It’s been a year since President Barack Obama signed the American Recovery and Reinvestment Act (better known as the stimulus bill) into law. I didn’t like the early concessions Obama made to Republicans in a fruitless effort to win their support for the stimulus. I was even more upset with later compromises made to appease Senate conservadems and Republican moderates. They reduced spending in several areas that had real stimulative value (school construction funds, extra money for the Low Income Home Energy Assistance Program, aid to state governments) in order to include tax cuts that have much less stimulus “bang for the buck.” Senator Tom Harkin was right to question why 9 percent of the stimulus bill’s cost went toward fixing the alternative minimum tax, for instance.

Still, I supported passage of the stimulus bill. In late 2008 and early 2009 the U.S. economy was losing 600,000 to 700,000 jobs per month. Something had to be done. On balance, the stimulus did much more good than bad. Economists agree it has saved or created a lot of jobs:

Just look at the outside evaluations of the stimulus. Perhaps the best-known economic research firms are IHS Global Insight, Macroeconomic Advisers and Moody’s Economy.com. They all estimate that the bill has added 1.6 million to 1.8 million jobs so far and that its ultimate impact will be roughly 2.5 million jobs. The Congressional Budget Office, an independent agency, considers these estimates to be conservative.

Two and a half million jobs isn’t enough to compensate for the 8 million jobs lost since this recession began, but it’s a start.

Not only did the stimulus create jobs, it greatly increased spending on programs that will have collateral benefits. Incentives to make homes more energy efficient will reduce greenhouse gas emissions and save consumers money that they can spend elsewhere. Money for sewer improvements will provide lasting gains in water quality (inadequate sewers and septic systems are a huge problem in Iowa). The stimulus included $8 billion for high-speed rail. It wasn’t nearly enough, of course; we could have spent ten or twenty times that amount on improving our rail networks. But that $8 billion pot drew $102 billion in grant applications from 40 states and Washington, DC. The massive demand for high-speed rail stimulus funding increases the chance that Congress will allocate more funds for rail transportation in the future.

Unfortunately, most Americans don’t believe the stimulus bill created jobs. That’s largely because unemployment remains at a historically high level of 10 percent nationwide. Also, inflation-adjusted average weekly earnings have gone down during the past year. In addition, Republicans have stayed on message about the worthlessness of the stimulus bill, even though scores of them have hailed stimulus spending in their own states and districts.

Democrats on the House Labor and Education Committee released an ad that lists various popular stimulus bill provisions, such as increasing Pell Grants and teacher pay. The ad uses the tag line, “There’s an act for that,” naming the American Recovery and Reinvestment Act at the end. I don’t think it’s effective, because the ad doesn’t include the word “stimulus.” Few people will realize that the ARRA refers to the stimulus bill.

Bleeding Heartland readers, how do you view the stimulus one year later?

Crossposted from Hillbilly Report.

It seems like the one constant that can be depended on in this country anymore in good times or bad is the fact that working folks are working harder and harder and simply are not getting ahead. Even before the Republican recession last year wages have stagnated for decades and the gap between rich and poor has only widened as our middle-class continues to shrink. New numbers show that while incomes across the board have fallen, the recession has once again hit middle and lower class working Americans the hardest.  

Hope you’ve been enjoying the perfect Iowa weather during this holiday weekend. The U.S. Department of Labor and Blog for Iowa provide background on the history of Labor Day.

Organized labor doesn’t have a lot to celebrate right now, with more job losses in the manufacturing sector and unemployment rising across the country (though Iowa’s unemployment rate is significantly lower than the national average). The Iowa Policy Project finds that “the state of working Iowa” is not good. As in the previous recession, we are losing jobs with good benefits as wages stagnate for the people who still have jobs. We now rank 32nd in terms of median wages, and lower incomes mean less money for consumers to spend at other businesses. Click here for the full report, which also explains that “policy makers could do more to make work pay for low- and moderate-income working families and to insist upon job-quality requirements in economic development strategies.”  

Iowa hasn’t adopted most of organized labor’s key legislative priorities in recent years, in part because of the “six-pack” of Iowa House Democrats that blocked those bills. On the plus side, Curt Hanson’s victory in the House district 90 special election means we haven’t lost any ground on this front. We only need to persuade one or two “six-pack members” (or defeat them in Democratic primaries) to find the 51st vote for “prevailing wage,” for instance.

