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AFL-CIO's Trumka Speaks on Wages and Trade

By    |   Monday, 02 Feb 2015 09:04 AM

It wasn't Labor Day, but on Feb. 1 Richard Trumka, president of the AFL-CIO, appeared on C-SPAN's Washington Journal to discuss the minimum wage and other issues related to the recent State of the Union speech and the various budget proposals presented to Congress as it begins the 2015 session.

The minimum wage has important implications for the economy to the extent that it affects entry-level jobs available to part-time workers and workers with families to support attempting to assemble two or three such jobs.

It also has symbolic importance as the parties prepare for the 2016 election, and the issue is further complicated by states and even local governments that have enacted their own minimum-wage standards. The tenor of the debate has changed somewhat in recent months as the economy shows signs of strengthening, but the low-wage sector sees little improvement and its unions have grown restive.

Conservatives have traditionally questioned whether the minimum wage helps workers on balance or whether it has the perverse effect of closing the lowest rung of the employment ladder to young people who are trying to save for college or supplement their families' incomes. Also, a rise in the minimum wage could affect the stocks of companies that rely heavily on minimum-wage workers, with the classic example being McDonald's (MCD). The manufacturing sector looks to trade agreements as a means of boosting exports and contributing to the recovery.

Trumka was interviewed by veteran Sunday host Steve Scully. When Scully pointed out that opponents of the minimum wage, such as the U.S. Chamber of Commerce, contend that raising the minimum wage discourages employers from hiring workers at that level, Trumka called it a "red herring" and that seeking a raise is just a normal effort by employees to get fair compensation for the contribution they make to the productivity of industry.

Trumka quickly introduced another issue of great interest to labor, which is the effort by the administration to obtain Trade Promotion Authority (TPA), so-called "fast track" power from Congress in order to complete the negotiation of several pending agreements that labor opposes. Trumka called for safeguards to be built into any TPA legislation that would give Congress the opportunity to amend, not just to ratify, any proposed trade agreements. Of course, the argument against that is that the negotiating partners are unwilling to negotiate with the president and then let Congress have another bite.

In addition, Trumka complained that China would not be subject to the provisions of the Trans-Pacific Partnership (TPP) now being negotiated. He argued that every trade agreement negotiated so far has had the effect of driving wages down, and he repeated the accusation that critics from both parties have made for many years — that China has manipulated its currency in order to build up a huge trade surplus and grow its export sector at the cost of American jobs. Trumka lamented that the argument labor is now engaged in with the administration over TPA is like fight between spouses that he hopes they will be able to work out.

Scully referred to a comment from the Heritage Foundation that the product of labor unions has become obsolete and workers are no longer interested in it. In response, Trumka contended that workers such as nurses who have not traditionally been unionized have sought to use collective bargaining to maintain the standards of their profession. Earlier, when Scully cited statistics from the Labor Department showing a downward trend in union membership, Trumka turned the point around and asserted that workers were more prosperous when unions were stronger.

This writer would conclude that all of this discussion and argument reflects the global nature of markets as a result of advances in technology and communications, and the gold-plated benefits unions obtained for workers in the steel and auto industries created incentives for employers to replace the workers with machines and robots. At the big picture level, the decline in oil prices gives the U.S. an advantage and buys time to make needed adjustments, but the political environment stands as an impediment to structural change.

(Archived video can be found here.)

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Robert-Feinberg
It wasn't Labor Day, but on Feb. 1 Richard Trumka, president of the AFL-CIO, appeared on C-SPAN's Washington Journal to discuss the minimum wage and other issues related to the recent State of the Union speech and the various budget proposals presented to Congress as it begins the 2015 session.
Trumka, labor, minimum, wage
688
2015-04-02
Monday, 02 Feb 2015 09:04 AM
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