Richard Kirsch

Roosevelt Institute Senior Fellow

Recent Posts by Richard Kirsch

  • The Challenges to Organizing Workers in Today's Economy

    Apr 2, 2014Richard Kirsch

    This is the fourth in a series of posts summarizing a new Roosevelt Institute paper report by Senior Fellow Richard Kirsch, entitled "The Future of Work in America: Policies to Empower American Workers and Ensure Prosperity for All." The report provides a short history of how the rise and decline of unions and then explores reforms in labor policy to empower American workers to organize unions and rebuild the middle class.

    This is the fourth in a series of posts summarizing a new Roosevelt Institute paper report by Senior Fellow Richard Kirsch, entitled "The Future of Work in America: Policies to Empower American Workers and Ensure Prosperity for All." The report provides a short history of how the rise and decline of unions and then explores reforms in labor policy to empower American workers to organize unions and rebuild the middle class. Today’s post identified the major challenges posed by the changes in how employment is structured, which new policies must address.

    When you consider what it would take, under American labor law, to organize the nation’s biggest employers, you understand the huge challenge unions face to organize workers and win a fair share of the nation's economic progress.

    Today, the largest employers in the country (Walmart, McDonalds and Yum Brands – owner of major fast-food chains like KFC and Pizza Hut) – employ a small number of workers, primarily low-wage, at each of their thousands of locations. Walmart - which employs approximately 300 workers at each location - is the largest of these. Unions would need to collect the signatures of half of the workers at each of thousands of locations, so organizing a major share of the company’s employees is daunting.

    After a union did get the support of a majority of workers at any location, the company could warn its employees against voting for the union while they were on the clock, but the union would need to find and talk to each employee outside of work. The only penalty the company would face for firing union activists or supporters would be to pay back-pay, a nominal amount when wages are so low, and only after a protracted regulatory and judicial process.

    Of course, since many of the workers are part-time, job turnover is very high. As a result, the longer the store succeeds in delaying an election, the more workers will turn over, requiring the union to continually organize new crops of workers to win a simple majority. If the workers won the election and the store refused to negotiate in good faith, it could prolong the talks until only a few of the original workers remained. If workers did strike, the store could hire replacement workers and wait longer. Or they could decide to close the store – as Walmart did in Canada – because the loss to the company of one outlet among thousands has virtually no impact on its bottom line. And if by some miracle a union organizing effort was successful, the union would represent only the one store that employed only a fraction of the corporation’s workforce, making it difficult to influence broader industry standards.

    When we look at the job categories that are adding the most workers today we see the same story. The organizing challenges of two groups of workers - retail sales and fast food - are captured in the discussion above. We also find other obstacles. Only one of the six job categories with the most job growth – registered nurses – has historically been represented by unions. A substantial share of workers in two other growing categories – home health aides and personal care aides – are not covered by the NLRA, whether because they work for the person they are assisting or because they are categorized as independent contractors.

    We can group the major challenges facing labor organizing and policy into five categories:

    Current labor law is tilted against unions. There are virtually no strong incentives for employers to recognize unions or to reach bargaining agreements. Government is ineffective in enforcing the laws on the books and powerful tools that unions might use to gain more power in the economy are prohibited.

    Only a relatively small number of workers are employed at one site. As we described above, organizing workers at many of the nation’s large corporations now requires successful campaigns at thousands of worksites.

    Industries are typified by diverse, global supply chains, in which a major corporation that sells goods to the public does not directly employ many of the workers who produce its products. As a result, the employer that is driving the price for the good or service being delivered is shielded from legal responsibility for the conditions of work, the compensation paid to many of the people who make the good or deliver the service, and responsibility for responding to unionization efforts.

    Labor law does not cover many workers. Approximately one-in-four workers are not covered by the NLRA or other labor laws. These include domestic workers, farmworkers, supervisors and independent contractors.

    Corporations have become much more powerful than unions and often more powerful than governments, making decisions that determine people’s well being and shape the national and global economy. Corporations use their power to cut wages and benefits, including by subverting labor laws.

    A major goal of the Future of Work Initiative is to envision policies to address these challenges, in order to create a society of broadly shared prosperity. We seek policies to both reform and transform American labor law and policy. In the final two posts in this series, we will describe a wide variety of policy ideas to address the five major challenges listed above.

    Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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  • The ACA in Threes: The Good, The Bad and the Ways to Make it Better

    Mar 31, 2014Richard Kirsch

    With the first open enrollment period ending today, consider some successes, outrages, and bug fixes for the Affordable Care Act (ACA). Roosevelt Institute Senior Fellow Richard Kirsch will debate implementation issues and the future of the ACA with the Heritage Foundation's Robert Moffit tonight at New York University. For more information, click here.

    The Good: Three Big Successes of ACA:

    With the first open enrollment period ending today, consider some successes, outrages, and bug fixes for the Affordable Care Act (ACA). Roosevelt Institute Senior Fellow Richard Kirsch will debate implementation issues and the future of the ACA with the Heritage Foundation's Robert Moffit tonight at New York University. For more information, click here.

    The Good: Three Big Successes of ACA:

    The Affordable Care Act is saving peoples lives: Already. Like Kathy Bentzoni, a Pennsylvania school bus driver, who dropped her old insurance because it was expensive and rejecting claims because of her pre-existing conditions. After getting ACA coverage at $55 a month, she was able to seek care: “They found my hemoglobin level was 5.7, and the normal is 14. I needed a transfusion. It was due to a rare blood disorder. Where would I be without Obamacare? ER, 3 units of blood, multiple tests in the hospital and a 5-day inpatient stay without insurance? Probably dead.” Kathy was not alone in that fear – studies show that tens of thousands of people each year die because they don’t have health coverage.

    Medicaid enrollment is a bigger success than expected: Not only is Medicaid enrolling people who are eligible for the first time – 4.6 million of them – but almost another 2 million more are enrolling who were eligible before, but had not applied. In the big push to get people to sign up for the ACA, many people who have been eligible in the past applied for the first time.

    Seniors on Medicare are saving money, getting better care: While most seniors don’t think that the ACA has anything to do with them, it does. Last year, 37 million people on Medicare – seniors and people with disabilities – received free preventive care. Since the law was enacted, 8 million people enrolled in Medicare have saved $10 billion on prescription drugs, as the prescription “donut hole’ closes. And for the first time in 30 years, hospital readmission rates for people on Medicare are coming down, because hospitals are now penalized for pushing people out before they are ready.

    The Bad: Three Outrages Against the ACA

    States that have refused to expand Medicaid: In an example of partisan politics killing people, Republicans in 24 states have refused to expand Medicaid, leaving 5 million people who would be eligible for coverage without any recourse.

    Koch brothers campaign to discourage young people from signing up: In an example of billionaires killing people, the Koch brothers have funded tasteless ads and campus beer parties in an attempt to keep young people from signing up for insurance on the exchanges.

    Republican lies about job loss and the ACA: One advantage of the ACA is that it gives people the freedom to leave their jobs or reduce their work hours, and still be able to get affordable coverage. When the Congressional Budget Office estimated that 2.3 million American workers would gain this freedom over the next 8 years, Republicans falsely claimed that it would cost jobs. If anything, it will create jobs for people who fill in for those who take advantage of their new freedom. I thought Republicans liked freedom.

    The Ways to Make it Better: Three Big Fixes for the ACA:

    Allow Medicare to operate in the exchanges: The best way to bring price competition and access to virtually ever doctor and hospital in the exchanges would be to have Medicare offer a plan (without age requirements) in every exchange. This is the easiest and most effective way to bring back the public option.

    Base the employer mandate on a play or payroll tax: As I’ve explained here, the best way to get rid of the convoluted system of employers paying a penalty for employees who work more than 30 yours a week, would be to have employers who don’t provide coverage pay a percentage of payroll for health care, just like employers now do for Social Security.

    Lower the premiums and out-of-pocket costs: While the ACA is providing affordable coverage for millions – and will offer lower premiums than 29 million people are paying now – they are still too high for many families. And the out-of-pocket costs in the cheaper plans are way too high. The subsidies should be increased for middle-income people – funded by progressive taxes – and the high-out-of-pocket plans ended. 

    Richard Kirsch is a Senior Fellow at the Roosevelt Institute, a Senior Adviser to USAction, and the author of Fighting for Our Health. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

    Photo of President Obama signing the Affordable Care Act copyright George Miller, via Creative Commons license.

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  • National Labor Law in the United States: Scanty Protections for Organizing Leave Out Many Workers

    Mar 27, 2014Richard Kirsch

    This is the third in a series of posts summarizing a new Roosevelt Institute report by Senior Fellow Richard Kirsch, entitled “The Future of Work in America: Policies to Empower American Workers and Ensure Prosperity for All.” The report provides a short history of how the rise and decline of unions and then explores reforms in labor policy to empower American workers to organize unions and rebuild the middle class. Today’s post explains why labor law in the U.S.

