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US Rep Frank Calls On Businesses For Wages, Trade Deal January 3, 2007

Posted by notapundit in Congress, Politics, US News.

WASHINGTON (Dow Jones)–Rep. Barney Frank, D-Mass., said Wednesday Congress could grant business groups victories in areas such as trade, immigration, and foreign investment if more concessions were made in the areas of wages, labor, and health care.

“We are now in a situation in which many of the people in the business community are very frustrated because they cannot get adopted at the national level policies that they think are important for growth,” Frank, who is set to become chairman of the House Financial Services Committee, said in a speech to the National Press Club. “In some cases I agree with them, in some cases I don’t.”

But Frank said a Democratic Congress would be willing to consider many of the policies supported by U.S. businesses if actions were taken to address what he described as the broadening gap between economic growth and the average U.S. worker.

“It has generally been an accepted fact that economic growth is a good thing and that the rising tide will lift all boats,” Frank said. “The rising tide is a good idea if you have a boat. But if you couldn’t afford a boat and you were standing tiptoe in the water, the rising tide goes up your nose.”

Frank said recent U.S. growth has been enjoyed by only 10% of workers while the wages for most are falling behind inflation.

“There is now a small segment of the American population that is essentially profiting from economic growth and the great majority are not,” he said.

Frank tried to counter arguments that raising wages would stall growth. He said new U.S. policies could allow progress on trade, direct foreign investment, and immigration if this is done in conjunction with stronger labor policies and better health care for workers.

“What we are talking about is not whether or not there should be inequality, but where we are today,” he said. “We have a system which is producing – by a combination of natural forces and government policy – more inequality than is necessary for efficiency or than is socially healthy.”

By Damian Paletta, Dow Jones Newswires


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