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Wall Street banks should pay to restore American jobs

by Richard Trumka and Patrick Eiding

Kelle Sallard is angry. In July of last year she achieved her lifelong goal of purchasing her first home in Upper Darby, just outside Philadelphia. Then, a mere four months later, her employer, Verizon, faced with an abysmal economy, laid her off along with several hundred others throughout the state of Pennsylvania. Today, squeezing by on unemployment while applying for jobs, Kelle struggles to keep up with her mortgage and is falling behind on her bills.

“I think there are a lot of people to blame for the situation I find myself in, but chief amongst those responsible are the big banks on Wall Street,” Kelle said. “It’s disgusting how the Wall Street CEOs who tanked our economy and cost me and so many others our jobs can act the way they have, pocketing our taxpayer dollars in the form of huge bonuses, without the slightest regard for the pain they’ve caused. It makes me really mad.”

Kelle’s story is all too common in this Great Recession. Today America is 11 million jobs in the hole—we lost more than eight million jobs since the recession started when we needed to create at least two and a half million jobs just to stay even with population growth. For Pennsylvania, the result has been near double-digit unemployment. We need to create good jobs, and we need to create them now.

But while Americans across the country continue to lose their jobs, homes, retirement savings and hope, Wall Street practices business as usual. People are frustrated, angry and fed up. And we are not going to let Wall Street off the hook. Americans are fighting back in every state, demanding that the big banks be held accountable for the damage they’ve done. On Friday, we brought the fight to Philadelphia with a rally near City Hall.

We are telling the banks: pay your fair share to restore the jobs you destroyed; stop fighting financial reform; and start lending to communities, small businesses and others starved for credit.

Wall Street turned its back on the very same people who came to its rescue just months ago. Instead of using $700 billion in taxpayer bailout funds to free up credit and create desperately needed jobs, Wall Street banks have sat on their cash, refused to modify home mortgages and awarded their executives a record $145 billion in 2009 pay and bonuses.

Wall Street destroyed millions of American jobs. It should pay to restore them. Still, the Big Six Wall Street banks—Bank of America, Citigroup, Goldman Sachs, JP Morgan Chase, Morgan Stanley and Wells Fargo/Wachovia—are fighting tooth and nail to avoid any reasonable regulatory reform that would hold them accountable. They and their industry groups are spending millions on lobbying to kill needed financial regulations.

We are not going to let them get away with it. We have four proposals to make Wall Street pay to repair the economy. First, impose fees on Wall Street banks to pay back the cost of the bank bailout. Second, enforce a special levy on Wall Street bonuses. Third, tax the income of hedge fund and private equity managers—the wealthiest people in the country—at ordinary income rates just like the rest of us. Fourth and most important, enact a financial speculation tax and coordinate with other major financial market countries to adopt this tax globally. This tax will curb destabilizing speculation and raise hundreds of billions of dollars to fund needed jobs and public investment.

It’s time for Philadelphia to turn up the heat on the big banks on Wall Street. The American people have done our part to help get the economy back on track. Now it’s Wall Street’s turn to pay for the jobs they destroyed.

The writers are, respectively, the president of the AFL-CIO and the president of the Philadelphia Council of the AFL-CIO.

March 19, 2010 at 2:47 pm

--Richard Trumka and Patrick Eiding

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