Roosevelt Fellows React: Will Krueger's Common Sense Break Through?

Aug 29, 2011

As President Obama just announced, Princeton Professor Alan Krueger is his pick to be the next Chairman of the Council of Economic Advisers. Will Krueger's background in labor bring a fresh perspective to the table? Or will he too be stymied by business as usual? Roosevelt Institute Fellows weigh in.

As President Obama just announced, Princeton Professor Alan Krueger is his pick to be the next Chairman of the Council of Economic Advisers. Will Krueger's background in labor bring a fresh perspective to the table? Or will he too be stymied by business as usual? Roosevelt Institute Fellows weigh in.

"At a time when the economic and political hurricane in Washington appeared to cause all people with any economic training or talent to evacuate the administration, it is welcome news to see that Princeton economist Alan Krueger has joined as the head of the Council of Economic Advisers. He is a fine economist with government experience at the Treasury and the Labor Department and he should be very familiar with the people and practices of government. There are no issues more important to address than the persistent and devastating high levels of unemployment, and Krueger's academic strengths are ideally suited to meet the challenge. Dr. Krueger has also done a great deal of work on the economics of popular music. One hopes that he can change the tune of austerity that is currently a hit in Washington D.C. and refocus our nation on the need to eliminate the tolerance of so many idle resources." -Senior Fellow Rob Johnson

"I think the choice of Krueger is great, but a little too late. He's well respected across the ideological spectrum within the mainstream economic discipline, and he's generally a liberal economist, concerned about issues of economic and racial inequality, and not zealously anti-labor. (In fact, he's probably slightly pro-labor.) He's not a Krugman or Stiglitz or Sachs politically, but he's not far behind them. His work has been important in debunking right-wing ideology about the effect of the minimum wage. In fact, one of the most important studies of his career may be a highly influential paper and book he wrote with David Card using a 'natural experiment' of a minimum wage increase in New Jersey and not Pennsylvania to empirically assess whether or not an increase in the minimum wage had an adverse affect on unemployment, finding it did not. The method and evidence used were of the highest and most cutting-edge within the discipline, forever changing the debate.

"Which brings me to my second point: as Krugman recently pointed out, science doesn't matter to today's right. So although Krueger is an excellent economist and a great appointment, it doesn't seem like it will matter much in terms of the policy debate and policy choices on the agenda. And frankly, it's not as if Christina Romer, his predecessor, really had much influence relative to the Summers and Geithners in the administration. So I'm really less sanguine about his influence now (and that of Rebecca Blank, one of the top poverty scholars of her generation over at Commerce) on issues of economic policy and inequality." -Fellow Dorian Warren

"It's good to have a highly competent labor economist running the place. He has long been concerned with unemployment, wage stagnation, and inequality. Whether he can break through the political wall at the White House is another question." -Senior Fellow Jeff Madrick

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Verizon Strike is About All of Our Economic Futures

Aug 24, 2011Richard Kirsch

When a company making big profits squeezes its workers, we all pay.

For now, Verizon's striking workers are back on the job. A two-week walk-out by 45,000 Communications Workers of America (CWA) and International Brotherhood of Electrical Workers (IBEW) members from Massachusetts to Virginia led to Verizon finally agreeing to seriously engage the unions at the bargaining table. But the tough bargaining is just beginning. The issues at hand are about more than just a labor dispute -- they are at the heart of the problems facing our economy.

When a company making big profits squeezes its workers, we all pay.

For now, Verizon's striking workers are back on the job. A two-week walk-out by 45,000 Communications Workers of America (CWA) and International Brotherhood of Electrical Workers (IBEW) members from Massachusetts to Virginia led to Verizon finally agreeing to seriously engage the unions at the bargaining table. But the tough bargaining is just beginning. The issues at hand are about more than just a labor dispute -- they are at the heart of the problems facing our economy.

So what about the rich getting richer while average Americans tread water? The Chairman of Verizon, Ivan Seidenberg, made $18 million last year, 300 times that of the average worker (see Verizon proxy statements). Verizon made $3 billion in profits for the first half of this year alone and $22.5 billion in the past four years. Still, the company is asking its workers for $1 billion in annual concessions, which work out to about $20,000 a worker. Verizon's list includes cuts in pensions, holidays, sick leaves, and benefits for workers injured on the job. The company is asking workers to pay thousands of dollars more for health care each year, while Seidenberg and his wife get free health care for life.

Corporate America is doing fine while paying fewer taxes at home and shipping jobs overseas. Verizon got corporate tax refunds from the IRS totaling $1.3 billion in 2009 and 2010, years in which it made $7.5 billion. Verizon has outsourced thousands of jobs and is asking in the new contract for provisions that would make that outsourcing even easier.

Unions are a shrinking part of the American work force, leading to lower wages and benefits. CWA and IBEW represent Verizon's landline business. Despite repeated attempts to unionize Verizon, only 70 Verizon wireless workers belong to a union. One bright spot is that the unionized members of Verizon are also installing the company's FiOS product, which delivers cable television and Internet. But Verizon is competing with big, non-unionized cable companies like Time Warner and ComCast, where wages and benefits are significantly lower. There is better news in the broader wireless industry, where 40,000 employees of AT&T wireless are unionized. But that represents about one-third of the industry, whereas virtually the entire landline business is unionized.

Is new efficient technology replacing the old and displacing jobs? Verizon wants to make it seem like its unionized landline workers are working for a dying technology. But much of what we think of as new technology relies on the landlines installed and maintained by Verizon's unionized workers. Did you realize that your wireless signal actually goes through landlines that carry it from a cell tower? Or that when you use Skype or make a call on Gmail that they are carried by landlines? Severe limits on available spectrum force wireless companies to constantly find new ways to transmit signals over wired connections.