    This is the third in a series of posts summarizing a new Roosevelt Institute report by Senior Fellow Richard Kirsch, entitled “The Future of Work in America: Policies to Empower American Workers and Ensure Prosperity for All.” The report provides a short history of how the rise and decline of unions and then explores reforms in labor policy to empower American workers to organize unions and rebuild the middle class. Today’s post explains why labor law in the U.S. provides a fragile, limited foundation for giving workers the power to claim a share of economic wealth or have a voice at work.

    Last month the body that governs labor law in the United States, which for the first time in ten years has a full complement of members, proposed some new regulations. The uproar from business trade associations was predictably over-the-top, declaring that a proposed regulation simply requiring that businesses disclose the identity of anti-union consulting firms was aimed at taking employers out of the union organizing process entirely.

    From the rhetoric of the business lobby and their conservative allies, you would think that the U.S. has robust labor laws, which put employers at a dire disadvantage. But the truth is that federal labor laws provide a weak and limited set of legal procedures for workers who want to organize for a fair share of the wealth they produce.

    When the National Labor Relations Act (NLRA) was enacted in 1935, during the heart of FDR’s New Deal, the United States finally recognized the value of providing a systematic legal structure for workers to negotiate with employers. The NLRA’s passage alone did not make union organizing easy. It took continued pressure from striking workers, as well as government-imposed labor peace to ramp up production during World War II, to achieve some compliance by employers with the NLRA’s framework for collective bargaining.

    But just two years after the War ended, Southern Democrats joined Republicans, to dramatically weaken the young law – which already had plenty of shortcomings – by passing the Taft-Hartley Act, over President Truman’s veto,. What remains is a tepid law, offering a limited, fragile foundation for organizing workers, complete with loopholes which can be exploited by employers who resist unionization.

    The NLRA applies to most – but not all – private sector workers. It leaves out domestic workers, farmworkers, supervisors (workers who supervise others but don’t make policy decisions) and independent contractors (even when they work for one employer). It also leaves out all public employees.

    In order for the workers who want to organize to form a union with collective bargaining rights, a majority of eligible workers in a bargaining unit must agree to support the union. The employer and union must agree to who is in the bargaining unit (or the NLRB will decide), which typically is no wider than a single facility or a certain category of workers in a single facility or department.

    Workers can request to form a union by having a majority sign union cards, but the company can insist on an election, during which the company can bar union representatives from speaking at the worksite, but can compel workers to listen to anti-union speeches.

    While employers are not legally permitted to fire a worker for supporting the union or for taking other forms of collective action, the only penalty that employers face for firing a worker is that they are required to re-hire the worker and provide them with back pay. Moreover, this back pay award is reduced by the amount of wages that the employee earned or could have earned after the firing. It often takes years before the Board and courts order even such a small penalty. These weak penalties make it easy for employers to break the law, and, as a result, the firing of union supporters has become commonplace.

    Once a union is recognized – either by winning an election or by card check – the union and the employer are required to bargain in good faith over wages, benefits, and working conditions. Other factors impacting workers are off the table unless the union and employer agree to discuss them. If an employer refuses to negotiate in good faith, the Board may request that a federal court hold the employer in contempt and fine it, a process which usually takes years. If the employer and union do negotiate but cannot agree on these questions, the employer may determine actions on its own.

    During contract negotiations, both sides are permitted to use economic pressure to win concessions over mandatory subjects. The union can not apply economic pressure to suppliers or customers, only to the employer itself. The NLRA prohibits employers from firing strikers, but employers are entitled to hire permanent replacements for strikers. After the strike ends, any striker who has been permanently replaced technically remains an employee, unless she has found comparable work. But the employer is not required to actually offer them work until a position becomes open. As a result, striking workers may be out of work for a long time or never offered a job at the firm.

    Employers are also permitted to lock out workers. Workers who have been locked out also may be replaced temporarily, but not permanently. If a union strikes over an employer’s commission of an unfair labor practice – such as firing a worker for supporting the union – the employer may hire only temporary replacements, and they must reinstate the strikers immediately upon the end of a strike.

    Of course, it takes timely action by the Board, backed up by federal courts, to enforce any of these protections. But, as we discussed in the previous post in this series, a combination of appointments of regulators hostile to the NLRA and aggressive corporate resistance to complying with the law have made timely enforcement the exception.

