A Senate hearing this week focused on how smart policy can ensure the U.S. can compete with China — and how workers can see the benefits, too.
Senators examined ways to put American workers at the center of U.S. trade policy – while also enacting policy to allow the U.S. to better compete with China – during a congressional hearing on Wednesday that also brought together labor leaders and other experts.
Titled “Defending and Investing in U.S. Competitiveness,” the Subcommittee on Fiscal Responsibility and Economic Growth hearing focused on ways to ensure U.S. competitiveness now and for the future.
“Economic competition from China presents serious challenges for American workers and businesses – but it also presents a call to action,” said Sen. Elizabeth Warren (D-Mass.). “We have a historic opportunity right now to invest in American workers and American families. In other words, to invest in U.S. competitiveness.”
What emerged from the hearing was a consensus that American workers need to be at the heart of U.S. competitive policies, both foreign and domestic. “We can and we must do better for our workers. It is the right thing to do. It is the competitive thing to do. And it is the only way to build a strong future for our nation and our people,” Warren said.
Action is currently underway to pass such policy measures. Just prior to the hearing, Democratic senators took part in a luncheon with President Biden to discuss the proposed $3.5 trillion reconciliation package. The package, in addition to the $1.2 trillion bipartisan deal for more traditional forms of infrastructure, is set to focus on “human infrastructure,” including childcare, eldercare, and education.
The fact that this hearing, which featured input from labor members and experts, took place as negotiations for the two infrastructure packages are underway is a sign that “President Biden puts labor at the center of all of his policies from trade to enforcement to wages to all of that,” said Sen. Sherrod Brown (D-Ohio).
A topic that seemed to dominate the conversation was the impact of China on American workers’ competitiveness. “We all recognize that China has been acting with impunity…in part because countries around the world have been refusing to act,” said Sen. Bill Cassidy (R-La.).
Recent years have seen the rise of Chinese prominence in industrial circles, which has been bolstered by unfair trade practices and lax environmental and labor standards. As Sen. Sheldon Whitehouse (D-R.I.) pointed out, the past few decades have seen an increasing number of U.S. companies offshore to China to take advantage of these low standards. As a result, America’s manufacturing base has suffered.
“It’s created this hollowing out of our communities. The impact isn’t just to the immediate workers who lose their jobs because of trade, but their communities,” said Dr. William E. Spriggs, who serves as a professor of Economics at Howard University and as chief economist for the AFL-CIO.
It’s also an issue of racial equity. Offshoring has led to a loss of 6 million American jobs – 1 million of which are jobs once filled by Black Americans.
“A lot of our manufacturing plants…are in communities where the poverty rate exceeds the national poverty rate,” said Roy Houseman, legislative director for the United Steelworkers. “These manufacturing plants are key employers for a lot of these workers. So…without the ability to review [trade agreements] and have worker input and have good analysis for you all to make a firm agreement,” American workers suffer.
Warren was quick to throw her support behind Houseman’s assertion. “We should be addressing workers concerns at the beginning, when the trade policy is negotiated, not trying to pay them off once they lose their jobs and their communities have been destroyed,” she said.
Unfortunately, China’s impact in the American manufacturing sector goes beyond just offshoring.
“China’s Belt and Road Initiative tracks some of the biggest illicit trade routes known for corruption, money laundering, and an array of traffic contraband,” warned David M. Luna, executive director of the International Coalition Against Illicit Economies (ICAIE).
Jane Nakano, a senior fellow for the Energy Security and Climate Change Program at the Center for Strategic and International Studies, and Yaya J. Fanusie, an adjunct senior fellow at the Center for a New American Security, also pointed to China’s financing practices as an area of concern.
“More needs to be done to address China’s financing practices for energy exports that have market distorting effects against cleaner energy sources and technologies as well as energy technologies that are manufactured by advanced industrial democracies, like the United States,” Nakano said.
While the discussions did drill down into specifics about each of these concerns, they were best summarized by a statement from Warren: “If we give American workers the tools that they need, they can compete with anyone, including… China.”
What are those tools? The two proposed infrastructure packages offer a good place to start. To truly succeed in out-competing China, robust action is needed. “Physical infrastructure is only one piece to a prosperous, equitable, and just economy. Our human infrastructure needs investment,” Houseman said.
This is because, right now, “the challenges that we face are very similar to Chinese families”, pointed out Dr. Mary E. Gallagher, who serves as the Amy and Alan Lowenstein Professor in Democracy, Democratization, And Human Rights at the University of Michigan. By pulling ahead in human infrastructure, American workers have the opportunity to outpace Chinese workers.
“Our competitors learned long ago that…to get people to work means more than roads and bridges,” Spriggs said. “It means the whole infrastructure, the rules and everything that goes with getting people to work. It means you have to have access to high quality childcare, eldercare, and you must have paid family leave.”
Added Warren: “I think of our advantages: we have a workforce that is more diverse…better educated…and more skilled. But in order to build on those advantages we have got to make investments in our people.”
“Those advantages are not accidental,” she continued. “They are the result of direct investment in education, in workers’ rights… These investments have frayed over the past several decades.”