I haven’t heard much lately about Senator Tom Harkin’s efforts to find a compromise on the Employee Free Choice Act. Getting 60 votes in the Senate for anything meaningful is likely to be quite difficult. The Service Employees International Union has some news related to the EFCA here.

Two years ago I attended the Solidarity Fest Labor Day celebration in Des Moines, featuring John Edwards and Hillary Clinton. The same event, sponsored by the South Central Iowa Federation of Labor, AFL-CIO, takes place today in the 4-H building at the State Fairgrounds from noon to 2 pm. Later today, the Friends of Iowa Midwives are having a family-friendly potluck picnic at Raccoon River park in West Des Moines (4 to 8 pm, suggested donation $5).

After the jump I’ve posted details for lots of other events coming up this week.

The Des Moines Register’s Clark Kauffman wrote a must-read piece for today’s paper about a bunkhouse for mentally disabled men at the Johnson & Johnson Egg Farm near Goldthwaite, Texas. The bunkhouse is

the last run by the same Texas family who controlled Henry’s Turkey Service and the Atalissa, Ia., bunkhouse from which dozens of mentally retarded turkey plant workers were evacuated by the fire marshal in February.

Click here for the full archive of Des Moines Register stories about Henry’s Turkey Service and its facility in Iowa. The exploitation of workers there over many years is the subject of numerous current investigations. The horrific story had political fallout as well. Iowa Senate Republicans rejected Gene Gessow’s nomination to head the Department of Human Services, saying that as acting head of the department, Gessow “failed to be forthright about the Atalissa bunkhouse situation during important legislative oversight committee hearings.”

I’ve highlighted a few parts of Kauffman’s latest report after the jump, but I encourage you to click over and read the whole piece. Then ask yourself why any companies are allowed to pay the mentally disabled less than minimum wage. If a person is competent to do work a corporation needs done, that person deserves the same pay a person with no disabilities would receive.

I saw on Talking Points memo’s DC Wire that Senator Tom Harkin is sounding out Republican colleagues on a potential compromise for the Employee Free Choice Act, according to Roll Call. The Republican leadership will certainly try to filibuster this bill, and Democrats do not currently have 60 votes in favor. Some weaselly Democrats who voted for the EFCA in 2007 (knowing President Bush would veto it) are hedging now. In addition, Republican Senator Arlen Specter, who has supported the EFCA in the past, has flipped on the issue in light of a primary challenge from the right.

CEOs from three companies (Costco, Whole Foods and Starbucks) proposed a compromise on the EFCA recently. Harkin and other leading Democrats are not willing to accept that proposal for various reasons. For one thing, it would not include binding arbitration.

Earlier this month, Harkin had an excellent response to Republican critics who say we can’t afford to help labor unions now:

“In 1935, we passed the Wagner Act that promoted unionization and allowed unions to flourish, and at the time we were at around 20 percent unemployment. So tell me again why we can’t do this in a recession?” said  Sen. Tom Harkin (D-Iowa), invoking the pro-labor changes of the New Deal. “This is the time to do it. This is exactly the time we should be insisting on a fairer playing field for people to organize themselves.”

The Center for American Progress Action Fund created this outstanding web page supporting the Employee Free Choice Act. You’ll find many useful resources there, including a basic overview of what the EFCA would and would not do and an interactive map showing why unions are good for workers and the economy.

I clicked on Iowa and learned, “Union workers in Iowa make 8.40 percent ($1.48 per hour) more than non-union workers, on average.” (Click here and scroll down the page to see how the Center for Economic Policy Research calculated those figures.) Higher wages are not only good for individual families, they boost the economy as a whole consumer spending drives so much economic activity.

I am pessimistic about the prospects for passing the EFCA this year, but I give Harkin credit for trying to find a compromise that would still make it significantly easier for workers to form unions.

The “prevailing wage” bill fiasco finally ended on Monday:

In what officials called the longest vote in Iowa Statehouse history, House Speaker Pat Murphy at 1:09 p.m. today closed the voting machine on the prevailing wage bill after 2 days, 19 hours and 14 minutes, declaring the bill had lost.

The vote was 50-48, one vote short of passage. But then House Majority Leader Kevin McCarthy, D-Des Moines, switched his vote to “no” — a procedural move that will allow him to bring the bill up for reconsideration later this session. So the final vote stood at 49-49.

After the jump I consider the two eternal political questions: “What is to be done?” and “Who is to blame?”

