Beyond the Weekend: New data reveals how unions benefit communities, consumers, employers, and employees

You’ve probably seen that bumper sticker that says, “The Labor Movement: The Folks Who Brought You the Weekend.” While the sentiment rings true – and not just about the weekend, let’s be clear -  it also evokes a kind of “what have you done for me lately?” feeling.

It turns out the answer is: quite a bit.

Beyond the Weekend, a publication of the American Rights at Work Education Fund, features highlights from five new reports demonstrating the broader value of collective bargaining, including:

• Frontline healthcare workers collaborating with hospital administrators to find real solutions that improve care and control costs.

• Partnerships between union-represented teachers and school administrators boosting student achievement in schools that serve disadvantaged families.

• Union members’ pensions funding public and private works projects that create good American jobs.

• Building trades unions partnering with community groups to create new career paths for workers of color and women.

• And through their unions, childcare providers gaining new skills and resources to improve how they care for children of low-income families.

Read more here » (pdf)

Nearly 1 million Washingtonians are uninsured; more than 155,000 residents are on the wait list for Washington’s Basic Health Plan (BHP), which shares costs for basic health insurance between participants and the state.

Fact Sheet: Why Washington should act now to fix the health insurance gap

In 2014 the Affordable Care Act (ACA) will cover those eligible for BHP, along with hundreds of thousands of others who are now without health coverage, funded with federal dollars. But unless Washington extends BHP coverage now, local workers and families will face two more years of unaffordable care, and the state’s economic recovery will suffer as a result.

There is a better alternative – one that does not require raising taxes or diverting funds from other public priorities: Legislators can expand Basic Health enrollment by authorizing revenue bonds for a portion of ongoing revenues from the state’s Tobacco Settlement fund.

Seven reasons to expand Basic Health coverage in 2012

Fewer people working without health insurance means lives – and quality of life – saved. People who are uninsured are more likely to be ill and die prematurely.[1] Although the Affordable Care Act (ACA) will ensure coverage in 2014, disease and illness won’t wait until then. Even if people are able to get coverage in 2014, it may be too late for effective treatment. Breast cancer doesn’t wait for insurance coverage.

More and more adults work for employers who do not offer health insurance. Nearly two-thirds of uninsured adults are working and more than three-fourths live in poverty.[2] Expanding enrollment in the BHP would give many of these low wage workers access to health coverage, since the vast majority of these individuals meet the criteria to qualify for Basic Health.

It is not a free lunch. Just as with private insurance, participants pay a significant portion of the costs, while the state picks up the remainder. Premiums range from $17 a month to $303 a month per person, depending on family income and age.

State investments in health insurance help boost economic productivity. Worker health issues result in national economic losses estimated at $260 billion annually, or 2.4% of GDP; the increased worker productivity resulting from health coverage is an important economic investment.[3]

Health care investments now will protect jobs. Nearly 10% of the state’s nonfarm jobs are in health industries.[4] While growth in these sectors has been positive, there has been a clear reduction in new jobs as the state has reduced investments in health.[5] Growth in the health care sector flattened substantially during the same time. By increasing state investments in health services, legislators could protect jobs and increase economic growth throughout all industries. Every $1 million invested in basic health protects 14 jobs in industries across the state.[6]

The BHP is an investment in Washington’s women and families. Nearly 300,000 people work in health care sectors across the state, and more than three-quarters of them are women.[7] Today’s families are increasingly reliant on women’s earnings – especially since the Great Recession left significantly more men without jobs. Protecting and creating jobs in the health sector increases the economic stability of women and their families.

Expanding preventative care means better emergency services for all. When preventive services are unavailable, people turn to emergency care to address health needs – filling waiting rooms, increasing wait times and limiting space for everyone. Expanding Basic Health coverage means people can see doctors for regular preventative care instead, enabling emergency rooms to handle trauma cases quickly.

