UAW auto workers trade union President Ron Gettelfinger addressed the Detroit Economic Club last Thursday and attempted to deal with aspects of the crisis of American capitalism.
He said: ‘I’m here today to talk about an issue that we as Americans don’t like to talk about: growing social and economic inequality in the United States.
We don’t like to talk about it because doing so forces us to confront the harsh reality that, on our watch, progress has stalled.
We don’t like to talk about this, but this past week two events thrust the problem of growing social and economic inequality squarely before us.
The first, obviously, was Hurricane Katrina; the second, the release of the US Census Bureau’s annual report.
Typically, the release of a government report would have been lost in the wall-to-wall media coverage of a natural disaster of Hurricane Katrina’s magnitude.
This time, however, the heartbreaking images from New Orleans, Biloxi and other Gulf Coast communities put human faces on the Census Bureau’s statistics, and made the report’s picture of two Americas impossible to ignore.
MSNBC’s David Shuster, reporting from a devastated working-class neighborhood in Biloxi, was one of the first in the media to make the point that families were buried beneath the wreckage of their own homes not because they ignored warnings to evacuate, but because they didn’t have the money for a tank of gas.
As Shuster noted, Katrina struck at the end of the month, when people living paycheck-to-paycheck are broke. The same was true in New Orleans, a city where nearly one-in-three people live below the poverty line.
Countless New Orleans residents were stuck in Katrina’s path without cars or gas, money or public transportation.
Stuck in the neighborhoods closest to the very same levees that experts at FEMA and the Army Corps of Engineers had warned for years needed to be repaired and strengthened.
Stuck on rooftops, desperately signaling for help.
Stuck in the New Orleans Convention Center and the Superdome, waiting for days for a drink of water and a bus ride to safety.
None of us will ever forget the horrific reports and images from New Orleans: babies dying in their mothers’ arms from dehydration. . . corpses floating down the flooded streets. . . police officers driven to suicide by overwhelming grief and hopelessness.
None of us will ever forget any of that. But we must do more than remember; we must act – as individuals and as a nation. . .
And while volunteers and charities will continue to play a vital role in helping the storm victims rebuild their lives, government must play the lead role in rebuilding the physical and social infrastructures of New Orleans, Biloxi, and other Gulf Coast communities devastated by Katrina.
Rebuilding the levees, roads, bridges, water systems, schools, hospitals, libraries and other public infrastructure destroyed or damaged by Katrina will be a monumental task.
Yet, if that is all we do, we will have failed to learn some of the most important lessons from this disaster.
One lesson is that we urgently need to re-order our national priorities.
The Administration and its allies in Congress have given massive tax breaks to the richest Americans, while cutting funding for everything from flood-control projects in the Gulf, to public education, to health care for children, to police and firefighters.
They sent our young men and women to Iraq to destroy weapons of mass destruction that never existed.
And they’ve kept them there, in harm’s way, with no strategy for winning the peace in Iraq and no exit strategy, while here at home urgent needs go unmet.
Time and again, the Administration and its allies in Congress have catered to the privileged and the powerful at the expense of children, the elderly, working families, and the poor.
To be fair, President Bush’s policies didn’t create poverty and inequality, but they most assuredly have made these problems worse.
As Nicholas Kristof wrote in The New York Times earlier this week – quote:
“Hurricane Katrina. . . underscores a much larger problem: the growing number of Americans trapped in a never-ending cyclone of poverty. And while it may be too early to apportion blame definitively for the hurricane, even President Bush’s own administration acknowledges that America’s poverty is worsening on his watch.
“The US Census Bureau reported a few days ago that the poverty rate rose again last year, with 1.1 million more Americans living in poverty in 2004 than a year earlier. After declining sharply under Bill Clinton, the number of poor people has now risen 17 per cent under Mr Bush.” – End quote.
Think about that for a moment. Four straight years of rising poverty. Some 37 million Americans – 13 million of them children – living in poverty. And yet the Administration and its allies in Congress repeatedly have refused to raise the minimum wage from $5.15 an hour.
But apparently not everyone thinks pay raises are a bad idea. Forbes.com reports that last year the CEOs of America’s 500 largest corporations got an aggregate pay raise of 54 per cent, bringing their total compensation as a group to $5.1 billion, versus $3.3 billion in fiscal 2003.
The Census Bureau also reported that last year 800,000 more working Americans joined the ranks of the uninsured; now 45.8 million Americans are without health insurance.
Last year, the median household income in the US was basically flat for the fifth straight year, the longest stretch of income stagnation on record.
And an analysis of Census Bureau data by the Economic Policy Institute found that only the top five per cent of households experienced average, real income gains in 2004; household incomes for the lower 95 per cent were stagnant or dropped.
Income inequality was near all-time highs in 2004.
The time is long overdue to set a new course for America, to get off the low road and onto the high road. . .
