Tech industry, unions at odds over 'stimulus' plan

WASHINGTON--As a presidential candidate in 2008, Barack Obama famously courted both labor unions and Silicon Valley firms. Now President Obama is finding that two groups that have been some of his most enthusiastic supporters are at loggerheads.

The tech sector sees President Obama's call for billions of dollars in targeted tax cuts and deficit spending on a new green economy as a generous windfall. So does the labor movement, which spent at least $385 million electing Democratic candidates, and is at odds with business over investment and procurement policies in the so-called "stimulus" package, including the "buy American" provision.

At the opening of the Good Jobs Green Jobs national conference here Wednesday, union leaders said high labor standards must be maintained in the government's nearly trillion-dollar attempt at economic recovery--which includes billions of dollars for broadband deployment and tens of billions of dollars for energy initiatives.

"If we extinguish workers' rights, the chances for a green economy are nonexistent," said Larry Cohen, president of the Communications Workers of America, the largest communications and media union that represents workers from AT&T, Embarq, Comcast, and many other companies. "We're not protectionists--we're people who believe in a sustainable economy. We can't just depend on markets, and if we do, we're likely to come up with answers that are at best incomplete."

On the other hand, many economists agree that higher union salaries can lead to fewer jobs (and higher unemployment). The Concise Encyclopedia of Economics says: "High union wages that exceed the competitive market rate are likely to cause job losses in the unionized sector of the economy."

More than 2,000 business, labor, and environmental advocates are participating in the conference, which lasts through the week, to shape the national dialogue on creating a "green" economy.

"This is the working-class and the progressive-movement's Davos," said Leo Gerard, the international president of the United Steelworkers.

A "green" economy will create new opportunities for labor, Gerard said, citing Gamesa, a Spanish windmill company with a branch in Pennsylvania.

"Gamesa is 100 percent union, and they make their windmills 100 percent union," he said. "In a windmill, you've got over 200 tons of steel, 20 tons of composite material, 250 cubic yards of cement...Every one of those is a green job, and one wind turbine can create enough energy for 500 to 600 homes."

For such projects to work as an economic stimulus in the United States, though, labor leaders said American jobs must be better protected. They pointed out that the "buy American" provision of the "stimulus" package, which would require manufactured goods used for projects funded by the legislation to be produced in the United States, is in line with long-standing procurement laws already in place.

"The economic philosophy of the right wing has allowed them to ignore that," Gerard said.

Regardless of its consistency with U.S. laws, he said, the controversy surrounding the bill has misdirected the dialogue about the economic package from its main objective: creating good jobs.

"This isn't about a trade war," Gerard said. "It's about making sure we're not putting our jobs out to bid for China."

The technology industry, which will play an integral part in developing smart grids, renewable-energy sources, and other "stimulative" efforts, sees the "buy American provision" very differently.

Dozens of companies and trade associations, including AT&T, Dow Chemical, Cisco Systems, IBM, Intel, Microsoft, the Computer and Communications Industry Association, and the Consumer Electronics Association, sent a letter Tuesday to Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.) saying the provision "will harm American workers and companies across the entire U.S. economy, undermine U.S. global engagement, and result in mirror-image trade restrictions abroad that would put at risk huge amounts of American exports."

"Government procurement is part of the WTO agreement," CCIA president Ed Black has said separately. "U.S. companies have won nondiscriminatory access to supply products for other governments because of these provisions. Keeping that reciprocity is important to the current economy and the economic recovery we are all hoping to see."

He said his organization has additional concerns that the "buy America" provision could be extended to information technology and is particularly concerned that the provision could extend to health IT stimulus efforts.

Gerard said at Wednesday's conference that "there's a fairly high level of duplicity" in the discussion over the "buy American" provision.

"I didn't hear any of the high-tech firms yelling and screaming when China said they were investing $700 billion for Chinese jobs," he said, "when they refused to sign the WTO procurement policy. All of a sudden, because we want to do this in the United States, something's wrong."

"I resent the high-tech community, (which has) resisted all kinds of training programs so they can export cheap labor," he added.

Wednesday's conference preceded a rally on Capitol Hill at which union activists voiced their support for the Employee Free Choice Act, a controversial measure that would allow workers to unionize by signing a card rather than through secret ballot. Some members of the tech industry are opposed to this measure as well.

"Future job growth is likely to come from the technology industry, and innovation requires the flexibility for companies to hire and fire," CEA President Gary Shapiro told CNET News in November. "In the tech industry, unionization would be devastating, frankly."

"When it comes to workers, we can't just be another commodity thrown in a landfill," Cohen said when speaking about the Employee Free Choice Act. "We want good jobs, we want green jobs, we want union jobs, and we're going to take a stand."

CNET News' Declan McCullagh contributed to this report.