Remarks by John J. Sweeney President, AFL-CIO Association for a Better New York December 6, 1995 For me this speech is like a homecoming. New York is where my family build a new life in a new land; where I got my education and my start in the labor movement; and where, six weeks ago, I got an honor and a responsibility beyond my greatest dreams -- the leadership of the national labor federation, the AFL-CIO. Addressing this audience, I feel like I'm among old friends. Whether your're leaders in business, labor, government, education or community service, I feel we're bound together by the values we share -- the sense of mutual responsibility that defines this city and this nation at their best. If I come here with a warning, rest assured that it's a friendly warning -- a call to action from one friend to another, so that, together, we can avoid a danger that threatens us all. For the past six weeks, I've been trying to live up to my campaign commitment of not just sitting behind a desk in Washington. So I've been crisscrossing the country trying to solve some of the awful confrontations I inherited. We have Boeing workers out on strike in Seattle; newspaper workers out at the Detroit News; paperworkers still out after 30 months at Staley in Decatur, Ilinois; and a big dispute involving hospital workers brewing at Kaiser in Northern California. I have to begin by congratulating the Teamsters' track workers for their success in bringing Metro-North to terms. They conceived and carried out a brilliant strike strategy. And the entire labor movement takes pride and encouragement at what they were able to accomplish. As some of you know, at the AFL-CIO conversion here in New York six weeks ago, there was a great debate about the kind of tactics our labor movement should use. In his keynote address, my old friend and former rival, Tom Donahue, said he was more interested in "building bridges than in blocking bridges." And it became a metaphor for the issues involved in the election of our reform slate -- and for the issues facing American workers and American business. Tom was referring to a Service Employees local representing janitors in Washington, D.C. They blocked the 14th Street Bridge for two hours one morning. They were protesting exorbitant tax breaks for real estate developers at a time when our nation's capital city is going broke, services are deteriorating, and working people are suffering. I responded by saying that, when our employers and other powerful people refuse to listen to the working families we represent, then, sometimes, we have to dramatize their plight, with tactics such as blocking bridges. But, as I made clear at the convention, I believe in building bridges any time the shelling stops long enough for us to start pouring concrete and putting up steel. We need to build those bridges because we want to be full partners with our employers, full participants in the economy, and full citizens of our society. I want to build bridges between labor and management, so that American business can be more successful, and American workers can share in the gains. When we do this, we'll build bridges for the working poor to climb into the middle class; bridges for the middle class to continue the great American journey of generations progress; and bridges over troubled waters in a nation increasingly divided along the lines of color and class. At its best, this city and this nation have build these bridges -- and all our people have benefitted. From the Roosevelt administration until the Reagan Era, business, labor, and government in the United States were busier building bridges than blocking them. Sure, we had some bumps along the way. But, for the most part, we reaped the rewards of a unique economic and social compact, especially here in this city. My father was a bus driver, a member of the Transport Workers Union. Some of my earliest memories are of going to union meetings with him and listening to Mike Quill. Those were tough times, But you knew that, if you worked hard, you could earn more money and live a better life. Employers knew that, if they paid their workers fairly and plowed a little of their profits back into their communities, they could count on employee loyalty and healthy consumer spending, which has always made up two-third of our economy. President Kennedy found a simple but eloquent way to describe this successful social and economic compact: "A rising tide lifts all boats." When things were good, as they were for almost 30 years after the end of World War II, we all prospered because we prospered together. We were concerned with raising the standard of living for working Americans, not just accumulating enormous wealth for a fortunate few. When things broke down, we fixed them -- together. And you know that better than anyone. Twenty years ago, when this city faced up to and solved the worst fiscal crisis in its history, you did it together. Lew Rudin must have seen it coming when he foundd this organization in 1971. The Association for a Better New York saved the New York City payroll four times by encouraging the pre-payment of real estate taxes by many of the organizations represented in this room. You did your part, and you should be proud. And labor did its share as well, as people like Ed Cleary and Jack Sheinkman and Victor Gotbaum recall. We used our political clout in Albany to pass legislation allowing the city to abrogate our own contracts. And we poured our pensions into bonds to keep the city afloat. We did it because we knew that, when things were better, we would all recoup our losses -- business and labor alike. We did it because we had some unwritten rules -- a social compact -- that we lived by. Unfortunately, those days are gone. Thanks to the work of the Association for a Better New York, some semblance of our great labor-business-government compact