Following up on this morning’s action alert, I am pleased to report that the Iowa Senate approved a bill ending wage discrimination today. From a Senate Democrats press release:

Today the Iowa Senate voted to outlaw wage discrimination based on age, race, religion, gender and the other protected classes cited in the Iowa Civil Rights Act.

“Your pay should be based on your job performance, not your religion, age or gender,” said State Senator Staci Appel of Ackworth, Chair of the State Government Committee and the bill’s floor manager.  “This is particularly important for the many Iowa families where women work outside the home.  When an Iowa mom is paid what she is worth, the entire family benefits.”

“Iowa voters are urging us to focus on protecting and growing the middle class,” said Senate Democratic Leader Mike Gronstal.  “Today’s vote to outlaw wage discrimination is just this session’s first step in that direction.”

The legislation, Iowa ‘s version of the federal Ledbetter Fair Pay Act, will have particularly positive impact for Iowa women and their families.  Iowa currently ranks 37th among states when it comes to gender wage equity.  Under Senate File 127, the Iowa Civil Rights Commission would have the ability to award double the wage differential for the period of time the discrimination occurred and up to three times that wage differential in cases of willful violation.

The legislation applies only to employers who have four or more employees.  It does not apply to wage differences that result from a seniority system, a merit system, a system which measures earnings by quantity or quality of production, or is based on any other factor other than the age, race, creed, color, sex, sexual orientation, gender identity, national origin, religion, or disability of the employee.

The legislation now goes to the Iowa House for its consideration.

It was a straight party-line vote: 32 Democratic senators in favor, 18 Republicans opposed. Like they say, elections have consequences.

Note: when the U.S. Senate approved the Lilly Ledbetter Fair Pay Act of 2009 last month, four Republicans joined all the Democrats and independents in support of the bill. That included three women Republicans in the U.S. Senate. I wonder why the three women in the Iowa Senate Republican caucus are less concerned about wage discrimination.

The Des Moines Register provides some background on the problem in Iowa:

It’s taboo in the private business world for workers to compare salaries, so Iowa women with careers in finance and insurance may not know that Iowa men earn about $78,000 a year on average, while women bring in $40,000. […]

Iowa’s female workers – both hourly and salaried – earn 78 cents for every dollar male workers make, according to data from Iowa Workforce Development.

For example, in retail home furnishing stores in Iowa, men make $36,000 a year on average while women earn $22,000, according to a study of 1.45 million Iowa workers’ 2007 wages.

In food service, men bring in $13,000, while women take home $10,000.

In Iowa hospitals, men earn $61,000, women make $37,000.

Even in elementary and secondary schools, men make $35,000 a year on average, while women earn $27,000.

These industry averages could reflect factors such as differences in experience and job skills, but also reveal a disproportionately lower wage for women overall, state officials said.

Passing along an action alert from the Iowa Commission on the Status of Women:

The Iowa Senate is scheduled to debate SF137 — Iowa ‘s version of the Ledbetter Fair Pay Act– starting this afternoon!

Read the full text of this bill at the following link:

http://coolice.legis.state.ia….

This bill is a crucial step in ending wage discrimination in Iowa based on gender and other protected class status, like disability and race.

Please contact your State Senator http://www3.legis.state.ia.us/…  BEFORE 1:00 TODAY and let her/him know your thoughts on the bill.  Email works great, but if you’d prefer to phone, call the Capitol Switchboard at 515-281-3221.

Some facts about wage discrimination and the bill:

– Iowa is ranked 37th among states for gender wage equity, and Iowa women are in the workforce at greater rates than the vast majority of other states.

– The bill goes farther to protect Iowans from wage discrimination than the Federal law does.

– It would apply for employers that have 4 or more employees (Federal law only protects those with 15 or more employees).

– It provides a deterrent to those few employers who might be temped to discriminate from doing so in the first place, by allowing damages of up to triple the back wages owed to a person where discrimination has been found, for the entirety of the time discrimination is proved to have occurred (Federal law only provides two years of back wage differential, or in some cases, three years).    

While you’re at it, please share your thoughts on gender balance on local boards and commissions.  SF133 http://coolice.legis.state.ia…. , a bill requiring local boards and commissions to be gender balanced like those at the state level, is also eligible for debate in the Senate. A recent phone survey of all 99 counties found that, across four county economic boards and commissions, less than one in six of those appointed to serve and make local economic decisions is a woman. Our communities deserve better representation and more balanced decision making.

