In his upcoming State of the Union speech, President Barack Obama is expected to prioritize what is emerging as his legacy issue: combatting America's growing wealth inequality. Expect him to promote policies to create new middle-class jobs, especially in manufacturing, and counter the erosion of wages now undermining workers economy-wide.
But in the speech, Obama is also expected to highlight several major trade initiatives, including his priority Trans-Pacific Partnership (TPP) deal, a massive pact with 11 Asian and Latin American nations that Obama hopes to sign quickly. The business lobby is at full tilt pushing Obama to use the SOTU to call on Congress to pass Fast Track trade authority for the TPP.
The thing is that economists of all stripes agree that U.S. trade policy has been one of the major contributors to growing U.S. income inequality.
There really is no disagreement about that -- the only debate is about the degree of the effect. A study published by the Peterson Institute for International Economics -- an early supporter of the North American Free Trade Agreement (NAFTA) on which TPP is modeled -- estimated that as much as 39 percent of the observed growth in U.S. wage inequality is attributable to trade trends. Other studies have posited greater and lesser contributions.
The TPP would replicate and expand to additional countries the trade agreement model established in the NAFTA. Twenty years of evidence of NAFTA's contribution to U.S. income inequality has become a major problem for Obama's push to get Congress to provide Fast Track authority for the massive TPP deal, described as NAFTA on steroids.
Not a single House Democrat would sponsor the legislation submitted two weeks ago to establish Fast Track. Last week, 17 Senate Democrats made their feelings known in letters to Majority Leader Harry Reid (D-Nev.). And last November, 151 House Democrats signed a letter saying they oppose Fast Track, arguing that lawmakers have been cut out of negotiations.
Congressional opposition to more-of-the-same trade deals has intensified as Obama's past SOTU trade promises have fallen flat. In contrast to Obama's 2011 SOTU promise that his only major past trade deal, the U.S.-Korea Free Trade Agreement, would boost exports, in the agreement's first year, U.S. exports to Korea fell 10 percent, imports from Korea rose and the U.S. trade deficit with Korea exploded by 37 percent. This equates to a net loss of approximately 40,000 U.S. jobs.
The drop in exports to Korea added to last year's sluggish overall two percent U.S. export growth rate. Given current trends, the U.S. will not achieve the president's export-doubling plan until 2032 -- 18 years behind the 2014 deadline Obama set in his 2010 State of the Union speech.
This follows on the recent 20th anniversary of NAFTA, which fueled an explosion of the U.S. trade deficit with Mexico and Canada to $181 billion by 2012, resulting in a net American loss of one million jobs. (The net job loss figure is derived from the U.S. government methodology employed to calculate the employment effects of trade flows.)
U.S. government data show that the average annual growth of our trade deficit has been 45 percent higher with Mexico and Canada than with countries that are not party to a NAFTA-style pact. U.S. manufacturing exports have grown at less than half the rate to Mexico and Canada since NAFTA than in the years before it. Before NAFTA, the U.S. had a small trade surplus with Mexico and a modest deficit with Canada.
While many focus on the number of U.S. jobs lost from NAFTA and similar pacts, the most significant effect has been a fundamental alteration in the composition of jobs available to the 63 percent of American workers without a college degree. And this has had a direct impact on income inequality.
Trade pact investment rules remove many of the risks otherwise associated with sending jobs offshore to where labor costs are drastically cheaper. The United States has lost millions of manufacturing jobs during the 20 years of NAFTA and decade-plus since Congress approved China's entry to the World Trade Organization. As a result, the wages most U.S. workers can earn have been severely degraded even as overall unemployment has been largely stable (excluding the Great Recession) as new low-paying service sector jobs have been created.
According to the U.S. Bureau of Labor Statistics, two of every three displaced manufacturing workers who were rehired in 2012 experienced a wage reduction, most of them more than 20 percent. The list compiled by the Department of Labor's Trade Adjustment Assistance program of more than 845,000 specific American jobs lost to NAFTA and similar pacts reads like the funeral program for the middle class.
The implications for growing income inequality are broad. It is not only those American workers who lost a job to NAFTA or China trade who face downward wage pressure; as increasing numbers of workers displaced from manufacturing jobs joined the glut of workers competing for non-offshorable, low-skill jobs in sectors such as food service and retail, real wages have fallen in these growing sectors as well.
The U.S. government data is striking: The shift in employment from high-paying manufacturing jobs to low-paying service jobs has contributed to overall wage stagnation. The average U.S. wage has grown less than one percent annually in real terms since NAFTA was enacted even as worker productivity has risen more than three times. Since the January 1, 1994, implementation of NAFTA, the share of national income collected by the richest 10 percent has risen by 24 percent, while the top 1 percent's share has shot up by 58 percent.