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Where did Verizon get the funds to start Verizon Wireless? From the cash generated by its traditional landline business. But while Verizon shareholders continue to reap the benefits of that investment, Verizon wants to stop the landline workers from sharing in the returns.

In short, what's at stake in the labor dispute between Verizon and its unions are the middle class jobs that drive the economy but are fast disappearing. It's not a surprise that Verizon's Chairman, Seidenberg, is also the Chairman of the Business Roundtable, the organization that represents the CEOs of America's biggest companies. Verizon is working hard in its proposed contract to keep up with all the corporate Joneses that have reaped record profits by cutting wages and benefits, shipping jobs overseas, and legally bribing Congress to create huge loopholes in the corporate tax code.

In two weeks we will mark the tenth anniversary of the attacks on the World Trade Center. Will we remember that in the days following the catastrophe, Verizon technicians resurrected the entire communications infrastructure of lower Manhattan, allowing the stock market and world financial markets to resume business with barely a hitch? In the last decade, Wall Street did great -- even after crashing the economy and getting government bailouts. It's the Main Street workers who kept the Wall Street infrastructure going who remain under attack, just as our entire economy remains under attack by companies like Verizon that would destroy middle class jobs in the United States to protect their multi-millionaire CEOs and corporate shareholders.

Next time you pick up your telephone, remember that the fight that Verizon's workers will continue to wage with the company over their contracts in the coming weeks and months is not just about whether the men and woman who make that call possible will continue to hold decent jobs that provide security for their families. It's about whether one more middle class engine of America's puttering economy will be wrecked.

Richard Kirsch is a Senior Fellow at the Roosevelt Institute and a Senior Adviser to USAction, whose book on the campaign to win reform will be published in 2012. He was National Campaign Manager of Health Care for America Now during the legislative battle to pass reform.

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Four Steps for Smart Scheduling: A Giant Leap for Working Families

Jul 25, 2011Joan Williams

workers-200Last Monday, unions and employers came together to make work-life balance a reality for hourly workers.

workers-200Last Monday, unions and employers came together to make work-life balance a reality for hourly workers.

The common assumption is that workplace flexibility is impractical for hourly workers. Not so: On Monday, models emerged to offer workplace flexibility in three contexts where it might seem impossible: health care, restaurants and small business.

Jennifer Piallat, owner of Zazie Restaurant in San Francisco, is busy inventing a new model of the restaurant business. The classic model gives servers unstable schedules that change from day to day and week to week. There are good reasons for this: much of servers' compensation comes from tips, and a "bad" shift (Monday night) can yield $50 in tips, whereas a "good" one (Saturday night) can yield $300 in tips. So the instinct is to shift people in and out of the more lucrative shifts by having them work different days on different weeks.

But that doesn't fit with many workers' lives. Low-income families are more likely than other families to be tag teaming, where Mom works one shift and Dad works a different shift. That means that, if Dad's schedule is unstable (or vice versa), Mom may be unable to show up for her shift-and may lose her job. Low-income families also are much more likely than other Americans to be caring for an elder 30 or more hours a week, and much more likely to be caring for ill relatives-that's often one reason these families are poor.

So Piallat sets up a permanent, long-term schedule that gives each server some high-tip and some low-tip shifts. That's the first step for employers of hourly workers. Virtually any job can be restructured to achieve a more stable schedule.

A related issue was addressed by Connie Leyva, President, California Labor Federation & UFCW Local 1428, who represents grocery and drug store employees. Her union negotiated more notice of weekly schedules, requiring that schedules for the following week be posted by Friday at noon. "It doesn't seem like a big deal. It's a huge deal," she noted.

Leyva's union also negotiated a contract that guarantees four hours of work once employees report to the workplace. This addresses one of the big problems with just-in-time schedules -- often, workers show up on a slow day only to be sent home for lack of customers.

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Creating a dependable schedule is only the first step. The second step is to set up a formal system for handling schedule changes. At Zazie, Piallat puts up a big Office Depot calendar. If you can't make your 9 a.m. shift, you just write your name by that shift; the first person who signs their name by yours gets the shift.

The third step is to address the issue of overtime. Netsy Firestein of the Labor Project on Working Families, who sat on the labor panel at the conference, reported that some unions have negotiated contracts in which employers rely on voluntary instead of mandatory overtime. My report Improving Work-Life Fit in Hourly Jobs found two additional tools for scheduling overtime that accommodate the reality of employees' lives. One is to separate the workforce into four groups, and assign each group one week a month for which they need to be available for overtime. (Piallat of Zazie commented she was going to adopt this system.) Another is to give employees vouchers that allow them either to bid for overtime, or to avoid overtime.

The final step is to offer hourly workers short periods of time off work. A key issue is allowing employees to take time off in two- or four-hour segments. This is vital for low-wage workers who cannot afford to attend a school conference or doctor's appointment if they need to take an entire vacation day in order to do so.

Marianne Giordano, President of OPEIU Local 30 and labor rep on Kaiser's labor-management partnership, reported that Kaiser Permanente -- a hotbed of best practices thanks to its labor-management partnership -- has already instituted this policy successfully. Giordano described a call center that had once had extraordinarily high turnover and low morale. "There has been a complete turnaround," she reported, as a result of workplace flexibility initiatives. "If it can be done in a call center, it can be done anywhere."

Barbara Grimm, Senior Vice President at the Kaiser Office of Labor Management Partnership, reported marked success with self-scheduling, and noted the importance of cross-training. Kaiser actually offers business training to workers to give them the tools they need to help work with managers to deliver the best possible patient care. "The person who is doing the job knows best how to do it," said Grimm. "Teams come up with their own staffing solutions. It usually works better that way. They can come up with better solutions in terms of work satisfaction, patient satisfaction and affordability."