Email works great, but if you’d prefer to phone, call the Capitol Switchboard at 515-281-3221.

Iowa Commission on the Status of Women

Lucas State Office Building

Des Moines, IA   50319=

PH: 515-281-4461 or 800-558-4427

FAX: 515-242-6119

www.women.iowa.gov

I disagree that e-mail “works great” in these situations. A lot of legislators have huge e-mail backlogs that they never read, or don’t read in time for it to affect their opinion of a pending bill.

I would call the switchboard to weigh in on this issue.

The Iowa Legislature opened its 2009 session today, and Senate Majority Leader Mike Gronstal let the members of the upper chamber know that he has “never seen such a tough situation” with the state budget and economy in his 26 years at the statehouse.

In his opening address the the Iowa Senate, Gronstal listed some of the biggest challenges facing legislators, in particular rebuilding communities damages by last year’s natural disasters and leading Iowa “through these tough times without sabotaging the commitments we’ve made on economic growth, health care and education.”

He warned that a lot of legislators won’t get what they want this year:

Our resources are limited.  We will say “no” to many good ideas.  We are going to disappoint some people and frustrate others.

If your idea of being an elected official involves being loved by everyone, the next few months will be pretty rough.

Gronstal also noted that bipartisan majorities approved many key policies in Iowa during the past few years, and called for finding “bipartisan solutions” to this year’s challenges.

In his opening address to the chamber, Senate President Jack Kibbie echoed Gronstal’s warning that leaders will be saying “no” to a lot of requests from legislators.

He also advocated some policies that are anything but bipartisan: a gas tax hike and the expansion of workers’ bargaining rights.

Kibbie said increasing the gas tax would create jobs and boost economic development:

First, we can no longer put off the challenges to our transportation infrastructure. It is vital that we begin to clear the backlog of projects that play a  significant role in future economic development. In my district my constituents, Republicans and Democrats, all tell me that we need to get to work and if the only impediment to that progress is money they are willing to pay a few more cents at the pump. I support efforts that result in a gas tax increase. Success in that endeavor will mean better roads, jobs, and an economic boost to Iowa’s families and communities.

I’ve supported a gas tax increase since John Anderson proposed it during his 1980 presidential campaign, but I don’t expect that measure to get through the legislature without a bruising battle.

Here’s a piece listing the many potential benefits of a federal gas tax increase. Kibbie is talking about a smaller increase in the state gas tax, but many of the same benefits would apply.

Kibbie also said Iowa workers need good wages, and therefore “we should not fear passing Legislation that help[s] workers bargain for a better future.”

Kibbie could be referring to the “fair share” bill that Democrats didn’t have to votes to get through the Iowa House in 2007, or to the collective bargaining bill that Governor Chet Culver vetoed last spring. Either way, Republicans and corporate interest groups will put up a fight.

Getting labor legislation through the Iowa House, where Democrats have a 56-44 majority, is likely to be more difficult than getting it through the Iowa Senate, where Democrats have a 32-18 majority.

The complete texts of the opening statements by Gronstal and Kibbie (as prepared) are after the jump.

From Daily Kos user rok for dean:

In 1950, the average pay of an S&P 500 CEO was less than 30 times that of an average U.S. worker; by 1980, prior to the “Reagan Revolution,” the average pay of the S&P 500 CEO was approximately 50 times higher than that of an average U.S worker.  But by 2007, the average pay of an S&P 500 CEO had soared to more than 350 times as much as that of an average U.S. worker.

This is both immoral and unsustainable in a democracy.  By way of comparison, in Europe, an average CEO only makes 22 times as much as an average worker, and in Japan, only 17 times as much.

If America wants to be competitive again, we need to reduce CEO pay to a level comparable to CEO pay in Europe and Japan.  I know exactly how to accomplish this feat.  The [United Auto Workers] should agree to immediately lower U.S. union worker pay to a level equal to the level paid by their non-union, non-American competitors.  In return, auto CEO’s must agree to permanently lower their compensation to only 20 times that of an average union worker.

Sounds fair to me. How many Republicans who’ve been beating the war drums about excessively generous pay to union workers would agree to those terms?

It’s true that union workers get paid more than non-union workers (though strong unions are associated with higher average wages even for non-union workers in the same area). But in a country where two-thirds of our gross domestic product depends on consumer spending, higher wages are not a bad thing.

