Austerity only weakens the economy

You’d never know it if you listen to the news from Washington, but America is in crisis. 

It’s a crisis that has raged for years — devastating families, depriving young people of their dreams, destroying communities — the crisis of mass unemployment. Millions of Americans who want to work cannot find jobs. And even worse is the leadership deficit: Leaders who should be moving us out of this crisis continue to make the situation worse. 

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Our economy is slowly rebounding from its collapse in 2008, and jobs have now been growing steadily for 28 straight months. But our economy is still far from healthy. 

Things are grim for young workers: 18- and 19-year-olds have largely dropped out of the labor market, with fewer than half showing up in the monthly unemployment numbers. Among 20- to 24-year-olds, labor force participation is back only to 1972 levels. Things aren’t much better for 25- to 29-year-olds, with 1 in 4 out of work. 

We are experiencing a whole generation of high unemployment, and young people who expected more for their hard work are deferring their dreams and opportunities. 

This current generation is not building the employment histories and the work experience it needs to succeed. It will be the least experienced generation since we started tracking experience in 1948. 

In the face of high unemployment and slow growth, out-of-touch Republicans are throwing tantrums and threatening to harm our economy through a series of manufactured crises. What are the demands of these hostage-takers? They want Democrats to agree to cut Social Security and Medicaid and Medicare benefits, cutting the safety net out from under middle-class families who have borne the brunt of decades of slow growth and diminished opportunities. 

This doesn’t even begin to touch on the harmful effects of sequestration, which is just a fancy word for a dumb idea. These across-the-board cuts will cost 750,000 jobs — local defense facilities won’t be staffed, moms and dads will have less money to spend, national parks will be closed and 3- and 4-year-old children summarily cut off Head Start rolls.  

Sequestration isn’t the first blow; it’s just another in a series of disastrous policies that have us working against ourselves. Even the conservative Wall Street Journal noted that sharp cuts to state and local government spending kept unemployment high in the wake of the economy’s collapse. 

So what are we doing to reverse course? Well ... nothing. We are actually moving toward more fiscal austerity, which will further weaken the economy and cost jobs. On some days, it seems like all of official Washington is racing to embrace the most destructive consensus since the Iraq war. 

But the consensus around fiscal austerity doesn’t extend to asking corporations and the richest 1 percent to share in the sacrifice. If we were really talking about things we can’t afford, at the top of that list would be tax breaks for corporations that ship jobs overseas, tax breaks for hedge fund managers, more tax breaks for corporations that hide their profits outside the country and continuing tax cuts for the top 2 percent. Just closing one destructive loophole — tax cuts for corporations that ship jobs overseas — would be enough to replace almost half of the jobs-destroying sequester. 

These loopholes are the real budget busters, not grandparents who worked hard all their lives and only want to retire in dignity with a modest lifestyle. 

While we move toward a low-road economy and undermine the power of working people to join together, other countries are proving that investing in workers and raising wages to create demand is a successful strategy. While we bicker over whether or not we can afford to invest in our crumbling roads and bridges, strengthen our education system and lead in global innovation, our competitors in Germany and China are moving ahead.

We can turn this around. But that means investing in our nation, not calling for brutal cuts to vital programs. That means raising the minimum wage, not allowing employers to lowball U.S. workers. That means reforming our immigration system, not creating a second class of workers without rights to achieve the American dream. That means allowing workers to join together and bargain for better lives, not continuing a generation of wage stagnation.

These aren’t new ideas and they aren’t rocket science. Putting America back to work doesn’t take genius — it takes courage: the courage to repeal sequester and to protect our social insurance system, the courage to put rebuilding the middle class ahead of keeping Washington insiders and Wall Street moguls happy, the courage to lead. 


Trumka is president of the AFL-CIO.