If flexibility is impossible in any industry, it would seem to be the moving industry. But it isn't, reported Lori Tubaya of Johnson Moving & Storage. Jim Johnson, the company owner, heard me speak in 1995, and went home and offered telecommuting for everyone in the company. "That not only changed my life...it has benefited five generations of my family," said Tubaya. She discussed the near-zero turnover at her company among employees in charge of collections-typically a high-turnover job. The company also offers flexibility to the movers themselves. She told the story of one mover who was a divorced father with custody of a child. He kept arriving late. "Instead of making excuses, saying the bus was late, he could just tell us he needed to come in later so he could drop his child off from school," Lori said.

Bottom line: if these employers can improve the work-life balance for movers, health care workers and retail and restaurant staff, this can be done anywhere, in any job.

Joan Williams is the author of Reshaping the Work-Family Debate.

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FDR's Championing of Labor Unions Key to Prosperous Post-War Economy

Jul 22, 2011David Woolner

Under Roosevelt's leadership, union membership and the size of the American economy grew hand-in-hand.

"It is now beyond partisan controversy that it is a fundamental individual right of a worker to associate himself with other workers and to bargain collectively with his employer." FDR --Address at San Diego Exposition, October 2, 1935

Under Roosevelt's leadership, union membership and the size of the American economy grew hand-in-hand.

"It is now beyond partisan controversy that it is a fundamental individual right of a worker to associate himself with other workers and to bargain collectively with his employer." FDR --Address at San Diego Exposition, October 2, 1935

Just over three quarters of a century ago, Franklin D. Roosevelt signed one of the most important -- though frequently overlooked -- pieces of the reform legislation to come out of the New Deal: the National Labor Relations Act. More often referred to as the Wagner Act, after its champion, Senator Robert Wagner of New York, this landmark bill established the National Labor Relations Board, an independent, quasi-judicial government agency that played a critical role in the remarkable expansion of union membership that took place during the Roosevelt era.

Prior to the passage of the Wagner Act, and thanks in part to the anti-union climate of the 1920s, union membership in the United States had declined precipitously. At the onset of the Great Depression, for example, membership in the American Federation of Labor had fallen from a high of five million in 1919 to less than 3 million in 1933. Seeking to expand workers rights as part of his administration's efforts to launch the New Deal, FDR created a weaker NLRB as part of the 1934 National Recovery Administration. But the 1934 agency proved largely ineffective and in 1935 FDR endorsed Senator Wagner's efforts to make the NLRB permanent and more powerful. The new law declared a whole series of coercive management practices to be illegal, and gave private sector workers the right to form unions and to engage in collective bargaining. It also gave the NLRB the right to determine bargaining unit jurisdictions, oversee union elections and certify the results as legally binding. The law also insisted that management had a duty to bargain with a properly certified union, though of course it did not compel the union to agree with the union demands.

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As with many other pieces of New Deal legislation, the establishment of the NLRB was bitterly attacked by employers as a measure that would ruin the US economy. But such fear mongering proved completely unfounded. Over the next ten years both union membership and the size of the US economy would grow hand in hand, so that by 1945 the ranks of unionized worker had reached a record 35 percent of the non-agricultural workforce, while wages had increased by 65 percent, unemployment had fallen to less than one percent, and the US economy exploded to meet the demands of the Second World War.

Moreover, the labor legislation of the New Deal helped form the basis of a long period of post-war prosperity that vastly expanded the size and wealth of the American middle class. Yet sadly, the right of American workers to form unions and engage in collective bargaining -- and hence protect their job security and wages -- is once again under attack. The recent attempt by conservative Republicans in the House of Representatives to challenge the NLRB authority to act through the introduction of such bills as the Protecting Jobs from Government Interference Act is but one example of this ongoing attempt to weaken the NLRB's authority and with it the power of unions to fight against unfair labor practices. In 1935, in the wake of the Wagner Bill, FDR asserted that the "fundamental...right of a worker to associate himself with other workers and to bargain collectively with his employer" was "now beyond partisan controversy." Based on the recent activities of this Congress, and the strong anti-union movement among conservatives in states like Wisconsin and New Jersey it would appear that he was sadly mistaken.

David Woolner is a Senior Fellow and Hyde Park Resident Historian for the Roosevelt Institute.

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Dorian Warren on Why We All Need a Strong Labor Movement

Jul 18, 2011Bryce Covert

dorian-warrenI got the chance to talk with Roosevelt Institute Fellow Dorian Warren, who just publis

dorian-warrenI got the chance to talk with Roosevelt Institute Fellow Dorian Warren, who just published new research on workplace anti-union campaigns. We discussed his surprising findings about illegal employer intimidation tactics, the labor movement's biggest weaknesses, and why comprehensive labor reform would amount to some of the best economic stimulus we could find.

Bryce Covert: You recently published new research on workplace intimidation tactics against union organizing. Can you explain the important findings that came out of your work?

Dorian Warren: As background, let me start by saying that we already know what happens when workers try to organize into a union: employers routinely violate the law. They use a range of legal and illegal tactics. The most egregious one is firing workers who are seen as union leaders or union influencers, and that happens in about 34% of union election campaigns. A number of other illegal tactics include threatening workers, threatening to close the plant, threatening to close the shop, illegal pay raises, that kind of stuff.

