Corporations and the Middle Class
President Obama recently proposed that Congress enact legislation that would provide an estimated $200 billion in tax breaks for businesses that invest in new plants and equipment, a $100 billion extension of the business tax credit for research and development, and $50 billion over the next decade to improve roads, rails and other infrastructure, to create jobs in America. However, CNN Money wisely reports, "the tax breaks might actually cost some jobs if a business buys technology from overseas that improves productivity rather than hiring more U.S. workers."
While tax breaks provide incentives for companies to invest, Congress must insure that investment tax credits apply only for American made products which result in American jobs. In addition, Corporate America must be asked to contribute its fair share to create good-paying jobs for Americans.
More than 14.9 million American workers remain unemployed while America's employed are being squeezed for more productivity as wages continue to fall and Corporate America continues to profit at the expense of Americans.
We must reverse the cycle.
According to Newsweek columnist Robert Samuelson, companies on Standard & Poor's 500 index are "sitting on huge cash reserves: a record $838 billion."
Just as President Obama wants to use tax incentives funded by taxpayers to help create jobs, Corporate America must accordingly act responsibly and also invest in our nation.
Corporate America has been cutting jobs while sitting on a record $838 billion. This action is reminiscent of the Goose that Laid the Golden Egg story. There was a special goose. Every day the goose would lay a golden egg that made a man and his wife very rich. The couple thought if they could cut the goose open - they could become even richer. So they killed the goose but found that there were no golden eggs inside, and because the goose was dead, no more golden eggs were produced.
Labor is America's goose that drives our economy at home because labor produces real wealth and wages, the golden egg, that builds our economy from the ground up. If we continue to out-source American jobs to foreign countries and cut our workforce and reduce wages there will be no more golden eggs to sustain our nation's economy.
A simple premise supports the economic benefit derived from good-paying middle class jobs. When Americans work and are paid good wages, income enters the stream of commerce. Workers in turn spend in restaurants, car dealerships, shops and other local small businesses. This generates income for businesses and revenue for our cash-strapped local governments to pay for public services such as schools, public safety, roads and libraries.
Henry Ford understood the progressive concept of creating good-paying jobs because he helped to create the middle class. In 1914, auto workers were paid an average of $2.34 a day and worked a 9-hour shift. Ford shocked the world when he increased many of his employees' pay to $5.00 a day and reduced the shift to an 8-hour work day. His foresight enabled Ford employees to lead more productive lives with their families and also allowed them to participate in the American dream of owning a home and purchasing a car.
Similarly, Corporate America must step up before it is too late and invest its record $838 billion by creating more American jobs. Investment in rebuilding outdated energy, transportation, communication, sewage and water infrastructures and manufacturing plants will benefit our nation's long term economic development and is good for America.
America has always been the land of opportunity which is why Corporate America must begin to renew its investment and partnership in our nation's job force and keep America's promise to keep the American Dream within reach.
To ignore the plight of the American worker will kill the goose that lays the golden egg.
Tracy Emblem is an attorney in Escondido.