March 28, 2017

Brown Opening Statement at Hearing on Economic Growth

WASHINGTON, D.C. — U.S. Sen. Sherrod Brown (D-OH) – ranking member of the U.S. Senate Committee on Banking, Housing, and Urban Affairs – released the following opening statement at today’s hearing entitled, “Fostering Economic Growth: The Role of Financial Companies.” 

Brown’s remarks, as prepared for delivery, follow.

Senator Sherrod Brown - Opening Statement
Hearing: "Fostering Economic Growth: The Role of Financial Companies" 
March 28, 2017

Thank you, Chairman Crapo for holding this hearing.  I appreciate the process you have put in place for the Committee to discuss economic growth.  I hope that with the Committee’s call for proposals we’ll be able to put some new ideas on the table that will gain broad, bipartisan support.

Rolling back Wall Street reform clearly does not fit the bill.  Our financial system is more stable because of Wall Street reform. Banks are better able to handle losses and consumers are better protected from the types of predatory loans that led to the crisis.

But too many Americans still haven’t recovered from the 2008 financial crisis, when 9 million workers lost their jobs, 5 million homeowners were foreclosed upon, and people lost trillions of dollars from their retirement savings.

This crisis came on top of economic policies that, since the 1970s, have shrunk the middle class.

Minority communities, particularly African-Americans, were hit even harder by the crisis, and have had difficulty rebuilding wealth, buying homes, saving for retirement, and re-entering the labor force.

I understand why so many Americans are angry.  Nearly a decade after the financial crisis, the wealthy have pocketed almost all of the gains, but wages for most Americans have been stagnant. 

Wall Street is once again making record profits, and many indicators—like stock prices, business lending, and consumer lending—are at pre-crisis levels or higher. 

Wages of Wall Street employees have increased 70 percent since the 1980s, when they were comparable to the wages of those in other industries.

During the same period, good manufacturing jobs disappeared as a result of trade policies that favored investors over workers. 

Even within the financial sector, the gains haven’t been felt evenly. Bank workers at the low end of the pay scale saw their real wages decline from 2007-2013.  One third of bank tellers working for banks are on government assistance; and the CEOs of the top 5 banks make 470 times the annual salary of the median front-line bank worker.

Hard work simply isn’t paying off the way it used to. And that’s true for all workers, across industries and income levels. Whether you punch a time sheet or make a salary or earn tips, whether you’re a contract worker or a temp. Whether you work in a call center on a factory floor or in a bank.

One of the best ways that financial services companies can help economic growth is to pay their workers a living wage and provide decent benefits.  It should come as no great shock that demand for housing and other goods and services is tepid – too many Americans are struggling to make ends meet.

The response from the Administration is not encouraging.  It has been stocked with Wall Street executives who “want to do a number” on the law that holds their former firms accountable.

Its budget would eliminate much of the federal efforts to promote economic development opportunities in communities, both rural and urban, across the country.  And so far, there is no sign of the promised $1 trillion infrastructure program.

If Americans don’t have reliable housing or transit systems to get to work, or even access to meals, how can we expect to have a healthy and productive workforce and a growing economy? 

Financial companies have an important role to play in our economy, to the extent that they support the rest of the economy.

But finance is a means to an end, not an end in itself.  Trading paper among a few large financial companies or making the wealthiest 1% of Americans even wealthier does not grow our economy. 

Earlier this year in Columbus, I outlined a broad plan to restore the value of work in America in four key ways:

-        Raise wages and benefits;

-        Give workers more power in the workplace;

-        Make it easier for more workers to save and employers to make matching contributions for retirement—something Senator Crapo and I have worked on together in the Finance Committee; and

-        Encourage companies to invest in their workforce. 

When we talk about economic growth, we need to talk about policies that help Americans’ pocketbooks, their savings, and their job security. 

Thank you, Mr. Chairman.