The other thing to note is that usually when workers file a petition with the National Labor Relations Board for an election, the wait from the date they file a petition to when the election is scheduled is really long. Throughout all that time, employers engage in anti-union campaigns, again using these legal and illegal tactics. So the National Labor Relations Board proposed a rule change to potentially decrease the number of days between when workers file a petition and form election and when the election is scheduled and held.

The research that I did with my coauthor Kate Bronfenbrenner was to look at the timing of when employer campaigns start through the election and what difference the proposed rule change would make. What we found was that the employer campaign starts very early. It definitely starts once workers start filing a petition for election, it continues constantly, and the number of tactics they use are multiple. So every single day before an election the employer campaign is constant, the tactics are cumulative, and it's unrelenting.

But the surprising finding is that employer campaigns start even before workers petition. So let's say Target or WalMart hires new employees and as part of the orientation it gives them an anti-union video to watch. From day one that's basically an employer anti-union campaign. Then it's constantly probing and trying to find out if there's any talk of unionization. The employer knows that workers are talking about potentially wanting a union, and they start doing things way before workers even file a petition to ask for an election. The longer employers can delay an election, the more time they have to harass and intimidate workers. But our research shows that from before the workers file a petition to when they file a petition, leading all the way up to an election and even after the election if they win the election, the employer's still using these tactics to intimidate and harass workers.

BC: What are the details of the NLRB rule change proposal and what are its implications?

DW: The proposal is to streamline the NLRB election process, which is very clunky. There are lots of delays and it takes a long time for workers to actually get an election. It would also prevent employers from attempting to delay. Workers usually file for election, the election date is set, but then close to the election date the employer files a claim with the National Labor Relations Board, usually falsely accusing the union of some kind of unfair practice or tactic, which then the Board has to investigate. So they delay the election. Then after the investigation, which usually finds nothing wrong, the election is rescheduled, and then that starts all over again. This rule would say there will be no delays. There will be an investigation after the election as opposed to postponing elections to investigate these delays, so-called infractions, either by employers or the union. The idea would be obviously that these changes would give workers a better chance to unionize free of intimidation and coercion.

Assuming this rule change goes through, it would make it potentially easier for workers to organize because they wouldn't be subject to the employer campaign for as long and therefore would probably end up winning more union elections. It will make organizing easier in a climate where employers are absolutely hostile by default and break the law because the penalties aren't that strong.

Employers are going crazy about this. The Chamber of Commerce is going crazy about this proposed rule change because they know that this would make it easier for unions to organize.

BC: If the rule goes through, does it address what you identified in your research? What goes unaddressed?

DW: The only thing that would address what we found in our research would be comprehensive labor reform. But obviously the political possibility for that is zero. This rule change would help address what we find, but it's not going to eliminate the employer campaign. Employers are still going to violate the law and fire people and threaten people. They'll just have a shorter time to do it, so hopefully it won't have as much impact on workers as it does now. This rule change does nothing about our big finding that employers already violate the law before workers even file for a petition. Those practices are still going to happen and employers are still going to be spying on workers, essentially, to see if there's any talk of a union and then go into action immediately when they hear it.

It's a systemic problem. There's really nothing that would change it. There are no quick fixes in terms of what the National Labor Relations Board can do. They really need legislative change to alter the incentive structure against employers violating the law.

BC: Are there other short-term things that can be done right now short of comprehensive reform?

DW: After this I'm not sure what's left. There was another rule change that another federal agency did issue. The National Labor Relations Board covers all private sector workers except transportation workers. Railroad and airline workers are covered by the Railway Labor Act. If you're an airline worker and you want a union, the election goes to the National Mediation Board, not the NLRB. Last year, with two pro-labor Obama appointees, the National Mediation Board made a rule change for their election rules. In political elections, basically whoever gets the majority of the vote wins, and the same with the NLRB union elections. The Railway Labor Act was always different. It said that a majority of all workers was what it took to win unionization. So if people didn't show up to vote you were kind of screwed. Basically if someone didn't show up that was a no vote. The rule change was to make it similar to the National Labor Relations Board and our basic election rules for political campaigns -- just a majority of who shows up. They issued that rule change last year and again business groups went crazy. One of the implications of that is probably thousands of flight attendants at a couple of airlines, something like forty or fifty thousand flight attendants, are going to have elections to decide whether they want to join a union or not.

But after that I'm not sure what else the Board can do. They're already trying to speed up the processing of cases when employers or unions, but really employers, violate the law. There has to be an investigation and there's a trial to see if the employer violated the law, and then there's a ruling. There are hundreds if not thousands of cases and there's always a backlog because Republicans are trying to defund the Board and compromise its work.

After this latest rule change that's pretty much it. That's all they can really do.

BC: Ignoring politically impossibility, what would a modern-day Wagner Act to update labor laws look like?

DW: The first thing is there'd be no occupational exclusions. We should have a national campaign right now to take out the occupational exclusions of the Wagner Act. We know the history of why they're in there in the first place. It's unacceptable that they're still in. No worker should be denied protection or the fundamental right to freedom of association.

The second thing would be really, really strong penalties for violations of the law. Ideally it would match the whole system of employment law, including all the anti-discrimination laws like sex discrimination, race discrimination, age, disability. For instance, if employers fire a worker for union activity, the only penalty is that they have to hire the worker back and they have to post a sign in the workplace saying they won't do it again and potentially pay the worker back pay. That's not a strong incentive against violating the law. Unlike, say, anti-discrimination law, where you can sue for punitive damages, which works as a stronger sanction against employers for violating the law. Even raising the penalties so that you create strong incentives for employers to actually obey the law would be important. The potential for class action lawsuits when employers violate workers rights, the potential for triple or even hundred times back pay if they fire workers, really huge fines, punitive sanctions for violating any workers rights -- that would be, I think, ideal in any kind of twenty first century Wagner Act.