How revenue bonds can expand the BHP without raising new revenue

Washington state has already cut billions from vital public services, and many public priorities are competing for remaining scarce funds. But there is a means to secure funding to increase BHP coverage: issue bonds for a portion of the Tobacco Settlement payments.

Revenue bonds are a way to bring future revenue to the present. It does not involve a tax increase, so it requires only a simple majority of both the House and Senate to authorize. By issuing the bonds, future payments to the General Fund from the Tobacco Settlement will be smaller, as a portion will have already been distributed to the Basic Health Plan Stabilization Account.

Delaying coverage for Washingtonians until 2014 will only increase uncompensated care debt, delay financial stability for workers and families, and slow economic growth for the state. By contrast, making the investment in the BHP now – when the economic recovery is fragile – will:

• Enable low-income workers to have the peace of mind and wellbeing that comes with health coverage;

• Contribute to a more robust economy in years to come by increasing productivity, protecting and creating health care jobs, and slowing the growth of uncompensated care costs.

Once the Affordable Care Act is fully implemented, federal dollars will free up existing state money not dedicated to health coverage for investment in other public services.

Senator Karen Keiser

As legislators attempt to hammer out a final state budget agreement, Sen. Karen Keiser (D-Kent) has introduced a bill to expand Washington’s Basic Health Plan (BHP) for the first time in more than a decade – without raising taxes or diverting funds from other public priorities.

According to an analysis by the Economic Opportunity Institute, Keiser’s measure would reduce the number of uninsured by enabling coverage for more than 130,000 working Washingtonians, including 95,000 on the BHP’s wait list.

The bill would also provide a needed boost to Washington’s economy – EOI’s study notes that every $1 million invested in Basic Health protects 14 jobs in industries across the state.

The number of people without health insurance in Washington has climbed over the last decade, even during economic upswings. At the same time, BHP enrollment in has fallen dramatically, due to several years of compounding state budget cuts. Today, the BHP covers only 35,000 residents; more than 157,000 are on the wait list due to shortfalls in state funding.

Senate Bill 6632 expands Basic Health coverage by authorizing the state to issue revenue bonds for a portion of future Tobacco Settlement revenues. The funding would be sufficient to expand Basic Health through the end of 2013, when the federal Affordable Care Act (ACA) will ensure health care for Basic Health enrollees. The measure requires only a simple majority to pass the legislature.

Policy Brief: Doing better than "getting by": How to expand WA Basic Health

The number of people without health insurance in Washington has climbed over the last decade, even during economic upswings. At the same time, enrollment in Washington’s Basic Health Plan has fallen dramatically, the result of several years of compounding state budget cuts. Today, Basic Health covers only 35,000 residents, and more than 157,000 are on the wait list due to shortfalls in state funding.

In 2014, the Affordable Care Act (ACA) will ensure health care for all those covered by Basic Health. In the meantime, lawmakers may choose to maintain Basic Health through 2013. However, mere maintenance will not address the failure of the private insurance market to provide coverage to growing numbers of Washington residents.

There is a better alternative – one that expands Basic Health coverage without raising new revenue: The legislature can authorize the state to issue revenue bonds for a portion of the Tobacco Settlement revenues. Doing so will enable Basic Health to cover more than 155,000 people –  including the majority on the current wait list – as Washington voters originally intended.

Factors that favor revenue bonding:

• Bonding existing revenue requires only simple majorities of the legislature to pass.

• A lump-sum payment is worth more today than an equivalent stream of revenue apportioned to future years. The future value of $1 million is not as much as its present value. This devaluation is compounded by inflation. For example, the purchasing power of $1 million 20 years ago would require nearly $2.5 million today to have the same value.

• Bonds issued by the Tobacco Settlement Authority are the obligation of the Authority, not the state.