    Today, the NLRA process is used much less than in the past. The number of elections for union representation dropped by 59% from 2000 to 2012, from 2,957 to 1,202. Most of the elections were to continue current union representation, rather than win the right to bargain for new workers. The number of new workers organized through the election process in this period shrank from 106,459 in 2000 to 38,714 in 2012, a decrease of 64%.

    The weaknesses in current labor law, particularly in relation to the changes in the economy between the mid-twentieth century and today, provide the context for the following posts in this series, which present an array of proposals to reform and transform labor law for the 21st century economy. 

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  • How the Weakening of American Labor Led to the Shrinking of America’s Middle Class

    Mar 26, 2014Richard Kirsch

    This is the second in a series of posts summarizing a new Roosevelt Institute report by Senior Fellow Richard Kirsch, entitled “The Future of Work in America: Policies to Empower American Workers and Ensure Prosperity for All”.

    This is the second in a series of posts summarizing a new Roosevelt Institute report by Senior Fellow Richard Kirsch, entitled “The Future of Work in America: Policies to Empower American Workers and Ensure Prosperity for All”. The report provides a short history of how the rise and decline of unions and then explores reforms in labor policy to empower American workers to organize unions and rebuild the middle class.  Today’s post describes the corporate effort beginning in the 1970s to grab more of the nation’s wealth, at the expense of workers.

    When General Motors President Charles Wilson told a U.S. Senate Committee in 1953 that what was good for General Motors was good for the country, he captured an era in which the good wages and benefits earned by the workers at U.S. manufacturing companies powered the nation’s economy and built the middle class.

    But sixty years later, what is good for the GM of our day – Walmart – is clearly not good for America, as a comparison between the biggest private employers of both eras underscores. While the American auto industry operated on the premise of one of its founders, Henry Ford, that workers should get paid enough to buy its costly products, Walmart operates on the premise that its workers should get paid so little that the only place they can afford to shop is at their low-priced employer.

    A General Motors plant was the anchor of a community. It became the hub of a supply line for auto parts manufactured by other unionized companies. Its managers and factory workers earned enough to shop at local businesses and pay taxes to support public services. They had the resources and time to participate in the life of the community. They expected to stay with GM for their entire careers and to retire on a pension earned while working at the firm.

    How very different from Walmart. When a Walmart opens up, local businesses close. Wages decline throughout the community. Many of the items in a Walmart store are made outside of the country, part of a global supply chain built in search of lower wages in order to meet Walmart’s low pricing demands. Workers often earn so little that they qualify for government benefits. Many Walmart employees are hired part-time or as temps. They lack job security and retirement security, other than the small Social Security checks their wages will accrue.

    There are stark differences between prospects for organizing workers into a union between the auto factories of the 20th century and the Walmarts of today. The GM plant in which workers staged the famous sit-down strike in Flint, Michigan in 1937 employed 47,000 workers. The average Walmart store employs 300 workers. It would be too expensive for an auto manufacturer to shutter a factory threatened by a strike. But when workers voted to unionize a store in Canada, Walmart closed down that location, a small loss for a company with 4,200 stores.

    How did the transition from the manufacturing economy to the Walmart economy occur? The breakdown of the union and government enforced New Deal social compact, in which major corporations shared their profits with their workers, began in the mid-1970s. The resurgence of economies around the globe and the shocks of oil price increases threatened the dominance and profitability of American business. The U.S. began bleeding manufacturing jobs, a loss of 2.4 million jobs between 1979 and 1983.

    U.S. corporations responded in a number of ways. One was to insist that, in the words of a 1974 Business Week editorial, “Some people will have to do with less…so that big business can have more.”

    Corporations increased their focus on rewarding shareholders with short-term profits, rather than investing in their workers or in long-run growth. General Electric, for example, slashed its workforce and cut investment in research, and its stock price soared.

    When Chrysler faced bankruptcy in 1979, the United Auto Workers agreed to an end to annual wage increases tied to productivity. These concessions were then extended to unionized workers at Ford and General Motors. As Harold Meyerson writes, “Henceforth, as the productivity of the American economy increased, the wages of the American economy would not increase with it.”

    Corporations also began exploiting weaknesses in U.S. labor law, which allowed corporations to hire replacements for striking workers. In 1981, a period of high unemployment, President Ronald Reagan fired the nation’s air-traffic controllers for going out on strike. Major firms in a host of industries followed Reagan’s precedent: they demanded that their workers accept lower wages, which precipitated strikes, and then hired replacement workers at lower wages. The strike - the central tool that workers had used to win their fair share of economic growth - virtually evaporated over the next few decades. In the 1960s and 1970s, workers staged an average of 286 strikes a year. That declined to 83 strikes a year in the 1980s and finally to 20 a year since 2000.

