A Real Jobs Plan!

By John Heptig

In 1791, Alexander Hamilton presented to Congress his plan on how to build a strong manufacturing industry in the United States, known as the Report on Manufacturers. One of the key components in this plan was the use of tariffs to protect American industries. After Congress implemented his plan, tariffs were used so heavily that between the late 1700s and the Civil War, they were used for 100 percent of the U.S. Government's revenue. Even between the Civil War and WWI, the use of tariffs was still responsible for the majority of revenue. For roughly 200 years until the advent of Reaganomics in the 1980s, tariffs were a major part of America's industrial policy. During this time period, America had transformed from an immature nation to a global super power. We had created the greatest manufacturing base the world had ever seen and plenty of good paying blue-collar jobs to go with it.

Coincidentally, right around the time Ronald Regan began implementing his free trade policies, America's 200 year history of a strong manufacturing base began to crumble with the outsourcing of jobs to third world countries. And once Bill Clinton signed the NAFTA and WTO trade deals, America had completed its transition to a full-fledged service economy where flipping burgers for minimum wage is almost guaranteed for anyone without a college degree and certainly for someone without a high school diploma. The days of a young hardworking American, starting a family right out of high school and supporting their family with a good paying manual labor job are over. Nowadays, Americans have to decide to hold off on marriage until they can finish college and find a decent job. Unfortunately, this often results in disappointment as well with many young Americans being forced to move back in with their parents due to the fact that the market for jobs requiring college degrees is now over saturated.

With the economic woes of our country stemming primarily from policies on the national level, the question then becomes, what can the State of Pennsylvania do to improve its own economy? To answer that question, I would like to introduce several key policies I would push to enact, if elected, to build a thriving economy in Pennsylvania:

Dramatically Increase the Minimum Wage:

A common mantra among those who are laid off and can't find work is "there aren't any jobs out there". And although I agree that the good paying blue-collar jobs of the past have been shipped to third world countries for slave labor, there technically are jobs. Unfortunately, most of these jobs pay minimum wage and are only to flip burgers, pump gas, or some other type of menial work. Therefore, if we are going to allow the wealthy elite to turn our country into that which runs on a service economy, then we should at least demand that the jobs that do exist must at least pay a living wage. As President Franklin D. Roosevelt once said, "No business which depends for existence on paying less than living wages to its workers has any right to continue in this country".

Now for those who would say something similar to, "You can't just enact laws to enforce a living wage. No one can define the term living wage.", I would say to them yes you can and Republican President Theodore Roosevelt has defined it quite clearly. He said a living wage is "enough to secure the elements of a normal standard of living + a standard high enough to make morality possible, to provide for education and recreation, to care for immature members of the family, to maintain the family during periods of sickness, and to permit a reasonable saving for our old age."

Anyone who puts in a solid week of work, should be able to, at a minimum, support his or her family by living comfortably within reason. They should not have to work 60 or 70 hours a week only to struggle to put food on the table. They should, in fact, be able to enjoy the fruits of their labor. Therefore, if the minimum was raised to roughly fifteen dollars per hour, or double what it is today, those who get laid off from their job and can't find any other work in their field will at least have the security of knowing that no matter what happens, they will always have the capability and opportunity to provide for themselves and their families.

Provide Single Payer Health Care to all Pennsylvanians:

In 2009, the Center for Economic and Policy Research did a study comparing small businesses between "22 rich democracies". Contrary to popular belief, the U.S. is way behind when it comes to entrepreneurship and small businesses, as this study shows. For example, when it comes to the smallest of small businesses, which is self-employment, 7.2% of Americans run their own business. We were ahead of Luxembourg but behind everyone else with Italy leading the way with a 26.4 percent self-employment rate.

When it comes to employment in small manufacturing businesses with less than 20 employees, the U.S. is only at 11.1 percent and is behind nearly all the other countries for which the OECD has data. Italy again leads this category with 30.9 percent. If you raise the cutoff to businesses with less than 500 employees, the U.S. comes in last with France at the top of the list at 63.7 percent compared to our 51.2 percent.

Even if you ignore manufacturing and compare other small businesses such computer upstarts and research and development, the U.S. still lags behind.

Now you may be wondering what this has to do with health care. Well the point that I'm trying to make is that in countries where health care is provided to all its citizens without the requirement of working for "the man", people are more likely to start their own business due to the security of a strong social safety net. In the U.S., however, starting your own business can be a major risk and struggle partially because health care would then be difficult to receive for you and your family.