Get the full story in EOI’s latest policy brief: Doing better than “getting by”: How to expand WA Basic Health

[By Ann O'Leary - cross-posted from Huffington Post]

Ever wonder what happens to a worker who becomes disabled for weeks from injuries in a car accident? Or the worker who has a baby but no maternity leave? Or the worker whose parent, suffering from Alzheimer’s, falls and hits his head and can no longer live alone?

Here’s what happens, and neither option is appealing:

One, they stay home, a necessity in such cases as an auto accident or giving birth. It risks losing pay, and, sometimes, the job. In either case, it can set off a downward spiral. A 2001 Harvard Law School study found that a quarter of two-income couples who filed for bankruptcy did so after one of them missed work to recover from an illness or to care for a family member suffering an illness.

Or, two, they can work through the illness or injury, or they can return to work before recovery is complete. Neither is ideal — for the health of the worker or for the affected family member. Workers who return too soon often relapse, causing more lost productivity; and in the case of sick kids, The American Academy of Pediatrics says “family-centered care” is a key contributor to better health outcomes but for kids whose parents can’t stay home their health suffers.

Whichever the choice, workers are left to fend for themselves with no protections against lost income. It happens every day across America, and in each instance, it’s neither right for the family nor smart for businesses or the economy.

Slowly, that’s changing. While partisan rancor in Congress undermines the possibility of passing legislation any time soon that would require employers to offer a minimum number of paid sick days, or create a national insurance program for paid family and medical leave, a handful of cities and states have enacted programs that safeguard workers and their families, and others are considering them.

Connecticut along with San Francisco, the District of Columbia, and Seattle now all require at least some employers to offer a minimum level of paid sick days. California and New Jersey now offer paid family and medical leave insurance, allowing workers to take up to six weeks of leave for the birth of a child or to care for a seriously ill family member and longer to recover from one’s own illness.

Now, it’s Washington state’s turn.

Recently, I had the privilege of testifying before a joint session of its House and Senate labor committees on two important measures under consideration. One would provide funding for a program enacted in 2007 yet never implemented that would allow workers to take up to 6 weeks of paid parental leave. The other would expand that law to allow leave for family care and for a worker’s own medical needs. Lawmakers have yet to identify funding streams.

Despite the urgent need in a changed world, where we no longer have stay-at-home moms to care for ailing family members and the obvious medical, economic and social benefits of paid leave, some committee members seemed unconvinced. They expressed concerns about the impact on the state budget and on businesses.

Those concerns are misplaced.

Administrative costs would be minimal because Washington state, like all states, has an agency already processing unemployment insurance claims. Adding paid family leave would take a little time but not a lot of additional money.

The business argument doesn’t wash either. In California, where paid family leave is funded entirely through a payroll tax on employees, a new study by researchers Ruth Milkman and Eileen Appelbaum found that 89 percent of state businesses viewed paid family leave as positive or having no effect, 87 percent said it generates no additional costs and 9 percent said it actually saved money.

Families are struggling today and the economic costs of being ill, having a baby or taking care of a sick family member only make families and children more vulnerable.

But it’s not only families who lose — employers lose valuable employees who must choose care over work, and the economy loses income that is reinvested in the community.

The question before lawmakers in Washington state and else where isn’t whether workers should be able to take time off to care for ill family members or to recover, without losing pay. The real question is why all states aren’t following California, New Jersey, and Connecticut with a smarter economic policy that protects families against these risks, reduces the shock on business and the economy and preserves the health and well-being of America’s next generation.

Ann O’Leary is Director of the Children and Families Program at The Center for the Next Generation and Lecturer at the Berkeley School of Law.

Washington’s Basic Health Plan is designed to fill the gap, but years of budget cuts have reduced enrollment from a high of 135,000 in 2002 to just 35,000 today. Today, over 157,000 Washington residents who qualify for Basic Health are wait-listed – while state legislators debate yet more cuts to the program. But further budget cuts won’t just undermine Basic Health – it may also harm the state’s still-fragile economic recovery, since the available data indicates that every $1 million invested in health care funds approximately 14 jobs across all sectors in Washington.

