9/11-15/08                               

FACTS:             

1) Remove Incentives to Ship Jobs Overseas
Taxes: Current law allows companies to defer paying taxes on their overseas income indefinitely while deducting many of the expenses associated with moving offshore – this provides a double subsidy to U.S. companies that ship work overseas, effectively penalizing those companies that keep jobs in the U.S. Ending overseas tax breaks would generate an additional $7 to 12 billion a year in tax revenue and eliminate the perverse incentive to move work abroad to avoid paying taxes.

Public Contracts and Subsidies: Many companies that ship work overseas receive billions of dollars worth of government procurement contracts, subsidies and state and local tax abatements. These taxpayer-financed benefits usually come with very few strings attached, allowing companies to skim additional profits by performing publicly funded work overseas. Laws at the local, state and federal level should be reformed to ensure our taxpayer dollars are not subsidizing the destruction of American jobs.

Currency: A number of U.S. trading partners – China in particular – manipulate the value of their currency relative to the dollar to give their exports to the U.S. an artificial cost advantage, while making American products more expensive. This puts American producers and workers at an impossible cost disadvantage, effectively shutting them out of export markets and undermining their competitiveness at home. The U.S. must take immediate and aggressive action to ensure that the dollar is appropriately valued and withdraw trade benefits from countries that insist on manipulating their currency to unfair advantage, in violation of international trade rules.

Trade Laws: Domestic trade laws enable the government to redress unfair trade practices that give an illegitimate advantage to overseas production. These laws were intended to provide the first line of defense for American producers and workers, yet they are very poorly enforced. The World Trade Organization has weakened our ability to use these laws, and on-going trade negotiations may undermine these laws even further. We must vigorously enforce our domestic trade laws, defend them from challenge, and work to strengthen them in the future.


Trade Agreements: Trade deals such as the North American Free Trade Agreement (NAFTA) create new rights, but no responsibilities, for companies that ship jobs overseas. NAFTA contains strong legal protections for companies investing abroad and guaranteed access for their products into the U.S. market. But NAFTA provides no comparable protections for the rights of workers and the environment, allowing companies to escape their international obligations by shipping work overseas. We must fundamentally reform flawed trade rules to hold companies accountable for respecting workers’ rights no matter where they produce.

     

 

2) Reward the Creation of Good Jobs in the United States
Health Care: Ballooning health care costs are creating a crisis for all American families and companies, with particularly devastating impacts on American manufacturers. The absence of a functional health care policy in the U.S. not only denies millions access to quality, affordable health care – it also impairs our companies’ ability to compete with companies in nations that control costs and share them more broadly, rather than imposing the burden on individual employers and employees. A national solution to our health care crisis is needed to reduce cost burdens on American firms and workers and make U.S. production more competitive.


Public Investment: New technologies and productivity advances require wise investments, and the public sector can play an important role in stimulating such innovation. The U.S. needs a comprehensive policy on education and training, research and development, infrastructure investment, and energy independence to spur innovation and ensure it leads to the creation of more good jobs. State and local economic development policies also have an important role to play in helping American producers remain competitive in the global economy.
3) Improve Transparency and Protect Consumers

Data Collection: There are no comprehensive, official data on how many U.S. jobs have been lost to trade and offshore outsourcing. Even government statistics on service sector imports are unreliable, since they are self-reported by importing companies. The U.S. government should collect detailed and comprehensive data on the number of jobs lost overseas due to offshore investments and trade, including by requiring all companies to fully disclose this information. Greater coordination among agencies that collect labor market and international economic data is also needed.


Disclosure: Consumers have a right to know where the goods and services they purchase are produced – country of origin labels on goods sold in the U.S. are required by law, but there is no policy for “labeling” services sold in the U.S. Firms should be required to inform consumers where the services they purchase are produced and provided from, with penalties for disclosing false information and failures to disclose.


Privacy and Security: Personal financial and medical data is being sent overseas without consumers’ knowledge or consent and without the full protection of domestic privacy laws. Projects with sensitive security information, such as infrastructure engineering and design, are also being sent overseas. Information with such serious privacy and security implications must be adequately protected– if it is allowed to be processed abroad at all, it must be governed by the same legal safeguards that apply in the U.S. and subject to prior informed consent from consumers.

4) Assist Displaced Workers
Program Coverage: While all displaced workers need adequate notice, income support, training and health care, when resources are limited the federal government has a special obligation to assist workers who lose their jobs to trade and offshore outsourcing. The current WARN (advance notice) and Trade Adjustment Assistance (TAA) programs are intended to help trade-impacted workers make the transition to new jobs, but these displaced worker programs need to be expanded and strengthened. The WARN act should be amended to apply to more workers and provide more notice before layoff. TAA needs to be expanded to cover all workers who lose their jobs to import competition or production shifts, regardless of the sector (manufacturing or services) in which they work or the country to which their job has gone.


Program Administration: Significant additional funding will be needed to finance this expansion, and to support improved outreach, program administration, income support, health care, training, and wage insurance benefits that reach every worker who needs them. The Department of Labor must demonstrate the will to ensure workers receive the benefits to which they are entitled, and assist states in the effective administration of these benefits. Additionally, TAA programs should continue to be administered by state workforce agencies and state merit-staff, not contracted out to non-governmental entities.
5) Support Equitable and Sustainable Development Abroad

                                        

Development: Stimulating robust and stable development around the world not only benefits workers in other countries – it is essential to building a more balanced global economy where workers and countries can engage in high-road competition based on skills and productivity instead of a race to the bottom in wages and working conditions. Until workers in other countries are able to earn a decent wage and build a middle class, they will never be able to purchase the goods and services they produce, much less consume those produced in the U.S.


Workers’ Rights: The international community must recognize strong workers’ rights as a key foundation for vigorous democracy and equitable economic development, and incorporate obligations to uphold these fundamental rights in international rules and institutions. Research shows observing workers’ rights is good for growth and it contributes to development by building democratic institutions, decreasing inequality, and encouraging political participation. Underestimating the role of workers’ rights in development ignores the history of the wealthiest countries, where unions proved critical to democratization and the growth of a middle class.                                      

Debt Relief and Aid: Crippling debt burdens prevent many developing countries from meeting basic human needs and investing in the building blocks of development. Many indebted governments pursue short-term, export-led growth strategies to earn the dollars they need to pay the costs of debt service – strategies that do little to promote sustainable development and put even more competitive pressure on American workers. The U.S. must work with other creditors to relieve unpayable debt burdens and enable governments to invest the resulting savings in development. In addition, the U.S. must increase development aid and ensure its delivery is guided by democratic participation from those most affected.


International Financial Institutions: Too often, the International Monetary Fund (IMF) and the World Bank pressure countries to “reform” their economies in the wrong direction. They press for deregulation, privatization, liberalization of trade and financial markets, and rolling back labor market regulations, urging that such steps are needed to attract foreign investors and expand exports. These policy prescriptions have failed to create robust growth and reduce poverty, and they speed up the race to the bottom for workers everywhere. The international financial institutions must be fundamentally reformed to work with developing country governments, trade unions, and other citizens’ organizations to promote core workers’ rights, strengthen the rule of law and democratic institutions, and invest in domestically-oriented development strategies.