong Communities events happening around the state on March 15th. A full list will be on the Facebook page and on the website: www.protectohiofamilies.com , but events in the Cleveland area include Strongsville, Oberlin, and Ashtabula.
There are many great groups and organizations doing things to respond to our current crisis, and we need many voices. However, while the Kasich Administration has a strategy of divide and conquer, our coalition has an answer for that--unite together and stand up Ohio, for good jobs and strong communities.
Thank you.