The weakening pulse of health insurance coverage in Washington

Employers are shifting costs for health coverage to their employees, and employer-provided health coverage rates have fallen even in periods of economic growth.(1)

In Washington, the proportion of employers offering health coverage to full-time employees dropped from 76% in 2002 and 2003, when the state was coming out of a recession, to 66% in 2007, when the state was experiencing strong economic growth. In 2010, just 54% of employers offered health coverage to full-time employees.(2) The share of Washingtonians under 65 receiving employer-sponsored health insurance fell from 66.9% in 2001 to 60.6% in 2010.

In 2010, nearly one million Washingtonians had no health coverage. Among adults aged 18-64, the rate of uninsured is now 22.4%, up from 20.8% in 2009 and 17% in 2008.(3) At least one in four Washingtonians are under-insured, according to the Washington State Office of the Insurance Commissioner (OIC) (4), and the rate of uninsured is not expected to drop when the economy recovers.(5)

Designed to fill the gap, Basic Health now undermined by repeated budget cuts

Washington’s Basic Health Plan (BHP) has provided medical insurance coverage for low-income Washington workers for nearly 25 years. The state subsidizes health insurance for eligible residents, who share costs by paying monthly premiums, annual deductibles and co-pays to receive care.

Premiums are based on gross family income – to be eligible, individuals and families must have income below 200% of the federal poverty level, or $3088 per month for a family of three.(6) Health care is provided by the private sector; organizations that partner with the state include Community Health Plan, Group Health and Molina.

Basic Health became a permanent state program in 1993. In 1995, the Republican-controlled Legislature retained and expanded Basic Health, even while dismantling Washington’s implementation of universal health coverage. At that time 37,580 Washingtonians were enrolled in Basic Health. By 1997, enrollment had rocketed to 124,348.(7)

As enrollment continued to rise in the years that followed, Washingtonians demonstrated their support for Basic Health. In 2001, voters overwhelmingly approved a tax initiative that dedicated the bulk of its revenue to expansion of Basic Health coverage: Initiative 773. The measure, which increased the tax on cigarettes by 60 cents, was approved by two-thirds of voters with the intent to increase the number covered by Basic Health to 175,000 residents.

However, over the last decade Basic Health has become a regular target for spending reductions; state lawmakers have decreased funding and lowered enrollment levels. As a result, coverage has fallen dramatically; in less than 10 years, about 100,000 people have lost Basic Health benefits. As the rate of uninsured has climbed, the wait list has swelled. Officially established in May 2009, the wait list has grown to more than four times the number of enrolled in just two and half years.(8)

Basic Health: A strategic investment in jobs and productivity

Basic Health doesn’t just protect the economic security of tens of thousands of workers in or near poverty – it also protects thousands of jobs in the health care sector, and helps maintain Washington’s economic productivity.

A healthy workforce is a productive workforce. The Commonwealth Fund found that worker health issues resulted in national annual economic losses of $260 billion, or 2.4% of gross domestic product (GDP). Commonwealth concluded that providing health coverage boosts worker productivity by increasing access to important preventative care, and maintaining worker health is a positive economic investment.(9)

Health care is a key sector of the economy in most regions of the state.(10) Not only do health care dollars directly impact local economies, they also support workers who put earnings back into the economy. This creates an employment multiplier effect: as workers spend their income, it indirectly maintains and generates job opportunities throughout the state. In Washington, every $1 million invested in health care funds an average of 14 jobs across all sectors.(11)

Sources:

1. John Holahan, “The 2007-2009 Recession and Health Insurance Coverage,” January, 2011, Health Affairs 30, 1 (2011): 145-152.

2. Washington Employment Security Department, “2010 Employee Benefits Survey Report,” Labor Market and Economic Analysis, August 2011.

