[Congressional Record Volume 142, Number 54 (Wednesday, April 24, 1996)]
[House]
[Pages H3804-H3806]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     POSITIVE ECONOMIC AMERICANISM

  The SPEAKER pro tempore. Under the Speaker's announced policy of May 
12, 1995, the gentleman from Illinois [Mr. Lipinski] is recognized for 
60 minutes as the designee of the minority leader.
  Mr. LIPINSKI. Mr. Speaker, for too many Americans, the great American 
dream has been replaced by sleepless nights of worry. Worries about how 
to care for elderly parents, how to pay for a home, how to pay for a 
car, and how to pay for the children's college tuition, in a world 
where real wages have become stagnant, taxes are being raised, benefits 
are under assault, and jobs are being lost.
  Second jobs often become the only job, because the main jobs have 
been lost to downsizing, or have been transferred elsewhere. That's 
what people are dreaming about. Their anxiety is real, not imagined.
  American workers used to be in control of their own financial 
destinies. Hard work, loyalty, and ingenuity were rewarded and 
appreciated by American businesses. The result? Americans realized and 
lived the American dream, as generation after generation witnessed an 
increased standard of living. But younger generations do not believe 
they will have it better than their parents. For these days, hard work 
and loyalty are being rewarded with pink slips and unemployment checks.
  Before Pat Buchanan enlightened America to the plight of the American 
worker, the issue of jobs and the state of the American economy was not 
a part of the political discussion. In the worlds of Democratic leader, 
Richard Gephardt, Pat ``has, at the very least, recognized the crisis 
of falling wages and incomes. He has acknowledged what hard-working 
families go through to raise their children and put food on the 
table.'' And the New York Times stated that ``until Patrick J. Buchanan 
made the issue part of the Presidential campaign, it seldom surfaced in 
political debate.''
  Pat pointed out the falling wages of the American worker. According 
to the Bureau of Labor Statistics, average hourly pay has fallen 11 
percent since 1979. Why? Because of greedy corporations and the failed 
trade policy of the United States.
  First, let me talk about the trade imbalance in America. For years I 
have been fighting to balance the playing field by introducing 
legislation to impose restrictions on imported steel and automobile. 
Not because foreign steel and cars are better than their American 
counterparts, but because foreign countries are restricting imports of 
American steel and cars. It is not fair to the American worker to allow 
foreign products to generously flow into this country without opening 
foreign markets to the same American products. And now the North 
American Free Trade Agreement [NAFTA], and the General Agreement on 
Tariffs and

[[Page H3805]]

Trade [GATT], two deals I vociferously opposed, are only making things 
worse for Americans.

  By Trade Representative Mickey Kantor's own figures, each $1 billion 
in exports equals 20,000 jobs.
  In 1995 the U.S. merchandise trade deficit was over $175 billion. 
That means 3.5 million jobs were lost to foreign countries. And what is 
contributing to this deficit? NAFTA. In 2 years, we've gone from a 
trade surplus with Mexico of $1.35 billion to a trade deficit of $15.39 
billion last year. In addition, in 1995 the United States trade deficit 
with Canada was also over $15 billion. That is 600,000 jobs lost 
because of NAFTA.
  Many of our own companies have in effect thrown up their hands in 
surrender to low-wage countries and decided to ship their operations 
abroad to take advantage of minuscule labor costs. In Indiana, the 
Whirlpool Corp. has announced it is moving 265 positions to a plant in 
Monterey, Mexico in order to strengthen the plant and improve job 
security. Aided by NAFTA, Whirlpool has improved job security to such a 
degree that over 5,000 jobs have been lost at its plant in Indiana in 
the course of the last 10 years.
  But this is not a unique case. In my own district, General Motors has 
slowly but steadily been decommissioning its Electro-Motive plant for 
the last 10 to 15 years and sending the same work down to a subsidiary 
in Mexico.
  But Mexican and Canadian workers aren't any better off than American 
workers, and neither is our environment. Because of NAFTA, American 
roads may soon open to Mexican trucks--trucks that often weigh more 
than double the 80,000 pound United States limit. These trucks are lax 
in safety standards, and with only 1 in 700 trucks being inspected at 
the border, American roads will be filled with mammoth, unsafe trucks 
carrying materials to points throughout the United States.