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BC: To play devil's advocate, many say that pro-labor reforms in a recession will hamper businesses from creating jobs. What do you say to that?

DW: In the preamble to the National Labor Relations Act, the justification is to level the playing field so that workers can bargain for higher wages with employers, which would then help the economy and help get us get out of the Depression because it would fundamentally give workers consumption power. They'd buy more goods and services, which would create more jobs, which would help the economy. It's economic stimulus, essentially.

I would say the same thing is true now. The problem has been that with wage stagnation for forty years, people had to take on debt to keep up with inflation and to buy basic things because they weren't getting raises. If we were to pass a new Wagner Act today that gave workers the right to organize free of intimidation, they could bargain for higher wages with employers, who have record profits, and that would help to stimulate the economy again. First, it would help people get out of underwater mortgages, and second, it would help people be able to buy more stuff. Especially in an economy that's 70% based on consumption, actually giving workers more bargaining power is a form of stimulus.

BC: Following that logic, with all the backward movement against labor -- what happened in Wisconsin, the Supreme Court decision on WalMart -- is there an anti-stimulus effect from these attacks?

DW: Part of that process of downward mobility has been the loss of pensions and economic security for private sector workers, especially with declining unionization, which is only 7% in the private sector down from almost a third in the 1940s. The aim of these attacks on public sector workers is to put them in the same boat as private sector workers -- strip them of pensions, strip them of the ability to bargain for higher wages. In that sense I do think there is a huge effect on the economy because with higher unemployment and as people lose their bargaining power they're not going to be able to purchase more stuff. Also, as people lose their pensions I can't even imagine what that's going to do in terms of pushing older people into the workforce longer at the same time that there's probably going to be an increase in age discrimination.

For all those reasons, I think the attacks are very dangerous. It's basically figuring out a way to eliminate the middle class, which is just absurd to me, and to fundamentally destroy the labor movement, because the public sector is now the strongest part of the labor movement. A majority of unions are public sector workers for the first time in history. They're not in the private sector. And think about teachers and the attacks on teacher's unions: one in four union members in this country is a teacher. It's mind-blowing actually. It's also a political attack and an explicit attempt to weaken the strongest base of the Democratic Party.

BC: In your view, what can the labor movement focus on right now to help the tide flow in the other direction?

DW: The labor movement's big Achilles' heel is the fact that it never organized the South. That's important for two reasons. It's important for labor's strength because the South is a whole different economy. Because it was a non-union economy, it actually ended up destroying the manufacturing sector and the labor movement. The auto industry essentially moved to different states to get out of UAW contracts.

The second implication is political. Because labor has a huge influence on how workers vote, it's not coincidental that the South is pretty Republican and pretty right-wing. If you're a white working class man there's basically a twenty-point gap between whether or not you'll vote Democrat or Republican and it's all based on union membership. So if you're a white working class man and you're in a union, you're much more likely to vote Democrat than Republican -- it's the union difference. If you're a white working class woman you're already a little bit more likely to vote Democratic, but you're much more likely if you're a member of a union.

There has to be some really transformative strategy and real commitment, even if it's just targeting three key states for instance, for labor to organize the South. It would help make the labor movement stronger but also change the politics of the country, frankly. Labor's been the core base of the Democratic Party since the New Deal. It seems extraordinarily short sighted that the party is looking at the destruction of its base and just standing by like a deer in headlights, and in some cases aiding and abetting the attack on labor.

BC: Many saw what happened in Wisconsin as a sign of the labor movement's reinvigoration. Do you have hope for the future of the movement?

DW: I have a different take on Wisconsin. Yes it was great that people mobilized, but I would stop short of what others have called it -- a victory of some kind. I'm not very hopeful at all, even of Wisconsin. That was a moment. And we lost, frankly. And we're losing in more than a dozen states around the country. Wisconsin's either a sign of reinvigoration or a sign of the last gasp. I think people over-interpreted it. I want to be more sober about it and say okay, where do we go form here, what's the strategy? It's a defensive fight. We're the ones trying to defend fundamental rights. We lost. Now what do we do? What's our vision? First we have to get those rights back. And it's not like things were great before. What's our vision for revitalizing workers' rights broadly? Unless there are some serious breakthrough strategies that labor, that workers, can come up with, I think the labor movement has about five years to figure out how to stay alive. Otherwise it's all over.

There is a bit of good news. Last week there were recall elections in Wisconsin and all the anti-labor incumbents were defeated. That suggests that there is some sustainability and some momentum from what happened in February. That's hopeful. But we haven't seen the efforts of people to mobilize in Wisconsin in any other place. In Ohio, in New Jersey, in New Hampshire, in Michigan, Oklahoma, all across the country, there are these basically same bills, but there hasn't been the same kind of mobilization that was shown in Wisconsin. Something more has to happen on a large scale. I don't see it yet.

BC: You just described a very bleak picture. What's the difference between now and FDR's time, when there was a huge movement for labor rights in the midst of a depression?

DW: A couple of things. One key point was the 1934 sit-down strike of autoworkers. That helped to spark a movement to unionize industrial workers, whether in auto or steel or rubber or textiles. But that was five years into the Great Depression. I don't think we're at a point where workers overall feel like the existing system is discredited. Maybe we're getting there as these quarterly reports keep coming out on corporate profits and CEO salaries. I think we're getting there. It can't happen fast enough.