3. U.S. Census Bureau, 2010 American Community Survey, Tables DP03 and B27001 for Washington.

4. Mike Kreidler, “State of the uninsured: Health coverage in Washington State,” December 2011, Office of the Insurance Commissioner, www.insurance.wa.gov.

5. Mike Kreidler, “A problem we can’t ignore: The hidden and rapidly growing costs of the uninsured and underinsured in Washington State,” November 2009, Office of the Insurance Commissioner, www.insurance.wa.gov.

6. Washington State Health Care Authority, http://www.basichealth.hca.wa.gov/.

7. Washington State Office of Program Research, February 2, 2011 presentation to the House of Representatives Ways and Means Committee, http://apps.leg.wa.gov/cmd/default.aspx?cid=WAYS.

8. Washington State Health Care Authority, data request, received December 9, 2011.

9. Karen Davis, et. al., “Health and Productivity Among U.S. Workers,” August, 2005, The Commonwealth Fund, http://www.commonwealthfund.org/usr_doc/856_Davis_hlt_productivity_USworkers.pdf.

10. Mike Kreidler, “A problem we can’t ignore: The hidden and rapidly growing costs of the uninsured and underinsured in Washington State,” November 2009, Office of the Insurance Commissioner, www.insurance.wa.gov.

11. Office of Financial Management, “The 2002 Washington Input-Output Model,” http://www.ofm.wa.gov/economy/io/2002/default.asp.

John Burbank, Executive Director

From the Everett Herald | By John Burbank

There’s no other way to say it: Health coverage for new employees is dismal in Washington.

Barely half of Washington employers actually offer health coverage to full-time employees. Then there is the traditional waiting period until you qualify, the employee share of the health costs … and it’s probably best to not even calculate the cost of full family coverage.

But Washington also has a home-grown solution. Thirty years ago two state senators (George Sellar, R-Wenatchee, and Jim McDermott, D-Seattle) teamed up to create the Basic Health Plan. As Sellar put it, lunch-bucket workers deserved health coverage, even if their employers did not provide it. Participants pay premiums and co-pays, and in turn, Basic Health provides coverage and peace of mind for workers and their families who have nowhere else to turn.

Over the years Basic Health has been a bipartisan target for cuts, whittled down in each succeeding fiscal crisis. Enrollment was set for 200,000 by the Republican-controlled 1995 Legislature. But the funding never really came through. Instead, legislators gradually squeezed down enrollment and funding, even while the need for health coverage grew.

In 2001, Basic Health enrollment was capped at 125,000 — but that upside-down situation was turned right side up that fall. Two-thirds of voters approved an initiative to increase cigarette taxes by 60 cents and use the money to expand Basic Health coverage to 175,000.

Coverage briefly expanded, but when the 2001-2002 fiscal crisis hit, the first thing the Legislature did was cut Basic Health funding. And that’s been the storyline for the past decade — cut and cut while the need for health care grows and grows. Today just 35,000 people are enrolled in Basic Health, and five times as many — 157,000 — are on the waiting list.

So what can the Legislature do now to cover the growing slack of employers who don’t provide health coverage and the hundreds of thousands of unemployed workers who have no access to health insurance? The answer is “revenue bonds.”

We’ve done it before. When Gov. Chris Gregoire was attorney general, she shepherded a settlement with tobacco companies that forced them to pay states for some of the health costs of tobacco-pushing through advertising. Washington’s portion is $4 billion over 25 years.

During the 2002 fiscal crisis, the Legislature took a portion of that $4 billion and created revenue bonds, essentially selling off a portion of the future stream of tobacco settlement money to get an immediate lump sum of $450 million. The measure passed with Democratic support (plus one Republican) by simple majority vote, and the governor signed it into law.

Today, 1 million people in our state have no health coverage, and the remaining 35,000 people on Basic Health may lose it if funding is cut. There’s a bright spot on the horizon if we can get to it: the federal government will finance health coverage starting in 2014 as part of the Affordable Care Act.