  And not only is the American worker paying for these bad trade 
agreements in lost jobs and extra peril to the environment, but a trade 
deficit also represents a liability on our national balance sheet--a 
loan that must be financed. If the trade deficit remains constant, by 
2010 the United States will be paying the equivalent of 2.5 percent of 
our GDP in interest payments and capital outflows to foreign countries.
  I agree with Pat Buchanan that global free trade should be judged by 
three simple rules: First, they maintain U.S. sovereignty; second, they 
protect vital American economic interests, and third, they ensure a 
rising standard of living for all American workers. It is clear that 
trade agreements like NAFTA and GATT are not following these rules and 
looking out for the welfare of working Americans, but are looking out 
for the interests of large multinational corporations whose sole 
loyalty is to the bottom line.
  For too long, we have engaged in trade deals and foreign policy that 
serve foreign countries. The $50 billion loan bailout to Mexico, which 
I opposed, only proves that NAFTA is a failure. And GATT, which often 
places the settlements of trade disputes in the hands of the World 
Trade Organization and representatives of small, Third World countries, 
compromises our sovereignty. Moreover, we rebuilt Europe and Japan 
after the Second World War--we still provide for their security--but 
it's time to use our powerful resources to rebuild the American dream 
and rebuild security for American families. Not just through Government 
programs--but through a partnership where Government can set fair and 
compassionate rules. Where Government can be an impartial referee, and 
where Government helps provide the tools.
  That leads me to the plight of the American worker. In the 1980's, 
mostly young, male, blue-collar workers dominated layoffs. Wages of the 
principal breadwinner were declining and families were making up for 
that by sending more family members into the workplace, and they worked 
longer hours. By the end of the decade, families were running out of 
hours, with both parents working at several different jobs.

  In 1988, I joined other colleagues in passing legislation that would 
prevent employers from blindsiding blue collar workers with sudden 
layoffs. This legislation, the Worker Adjustment and Retraining 
Notification Act, requires the employers to notify three bodies--
workers, State dislocated worker units and local governments--of 
impending major mass layoffs, plant closings, or plant relocations. 
Unfortunately, while this legislation prepares American workers and 
communities for what lies ahead, it does not stop employers from firing 
workers en masse and causing sleepless nights of worry.
  But now, white collar people with college degrees, a large number of 
women included, are also being laid off, or downsized, as corporations 
like to call it. Large corporations account for many of the layoffs, 
and a large percentage of the jobs are lost to outsourcing--contracting 
out work to another company. While these outsourcing jobs contribute to 
the 8 million jobs that President Clinton claims have been added to the 
work force since 1992, these jobs are often with small companies that 
offer little benefits and low pay, and many are part-time positions 
with no benefits at all. Often, the laid off only get temporary work, 
tackling the tasks once performed by full timers. Even though I am 
happy that jobs have been created, the statistics don't show that these 
are part-time jobs that do not pay living wages. In fact, the country's 
largest employer is Manpower Inc., a temporary-help agency that rents 
out 767,000 workers a year.
  A person who is dependent all of his life on low wages is a slave. 
This economic stagnation and loss of opportunity is sapping America of 
its boundless confidence and freedom. Clearly, the dignity of labor has 
been replaced by the slavery of insecurity. You can't do that to 
American workers and expect America to stay strong.
  Often, in order to allay this insecurity, these low-paid or temporary 
workers try to join a union in hopes of raising pay or improving 
benefits. At a recent congressional hearing, a $5.50 per hour employee 
of a small business with annual sales of over $150 million testified 
that management told the employees that they would put a padlock on the 
door and move the business to another town if the employees formed a 
union. This is not an isolated case, for throughout the landscape of 
the American office, warehouse, and factory there are widespread fears 
of joining a union and expressing one's views.
  The fear of job loss and anxiety about the future coupled with 
falling wages of Americans does not equate with America's economic 
figures. Profits of corporations are 50 percent higher than a decade 
ago, the gross domestic product is growing, and unemployment is lower. 
Then where is the money going? To fat cat corporations. The growing 
divide between Wall Street and mainstreet is causing a widening rift 
between the rich and the poor.
  In 1974, U.S. CEO's were paid an average of 35 times the average 
worker. Today, that ratio has ballooned to 187 to 1. Comparably, in 
Germany that ratio is 21 to 1. In Japan the ratio is 16 to 1. There are 
great effects that result from the greed of these corporate CEO's. In 
1979, the top 1 percent of earners in America held 22 percent of the 
wealth, Today, the top 1 percent hold 42 percent of the wealth. We even 
surpass Britain, long seen as the snooty example of a class structured 
society, in income disparity.
  It is clear that multimillionaire CEO's are keeping more of the money 
for themselves. Workers once received compensation increases equal to 
80 percent of productivity gains. Since 1979, workers have only 
received a 25-percent increase in compensation compared to their 
productivity gains. This is not fair, nor is it right. Workers who 
produce more and better products are being forced to labor longer for 
less compensation.
  Furthermore, it is not secret that when a company announces a layoff 
that its stock soars. On the day of the announcement that 40,000 jobs 
would be cut, AT&T's stock when up 4 percent and Bob Allen, the CEO of 
AT&T, saw his stock increase by $1.6 million, in that 1 day alone. The 
day Sears announced that 50,000 jobs would be downsized, its stock 
climbed 4 percent. When Xerox said it would trim 10,000 jobs, it stock 
surged 7 percent. The list goes on and on.
  Fortunately, not all corporations view their employees in simple 
terms of stock market statistics. Anheuser-Busch, Malden Mills, Inland 
Copper,

