"Globalization Increaes the Prosperity of America's Working Families"

February 5, 2007

When we look at the issue of globalization, inevitably the question of wealth inequality comes up. We see reports of massive pay-outs for executives, and the natural inclination is to question the fairness. But the acquisition of wealth is not a zero-sum game. If one worker brings in a big, new client and gets a bonus as a result, that doesn't mean that someone, somewhere has to take a pay cut.

The question we must ask ourselves is not "are some individuals getting wealthier at a faster rate than others." The question is whether everyone is becoming more prosperous. Is everyone's standard of living going up? If all individuals who wish to climb the economic ladder have the opportunity to do so, we are on the right track.

And the economic data show that is absolutely the case in America today. With a workforce of 146 million, there are more Americans working today than ever before. Unemployment is at the incredibly low rate of 4.6%. Two million new jobs were created in the last year alone. Average weekly earnings grew by 4.8% over that same time period. GDP grew at an annualized rate of 3.5% last quarter, propelled by a dramatic rise in exports.

These are excellent numbers, and they demonstrate the strength and vitality of the U.S. economy. But to really understand what they mean for individuals and working families, we have to delve in a little deeper. We have to look at the broader context and the bigger picture.

Let’s focus on the issue of wages. As I have stated, earnings are on the rise. This is obviously extremely important to working families trying to make ends meet. But even more important than growing wages is growing purchasing power. A bigger paycheck is meaningless if the government increases taxes and takes a bigger portion of that paycheck. That is why Republicans have focused so heavily on tax relief. Because of the tax cuts we passed in 2001 and 2003, after-tax income is up nearly 10%.

That's extra disposable income that Americans have to pay college tuition, get the car fixed or take a family vacation. It's extra income that Americans would not have without our Republican tax relief.

The cost of consumer goods also plays a major role in a family's purchasing power. That is why keeping our economy open to imports is so important. A tariff on inexpensive clothes from Bangladesh, for example, is a tax on the American family. A tariff on affordable furniture from China is a tax on the American family. Wha's more, tariffs and other protectionist barriers constitute a regressive tax, because they hit working families the hardest. It's not Italian leather bags or antique Belgian furniture that gets slapped with tariffs. It is the low-cost, everyday items that families need to get by. The more we open up our economy, the more we increase the purchasing power of the Americans who need it most.

Wages are rising, and that is essential. But we must remember that increased wages cannot be accompanied by a reduction in the purchasing power of those wages through greater protectionism and higher taxes. Republicans have pursued an agenda of economic liberalization and embraced the great benefits of globalization. As result, we can look at the question of whether everyone is growing in prosperity. And we can answer that question with a definitive and decisive "Yes."

I call on my colleagues on both sides of the aisle to continue on this path. I call on them to reject any calls to reverse course, to saddle Americans with greater taxes and cut off their access to the goods they need at prices they can afford. To reject any efforts to impose the regressive taxes of protectionism. Our economy cannot afford it. And we must recognize that those who are struggling most, can afford it least.