Should we just let people hang out there for two years, with disease, injury and death hanging over their heads? No. We need to build a bridge to 2014 — and thanks to the Legislature’s precedent for revenue bonds, we’ve got one.

Rep. Hans Dunshee (D-Snohomish) has proposed that the state sell revenue bonds by pledging about 40 percent of the remaining stream of tobacco settlement as payment. This would generate $350 million to finance Basic Health. A portion of that funding could be matched by the federal government, thanks to Sen. Maria Cantwell making sure funding for basic health was part of health care reform. In total, about 100,000 people would retain or gain health coverage.

With 1 million people lacking health insurance, covering 100,000 is more than a drop in the bucket — and less than what we ultimately need, which is health care for everyone. But we might not get to universal health coverage if we don’t take an incremental step to ensure basic health for our friends, our neighbors and ourselves. There is a way. Now the Legislature and the governor have to find the will.

Brendan Williams

Guest column by Brendan Williams, former Washington State legislator

When 61% of Ohio voters rejected Issue 2 and repealed an anti-labor bill signed into law March 31 by Republican Governor John Kasich on Election Day, considerable attention was paid to the fact that the repealed bill sought to impose draconian curbs upon the ability of public workers to collectively bargain.  Indeed, it flatly prohibited bargaining in certain cases, including in publicly-funded charter schools.

Less noticed, perhaps, was that among those new provisions overturned was Section 4117.08, which stated, “The provision of health care benefits for which the employer is required to pay more than eighty-five per cent of the cost is not an appropriate subject for collective bargaining.”

In other words, Ohio voters rejected the idea that it should be impossible for public workers to pay less than 15% of their health care costs.  Following this repudiation, the state and public workers sat down to bargain again.  In a deal announced November 16 by the Ohio Civil Service Employees Association, AFSME Local 11, the state agreed to extend the current contract three years from its expiration date of February 29, 2012.

Thus a state with one of the nation’s most anti-union governors has agreed, through 2015, to hold the state workers share of health care premium costs at the level – 15% – to which they rose here in Washington in last year’s legislative session.

That’s a lesson for both Republicans, and supposed Democrats, in the Washington Legislature who keep calling on state workers to pay an even higher share of cost.  It should give them pause when the special session begins November 28.

Even Wisconsin Governor Scott Walker, despite a series of anti-union measures contributing toward a current recall effort directed against him, had not sought to increase health care premium costs for state workers to the level now required in Washington.  A Wisconsin state worker now pays $208 a month for family health care coverage.  In comparison, the choice between three substantive Washington benefits plans would cost a state worker’s family from $236-288 a month.

By “substantive” I do not refer to the new so-called “Consumer Driven Health Plan” that the state is offering combined with Health Savings Accounts.  This Republican idea, which has been offered by Republicans at the federal level as an alternative to universal health care, somehow passed a Democratic Legislature and was signed into law this past session.  It can be regarded as the antithesis of a universal health care system.  By cherry-picking the healthy, this new scheme may end up raising costs for other state workers.

Compare Washington to neighboring Oregon, where state workers are valued.  In Oregon, the state worker share of health care premium costs went up to a historic high of 5% – just one-third of the burden in Washington.  To help ease that burden Oregon state workers will receive a 1.5% cost-of-living-adjustment (COLA) next month, coupled with a 1.45% COLA in January 2013.  A 2.95% COLA looks pretty good compared to the 3% pay cut state workers here were forced to take, along with their increased health care costs.

Connecticut is among those states that went further, giving state workers 3% annual wage increases through 2015 while locking in their health care benefits through 2022.  Even the Republican governor of Missouri’s Office of Administration is recommending legislators grant state workers a 2% wage increase.

Here in Washington, the idea of having state workers pay more toward health care is really a false solution to a revenue shortfall not of their making.

