Issue: These two graphs perfectly capture both the success and failure of modern American manufacturing. Though productivity has increased over the past 30 years, it has done so at the cost of the employees driving it. Employers have taken every opportunity to layoff workers and automate manufacturing processes, leaving their loyal employees on their own and ignoring the human impact of their decisions.
Now this trend has come full circle with labor force participation down, stagnating median wages, and a middle-class is so hollowed out that average people now lack the purchasing power necessary to create economic growth. Rather than thinking about the long term sustainability of their businesses and the overall health of the economy, employers prioritized the bottom line and now we’re all paying the cost.
Proposal: We need to rethink where we place value in our economy. Gross averages such as GDP are useful for some purposes, but there is a human cost to growth that has been overlooked. It’s time for Congress to begin a national debate about the issue Supervisor Jane Kim has championed here in San Francisco - how to best regulate and tax emerging industries that increasingly rely on automation and machine learning. Ultimately, the data reveal that our tax code has failed to keep pace with the innovation that sends increasing amounts of wealth to the top, and it’s time to catch up before the American dream disintegrates entirely.
The WARN Act was passed in 1988 as a response to increasing instability in U.S. manufacturing, and mandated that most employers with over 100 employees give 60 days advance notice of anticipated plant closings and mass layoffs. While well intended, the WARN Act proved to be a toothless bandaid on a wound that has festered for decades, rotting the economies of local communities. If Congress wants to help the workers who have been laid off and are at risk of having their jobs automated across the country, we need to pass a 21st Century WARN Act.
When manufacturing employers with over 100 employees lay off employees or close a plant but are continuing to report net profits greater than the collective salaries of the employees they intend to lay off, they will have to choose one of three options. Employers can negotiate with individual employees to provide retirement benefits, workforce training, or a new role within the company with at least an equivalent salary to their original income. This will ensure that companies who can afford to keep their workers think twice about how valuable an employee is before laying them off, and that those who do lose their jobs aren’t left with no real opportunities.