Offshoring of American jobs is rapidly moving up the skills ladder, expanding the income inequality effect. Alan S. Blinder, a former Federal Reserve vice chair, Princeton economist and NAFTA supporter, says that one out of every four American jobs could be offshored in the foreseeable future. A study he co-authored found that the most offshorable industry is finance and insurance, not manufacturing. According to Binder's study, American workers with a four-year college degree and an annual salary above $75,000 are among those most vulnerable to having their jobs offshored.
The grandfather of modern free trade economics, Paul Samuelson, published a startling 2004 academic paper in the Journal of Economic Perspectives that shows mathematically how the offshoring of higher-paid jobs to low-wage countries can cause U.S. workers to lose more from reduced wages than they gain from cheaper imported goods. Trade theory states that while those specific workers who lose their jobs due to imports may suffer, the vast majority of us gain from trade "liberalization" because we can buy cheaper imported goods. Except, as job offshoring has moved up the wage level, this is no longer necessarily true.
When the Center for Economic and Policy Research applied the actual data to the trade theory, they discovered that when one compares the lower prices of cheaper goods to the income lost from low-wage competition under our current policy, the trade-related losses in wages hitting the vast majority of American workers outweigh the gains in cheaper priced goods from trade. U.S. workers without college degrees (the vast majority) lost an amount equal to 12.2 percent of their wages, so for a worker earning $25,000 a year, the loss would be more than $3,000 per year.
The 20-year record of NAFTA shows that deals like the Trans-Pacific Partnership would contribute to income inequality as more middle-class jobs are lost. Either Obama can prioritize a battle against income inequality or he can push more NAFTA-style trade agreements and the trade authority to railroad them through Congress, but he cannot do both.
Link to original article from Huffington Post
More information is available at http://www.citizen.org/fast-track.
PDAers have, with the rest of the world, reacted with outrage and heartbreak to the violence in Israel and Gaza. Board members like Medea Benjamin have worked for decades to bring attention to that area of the world, to its crying need for peace with justice. PDA was founded during the 2004 Democratic Convention in opposition to the Iraq War, which was being silenced by “official” party leaders. Our Inside/Outside strategy brought street heat to the suites, opening up our political process to the nonviolent call of Dr. Martin Luther King: turn from perpetual war to meeting human need. Nonviolence grounds all our policy advocacy: Healthcare Not Warfare; Windmills Not Weapons.
Washington DC – Today, the House of Representatives overwhelmingly passed the bipartisan McGovern-Jones-Lee resolution which requires the President to seek Congressional authorization before deploying armed services engaged in combat operations in Iraq.
The stunning military advance into cities in northern and central Iraq by an Al Qaeda offshoot, the Islamic State of Iraq and Syria—backed by some of Iraq's Sunni tribal paramilitary forces and a militia tied to remnants of the deposed Baath party—compounds Iraq's long-running tragedy.
According to Ha'aretz correspondent Amira Hass, the [Israeli Defense Force] ] IDF has been conducting mass arrests in the West Bank, between 10 and 30 every day. Twenty-four of the arrested are members of the Palestinian parliament from Hamas' Change and Reform party. The number of those arrested since the kidnapping and murder of the Israeli teens has already exceeded 1,000. The Palestinians are convinced that most of those detained have nothing to do with the kidnapping and that these are mainly political arrests for purposes of intimidation and revenge.
PDA Advisory Board members Reps. John Conyers, Keith Ellison, and Barbara Lee joined 3 congressional colleagues--Reps. Jim Moran, Hank Johnson, and Alan Lowenthal--calling upon President Obama and Secretary Kerry to "redouble" their efforts to urge Israeli and Palestinian leaders to reach a cease-fire agreement. The full text of their letter is below, and a signed PDF can be found here.
80 Members of Congress Write to the President on Iraq
Washington, DC – Today, Congresswoman Barbara Lee (D-CA13), Congressman Scott Rigell (R-VA02) and seventy other Members of Congress sent a letter to President Obama calling on him to seek Congressional approval before taking any military action in Iraq.
Please act now! We need your Congress member's signature on the Lee-Rigell Letter opposing a military attack on Iraq. Consult the list (see below). If your member of Congress is not there, call the Congressional switchboard ASAP (before Close of Business July, 2nd) and ask them to sign on to the Lee-Rigell Letter. Republicans may be willing to sign on, so it's worth trying them as well. The Switchboard number is 202-224-3121. Tell them to contact Rep. Barbara Lee's staffer Monica Pham at
At this writing, President Obama has neither the legal nor the political mandate to conduct airstrikes in Iraq or Syria.
On Thursday night, 182 Members of the House voted yes on Representative Barbara Lee's amendment defunding the use of the 2002 Iraq Authorization for the Use Military Force.
Members of Congress want to send a clear message to Obama: They won’t stand for another war.
After a recent string of insurgent attacks from the Islamic State in Iraq and Syria (ISIS) in the northern part of Iraq, President Obama told Congress on Monday night that he will order 275 troops to the country to protect American personnel and the U.S. embassy in Baghdad.