For the remainder of the biennium, requiring state workers to pay 25% – as opposed to 15% – of their health care premium costs would only “save” the state $28 million (in comparison, Gov. Gregoire thinks she can save $16 million simply by reducing the state’s contribution by $25 a worker to reflect actual health care utilization).

That $28 million is compared to a revenue shortfall of $1.4 billion, and the very real possibility of as much as $2 billion in cuts to both bridge this gap and restore reserves.

Yet, strangely, the idea of further gouging state workers generates disproportionate interest from the likes of the Seattle Times’ editorial board and certain conservative legislators of both parties.

The fact that, as of a September 2011 headcount, there were 6,549 fewer state workers than three years prior – with those left doing more for less – has not abated the appetite of those who wish to see them further suffer.  Meanwhile the Wall Street architects of our economic collapse prosper.  We can expect further calls for contracting out, despite findings like those of the Washington, D.C.-based Project on Government Oversight that the average contracted project costs government 83% more than its government-run equivalent.  A proposed cut like $5.4 million for medical interpreters would result in outsourcing such work to those, via telephone, not on the scene – jeapardizing patient safety.

Even assuming another 1,500 or so state workers’ jobs are lost under the proposed budget, and that another $28 million could be flogged out of those remaining – further depressing morale and increasing financial strain, credit defaults, and home foreclosures – the question would remain as to how the rest of the state’s revenue problem would be addressed.

Beyond further attacks upon state workers, we have seen few concrete ideas offered by conservatives.  Thus, the question for a Democratically-controlled Legislature is: Toward what end would we want to continue down the path of treating our state workers worse than John Kasich and Scott Walker?  While others rally will we fold?

Stan Sorscher, EOI Board Member

Guest post by Stan Sorscher

In a somewhat contentious Town Hall meeting, some of my Congressmember’s constituents, including me, were challenging his adherence to “free trade” policies. In his defense he said, “Go watch The Constant Gardener.” So I did.

Many scenes are shot in Africa, with vivid images of urban slums and timeless poverty, where people express dignity, strength and courage every day. A foreign pharmaceutical company is conducting drug trials using legions of Africans as test subjects. The experimental protocol ignores the villagers’ interests, killing many of them, providing none of the protections we would normally expect of clinical trials in a Western democracy.

The African city has no institutions of civil society (other than the inherent good nature of the people) – weak and distant government, bribery, police corruption, overwhelmed hospitals, a primitive public health agency, no scientific community, no free press or journalism, organized social or political activity…except for the local police, who serve the drug company. Every mother, father and child in the clinical trial is reminded of his or her own insecurity. Everyone dreads being singled out for anti-corporate behavior.

Things go badly, as you might imagine.

The movie is a work of fiction. What it tells us about trade is this: Public policies – trade policy included – create winners and losers. In this case, the winner is a multinational company acting with very little intervention from civil society. The losers are people and their communities who have no voice in choosing their own future.

To be clear: I am 100% in favor of trade. The question is not “trade or no trade”. The question is “good trade policy or bad trade policy”. I know a good trade policy when I see it: It will raise my standard of living. A bad trade policy lowers my standard of living.

Western democracies succeed because we have a strong middle class and strong institutions of civil society. We have the political balance to protect clean water and clean air. We regulate drugs, food, banks, and many consumer goods. We invest in public infrastructure, education, and R&D. We provide workplace safety, minimum wage, unemployment insurance, free speech rights, and more.

From the 60′s until now, South Korea enjoyed extraordinary growth using well-designed industrial policies, consistent with their strong cultural values of national identity and social obligation. South Korea’s industrial policies effectively balanced business interests with the public interest. This is the opposite of free trade.

By design, free trade agreements give investor interests highest priority – above the environment, human rights, labor rights, public health and financial regulation. Free trade agreements are full of rights for business, but conspicuously downplay rights for workers, people or the planet.

Under free trade rules, a mining company can overwhelm the resources of a small country, ruin the water supply, and clear forests over the objections of local governments and people. Political power steadily concentrates in favor of those with the most money, while the middle class erodes and communities are weakened.