And, right now, here at the Detroit Economic Club, we could send a powerful message to President Bush and the Congress by publicly committing to work together – business, government, and labor – for a national solution to America’s health care crisis – and, more importantly, by actually doing so.
What are we waiting for?
We all know that the US health care system is terribly inefficient. We spend far more of our Gross Domestic Product, and far more per person, on health care than any other country – 75 per cent more than Canada.
Yet nearly 46 million Americans don’t have any health insurance, and millions more are under-insured.
And for all our health care spending, the US ranks near the bottom among industrialized countries on life expectancy, infant mortality and virtually every other measure – regardless of what we spend.
In fact, the infant mortality rate in our nation’s capital is more than double the infant mortality rate in Beijing.
Prescription drugs cost more in the United States than in any other country. One reason is that the pharmaceutical industry has more than 1,200 lobbyists in Washington – or more than two lobbyists for every member of Congress.
And that industry certainly flexed its muscles a few years ago when the Administration was putting together its Medicare prescription drug program.
Drug lobbyists were literally at the table drafting that legislation. So it’s no surprise that the legislation explicitly banned Medicare from using the leverage of mass purchasing to bargain lower drug prices.
Some people say the answer to America’s health care cost crisis is more market competition in health care.
But, as economist Paul Krugman points out – quote: “In health care, the private sector is often bloated and bureaucratic. . . The United States has the most privatized, competitive health care system in the advanced world; it also has by far the highest costs and worst results.” – End quote. . .
Let me add that cost-shifting isn’t the answer. There’s been more cost-shifting in the US than other industrialized nations, yet our costs are rising far faster.
The UAW and General Motors, as you are aware, have been talking about health care for the past few months.
For reasons I’m sure you can all appreciate, I’m not going to talk about the specifics of those discussions.
But I do want to make it clear that the UAW understands that health care costs are a problem not just for General Motors. . . but for every other American employer.
That’s one of the reasons the UAW has been pushing for national health insurance since President Truman proposed it in 1948.
But some journalists and pundits make it seem like health care costs are General Motor’s only problem.
We don’t think it’s that simple. Health care costs alone – for that matter, total labor costs – don’t explain General Motor’s US market share falling from 41 per cent in 1985 to just over 25 per cent today.
Decisions about products, marketing and advertising strategies, and many other factors – including bad US trade policy – have something to do with that, too.
But, the conventional wisdom is that the UAW hasn’t done anything to help General Motors or other employers take costs out of the system, that we have our heads in the sand on this issue. Well, the conventional wisdom is just plain wrong.
In fact, the UAW has worked closely with General Motors to rein in health care costs – and health care costs for General Motors have increased at a rate below the national average because of our joint efforts.
Let me quickly highlight some of the things the UAW and General Motors have done on health care:
• In 2003 negotiations, we increased co-pays on prescription drugs; required mail order for maintenance drugs; pushed for broader usage of generic drugs – saving millions every year.
• We transformed traditional care into a “broad PPO” – the Traditional Care Network – reducing costs by 15 percent.
• We narrowed PPO networks to drive customers to more cost-efficient and higher performing providers – another cost saving.
• We took medical costs out of the Consumer Price Index for COLA calculations – another cost saving.
• Our Community Health Care Initiatives in Indiana and Ohio alone saved General Motors some $10 million in 2004 (according to General Motors).
• The electronic prescription initiative launched in southeast Michigan earlier this year by General Motors, Ford, DaimlerChrysler, and the UAW will save millions, while reducing errors and improving quality care.
• Additionally, we agreed to divert two cents of COLA each quarter per employee of the four-year agreement to secure pension improvements for current retirees and surviving spouses.
That all adds up to significant savings. And, as UAW Vice President Richard Shoemaker and I said in April and many times since, we are willing to continue working with General Motors, within the framework of our National Agreement, to reduce costs in health care and other areas.
We’re optimistic that we can find ways to do that. But we also know that we can’t solve the real problem. The real health care problem simply cannot be solved by any one union or any one company or any one set of negotiations, regardless of the size of the company. . .
The problem was clear 37 years ago; so was the solution.
And yet America is still the only advanced industrialized nation without national health care. . .’
Gettelfinger’s plea for higher wages and a higher minimum wage will fall on deaf ears, while his long list of concessions to GM over health care costs, all made to no avail, shows the futility of trying to prop up the system at the expense of UAW members.
There is only one way to make poverty history in the US, and to bring in the kind of national health service that all US workers need, and that is for the workers’ movement to break from both the Republicans and the Democrats and organise to carry through a socialist revolution in the United States.
Gettelfinger and the other bureaucrats of the US trade union movement are organically incapable of organising this struggle.
In fact the struggle for US socialism demands the construction of a section of the Fourth International in the US, without delay.