continues to function in this city. But, in the rest of the country -- in Los Angeles and Seattle and Detroit and Washington, D.C. -- the only rule is that you take what you can get away with. After getting whacked by the oil embargo, American business decided the best way to complete in the global economy was by driving down labor costs. Not by innovation, not by Yankee ingenuity, not through labor-management cooperation, not by insisting on international social standards and rights for workers .. but by squeezing the last possible ounce of productivity our of American workers and then throwing them on the scrapheap of unemployement or old age with reduced pensions and health insurance coverage. Since 1979, all of the income growth in our country has gone to the top 40 percent of households -- and nearly all of that went to the top 20 percent. Well, that isn't the way American built the world's largest middle class -- and the world's strongest economy. Henry Ford used to say he wanted to pay his workers enough to afford the cars they were building. Now, old Henry must be spinning in his grave: The average price of a car has jumped 70 percent in the past 10 years, while family incomes have climbed only 40 percent. The business community, our political leaders, and our mass mdia - - they all love to celebrate the American work ethic. But look at what has happened to the American worker. Think of the fellow who used to do America's heavy lifting, the working man whose formal education ended with his high school diploma. Over the last 20 years, his real income dropped by 30 percent. And now, it takes two and three wage earners to support a family. Meanwhile, corporate profits are up, up, up. In fact, according to Business Week, they're at a 45-year high. The stock market is up. Productivity is up -- it has been since the late 1970's -- nad it's way out front of compensation. This past year, workers' wages and benefits increased only 2.8 percent -- the lowest since 1981 -- while productivity was up 3.4 percent. Twenty years of declining wages and disappearing benefits are taking their toll on American life. There's a free-floating anger among hardworking people for whom the american dream is turning into a handful of ashes. For a growing number of American workers, blocking bridges seems like the very mildest form of protest. And that's not what their union leaders are telling them -- that's what their daily lives and telling them. I was in Europe last week, traveling with President Clinton, and I couldn't help but be impressed with what is going on in France. In this country, when we're faced with cuts in vital services that benefit workers and the poor, we shut down a few parts of the government. In France, the workers shut down the country -- even though only 8 percent of the work force is organized! I hope it never comes to that here in America. But, increasingly, American workers are down on their government, down on their employers, and down on their future. There's a new Times-Mirror poll that say 66 percent of Americans are concerned about being able to pay for health care if a family member gets sick. Fifty-seven percent are very concerned that their children will not have good job opportunities. Forty-eight percent say they are concerned about not having enough money for retirement, 44 percent not having enough to afford college, 34 percent worried about losing their job or taking a cut in pay. These numbers are all up 6 and 7 percent over March, 1994. A majority of the same repondents said they think business makes too much profit. And the vast majority say business doesn't value its employees, its customers or the communities they supposedly serve. Another poll dramatized how workers feel about their employers. The great majority of workers, it found, care a great deal about their work, but they no longer give a damn about their employers. And that's not surprising when you remember that their employers don't give a damn about them! This cycle of cynicism is eating away at our economy, which depends on consumer confidence and business optimism in order to thrive. American workers are running out of money -- and running out of hope. This holiday season, they are also loaded down with debt, and that is why retail sales are lagging. And, increasingly, people are blaming business -- and blaming their bosses -- for their precarious economic situation. Are they correct in where they place the blame? Take a look at this picture: Chase Manhattan and Chemical Bank announce a merger that will put 12,000 people out of work -- and their stock goes up. Does a rising tide now sing most ships -- except for the luxury yachts? What's wrong with this picture? Caterpillar inventories are fat, and sales are good, so they decide to install a two-tier wage system, schedule work on the weekends without paying overtime, and reject pattern bargaining. They force their workers out on strike, commit 300 unfair labor practices, and rack up record profits while they are doing it. After a year and a half, the workers are forced to come back to work without a contract because labor law enforcement is too slow to help them. How about this picture, right here at home: Citibank, which says is has a community commitment to New York City, decides to cut its building maintenance costs. So it replaces a cleaning contractor, whose workers are protected by a contract with an AFL-CIO union, with a contractor covered by a sweetheart contract with a so-called "independent" union. The new contractor replaces career janitors earning $15-an-hour with transients making $7.00-an-hour with no health benefits, who then have to depend on food stamps, AFDC, rent subsidies, and charity hospital care just to survive. Citibank says, "It's not our responsibility." And this picture: Gannett and Knight-Ridder are rolling in dough, so they decide