For Release: Thursday, September 08, 2005

Remarks of UAW President Ron Gettelfinger at the Detroit Economic Club - September 8, 2005

Thank you, County Executive Bob Ficano, for the leadership you give every day in our community and for that generous introduction. And thank you all for the warm reception.

I also want to thank our President, Beth Chappell, for inviting me back to the Detroit Economic Club. More importantly, I want to express my appreciation to Ms. Chappell and her staff for all they do to make the Detroit Economic Club one of this country’s leading forums for the discussion of public affairs.

I bring all of you greetings and best wishes from our entire International Executive Board. I want to also recognize former UAW President Doug Fraser who is here with us today.

I’m here today to talk about an issue that we as Americans don’t like to talk about: growing social and economic inequality in the United States.

We don’t like to talk about it because doing so forces us to confront the harsh reality that, on our watch, progress has stalled.

We don’t like to talk about this, but this past week two events thrust the problem of growing social and economic inequality squarely before us.

The first, obviously, was Hurricane Katrina; the second, the release of the U.S. Census Bureau’s annual report.

Typically, the release of a government report would have been lost in the wall-to-wall media coverage of a natural disaster of Hurricane Katrina’s magnitude.

This time, however, the heartbreaking images from New Orleans, Biloxi and other Gulf Coast communities put human faces on the Census Bureau’s statistics, and made the report’s picture of two Americas impossible to ignore.

MSNBC’s David Shuster, reporting from a devastated working-class neighborhood in Biloxi, was one of the first in the media to make the point that families were buried beneath the wreckage of their own homes not because they ignored warnings to evacuate, but because they didn’t have the money for a tank of gas.

As Shuster noted, Katrina struck at the end of the month, when people living paycheck-to-paycheck are broke. The same was true in New Orleans, a city where nearly one-in-three people live below the poverty line.

Countless New Orleans residents were stuck in Katrina’s path without cars or gas money or public transportation.

Stuck in the neighborhoods closest to the very same levees that experts at FEMA and the Army Corps of Engineers had warned for years needed to be repaired and strengthened.

Stuck on rooftops, desperately signaling for help.

Stuck in the New Orleans Convention Center and the Superdome, waiting for days for a drink of water and a bus ride to safety.

None of us will ever forget the horrific reports and images from New Orleans: babies dying in their mothers’ arms from dehydration … corpses floating down the flooded streets … police officers driven to suicide by overwhelming grief and hopelessness.

None of us will ever forget any of that. But we must do more than remember; we must act – as individuals and as a nation.

Much has already been done.

Relief and rescue workers, many of them volunteers, are working tirelessly, and heroically, to save lives and comfort the suffering.

Millions of Americans, joined by people throughout the world, are sending donations to the United Way, the American Red Cross, the Salvation Army and the many other wonderful non-profit and religious organizations involved in the relief effort.

Businesses, large and small, are donating money as well as water, food, vehicles, medicine, and other urgently needed supplies and equipment.

And thousands of families have opened their homes to families who lost everything in the hurricane and the flooding.

Much more help will be needed in the days, months and years ahead.

And while volunteers and charities will continue to play a vital role in helping the storm victims rebuild their lives, government must play the lead role in rebuilding the physical and social infrastructures of New Orleans, Biloxi, and other Gulf Coast communities devastated by Katrina.

Rebuilding the levees, roads, bridges, water systems, schools, hospitals, libraries and other public infrastructure destroyed or damaged by Katrina will be a monumental task.

Yet, if that is all we do, we will have failed to learn some of the most important lessons from this disaster.

One lesson is that we urgently need to re-order our national priorities.

The Administration and its allies in Congress have given massive tax breaks to the richest Americans, while cutting funding for everything from flood-control projects in the Gulf, to public education, to health care for children, to police and firefighters.

They sent our young men and women to Iraq to destroy weapons of mass destruction that never existed.

And they’ve kept them there, in harm’s way, with no strategy for winning the peace in Iraq and no exit strategy, while here at home urgent needs go unmet.

Time and again, the Administration and its allies in Congress have catered to the privileged and the powerful at the expense of children, the elderly, working families, and the poor.

To be fair, President Bush’s policies didn’t create poverty and inequality, but they most assuredly have made these problems worse.

As Nicholas Kristof wrote in The New York Times earlier this week – quote:

“Hurricane Katrina … underscores a much larger problem: the growing number of Americans trapped in a never-ending cyclone of poverty. And while it may be too early to apportion blame definitively for the hurricane, even President Bush’s own administration acknowledges that America’s poverty is worsening on his watch.

“The U.S. Census Bureau reported a few days ago that the poverty rate rose again last year, with 1.1 million more Americans living in poverty in 2004 than a year earlier. After declining sharply under Bill Clinton, the number of poor people has now risen 17 percent under Mr. Bush.” – End quote.