    In the early 1970s, after major consumer and environmental legislation was enacted by Congress over the objections of big business, Corporate trade associations moved their offices to the nation’s capital and made big investments in lobbying and campaign contributions. The policies they pushed included gutting trade protections for American manufactured goods. This eased the way for the loss of 900,000 textile and apparel jobs in the 1990s and 760,000 electronics manufacturing jobs in the past two decades.

    Corporations pressed for the appointment of national labor law regulators who were antagonistic to unions. The combination of weak labor laws and hostile regulators enabled businesses to resist union organizing more aggressively. Unions lost members, and their political clout declined relative to surging corporate political power. Their efforts to win labor law reform fizzled, even in Democratic administrations from Carter to Clinton to Obama.

    As major banks and Wall Street firms went public, they too became focused on short-term profits. They drove the businesses to which they loaned money or invested in to maximize their short-term profits by cutting pay and benefits and by firing workers. A hot private equity industry saddled businesses with huge debts and drove firms to slash labor costs.

    While the labor movement as a whole was slow to respond, there were some major unions that refocused resources on organizing new members. These unions won some victories in a few sectors, notably health care and in the public sector. But the gains were not enough to reverse the decline of union membership in traditional strongholds like manufacturing and construction. Today, unionized workers make up 11% of the workforce, the lowest level in 97 years. With only 7% of private sector workers in unions, the labor movement can no longer play an effective role in raising workers’ wages throughout the economy.

    American workers remain among the most productive in the world; productivity in major sectors like manufacturing continues to rise. But in industry after industry, the share of revenues going to wages has dropped, while the share going to profits has soared. Labor’s share of national income has plummeted, while the share taken by capital is at a record high. If median annual income had kept up with productivity, it would now be $86,426. But the current median income is actually $50,054, the lowest it has been since 1996 when adjusted for inflation.

    Today, unemployment is stuck at high levels. Millions of workers are trapped in part-time jobs or jobs for which they are over-qualified. Most of the new jobs that have slowly emerged after the recession are low-wage jobs, but the proportion of high-wage jobs is also on the rise. It is the share of middle-wage jobs that is shrinking.

    Economies will always face challenges. But the crushing of America’s middle-class over the past forty years was not inevitable. It was the result of decisions made directly by corporate America to advance public policies that enabled them to take more of America’s wealth and to share less with American workers. One of the most significant of these corporate strategies was to weaken the ability of unionized workers to demand a fair share of the nation’s growing wealth, whether they demanded their fair share at the bargaining table or in the halls of Congress.

    Rebuilding the engine of our economy - the middle class - requires us to re-imagine how organized workers can once again exercise power to recreate an America in which prosperity is broadly shared.

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  • The Future of Work in America: Policies to Empower American Workers and Secure Prosperity for All

    Mar 25, 2014Richard Kirsch

    Download the report (PDF) by Richard Kirsch

    Download the report (PDF) by Richard Kirsch

    The Future of Work is bringing together thought and action leaders from multiple fields to re-imagine a 21st century social contract that expands workers’ rights and increases the number of living wage jobs. The Future of Work is focusing on three areas: promoting new and innovative strategies for worker organizing and representation; raising the floor of labor market standards and strengthening enforcement of labor laws and standards; and assuring access to good jobs for women and workers of color.

    Under the sponsorship of the Roosevelt Institute, the Future of Work is a collaboration between the Roosevelt Institute and the Columbia Program on Labor Law and Policy. The project is organizing a series of meetings, policy papers, and a conference, that aim at generating, debating, and communicating multiple approaches to empowering American workers to build an economy of broadly shared prosperity.

    This report, Policies to Empower American Workers and Secure Prosperity for All, is an introduction to the first area: policies to invigorate worker organizing. The paper is in four parts:

    • A history of how organized workers fueled America’s broadly shared prosperity;
    • A history of how the weakening of American labor led to the shrinking of America’s middle class;
    • A primer on American labor law;
    • Policy ideas to reform and transform worker organizing.

    Read "The Future of Work in America: Policies to Empower American Workers and Secure Prosperity for All," by Roosevelt Institute Senior Fellow Richard Kirsch.

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