they can afford a big strike. They force 2,000 Detroit News workers into the street for reasonable wages and job security. K-Mart, which is nearly bankrupt because American workers don't have enough money to spend, keeps the strike going. They're the only major advertiser to refuse to pull their ads. And this picture: striking machinist finally negotiate a tentative agreement with Boeing Aircraft to end a 50-day strike. Boeing torpedoes the settlement by announcing $2.5 million in executive bonuses on the very day workers are voting! What's wrong with these pictures? For American workers and their families, they are snapshots from hell. Writing in the New York Times last January, Louis Uchitelle added words to the pictures. "Something is wrong with America's economic boom," he wrote. "After four years of ever-stronger growth, people's wages should be going up faster than their expenses. For most people, they're not, and this is the first time in decades that a recovery has gone so long without putting more money in more pockets. And now, if the recovery runs out of steam in 1995 -- as so many economists predict -- that money might never show up." As The Times and dozens of other media have recently discovered, raising wages has recently become the number one issue in our country. And next year's elections will revolve around who can offer credible ideas not only for generating jobs but for increasing incomes. Look for some smart candidates and their campaigns to hand signs in their headquarters with this slogan: "It's wages, stupid." American workers and their families are suffering as they haven't suffered since the Great Depression. And I'm convinced that business is going to suffer as well, if we don't close what is commonly called the "wage gap" and remedy the excesses of our new "winner take all" economy. Let me offer all of you a sophisticated economic theory I learned in college -- the carrot and the stick. The "stick" is this: On behalf of workers and their families, the leadership of the new AFL-CIO is going to challenge our unions to get busy doing what we are supposed to do. It's not just happenstance that our nation's 20-year wage decline has coincided with a 20-year decline in the power and effectiveness of the labor movement. I firmly believe, and I know some of you agree, that strong unions are vital to a thriving, high-wage economy. But, quite frankly, we haven't been holding up our end of the stick. As I said in my acceptance speech at the AFL-CIO convention six weeks ago, our problem is stagnant wages -- America needs a raise. The solution is a larger, stronger, smarter labor movement. We're going to renew and rebuild our labor movement by pouring vast resources into organizing from the Sunbelt to the Rustbest and from software writers to sweatshop workers. Our message to American workers is simple and but powerful: Whether you wear a blue collar, a white collar, a new collar, or no collar, we can help you make your job better. We're going to be stronger and we are going to take it to greedy employers who've been picking our pockets and they trying to tell us we stupidly lost our wallets. Now, let me offer you the "carrot" I promised: Labor's victories can be your victories, too. With decent paychecks, we can buy your products and services. With a little respect -- as that song says -- we can help you compete in the global economy. We are going to challenge American business to use our brains as well as our backs, to let workers and their unions contribute to your decision-making process, to let us help you make the hard choices that affect our family budgets as well as your bottom lines. For American business, this is our message: If you choose to join us in building a bridge between management and labor, then together we can build a path to a new shared prosperity for American business and American workers. The choice is yours -- and the benefits can belong to you, to us, and all Americans. I want to leave time for questions, so I'll close by saying that, especially here in New York City, the labor movement has always been interested in building bridges -- and much, much more. Our Housing Investment Trust, for instance, has invested more than $1.5 billion of union pension funds in union-built housing projects nationwide. And, here in the New York area, it has financed over 2,000 units of housing, with a value of over $64 million, and we're looking to do more. Recently, the Trust joined with the New York City Housing Development Corporation to provide financing for the 1,000-unit West end Towers in Manhattan. Our $22 million helped this $156 million project go forward. Earlier this year, the Trust committed $28.9 million in construction and permanent financing for the Queens Boulevard extended care nursing facility. We are also reviewing several additional investments in the New York area. Among them are the Daly Avenue apartments in the South Bronx and the rehabilitation of a 2,000-unit co-op in Brooklyn. I want you to know that the AFL-CIO Housing Investment Trust and our newer Building Investment Trust both love New York. And we are anxious to work with more New York developers, community groups, non-profits, and labor organizations. In a strange twist of fate, our trusts have money to invest at a time when our members don't have much money to spend. We'd like to have your help in putting more of our money into your pockets through partnerships like the Housing Investment and Building Investment Trusts. And we'd like to have your help in putting bigger paychecks into the pockets of our workers and their families. That way, they can afford more of your good and services and condominiums and apartments! Labor and management should be builders not brawlers. Together, we can build a better New York and we can reclaim and rebuild America. So let's get to work. Thank you very much...