Think about that for a moment. Four straight years of rising poverty. Some 37 million Americans – 13 million of them children – living in poverty. And yet the Administration and its allies in Congress repeatedly have refused to raise the minimum wage from $5.15 an hour.

But apparently not everyone thinks pay raises are a bad idea. Forbes.com reports that last year the CEOs of America’s 500 largest corporations got an aggregate pay raise of 54 percent, bringing their total compensation as a group to $5.1 billion, versus $3.3 billion in fiscal 2003.

The Census Bureau also reported that last year 800,000 more working Americans joined the ranks of the uninsured; now 45.8 million Americans are without health insurance.

Last year, the median household income in the U.S. was basically flat for the fifth straight year, the longest stretch of income stagnation on record.

And an analysis of Census Bureau data by the Economic Policy Institute found that only the top five percent of households experienced average, real income gains in 2004; household incomes for the lower 95 percent were stagnant or dropped.

Income inequality was near all-time highs in 2004.

The time is long overdue to set a new course for America, to get off the low road and onto the high road.

We need a progressive economic strategy aimed at raising the living standards and improving the quality of life for every American, not just those on the top rung of the economic ladder – a strategy for competing in the global economy on the basis of skill, knowledge, innovation and productivity, not the low road strategy of slashing wages and benefits, busting unions, and lowering our labor and environmental standards to the lowest common denominator.

The “high road” strategy means investing in our people … investing in the best possible education for our young people from pre-school through post-graduate studies … in training to enable workers to master new skills and new technologies … and in decent health care for every American.

The “high road” strategy means trade, tax and other national policies aimed at keeping America a leader not only in research and development of new technologies and products, but a leader in manufacturing as well… a leader in manufacturing, as well.

Now, the UAW realizes that all these changes won’t happen overnight, but we’ll never move forward unless we take the first steps.

For instance, right now the President and Congress could help tens of thousands of hurricane victims – and millions more of America’s lowest-paid workers – by raising the minimum wage for the first time since 1997.

It is totally unacceptable that anyone in this country can work full-time, 40 hours a week, 52 weeks a year, and still live in poverty. Right now, the President and Congress could take the proposed repeal of the estate tax and proposed cuts in taxes on investment income completely off the table, and instead provide the funding needed to make “No Child Left Behind” a reality, not an empty promise.

Right now, the President and Congress could take an important step toward strengthening manufacturing, creating good jobs, improving our environment, and lessening our dependence on foreign oil by passing legislation to give tax credits to manufacturers to convert existing facilities to the production of energy-saving, advanced technology vehicles, power trains and other components.

Right now, we could take the first steps toward making the global economy work for working people by insisting that all trade agreements contain strong and enforceable protections for workers’ rights, human rights, and our environment.

And, right now, here at the Detroit Economic Club, we could send a powerful message to President Bush and the Congress by publicly committing to work together – business, government, and labor – for a national solution to America’s health care crisis – and, more importantly, by actually doing so.

What are we waiting for?

We all know that the U.S. health care system is terribly inefficient. We spend far more of our Gross Domestic Product, and far more per person, on health care than any other country – 75 percent more than Canada.

Yet nearly 46 million Americans don’t have any health insurance, and millions more are under-insured.

And for all our health care spending, the U.S. ranks near the bottom among industrialized countries on life expectancy, infant mortality and virtually every other measure – regardless of what we spend.

In fact, the infant mortality rate in our nation’s capital is more than double the infant mortality rate in Beijing.

Prescription drugs cost more in the United States than in any other country. One reason is that the pharmaceutical industry has more than 1,200 lobbyists in Washington – or more than two lobbyists for every member of Congress.

And that industry certainly flexed its muscles a few years ago when the Administration was putting together its Medicare prescription drug program.

Drug lobbyists were literally at the table drafting that legislation. So it’s no surprise that the legislation explicitly banned Medicare from using the leverage of mass purchasing to bargain lower drug prices. Some people say the answer to America’s health care cost crisis is more market competition in health care.

But, as economist Paul Krugman points out - quote: “In health care, the private sector is often bloated and bureaucratic. . . . The United States has the most privatized, competitive health care system in the advanced world; it also has by far the highest costs and worst results.” - End quote.

One reason for that gap between spending and results is that the U.S. spends more than $1,000 per capita – or nearly $400 billion – a year on health care related paperwork and administration. Canada spends about $300 per capita.

I should point out that the administrative costs in the private part of our health care system are dramatically higher than the administrative costs of Medicare; this is one instance where government is far more efficient than the private sector.

Let me add that cost-shifting isn’t the answer. There’s been more cost-shifting in the U.S. than other industrialized nations, yet our costs are rising far faster.

The UAW and General Motors, as you are aware, have been talking about health care for the past few months.

