WHEREAS:
During the year ending June 30, 2022, the rate of inflation was over 8%, the highest it has been in over four decades; and
WHEREAS: Rising inflation is a worldwide phenomenon, indicating that inflation is not the result of the American Rescue Plan or other federal spending. The rate of inflation in the European Union is 8.1% and in the United Kingdom it is over 9%; and
WHEREAS:
During the pandemic, people purchased more goods and less services. The pandemic also disrupted the supply of goods as production and shipping faced enormous challenges. Because labor costs did not cause the reduction in the supply of goods that led to price hikes, efforts to reduce workers’ wages or create higher unemployment are not the solution to inflation; and
WHEREAS:
Because increases in workers’ wages are lagging far behind inflation, rising prices not only create hardships for many working families but also reveal that wages are not driving up prices; and
WHEREAS:
The average price of gas was $3.41 per gallon prior to the Russian aggression with Ukraine. The rise in the worldwide price of fuel since February 2022 is a result of the reaction to Putin’s war and not due to energy policy or the rising costs of production. The Unites States remains a net energy exporter. Major energy corporations are taking advantage of the current situation and reaping record windfall profits because of limited demand for Russian-produced energy; and
WHEREAS:
U.S. corporations have exercised enormous economic power for decades and this power has played an outsized role in driving inflation. The Economic Policy Institute has compiled data demonstrating that corporate profits account for half of the current increase in inflation. This is not typical. From 1979 through 2019, corporate profits accounted for 11% of price increases; and
WHEREAS: Over the past four decades, when unemployment fell and the economy heated up, profit margins declined and the share of corporate income going to wages rose. But during the recovery from the pandemic recession, the opposite occurred as profits increased and workers’ share of income declined. Although the labor market is now strong, it is not overheating the economy. Federal Reserve and fiscal policies focused on cooling down the economy will cause needless suffering. Similarly, tariffs imposed in recent years are not significantly driving inflation and their elimination would also cause undue harm to workers.
THEREFORE BE IT RESOLVED:
AFSCME stands in support of policies to address inflation that will support working families and not undermine their well-being. AFSCME specifically rejects efforts to rapidly restrain economic growth and we urge the Federal Reserve Bank to be cautious regarding future increases in interest rates. Panic-induced interest rate increases that may cause a recession are not an effective response to inflation; and
BE IT FURTHER RESOLVED:
AFSCME supports an excess profits tax, especially for energy producers, to dampen the corporate incentive to continue to raise prices. Corporations enjoy too much power in the global economy and the normal dynamics of supply and demand no longer apply because competition in the marketplace is limited. Stronger antitrust policies, and vigorous enforcement, are necessary to address corporate price gouging and restore competitive balance; and
BE IT FURTHER RESOLVED:
AFSCME supports investments in child care and elder care to give more people the support they need to join or rejoin the labor force and help employers find qualified workers to produce goods and services. In addition, AFSCME supports prescription drug pricing reform, such as policies authorizing Medicare to negotiate drug prices and capping drug price increases at no more than the overall rate of inflation, while passing along the savings to private payers, including working families and their health plans; and
BE IT FINALLY RESOLVED:
AFSCME supports the development and implementation of a national industrial policy to create more domestic sourcing of critical components such as microchips, high-capacity batteries and energy storage, pharmaceuticals, medical equipment, rare earth minerals, aluminum and steel, solar panels and other essential components of modern life.
SUBMITTED BY:
International Executive Board