The second factor I think is that there was a real fight in the labor movement around a new model. The old craft model of unions that worked for the building trades, for instance, was not adequate for the new industrial economy. There had to be some other model of unionism, so industrial unionism was created in the 30s to match the new kinds of work and the new kinds of employers. I think we need a similar kind of breakthrough strategy now. What kind of unionism do we need for the current moment, for the current economy? We've been toiling at the edges. The labor movement has been trying different strategies incrementally, but there hasn't been a new model of unionism that can recruit people by the thousands, if not hundreds of thousands.

Third is frankly a question of presidential leadership. The 1933 National Industrial Recovery Act was the first time that workers were given the right to organize. Then it got declared unconstitutional, and then the response was the Wagner Act. But in both cases there were posters and signs that union organizers would walk around with and on them was FDR saying ‘the president wants you to join a union.' There was a sense that now the law is on your side, the president's on your side, it is your fundamental right to do this. I think we're absolutely lacking that today. There's no sense that the law is on the workers' side, there's no sense that the president is on workers' side.

There's this new effort, Caring Across Generations, to organize workers from early daycare workers to home health workers who work with seniors. It's promising. There's an effort to organize WalMart, there's an effort to organize warehouse workers who are actually part of a crucial supply chain to WalMart and other big box stores. That looks promising. There are efforts by restaurant workers, carwash workers. So there are all these pieces that are definitely promising. I think the big question is a question of scale. Can they scale up fast enough to really make an impact sooner than later, or have an impact sooner than later? That's what I'm worried about.

*For more on the Wagner Act, see Roosevelt Institute Senior Fellow Thomas Ferguson discuss its history and relevance to contemporary struggles at last year's panel at the FDR Library at Hyde Park, NY: "1935 and the Enduring New Deal" (click on video for Sept. 26, 2010).

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Where Have All the Good Jobs Gone?

Jun 23, 2011William Lazonick

jobs-letters-150In a brand-new series, economist Bill Lazonick takes on the structural changes and reforms needed to create good jobs in the U.S. First question: what happened to the jobs we had??

jobs-letters-150In a brand-new series, economist Bill Lazonick takes on the structural changes and reforms needed to create good jobs in the U.S. First question: what happened to the jobs we had??

It's now two years since the official end of the Great Recession. Yet the US unemployment rate in May was 9.1 percent, and even college grads are having trouble finding jobs. The US economy is mired in its third, and worst, “jobless recovery” since the early 1990s.

Things look pretty bleak for the foreseeable future. So how did it come to this?

Let's take a look. The scarcity of good jobs, even in an economic recovery, reflects the cumulative impact of three structural changes in the employment practices of US industrial corporations, going back three decades to the early 1980s. These changes are the result of a triple-layered process of 1) rationalization, 2) marketization, and 3) globalization. Together, these trends have taken a permanent bite out of the quantity of well-paid and stable middle-class jobs in the US economy.

From the beginning of the 1980s, the trend of rationalization, which is characterized by plant closings, tended to jettison the jobs of unionized blue-collar workers. And from the beginning of the 1990s, marketization, which brought the end of the one-company-career norm, has placed the job security of middle-aged and older white-collar workers in jeopardy. Finally, from the 2000s, globalization, which drove the offshoring of jobs, left all types of members of the US labor force -- even those with advanced educational credentials and substantial work experience -- vulnerable to displacement.

In each case, the structural change in employment took root in a cyclical downturn: rationalization in the double-dip “blue-collar” recession of 1980-1982; marketization in the “white-collar” recession of 1900-1991; and globalization in the “Internet” recession of 2001. Looking back, we now know that the recoveries that followed the recessions of 1990-1991 and 2001 were “jobless” as marketization and globalization, along with ongoing rationalization, continued after the recoveries. Indeed, in terms of blue-collar employment, the recovery from the recessionary conditions of 1980-1982 was also jobless because of the continuation of plant closings in 1983 and beyond. In 1985, for example, the number of machine operators, inspectors, and assemblers in the US economy was down 22 percent from 1980. For the economy as a whole, however, these blue-collar job losses in the first half of the 1980s were offset by new employment opportunities for white-collar workers created by the microelectronics boom and the rise of what would come to be known as the New Economy.

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Initially, you could justify these structural changes in employment in terms of changes in industrial conditions related to technologies, markets, and competition. The plant closings that came with rationalization were a response to the superior productive capabilities of Japanese competitors in consumer durable and related capital goods industries that employed significant numbers of unionized blue-collar workers. The erosion of the one-company-career norm among white-collar workers that characterized marketization was a response to the dramatic technological shift from proprietary technology systems to open technology systems that was integral to the microelectronics revolution. The offshoring of the jobs of well-educated and highly experienced US members of the labor force that went along with globalization was a response to the emergence of large supplies of highly capable workers in nations such as China and India, many of them with graduate degrees and work experience in the United States.

But once these structural changes in employment had gained legitimacy as responses to new industrial conditions, US corporate executives often pursued them purely for financial gain. Some companies closed manufacturing plants, terminated experienced workers, and offshored production to low-wage areas of the world simply to increase profits, often at the expense of not only the jobs of long-time US employees who had helped to make a company successful but also, going forward, investment in the company’s long-term competitive capabilities. As these changes became embedded in the structure of US employment, business corporations declined to invest in new, higher value-added job creation on a scale that could at least offset the job losses.

At first sight, the Great Recession of 2008-2009 appears to be detached from these changes in employment practices, given its origin in the casino-like activities on financial firms in the subprime mortgage market. Yet the very existence of a large body of subprime borrowers derived in large part from the failure of US industrial corporations since the 1980s to invest in innovation and high-quality job creation while middle-class jobs were permanently lost through rationalization, marketization, and globalization. Through subprime lending, Wall Street sought to exploit the vulnerability of a working-class population to whom industrial corporations no longer delivered middle-class employment opportunities. And, as I will explain in a later post, the current dismal employment situation and outlook reflects the ongoing investment and employment practices of US industrial corporations that, over the past three decades, have become thoroughly financialized.

