Democratic presidential candidate John Kerry speaks to United Auto Workers
members during a campaign stop where he received the UAW endorsement
John Kerry, the U.S. Democratic presidential candidate, took dead aim at President George W. Bush’s economic record yesterday, as he unveiled his first major policy proposal since winning his party’s nomination last week.
The senator from Massachusetts told a partisan crowd in Detroit that if he is elected President he would enact changes to the tax laws aimed at reversing the trend of U.S. companies shipping jobs to other countries — commonly referred to as “outsourcing” — telling those assembled that he would “end the tax policy allowing companies to defer U.S. taxes on profits made in other countries.”
The Democratic nominee said his tax reform plan would help him create 10 million jobs over four years.
“We have a tax code that does more to reward companies for moving overseas than it does to reward them for creating jobs here in America,” Mr. Kerry said. “If I am President, it will end.”
With much of the media attention still firmly focused on issues of national security and the war in Iraq, polling indicates that ordinary Americans are increasingly concerned with the sluggish state of the domestic economy and the weak labour market.
Since Mr. Bush took office in 2001, 2.2 million jobs have been lost in the United States. And though the labour market has improved in recent months, two years of interest rate cuts and tax rebates have failed to spark the kind of broad-based hiring that economists were expecting and politicians were hoping for.
The situation is especially bleak in the manufacturing industry. Manufacturers have been slashing jobs in the U.S. for 43 consecutive months, dating back to July, 2000. Over that time, more than three million factory jobs have been lost, many of them in working-class districts that voted for Mr. Bush in the last election.
“In the final analysis, it’s not going to come down to the war in Iraq, or how the Bush administration has handled the global campaign against terror,” said Donald Abelson, University of Western Ontario political science prof. “It’s going to come down to economics and the financial well-being of Americans. And job loss versus job creation is going to be huge.”
Outsourcing is an increasingly contentious part of the jobs debate, as U.S. companies shift operations to lower-cost countries. Countries such as India, China and Ireland have benefited from an influx of jobs ranging from high-tech design to customer service call centres.
According to published reports, over the past six months, 61,000 jobs have been created across the U.S. But during the recovery from the 1990-1991 recession, more than three times that many jobs were created.
“This is the slowest [employment] recovery we’ve seen,” said David Watt, senior economist at BMO Nesbitt Burns. “Last time people talked about the jobless recovery, now people are talking about a job-loss recovery…It’s the easiest thing for Kerry to hammer George Bush on.”
And there are signs that both Democrats and Republicans are awakening to Middle America’s frustration over the employment situation.
Treasury Secretary John Snow has said that the Bush administration would support a six month extension of federal unemployment benefits. Several members of the U.S. Federal Reserve have recently given speeches emphasizing the economy is “turning the corner” and that outsourcing is a key part of U.S. corporate competitiveness.
“This economy is strong, and it’s getting stronger,” Mr. Bush said in a speech in Albuquerque, NM, yesterday. The question is whether the job market will vindicate his optimism in time for next November’s vote.
