WHEREAS:
America's industrial base is eroding. Of the 31 million new jobs created since 1960, only one million were in manufacturing; 3.5 million manufacturing and construction jobs were lost from 1979 to 1982. Basic industries such as steel, autos, and machine tools are linked to many other sectors of the economy. If their productivity is low and their output-, costly, then the efficiency and competitiveness of the rest of the American economy will be seriously damaged; and
WHEREAS:
Basic manufacturing and construction industries have traditionally provided a broad range of skilled, well-paying jobs that have enabled millions of families to achieve a middle-class standard of living. As these industries have lost out to foreign competition or been replaced by service and newer, high-technology manufacturing industries, this broad range of jobs has given way to a much more polarized wage distribution, with numerous low-paying jobs, a few highly-skilled professional and technical jobs, and relatively little in-between. In 1983, the average weekly earnings of production workers in the 20 fastest declining industries was $310, while in the 20 fastest growing industries it was only $210. If this trend continues, America's status as a middle-class society will be threatened; and
WHEREAS:
A productive private sector depends, in turn, on a healthy public sector. Businesses need a smoothly-functioning public infrastructure — good roads and bridges, efficient ports, water and waste disposal systems with adequate growth capacity, efficient mass transit systems for their employees. Businesses also depend on high levels of public investment in human capital — good basic and vocational education, job training programs, and public health and social service systems. Yet the Reagan Administration's high interest rate policies and cuts in federal grant-in-aid programs have devastated the ability of state and local governments to fund such public facilities and services; and
WHEREAS:
The Reagan Administration has pursued misguided macroeconomic policies of huge tax cuts for the wealthy and corporations, coupled with an excessive and costly military buildup. The unprecedented deficits thus created have encouraged the Federal Reserve to keep real interest rates at record levels. High interest rates have, in turn, devastated such interest-sensitive industries as auto manufacturing and construction. High interest rates have also contributed to an over-valued dollar, damaging the competitiveness of both businesses that wish to sell abroad and those facing foreign competition for U.S. markets; and
WHEREAS:
Federal tax policies, many of them enacted under the Reagan Administration, have further distorted business investment. Rather than encouraging investments aimed at modernizing our manufacturing capacity and creating jobs, federal tax policy is encouraging capital to flow abroad, into wasteful tax shelters, into non-productive corporate mergers, and toward investments in short-lived equipment. Investment tax incentives enacted under this Administration have been notably ineffective; investment as a share of GNP fell for two years in a row after enactment of the 1981 tax bill; and
WHEREAS:
In addition to problems caused by an unbalanced macroeconomic policy, high interest rates, an overvalued dollar, irrational federal tax policy, corporate mismanagement and decaying public facilities and services, certain industries have been damaged by other forces beyond their control. The need to restructure to meet foreign competition, to deal with unfair trade policies of foreign governments, and to raise capital to upgrade to a healthy yet more productive work environment are among the special problems of selected industrial sectors. In some sectors sufficient capital for new and emerging industries is also a problem. Every industrialized country except the U.S. has a set of policy mechanisms and strategies for dealing with such problems in order to enhance its own international competitiveness.
THEREFORE BE IT RESOLVED:
That AFSCME calls on the Congress to restore cuts made in federal programs aimed at ensuring a modern, efficient physical infrastructure and a healthy, well educated, and appropriately trained labor force; and
BE IT FURTHER RESOLVED:
That AFSCME calls on the Congress and the Administration to pursue a coordinated and balanced macroeconomic policy that will bring the structural deficit down while allowing real interest rates to call. If necessary to achieve this result, AFSCME supports a Congressional review of measures to bring Federal Reserve policy under more democratic control; and
BE IT FURTHER RESOLVED:
That corporate tax loopholes must be closed, tax shelters eliminated and substantial tax reform must be enacted, moreover, that AFSCME will oppose the use of corporate tax incentives — either across-the-board or targeted to specific industries or firms — as economic policy instruments. History has shown that they have shifted the tax burden onto working people, distorted investment decisions, and made it increasingly difficult for governments at all levels to fund needed public services, but have not significantly encouraged the economic behavior intended; and
BE IT FURTHER RESOLVED:
That AFSCME supports the creation of an industrial policy board and an industrial financing institution to address the specific problems of both distressed and emerging industries. Both organizations should provide for appropriate public interest representation in addition to that of government, business and labor. Funding assistance would take the form of loan guarantees, direct loans, and/or equity investment tied to specific actions to promote improved competitiveness and technological development. Tax incentives should not be used; and
BE IT FURTHER RESOLVED:
That AFSCME calls for new programs of job creation and community revitalization assistance for affected communities, and job retraining, financial support, and relocation and employment search assistance for workers displaced by the restructuring of distressed industries occurring under a revitalization strategy.
SUBMITTED BY:
International Executive Board