[[Page H3806]]

and United Technologies have all respected their workers and treated 
them like assets. For, instance, United Technologies reeducates its 
workers and gives stock incentives to employees who go back to school, 
no matter if the studies are related to United Technologies or not. 
This is the kind of social contract that is needed in America between 
corporations and its workers. Even financial forecasters have foreseen 
that companies which invest in their employees are better investments 
in the long term than companies that recklessly fire workers for the 
benefit of the quick buck.

  But currently, Wall Street is not reacting well to the news of 
employment gains. When on March 8, the Labor Department announced that 
705,000 workers had been added to payrolls, the Dow Jones industrial 
average fell 171 points. The next day's headline in the Washington Post 
screamed, ``Job Gains Send Markets Plunging.'' There is no doubt that 
the short sighted interests of Wall Street investors conflict with the 
long-term interests of working Americans. Less jobs, more profits, that 
is what Wall Street wants. As White House Press Secretary Mike McCurry 
said about the markets' response to job gains, ``Sometimes there's a 
disconnect between Wall Street and Main Street.'' No, Mr. McCurry, not 
sometimes. It happens more often than we care to admit.
  Sure, change and some turnover was inevitable as the American economy 
evolved past the industrial age. Technological innovations now allow a 
corporation to do more work with less manpower. But as of late, the 
economy has been driven by a policy that transformed labor markets. 
Incentives increased on Wall Street to break the social contracts 
between corporations and workers. Capitalism and greed ran rampant 
without regulations, injuring the working man and woman and losing 
sight of a vision for America's economic future. Yes, I do believe in 
capitalism, but I hold democracy and the welfare of the working men and 
women of this country in higher regard. While I respect the right of 
the individual, this society cannot be one that lives by the rule of 
survival of the fittest.
  There are solutions to the plight of the American worker. We must 
change trade policies, modify corporate behavior, strengthen workers' 
rights, and provide for a more effective social safety net for the 
unemployed.
  I also believe in free trade, because America has the most productive 
work force and best minds in the world. But most often, the countries 
that we trade with, do not have open markets and are not playing by the 
same rules that we hold to ourselves. They do not believe in free trade 
and therefore take advantage of America's willingness to play at a 
disadvantage. The time has come for a comprehensive U.S. trade policy 
that emphasizes reciprocity and stems America's hemorrhage of jobs and 
incomes. Future trade deals should not be made with foreign countries 
until they open their closed markets. Current trade agreements, such 
as NAFTA, should be amended or repealed unless certain conditions are 
met.

