Address to Congress 2007 by Leo Gerard – AFL/CIO Fraternal Delegate

Address by Leo Gerard - AFL/CIO Fraternal Delegate

The President: Our first real event this morning is to welcome Leo Gerard. Leo is our AFL-CIO Fraternal Delegate. He will give the opening address. I very warmly welcome him to our Conference, as I did yesterday. Leo is the International President of the United Steelworkers' Union and he is a member of the AFL-CIO Executive Council and Executive Committee.

His union has more than 850,000 members. Many of you may be aware that his union is closely discussing issues with Unite, which is our new big union. However, Leo's union is already an international one. Leo is Canadian by birth and he has a long track record of international work and he is truly an international friend of the TUC.

I think that many of us are aware that today is the sixth anniversary of the attack on the Twin Towers, which brought our 2001 Congress to an early end. I think none of us will ever forget that day. So it is appropriate that we take this opportunity to think about the issues in the world and to re-dedicate ourselves, as a trade union Movement, to the causes of international solidarity and working towards world peace, to which I think there is no better aim to have. Leo you are so welcome to our Conference, and I invite you to address our Conference. Thank you very much.

Leo Gerard (AFL-CIO Fraternal Delegate) said: Brother General Secretary, Sister President, Brothers and Sisters, Comrades. I've got to tell you that it feels good to be able to say the word 'Comrades' without expecting George Bush's arm to come out of sky and render me somewhere.

It is a painful morning for many of us. I remember what I was doing on September 11^th six years ago, and I remember stopping and crying because I could not imagine a world in which people would do this to each other. Today I still cannot imagine a world where people could do this to each other. I actually cannot imagine a world where so many of our people are getting treated so poorly, where people all around the world are being pitted against each other for various reasons. I am humbled by being here today at the 139^th Congress of the TUC. I bring greetings of solidarity from the AFL-CIO and, I should say, because of my Canadian heritage, from the Canadian Labour Congress. But the AFL-CIO/TUC relationship is one of the longest and most cherished that we have in the labour Movement in the United States.

As I sat through most of yesterday's debates, I thought about the tremendous similarities, the tremendous struggles that we have and how common they are. I thought about when I go to Brazil I hear many of the same things. When I go to Australia, I hear many of the same things. When I am in my homeland of Canada, I hear many of the same things. When I go to Africa, I hear many of the same things only worse. If I go to parts of Asia I hear the same things, except worse again. If I go to Europe, I hear discussions and dialogue about many of the same things. What really comes to my mind is the need for workers of the world to unite.

Using the term 'unite' makes me feel good right now because the United Steel Workers and Unite are engaged in what I think is one of the labour Movement's most historic explorations. We agreed in May of this year that we would explore the possibility of a transatlantic merger, that we would explore the possibility of bringing workers on both sides of the Atlantic towards the first step of the possibility of creating the world's first global union. I am convinced, as I hope my colleagues are, that one of the things we need to do to take on global capital is to have a stronger global labour Movement. One of the ways of having a stronger global labour Movement is to have unions of similar social and industrial values come together so that we can take on the issues of global capital.

I sat through the discussion yesterday about trade union freedom. What was ringing through my mind is that in America right now one of the tough issues we are fighting with and fighting for is something called the Employee Free Choice Act. Only in America do workers have the right to try and form a union and the boss has the right to do anything the boss wants to prevent you from forming a union. We are taking a position in the American labour Movement that if all I need to do to join the Republican Party is sign a card which says that I want to join the Republican Party, then workers in America ought to be able to join a union by simply signing a card that says I want to join a union, and should be none of the boss's damned business and the boss should not be allowed to interfere.

So we are fighting in 2007, as we will be in 2008, to get legislation passed in the United States that gives workers the right to form a union and which gives them the right to collective bargaining. With all due respect to all politicians everywhere, the best form of income distribution which has ever been invented in the world is free collective bargaining led by workers who have chosen their union of their own freewill and are able to bargain for the rights to distribution of the wealth they have created with their employer at the collective bargaining table, without interference by anyone on the right to strike if we cannot reach an accord. That is the best form of income distribution and wealth creation in the world. It is the best that has ever been invented.

I realise that I have limited amount of time, but those of you who know me always know that I have more to say than the time I have. I want to say something about private equity and financialisation. The right to form a union and the right to collective bargaining is a fundamental right of any democracy, but you need to have employers to bargain with. One of the things which has been happening during the past 25 years is the accelerated financialisation of the global economy; financialisation really leading to the political and economic decisions of nations and of industries being driven by financial markets as opposed to being driven by the real economy; the creation of everything from junk bonds, leverage buy-outs and private equity firms.