It would never occur to us to dismantle the balancing controls that make capitalism work well. We would never concentrate unchecked power in the hands or multinational businesses, and investor interests. Would we?

Twenty years ago, many of us recognized the unbalanced design of free trade, but we thought, “It couldn’t happen here!” Our strong middle class and strong institutions of civil society would protect us from harm.

Now, we can see that it worked the other way. As global businesses acquired more political power, living standards have steadily eroded for workers, families, communities and Main Street businesses. We see growing wealth inequality, deindustrialization of our economy, and reduced prospects for our children.

For many Koreans, the US-Korea Free trade agreement represents a historic break in policy. Under the Korea-US Free Trade agreement, Hyundai, Samsung and other large Korean companies can drop their social duty, and move toward the global view that shareholders and business executives get their piece of prosperity first, while everyone else can wait for their share to trickle down.

Under the US-Korea Free trade agreement, we may soon see South Korean products built with North Korean labor from the Kaesong Industrial Complex. This would make scenes in The Constant Gardener look like a workers’ paradise.

It is happening in America. It will start happening in South Korea. It has long since happened in Colombia – a textbook case of civil society crushed in favor of a wealthy elites and global capital. The US-Colombia free trade agreement will be a bitter pill for most Colombians.

Free trade is not an issue of workers in one country against workers in another. Instead, the issue is civil society in both countries being swept aside by investors and global corporate interests in both countries.

Why did my Congressman recommend the movie? I think the movie touched his heart. He is an advocate for good health care. I think he developed great sympathy for people in Africa, when he was posted there with the State Department. He feels strongly that America’s middle class is under threat.

We need policies for foreign trade that look like the policies that industrialized America, Korea, Japan, Singapore and much of Europe. Those policies were designed to create strong communities, opportunity and fairness, shared prosperity and investment in the future. For the most part, those policies focused on domestic investment and respect for the environment, human rights, labor rights, public health and financial regulation.

Free trade makes sense to market ideologues and it works sensationally well for the top 1% in each country, at least in the short term. Free trade is bad for workers, bad for communities, bad for long-term prosperity, and bad public policy.

(Here’s a four minute video version of this post):

Click for full report

For 30 years Washington state and the U.S. as a whole have experienced a decline in the middle class. If you listen to the pundits on TV, it sounds like it was inevitable – or at least unavoidable. Nothing could be further from the truth.

The rise of the middle class in the post-WWII era wasn’t an anomaly. It was the direct result of policy choices at both the federal and state level to grow a middle class. Likewise, the current decline of the middle class is due to policy choices at the federal and state level – although the continuing effects of the Great Recession are making it worse.

In the report Under Attack: Washington’s Middle Class and the Jobs Crisis, EOI and Demos collaborated to examine the decline in middle income jobs, rising inequality, a decline in benefits that meet the basic needs of a changing workforce, and the rising cost of the American Dream, including home ownership and a college education.

This generation will likely be the first to have a lower standard of living than their parents. For example: from 2001 to 2011, tuition at the University of Washington increased by between 6% – 20% per year – from $3,983 in 2001 to more than $10,500 in 2011. Washington now ranks 32nd among the states in percentage of low income students participating in post-secondary education. The top 1% now claims 35% of the nation’s wealth – nearly double that of the past 3 decades – while overall wealth has declined for the bottom 90%.

The growth of the middle class in the 20th century was reinforced by high levels of public investment in infrastructure and education – and everybody, including the wealthy, paid their fair share. Today, wealthy individuals and corporations are paying the lowest tax rates in nearly a century – and state and federal policy choices seem focused on slashing educational opportunity, health and basic services, instead of investing in American infrastructure and talent to bring us out of the recession,

The obsession with the federal deficit is threatening to be the coup de grâce to the American dream. The American people and the people of Washington state deserve better choices.