  To this end, I am a member of a bipartisan coalition of Members in 
the House and Senate that have introduced the NAFTA Accountability Act. 
This act would incorporate a comprehensive set of benchmarks against 
which to measure NAFTA's promises in regard to trade balances, net job 
growth, democracy, reduction of illicit drug activity, crime, and 
increased public health standards. If any of the benchmarks of a 
prudent trade policy are not met, Congress would instruct the President 
to withdraw from NAFTA. The American people themselves are clamoring 
for legislation of this kind, as recent polls indicate that 52 percent 
of the public in March 1994 believed that NAFTA would help the job 
situation here. By November 1995, only 36 percent of the public still 
held that belief, while 55 percent of the people believed that NAFTA is 
causing jobs to go to foreign countries.
  Changing bad trade deals goes hand in hand with changing corporate 
behavior, since these corporations are taking advantage of agreements 
by using cheap foreign labor while CEOs reap the profits. Moreover, 
multinational corporations often escape from paying U.S. income taxes 
while retaining the rights of citizenship. These tax loopholes must be 
closed, and corporations that receive tax breaks only to subsequently 
downsize should have their tax breaks eliminated.
  But eliminating corporate tax loopholes will not solve the whole 
problem. I propose going one step further and creating tax rates that 
reward those corporations which create higher quality and better paying 
jobs in America. A new social contract should be adopted between the 
Government, the business community, and the working people of America. 
Tax rates would be reduced for corporations if they pay living wages 
for their workers, maintain or add jobs, give good benefits, and train 
or upgrade skills.
  Corporate America is constantly clamoring for tax breaks, as the 
Republican Contract With America proposed to do. But tax breaks have 
been given in the past to these corporations only to see jobs go to 
foreign nations, the American work force downsized, CEO's reap huge 
profits, and the budget deficit balloon out of control. So let's give 
corporate America what they want: A tax break. But let's hold them 
accountable for the welfare of the American worker.
  Corporate America is not the only entity that can help the middle 
class. Unions, as the vanguard of the workers, also have a role to 
play. They ensure a stable economy. To quote from Ray Abernathy of the 
AFL-CIO, ``When organized labor and minimum wage laws were passed 
during the Depression, it wasn't only to prevent the exploitation of 
workers, it was also because big business understood the need to ensure 
the buying power of its customers.''

  That statement makes sense, because in modern economies, wealth is 
created when labor, capital, skills, and natural resources are 
continuously recycled as profits, wages, operating costs, taxes, or 
social welfare payments within the society that produced them. Unions, 
in effect, promote a healthy society by making sure that a fair 
percentage of the wealth is recycled in the form of wages. But 
distributing to much wealth as welfare undermines the work ethic, and 
distributing to much as profits to a relatively few top executives, as 
has been happening in America in the last two decades, concentrates 
wealth in the hands of a few.
  Therefore, this has undermined support for the community and has led 
to a weakened public school system, unsafe streets, a declining morale, 
and an anxiety about the future across America.
  At the very least, Government can ease the pain of down sized workers 
by passing health insurance reforms currently before Congress that 
allows those who lose their jobs to keep their health insurance. It is 
not fair, nor is it right, to have health and other social benefits for 
the very poor while Americans who have worked all their lives and 
contributed to the U.S. economy cannot have the same peace of mind. 
Mechanisms such as health insurance portability need to be instituted 
so that working Americans will not have to spend all of their savings 
on health care bills and subsequently fall to a level of poverty where 
the only means of living is provided for by the Government. But this is 
just a minimal step. Much more can and should be done to ease the real 
anxiety and worries that Americans are now feeling.
  We must all work together to not only reinforce America's place in 
the global economy, but to return the American worker and the American 
family to a prosperous place in society. Then we can progress on our 
course at the greatest industrial democracy in the world.
  Mr. Speaker, tonight I have presented the problem and a few potential 
solutions to the economic quandary America faces. But I would like 
everyone within the sound of my voice to send me their solutions. And 
in a few weeks I will present those solutions and give a vision of what 
America can be.

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