The head of Blackstone Group, one of the world's largest equity firms, Schwartzman said when he was capitalising his private equity firm by going public - talk about hypocrisy! - 'We needed to go public because when these things end they never end well'. Well, they ended well for him because he pocketed a billion dollars. They ended well for him because, by paying himself the billion dollar dividend, he paid himself a lower taxation rate. The taxation rate for the private equity dividend was less than his office janitor paid. His office janitor paid something like 30% tax whereas he paid a little under 15% before he worked his way through the loopholes, and maybe paid 7% or 8% at the very end. There is something wrong with an economy that rewards the manipulation of money and punishes hard work.

In fact, it is easy to generate high returns to equity with a combination of cheap debt financing and tax subsidies. That is not a long-term strategy nor does it require you to be a genius. There is a real cost to that. The hidden cost is to the investors who are paying many times for the leverage with additional risk. Those are our pension funds, the pension funds of British workers, French workers, American workers, Canadian workers, and those pension funds are being invested and they are being saddled with the additional risk. Those investments are not for the long term. Those investments are for short-term gain of profiteering billionaires.

I don't know how well you keep track of this in Britain but in America I keep track of it. Since the deregulation of the financial markets by Daddy Bush before Junior Mini-Shrub got in (Laughter) - before I sit down I have got to tell you something about George Bush, by the way. In fact, I would like to tell you a lot about George Bush - but if we think about the scandals and the thefts of workers' pension money through financialisation and the manipulation of financial markets through deregulation, in the US we had the first major one of the last two decades being the Savings & Loans scandal where they deregulated the savings and loan industry and it virtually collapsed and had to be bailed out. You see, socialism for the rich is okay. We need capitalism for the rest of us and socialism for the rich in the American model. They bailed out the savings and loan industry to the tune of almost $800 billion. That was publicly admitted.

Then in the US we got rushed into being told that we had to move our money out of American investments and put them into what was called then the Asian Tigers. They were unregulated markets so if you thought you were buying apples you might have been buying bananas, but you did not know because they were unregulated markets and you put your money into that. When that collapsed the industry lost $4 trillion, most of it our pension money. Then we had the junk bond collapses and the Michael Millickans and the lot who went to jail. You did not know that Michael Millickan was bald until he went to jail and had to sell his $4,000 toupé to help pay his fine.

Then we had the hedge fund collapse where, in the middle of the night, literally in the middle of the night, Allan Greenspan pulled together some of the world's largest banks and dredged up close to $500 billion of our money to re-invest back into saving the hedge fund industry that was collapsing and he was worried that it would bring down the financial market. He didn't give a damn that he was stealing our pensions.

Then came the tech bubble. Do you remember the time where, if you could tell people you had some kind of hi-tech idea you could raise all kinds of capital but if you had a steel mill you could not invest any money because you could not get capital to modernise your steel mill? When the tech bubble collapsed, we lost trillions again.

Then, most recently, we had the accounting scandals of the world's major accounting firms that collapsed. In that loss we are told that the financial markets lost $7 trillion.

After all of those collapses pension funds were taken from full funding to under funding because that is where the money was. Most of those funds are workers' deferred wages. Most of those are our funds that we bargained for in collective bargaining to put into pension plans and we have hired asset managers and those asset managers have got it invested in these Wall Street, Bay Street and Fleet Street scams. When those pension funds lost the money, what was the response? The response was not to come back and say 'We have to regulate the financial markets so they cannot destroy people's pension incomes'. The response in America is that we cannot afford defined benefit pension plans, that we need to go to defined contribution plans and workers ought to take the risk because bosses are too busy and bosses have made too many mistakes and been ripped off too many times with our pension money so the best thing to do and the safest way is to not give you a defined benefit pension plan but to give you a savings plan, put you money in it and hope for the best at the end. Excuse my language, but bullshit! We are not going to stand for that and we are going to fight I promised Derek and Tony that I wouldn't swear, but that is not really swearing.

We are going to fight to make sure that we always have defined benefit pension plans. We are going to fight to ensure that workers get their proper defined benefit pensions and that private equity funds (and all those scams) are properly operated in the light of day and that they are made under the same rules. I am not talking about public companies being our best friends, but private equity fund managers ought not to be operating in the dark of night while the rest of us have to operate in the light of day. We all need to operate by the same rules and we all need to operate in a way where we can see what is going on because that money is our money. That money is the money that, when I go to collective bargaining, and we are bargaining at the table and they say 'We've got a dollar', I say, 'Okay, I want so many cents of it to be invested in the future for my pension. I'm not giving you that money so that you can steal the damned thing'. Workers around the world have to start talking and singing from the same song book about pensions, private equity funds and about investments in the global economy.

The global economy does not have to be the kind of economy that pits worker against workers, country against country. It does not have to be the kind of economy where the rich get richer and the poor get poorer. Rich countries get richer, poor countries get poorer, rich people in rich countries get richer and poor people in rich countries get poorer. It does not have to be that kind of economy. It can be the kind of economy where if you want to trade you raise people's living standards. You can have decent healthcare. You can have decent control of the environment. You give decent pensions, decent wages and we all rise up together, not where some rise and the rest are pushed down. We need to fight for that kind of an economy. (Applause)

We need to fight for that kind of economy on the global stage.