William Lazonick is director of the UMass Center for Industrial Competitiveness and president of The Academic-Industry Research Network. His book, Sustainable Prosperity in the New Economy? Business Organization and High-Tech Employment in the United States (Upjohn Institute 2009) was awarded the 2010 Schumpeter Prize.

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Tom Ferguson on the Budget Battle: "We've Got Two Conservative Parties"

Jun 14, 2011

In a recent interview with New School Radio's Antonio Seccareccia, Roosevelt Institute Senior Fellow Tom Ferguson weighs in on the budget debate, which he sees as "the end stages of the Reagan Revolution." The problem, he says, is that there are essentially two conservative parties at the national level: "Republicans want to cut, Democrats want to cut less." That leaves no one to defend programs like Social Security at a time when people need them most.

In a recent interview with New School Radio's Antonio Seccareccia, Roosevelt Institute Senior Fellow Tom Ferguson weighs in on the budget debate, which he sees as "the end stages of the Reagan Revolution." The problem, he says, is that there are essentially two conservative parties at the national level: "Republicans want to cut, Democrats want to cut less." That leaves no one to defend programs like Social Security at a time when people need them most.

As for the growing deficit, Tom argues that the Republican push to cut taxes without cutting expenditures created the problem.  However, it only became truly catastrophic after the financial crisis, since "financial collapses typically crush economies for years, and that's driven down the tax take of governments."  In order to close the gap, we need to return to full employment as soon as possible.  Tom believes President Obama's biggest mistake was his failure to pass a big enough stimulus in 2009, and the economy continues to drag because of his reluctance to push for another round.

Click here to listen to the full interview, including Tom's take on Social Security, the Bush tax cuts, state-level union-busting, and more.

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Dorian Warren: NLRB Outrage Should Be Directed at Boeing

May 12, 2011

The National Labor Relations Board has come under fire from conservatives after filing a complaint against Boeing, arguing that the aircraft manufacturer's decision to open a non-union production plant in South Carolina constituted an illegal retaliation against unionized workers in Washington.

The National Labor Relations Board has come under fire from conservatives after filing a complaint against Boeing, arguing that the aircraft manufacturer's decision to open a non-union production plant in South Carolina constituted an illegal retaliation against unionized workers in Washington. In a letter to the Wall Street Journal, Roosevelt Institute Fellow Dorian Warren expressed his support for the NLRB's decision, writing that "to not have done so would send the wrong signal to both American employers and workers—that it's OK to flagrantly break our labor laws."

Warren believes that the outrage over the complaint should be "redirected at Boeing for explicitly and egregiously breaking the law," and notes that the complaint "was based on public comments from Boeing executives making clear their reasons for relocation: to avoid strikes by their employees." Sadly, the controversy isn't likely to go away any time soon. Congressional Republicans are already retaliating against the NLRB, and have threatened to block President Obama's nominations to the Board.

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Will Egyptian Workers Get a New Deal?

May 3, 2011Lynn Parramore

For the next few days, I’ll be sharing notes from a recent trip to Egypt (April 22 - May 1).

For the next few days, I’ll be sharing notes from a recent trip to Egypt (April 22 - May 1).

Standing in front of the Great Pyramid at Giza last Sunday, I imagined --  as have many before me -- the incredible human energy that must have poured into the construction. Popular lore and Hollywood films have taught us that the pharaohs forced slaves to build their monumental works, but scholarship suggests that builders may actually have been farm laborers and villagers who worked during the agricultural off-season as part of a New Deal-style program to keep them from starving while the Nile flooded their fields. They may have been very glad to get both work and reasonable rations while creating majestic works for the benefit of their country and for the glory of their gods.

So it seems fitting that Nobel Prize-winning author Thomas Mann conceived a story set in ancient Egypt inspired by his personal acquaintance with FDR and his admiration for the New Deal, which became the four-part masterpiece Joseph and His Brothers. Mann, persecuted by the Nazis for his criticism of their regime, found refuge in the United States, where he campaigned for Roosevelt and publicly endorsed the New Deal. He considered the social democratic ideals of the program to be a refutation of Nazism, and his presentation of Joseph's administration in Egypt was influenced by his view of the new rights that workers achieved under Roosevelt's leadership.

Today, the world is watching as modern Egyptians struggle to reconnect their government with the lives of workers and ordinary folks. In the post-Mubarak era, will they finally get a New Deal?

In the 21st century, labor conditions in Egypt have so far been atrocious, thanks in part, as I mentioned yesterday, to the eagerness of Mubarak to adopt Neoliberal policies centered on the privitization of public companies. Across the land, once-profitable companies have been sold below market prices and driven into ruin. For example, in 2004, the government sold a profitable publicly-owned glucose factory to a private group. In April 2010, the management claimed that it would shut down the factory for renovations, but instead dismantled the plant, laid off the workers with a miserable $100 severance, and began turning the grounds into a tourism development. Since Feburary 2011, workers have occupied the factory, demanding either their jobs or a decent severance.

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This new sense of empowerment can be felt across the country. Recently, Ahmed El-Borai, minister of manpower and immigration, let it be known that Egyptian workers would have the right to establish their own labor unions and federations. That's a big step in the right direction, and on Sunday, thousands of Egyptians waving red flags gathered in Cairo's Tahrir Square to celebrate their new freedoms. Under Mubarak, such an open gathering for the cause of workers' rights would have been unthinkable. The date chosen for the celebrations marked the anniversary of a General Strike in the United States in 1886, which began on May 1 (and subsequently called 'May Day'). The strikers, led by immigrant workers from around the globe, focused on securing the 8-hour work day and organized themselves as part of a wider series of rallies inspired by the Paris Commune in 1872.