In any event, unions are not primarily to blame for the auto industry’s current problems. Toyota is about to post its first operating loss in 70 years despite having an entirely non-union workforce. The tough economy has diminished demand for new cars.

American automakers also have to bear the burden of our broken employer-based health insurance system, but that’s a topic for another diary.

The same Republicans who claim they’d never raise taxes on Americans are only too happy to slash the wages of middle-class auto workers. As rok for dean says, let’s call their bluff and see if they would be willing to tie executive pay to a reasonable multiple of the average worker’s salary in the company.

Side note: my dad was a Republican, but it really bothered him when corporate executives would receive exorbitant salaries and bonuses even as they were driving their companies into the ground. Rewarding good performance is one thing, but paying incompetent managers obscenely high salaries is another.  

I opposed the massive Wall Street bailout rushed through Congress this fall, but if the government can provide hundreds of billions of dollars to financial firms with no oversight, it’s only fair that $13.4 billion of the Troubled Asset Relief Program be used to prevent General Motors and Chrysler from collapsing:

“These are not ordinary circumstances,” Bush said at the White House today. “In the midst of a financial crisis and a recession, allowing the U.S. auto industry to collapse is not a responsible course of action.”

The cost of letting automakers fail would lead to a 1 percent reduction in the growth of the U.S. economy and mean about 1.1 million workers would lose their jobs, including those in the auto supply business and among dealers, the White House said in a fact sheet.

‘Necessary Step’

President-elect Barack Obama endorsed the plan, calling it in a statement a “necessary step” to avoid a major blow to the economy.

“I do want to emphasize to the Big Three automakers and their executives that the American people’s patience is running out,” Obama said later at a news conference. “They’re going to have to make some hard choices.”

The United Auto Workers are “disappointed” that Bush added “unfair conditions singling out workers,” the union’s president, Ronald Gettelfinger, said in a statement.

“We will work with the Obama administration and the new Congress to ensure that these unfair conditions are removed,” Gettelfinger said.

This diary by TomP has a lot more detail and reaction to the bailout deal.

It would be grossly unfair for only the workers to be asked to sacrifice to make these companies profitable. Some Republicans, notably Senator Bob Corker of Tennessee are explicitly trying to drive wages in union shops down to the level paid to non-union employees of Japanese automakers in the southern states.

But it’s no coincidence that the standard of living in states with more union workers is higher than the standard of living in the deep south.

I don’t know enough about the details to know whether this bailout can save GM and Chrysler, but failing to act was not an option with so many jobs on the line.

By the way, all three U.S. automakers have made a lot of mistakes over the years, but kudos to management of Ford Motors for locking in a large credit line while credit was easy to obtain. In case you were wondering, that’s why Ford is not currently on the brink of collapse, begging for a government bailout. Nevertheless, I’m sure Ford will have to do a lot of restructuring to adapt to this tough economy, just like GM and Chrysler. I can’t imagine 2009 will be much better for new car sales than 2008 was.

Chrysler has already idled all of its plants for a month. Ford is extending the holiday break at most of its plants until January 12, and GM plans massive production cuts next year.

Those actions may be necessary to save the automakers, but they will have disastrous ripple effects in all the communities where the idled factories are located.

Some of these problems could have been avoided if Congress had fixed our broken health-care system years ago. This report is more than two years old:

The competitive disadvantage of U.S. automakers resulting from the absence of a national strategy on health care financing is becoming increasingly clear. GM faces legacy costs (health care plus pensions for retired workers) of $1,500 per car. Together, the Big Three automakers support roughly 800,000 retirees, compared to less than 1,000 for foreign-owned competitors in the United States.

Clearly the failure to address America’s health care finance problems has become a major competitive disadvantage for our economy as a whole and has placed U.S. workers in a diminished bargaining position for wages and job security in relation to the rest of the industrialized world. Targeting retiree health costs offers an opportunity to provide strong incentives for industry action on fuel savings investment and reduces the competitive disadvantage.

Share any relevant thoughts in the comments.

UPDATE: Why I am not surprised to learn that banks like Goldman Sachs and Morgan Stanley are giving out large bonuses to some executives after receiving billions in bailout money from the federal government?

Note also that George Bush attached all kinds of conditions to the loans for automakers, while major financial institutions just got free money with no oversight.