I should also note that if Pennsylvania was to provide single-payer health insurance to all of its citizens, business would be more likely to move here since they would not have the burden of spending a fortune on health insurance for their employees.

Create a State Owned Bank:

Currently, there is only one state-owned bank in the United State, the Bank of North Dakota. This bank, which is funded by tax revenue and other government funds, is able to provide low cost loans well below the market value. In every state except North Dakota, state and local taxes end up in Wall Street banks. In fact, according to Marc Armstrong, executive director of the Public Banking Institute, at least one trillion of our local tax dollars end up in Wall Street Banks. Imagine how many businesses, students, and homeowners would benefit if that money was used towards low interest rate loans.

Opening a state-owned bank in Pennsylvania could have many similar benefits. Profits from the low interest rates of the bank could be used to help fund the Pennsylvania budget which could be used for government programs or to lower taxes. Instead of Pennsylvanians investing their money in the casino style banks that can end up getting bailed out by the government, they would be ensured that their money is held in a reliable state bank.

Invest in Renewable Energy and High Speed Rail:

In order to ensure a quality life for future generations and the generations of today, renewable energy sources are a must have. Not only are they good for the environment, but they are good for the economy as well. Investing in renewable energy in Pennsylvania and working with neighboring states to build a high speed rail system could have limitless potential and an exponential effect on business growth. Instead of Pennsylvania being the talk of the country when it comes to dirty oil drilling, I say lets make Pennsylvania the talk of the country when it comes to clean renewable energy.

Lower the Retirement Age:

The logic behind lowering the retirement age to improve the economy is pretty simple. If elder workers are able to leave their career a few years earlier, that will open up positions to hire younger workers. Instead of young workers collecting unemployment, they would have more opportunities to contribute to society while improving their skills by working on the job. Additionally, taxes they pay will help fund those who are retired. Therefore, instead of them taking money from unemployment programs, they will be paying in to social security.

Shorten the Work Week:

With all of the advancements in technology, there is no reason human beings should not be as productive today in a 32-hour work week as they were fifty years ago in a 40 hour work week. Additionally, with a shorter work week, those who are unemployed will have more opportunities to find work by picking up those extra hours given up from the employed workers.

Hire More School Teachers:

More teachers means smaller classes, which means each student would have more one-on-one help, which means they will be more successful. Additionally, more working teachers means less unemployed teachers.

Provide Free College Education:

Funding college in a similar fashion as high school means that more students have access to higher education and as a result, society as a whole advances faster. Furthermore, when students are not required to borrow loans and have the burden of debt when they graduate, they will have more opportunities to invest their money into starting their own business or even just planning for their future more wisely.

As you can see, my approach to improve Pennsylvania's economy is a little unorthodox + I don't simply accept the status quo. Day after day, political leaders take a tepid approach to problem solving. Whether it's the fear of appearing radical or just plain ignorance, they continue to use the same old approach over and over again. If we think we can bring jobs back from third world countries which use slave wages simply by closing a few tax loop holes and lowering the overall tax rate slightly, we should think again. If we believe spending money on roads and bridges is somehow the answer we have all been looking for, we should think again. If we think allowing gas drillers to potentially pollute our drinking water is going to make some radical improvement in the unemployment numbers, we should think again. We need more than a just a few band-aids to our economic structure. We need, in some ways, a complete overhaul. We need to think big and we need political leaders with the courage to do so.

There was a time when our political leaders did think big, however. For example, in 1817, New York Governor DeWitt Clinton led the way for the construction of the Erie Canal. In 1862, President Abraham Lincoln signed the Pacific Railway Act to aid in the construction of the first transcontinental railroad. In 1935, FDR signed the Social Security Act. In 1956, Dwight Eisenhower signed the Federal-Aid Highway Act to build a 41,000 mile interstate highway system. In 1961, John F. Kennedy announced his plan to put a man on the moon before the end of the decade. And in 1965, Lyndon Johnson signed the Medicare bill into law.

It's hard to imagine any of these achievements happening if the political atmosphere was the way it is now back in those days. Politicians now run from the word socialism like cowards. They fear if they speak of big ideas they will look either naive or extreme. And with big money running politics it's not difficult to understand why. But this is no excuse + we must be determined to stand strong and move forward despite criticism and condemnation. We must return to the days where America thinks big and does big things. If I'm elected, I will bring this attitude and this conviction to the Pennsylvania General Assembly.