Residents of Mosul and Samarra, and a spokesman for a militant group, speak about their experience of the latest conflict
Why is Congress trying to allocate $601 billion to the military?
Next week, Congress will begin debate on a roughly$601 billion Pentagon budget for FY2015. Before we let this pass unchallenged, let's take a few minutes to put it in some historical perspective.
During the Bush years, people all over the world were horrified by America's aggression, human rights abuses and militarism. By 2008, only one in three people around the world approved of the job performance of U.S. leaders. The election of President Obama broadcast his message of hope and change far beyond U.S. shores, and Gallup's 2009 U.S.-Global Leadership Project (USGLP) recorded a sharp rise in global public approval of U.S. leadership to 49 percent.
U.S. efforts to overthrow foreign governments leave the world less peaceful, less just and less hopeful.
Soon after the 2004 U.S. coup to depose President Jean-Bertrand Aristide of Haiti, I heard Aristide's lawyer Ira Kurzban speaking in Miami. He began his talk with a riddle: "Why has there never been a coup in Washington D.C.?" The answer: "Because there is no U.S. Embassy in Washington D.C." This introduction was greeted with wild applause by a mostly Haitian-American audience who understood it only too well.
Or How the U.S. Military Avoided Budget Cuts, Lied About Doing So, Then Asked for Billions More
Washington is pushing the panic button, claiming austerity is hollowing out our armed forces and our national security is at risk. That was the message Secretary of Defense Chuck Hagel delivered last week when he announced that the Army would shrink to levels not seen since before World War II.
Washington is pushing the panic button, claiming austerity is hollowing out our armed forces and our national security is at risk. That was the message Secretary of Defense Chuck Hagel delivered last week when he announced that the Army would shrink to levels not seen since before World War II. Headlines about this crisis followed in papers like the New York Timesand members of Congress issued statements swearing that they would never allow our security to be held hostage to the budget-cutting process.
The U.S. is backing Ukraine's extreme right-wing Svoboda party and violent neo-Nazis whose armed uprising paved the way for a Western-backed coup. Events in the Ukraine are giving us another glimpse through the looking-glass of U.S. propaganda wars against fascism, drugs and terrorism. The ugly reality behind the mirror is that the U.S. government has a long and unbroken record of working with fascists, dictators, druglords and state sponsors of terrorism in every region of the world in its elusive but relentless quest for unchallenged global power.
America's military adventures have fueled a global explosion of terrorism and a historic breakdown of law and order.
Twelve years into America's "war on terror," it is time to admit that it has failed catastrophically, unleashing violence, war and instability in an "arc of terror" stretching from West Africa to the Himalayas and beyond.
The implementation of the Iran accord Monday signaled a modest but still important sea change in that country’s relationship with the world. As with all good diplomacy, the deal is a win-win for Iran and the United Nations Security Council’s permanent members.
MONTREUX, Switzerland (AP) — The United Nations is taking a day to see if there is enough common ground between Syrian President Bashar Assad's government and the opposition to talk directly for the first time since the rebellion began in 2011.
The talks in Syria began today, with the Syrian government and opposition exchanging accusations and invectives. Missing was the voice of nonviolent civilians, especially women, even through they have been trying for months to have a seat at the table.
At least ten states will be sites for testing drones — unmanned aircraft — in the next couple of years, the Federal Aviation Authority (FAA) announced on Monday. Six institutions have been authorized to operate test locations for the use of drones and for studying how they will interact with air traffic systems.
As we end the longest period of war in our history, we should be entering a period of postwar downsizing - but what about the communities dependent on the massive post-9/11 military budget?
End wars. Shrink the Pentagon budget. Reinvest the savings in neglected domestic priorities. It’s a logical progression. Right?
Washington, D.C.— Congresswoman Barbara Lee (D-CA) issued the following statement on the passing of former President of South Africa Nelson Mandela:
Iraq is still suffering from the US invasion because the apparatus of state oppression and terror is still in place, killing people every day. But few in the US seem to realize the scale of the war crimes committed in Iraq, an expert author told RT.
Having the most expensive and destructive military does not make the American people safer. The idea of U.S. "national security" seems inextricably entangled with the notion of "military supremacy."
All of a sudden we’re talking to Iran. Now, granted, that shouldn’t be such an astonishing bombshell. But given the reality of the last several decades, it pretty much is. And that’s all good. It’s been too long coming, it’s still too hesitant, there’s still too much hinting about military force behind it… but we’re talking. Foreign minister to foreign minister, Kerry to Zarif, it’s all a good sign.
A trillion dollars. It's a lot of money. In a year it could send 127 million college students to school, provide health insurance for 206 million people, or pay the salaries of seven million schoolteachers and seven million police officers.
MoveOn.org Petition - Congress Don't Renew Fast Track
Public Citizen Petition - Congress Must Reject Fast Track Authority
MoveOn.org Petition - Stop the Trans Pacific Partnership
CREDO Petition - Stop the Massive Corporate Power Grab
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