For reasons I’m sure you can all appreciate, I’m not going to talk about the specifics of those discussions.

But I do want to make it clear that the UAW understands that health care costs are a problem not just for General Motors … but for every other American employer.

That’s one of the reasons the UAW has been pushing for national health insurance since President Truman proposed it in 1948.

But some journalists and pundits make it seem like health care costs are General Motor’s only problem.

We don’t think it’s that simple. Health care costs alone – for that matter, total labor costs – don’t explain General Motor’s U.S. market share falling from 41 percent in 1985 to just over 25 percent today.

Decisions about products, marketing and advertising strategies, and many other factors – including bad U.S. trade policy – have something to do with that, too.

But, the conventional wisdom is that the UAW hasn’t done anything to help General Motors or other employers take costs out of the system, that we have our heads in the sand on this issue. Well, the conventional wisdom is just plain wrong.

In fact, the UAW has worked closely with General Motors to rein in health care costs – and health care costs for General Motors have increased at a rate below the national average because of our joint efforts.

Let me quickly highlight some of the things the UAW and General Motors have done on health care:

• In 2003 negotiations, we increased co-pays on prescription drugs; required mail order for maintenance drugs; pushed for broader usage of generic drugs – saving millions every year.

• We transformed traditional care into a “broad PPO” – the Traditional Care Network – reducing costs by 15 percent.

• We narrowed PPO networks to drive customers to more cost-efficient and higher performing providers – another cost saving.

• We took medical costs out of the Consumer Price Index for COLA calculations – another cost saving.

• Our Community Health Care Initiatives in Indiana and Ohio alone saved General Motors some $10 million in 2004 (according to General Motors).

• The electronic prescription initiative launched in southeast Michigan earlier this year by General Motors, Ford, DaimlerChrysler, and the UAW will save millions, while reducing errors and improving quality care.

• Additionally, we agreed to divert two cents of COLA each quarter per employee of the four-year agreement to secure pension improvements for current retirees and surviving spouses.

That all adds up to significant savings. And, as UAW Vice President Richard Shoemaker and I said in April and many times since, we are willing to continue working with General Motors, within the framework of our National Agreement, to reduce costs in health care and other areas.

We’re optimistic that we can find ways to do that. But we also know that we can’t solve the real problem. The real health care problem simply cannot be solved by any one union or any one company or any one set of negotiations, regardless of the size of the company.

Please bear with me on the following quote:

“This is a time of crisis and a time of decision, and … we cannot afford to postpone facing up to the real challenge of this crisis. The people of America have a decision to make. We believe the choice is clear.

“We can continue to accept the status quo and spend increasing billions each year to meet the skyrocketing cost of health care services;

“We can go on subsidizing the built-in waste and inefficiency of a system that will continue to fail to meet our essential health care needs;

“Or we can act in the knowledge that we must develop new ideas and new concepts and, through new social invention, create an appropriate system of national health insurance that provides an adequate and workable financial mechanism to make high quality comprehensive health care available to every American.

“I do not propose that we borrow a national health insurance system from any other nation. No nation has a system that will meet the peculiar needs of America.

“[But] I am confident that we have in America the ingenuity and the social inventiveness that is needed to create a system of national health insurance that will be uniquely American.” – End quote.

Those aren’t my words. They’re from a speech that Walter Reuther gave to the American Public Health Association in 1968.

The problem was clear 37 years ago; so was the solution.

And yet America is still the only advanced industrialized nation without national health care.

We have the best doctors, nurses, medical technicians and technology in the world.

Still, millions of Americans don’t get the health care they need when they need it.

For example, we could lower the infant mortality rate in this country dramatically simply by providing pregnant women adequate nutrition and prenatal care. It would cost only a few thousand dollars for each expectant mother, versus $35,000 or more for a week in a pediatric intensive care unit.

That’s the kind of choice on health care policy that we make in this country year after year. It is morally wrong and economically foolish.

Over the past few years, we’ve talked with a lot of people in the business community who care just as we care and who’ve told us, “You know, the UAW is right about national health insurance. Too bad it’s not politically feasible.”

Well, why not?

America is still a democracy and the President and Congress of the United States work for us – we the people.

We believe that we’ve let our policymakers off the hook, not only on health care but on the growing social and economic inequality in our country.

But let’s be honest about this: We’ve let ourselves off the hook, too.

And, we need to change that.

We need to stop listening to those who say we can’t have a health care system that works for all of us … or an economy that works for working people … or good schools for our children and secure retirements for our elderly.

We need to stop listening to those who shrug off growing social and economic inequality in America by saying, “That’s just the way it is.”

It’s not; it’s the way we, the people, let it be.

So, let’s stop listening to those who, wrapped in their smug complacency, keep telling us that we can’t.

Let’s listen instead to our own best instincts that tell us that we can.

Thank you very much.