With all due respect, I am privileged. I am very privileged. I was born into the labour Movement. My father was an organiser. This is all I know and I have had the blessing of being able to do this for all of my adult life, mostly in two countries, the US and Canada. I can tell you that if you try to fight this fight just in the US, just in Canada, just in the UK, just in Brazil, just in China or just in South Africa, we will lose because they don't fight on only one ground. They have a global strategy of how to move the global financial markets to encircle us, then to divide us and then to conquer us. What we need is a global labour Movement response to the crush of global capital. We need a global labour Movement response on the environment. We need a global labour response on defined pension plans, which are an entitlement after 30 - 40 years of work. We need a global response to the need and the right for healthcare.

Let me tell you about America. In America today 16% of Americans' gross domestic product goes to pay for healthcare. What is it in Britain - 10%, 11% or 12%? Sixteen per cent of gross domestic product goes for healthcare and 47 million people, millions of whom are kids, have no healthcare. I was reading on the plane an article which was headed: 'Denying children's healthcare' in the New York Times. The State of New York wanted to increase its allotment of resources that would go to the kids of New York and the Bush Administration intervened and said no and went to court. That is not the kind of America that you see on television.

In America when we go to the bargaining table it will cost somewhere between $12,000 for a modest healthcare plan for a worker and his family. That plan may have 20% co-pay and have the first $500 - $800 - $1,000 paid for by the worker. We might have what we think of as an excellent healthcare plan. That one might cost you $18,000 a year. That one may have that you pay the first $200 of family coverage yourself and you pay the next 10% of the co-pay for every service. Those of you who do collective bargaining will know, in America anyway, based on a 2,000 hour work year, $12,000 is $6 an hour. $18,000 is $9 an hour. America is trying to push the American model of an industrial economy. The American model is a disaster for working families in America. In fact, it is a disaster for America except that insurance companies, drug companies, private hospitals and the private healthcare industry put almost $400 million a year into lobbying to make sure that we do not change the status quo.

I can tell you that in 2008 the American labour Movement, led by the AFL-CIO, is going to change the political dynamic in America and some time after 2008 and before 2012 we will win universal healthcare in America so that we do not have the Bushites denying healthcare to kids and we do not have to go to the collective bargaining table and strip ourselves naked so that we can have healthcare for our families. We are going to change the system in America by kicking the shit out of the Republicans and electing some people who actually care about the future. Derek, that is not swearing.

As I close, let me just say that, like all of you, we want Bush and the military out of Iraq. That is a war that he lied us into and it is going to take our honesty to get us out of it.

Last but not least, a few weeks ago I was in Memphis, Tennessee. I could not figure out, while I was getting into Memphis, Tennessee, I could not get a hotel room that night. I had to end up staying 20 miles out of town. What I found out was that that was the night that they were celebrating the 30^th anniversary of Elvis's death. I saw every kind of Elvis you could imagine. I saw Elvis who could only speak Italian, I saw Elvis with red hair, I saw Elvis in blond hair with a surf board; in fact, I saw every kind of Elvis you could imagine. That was also the same day that it was announced that George Bush was down to 28% in the polls, but when I was in Memphis I found out that 32% of Americans believed that Elvis was still alive. (Applause) I think some of them are the same people.

Last night, as I normally do when I go to a city, I went looking for a gift for my wife. Just down the street, if you go looking tonight you will find that there is a little gift shop that sells trinkets. I bought a bronze rat there last night. As I was buying this rat that I was going to use as a doorstop at home the shop owner said, 'The bronze rat is 20 bucks but the story is $100. Do you want the story?' I said, 'No, I just want the rat'. He said, 'Well, you'll be sorry because you will really want the story'. I said, 'No, I just want the rat'. So I paid for the rat and I left.

As I was walking back a bunch of rats came up behind me and started following me. I looked behind and I thought that that was kind of curious. I started walking a little faster. As I started walking faster more rats showed up. Actually, I started to run and, if you look at this body, that is a feet. As I started to run more rats showed up. I got rather scared so I started to run real fast and rats started jumping all over me, climbing up on my neck and I was throwing them off. I was trying to get away. I was getting close to the Brighton Pier. There must have been a hundred thousand rats behind me. So I ran towards the Pier and I took the bronze rat and I threw it as far as I could and it went into the sea. All the rats ran right passed me they jumped into the sea and drowned. I thought, 'Oh, my God. It wasn't me they were after but it was this bronze rat'. So I hurried back to the gift shop. I got to the gift shop and the owner was there with this big huge smile on his face. 'Hah, hah, hah', he said, 'I knew you would be back. You're back for the story, aren't you?' I said, 'Hell, no. Can I buy a bronze Tory?' Thank you.