A jobs plan only big business could love

August 7, 2013

Obama's on another "pivot to jobs"--but his plans to address the jobs crisis won't do much to actually help working people, writes Lance Selfa.

LIKE THE television ratings sweeps or salmon swimming upstream, it seems to come around every year. Not necessarily at the same time each year. But just about the time when the public has stopped paying attention to politicians. What is it?

It's the Obama "pivot to jobs," where the president makes speeches and announces plans to address the jobs crisis that continues to afflict working people more than four years after the Great Recession officially ended. At the end of July, it returned again.

With a series of speeches in Galesburg, Ill., Jacksonville, Fla., and Chattanooga, Tenn., President Obama reaffirmed his rhetorical commitment to "rebuild the middle class," to create good jobs, and to bring manufacturing back. Not to state the obvious, but, we've heard this all before.

Two years ago in August, the Republicans had just succeeded in blackmailing Obama into signing a budget bill that cut more than $1 trillion in government discretionary spending over a decade. On the way to this debacle, Obama had offered the GOP plans to cut Medicare and Social Security at least twice. His presidency had hit its nadir, and Occupy Wall Street was about to erupt.

President Obama promotes his jobs program at a manufacturing plant in Maryland
President Obama promotes his jobs program at a manufacturing plant in Maryland (Jay Baker)

Knowing that he had a re-election to fight, Obama "pivoted to jobs," christening himself in September 2011 a "fighter for the middle class." A few months later, after his Homeland Security department had helped dozens of cities clear the streets of Occupiers, Obama announced that the battle against income inequality was the "the defining issue of our time" and a "make or break moment" for the middle class.

This pose certainly helped Obama win re-election. But now, with this second term seemingly adrift, he's dusted off a few of his campaign themes.

IT'S PROBABLY no coincidence that Obama's talk about jobs and the economy coincides with national opinion polls showing his public support "upside down," with a slight majority expressing disapproval of his job performance. What's more, the talk about jobs and income inequality positions Obama in the budget pantomime that is about to unfold with the Congress.

In the fall, the White House and Congress must agree to legislation to fund the government through the end of the current fiscal year, decide on how to fund it next year, and lift the federal debt ceiling to allow the government to issue debt to pay its bills. As they have done repeatedly since they took the House majority in the 2010 election, the Republicans want to force Obama to make draconian spending cuts as a price for their votes on provisions everyone knows they will end up supporting.

It's not as if Obama has to reach far to focus the public on jobs and the economy. For most of his time in office, opinion polls have shown that "jobs and the economy" has been the main issue that Americans are concerned about--even when Washington has been obsessed with budget deficits or phony scandals. That Americans are most concerned about their jobs and incomes shouldn't come as a great revelation.

Few people feel the "recovery" that has been ongoing since the Great Recession bottomed out in the summer of 2009. While the U.S. economy recovered to the pre-recession gross domestic product as early as 2012, the economy still has about 2 million fewer jobs--and 1.7 percent less industrial production--than it had in 2008.

Meanwhile, more than 8 million workers who want full-time jobs are working part-time. That's about the same number of jobs that were destroyed in the 2007-2009 recession. While a small slice of the population continues to enrich itself, median family incomes have declined by almost 9 percent since 1999. Workers' wages as a share of national income recently hit an all-time low since statistics have been kept.

In the face of this slow motion disaster, Obama and the Democrats have remained passive. Compared to conservative House Republicans--whose recent 40th vote to repeal the 2010 health care bill shows persistence, if not common sense--Obama's interest in promoting employment at living wages seems to come and go with the political season.

Yes, in 2011, Obama introduced an "American Jobs Act" to fund more than $50 billion in needed projects to build infrastructure, and to support a state and local government workforce that the recession has devastated. And in his 2013 state of the union address, he called for raising the federal minimum wage. But throughout all of this time, he's been much more focused on a winning a "grand bargain" with the GOP to cut so-called "entitlements" than he has been to press them to support jobs and working-class incomes.

Too often he acts as a bystander to events. Richard Kirsch of the website NextNewDeal.net, noting Obama's Galesburg pledge that "Whatever executive authority I have to help the middle class, I'll use it," pointed out that Obama could do just that. He could issue an executive order mandating living wages, paid sick leave and other benefits, and easing unionization for more than 2 million federally funded jobs that pay less than $12 per hour. A recent National Employment Law Project focusing on employees of federal contractors found that 74 percent of those studied made less than $10 per hour and 58 percent of them received no job benefits.

With a stroke of a pen, Obama could improve these workers' lives, and he wouldn't have to get authorization from Congress to do it. But he hasn't lifted that pen.

WHEN OBAMA does make his periodic "pivots," his devotion to the dogmas of neoliberal capitalism--and his thrall to neoliberal capitalists--undercuts whatever positive proposals his speeches include. Take a few examples from his latest round of speeches.

His talk about fighting for good jobs and the middle class sounds hollow when the site of one his speeches--Amazon.com's Chattanooga warehouse--is a poster child for all of the trends that are driving down workers' living standards.

The White House wanted to call attention to Amazon's recent announcement of 5,000 new jobs at the Tennessee facility. But those jobs pay an average of $11 an hour, and Amazon's Big Brother management style--where computers monitor every move a worker makes--drives workers to exhaustion. The basic minimum budget for single people to provide themselves with essentials like food, rent and medical care requires pay of about $14 an hour.

Obama's proposed boost to the minimum wage wouldn't even raise it to $10 an hour. Meanwhile, thousands of low-wage workers in the U.S. have joined the "fight for 15" campaign for a $15 living wage. Even self-described capitalist, investor Nick Hanauer, took a stance far to Obama's left, arguing for a $15 an hour minimum wage in a recent Bloomberg News column.

When Obama spoke at Jacksonville, he highlighted "public-private" partnerships like that currently financing improvements to the port of Jacksonville. That may sound good, and it forms the core of Obama's various plans for spending on needed infrastructure. But it opens the door to the privatization of public assets. And in case anyone wonders what this would look like at the national level, they have only to look at Chicago, where privatization of parking meters and the Skyway toll bridge to Indiana has led to higher fares and a destruction of decent public sector jobs.

Finally, Obama is tying his rhetoric about jobs back to his never-ending quest for the "grand bargain" with the Republicans. But this time, the grand bargain doesn't foreground cuts to entitlements, but leads with "tax reform."

What does this mean? In general, it's a repackaging of various proposals Obama has made before, revolving around the idea of cutting the nominal corporate tax rate of 35 percent to 28 percent. Cutting the U.S.'s "uncompetitive" rate of corporate taxes is always a favorite in business circles, even if every major industry in the U.S. pays less than 35 percent of its income to the government.

Obama's plan to cut the nominal corporate tax rate, to cut taxes on manufacturing industries further, and to make permanent a tax credit for research and development, is now packaged as a "jobs" plan. The president says he's willing to work with Republicans to achieve all of these corporate tax cuts as long as they are willing to devote some of the revenue that may flow to the government to jobs and infrastructure.

Already, the Republicans have rejected Obama's proposal. In the words of Senate Minority Leader Mitch McConnell (R-Ky.), "[It's]...just a further-left version of a widely panned plan he already proposed two years ago--this time, with extra goodies for tax-and-spend liberals."

That just about sums up the current state of the economic debate in Washington. While the majority of working people scrape to get by, one party wants to make it harder for them to make ends meet. And the other party offers sympathetic rhetoric--while trying to appease those who want to make life harder for workers. No wonder a recent Gallup Poll found only one in four Americans satisfied with the direction the country is moving.

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