The global solidarity among workers exhibited in the last few months has been a ray of sunshine during a stormy economic period fraught with widespread uncertainty. Sunday's Egyptian workers were galvanized by a strike in America in the 19th century, and they were also fully aware of and energized by the recent Wisconsin uprising. More than once, when I mentioned to an Egyptian that I was a blogger writing about American politics, a spontaneous cry of "Wisconsin!" followed. Back in February, in a flurry of cross-pollination, Egyptians carried signs celebrating Wisconsin in Tahrir Square and sent pizza to Wisconsin protesters, as those same protesters shouted out their support for the Egyptian revolution. Yesterday, when they gathered once again, Egyptian union members, students, and maligned workers felt themselves connected to their counterparts in every corner of the Earth.

Sunday's crowd in Tahrir Square included factory workers, members of the newly founded Federation of Independent Labor Unions, and members of newly-visible political parties, including the Workers Democratic Party, the Socialist Popular Alliance, the Egyptian Socialist Party, the Communist Party and the Revolutionary Socialists.  Workers voiced their goal to raise the minimum wage (now set at $67 per month) and set the maximum salary at no more than 15 times that amount. They demanded permanent contracts for temporary workers and a repeal of laws banning strikes and protests. Most of all, they called for the opportunity to work hard, to be treated fairly, and to provide a decent life for themselves and their families. These are fundamentally the same things American workers wanted under FDR. They are the same thing the French wanted during the Paris Commune. And they are the very same things that the Nile laborer desired as he watched the sun god Ra make his journey across the sky, beyond the pinnacle of the Great Pyramid his labor helped erect.

Lynn Parramore is the editor of New Deal 2.0, Media Fellow at the Roosevelt Institute fellow, co-founder of Recessionwire, and the author of Reading the Sphinx.

**Follow Lynn Parramore on Twitter at http://www.twitter.com/lynnparramore

BM

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In Education Reform, Everyone Must Put Students First

Apr 5, 2011Tarsi Dunlop

children-150Attacking unions can hurt working families, but teachers unions have their own role to play in reform.

children-150Attacking unions can hurt working families, but teachers unions have their own role to play in reform.

After the credits roll in Waiting for Superman, lingering audience animosity towards teacher's unions is understandable. What viewers take away from the film's closing minutes is that a lottery system for children's futures is the cruelest game of all. Michelle Rhee, one of the prominent protagonists in the film, is portrayed as a crusader for these same children; after she resigned as Chancellor of the DC Public School System, she founded an organization called Students First. Ms. Rhee believes that students deserve their own lobbying group that stands up to teachers' unions, with whom she had numerous negative encounters in her tenure as Chancellor. That focus is admirable and certainly logical given her experiences, because the film does make you wonder who stands up for children's interests. David Brooks recently said: "the future has no union," and in this short iteration, he was painfully correct.

Ms. Rhee's attacks on teachers' unions regularly thrust her into the limelight as a controversial figure in education reform. They also ultimately threaten to undermine her ability to justify how she can run an organization called Students First. There are larger implications of attacking the principle of unionism in America. While teachers' unions may pose systemically significant challenges to reform, they are an institution of democracy and the average American worker's advocacy mechanism. We should not destroy unions in the name of students -- the anti-democratic connotations in that message endanger working families who value their children's education. But at the same time, because of teachers unions' unwillingness to negotiate, parents who cherish their children's futures can rightly question union motives. Teachers unions must make sacrifices as well.

Unions may be under attack in many states, but their presence has left an indelible mark on the average American worker's quality of life -- unionized or not. In an industrial free market society, corporations and employers are concerned with making profits. Worker protection laws help ensure that women have the right to equal pay, more than eight hours at work includes overtime, and workers have the right to a safe working environment. Just recently, the nation remembered the Triangle Shirtwaist factory fire on its 100th anniversary; 146 lives were lost when bolted factory doors prevented workers, mostly young girls, from fleeing the building. Today, unions and workers continue to speak up against existing abuses.

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The right to organize, and the right to advocate for a higher quality of life on the job, is not at odds with American traditions and values. In a society where other powerful corporations lobby and argue, why should individual workers not be accorded this same right? Sometimes the power of the people to stand together, for each other's rights, is the only voice when those in power are determined to side with anti-worker businesses and large companies. For instance, a recent bill in the Maine State Legislature relaxes child labor laws, so one must then ask how children can prevent or report instances of employer abuse under less stringent laws. Union advocates and representatives become even more vital in cases like this; they provide an education resource for workers, clearly delineating their legal rights. But unions risk losing legitimacy when they refuse to recognize their own shortcomings; this obstinacy threatens to overshadow the rich union history in advocacy of the working class.

The absolute inflexibility of teachers unions is a disservice to some of their key arguments. It makes them look even more like a special interest group when they are unwilling to recognize their own shortcomings. It seems that if teachers' unions legitimately cared about group bargaining power, then they might want to reduce the number of bad apples among their ranks. A signal from the teachers' unions that they are willing to do one of two things might help: first, fully engage in a dialogue on teacher performance standards prior to being granted tenure; second, commit to contributing to higher standards and training for soon-to-be teachers prior their first teaching jobs. Finally, just because a teacher has been in the classroom for twenty years does not mean that he or she is good at the job. That's the unfortunate reality and there should be a recognition and response to it. What if, for example, teacher education institutions and programs took a greater involvement in maintaining teachers' skill sets -- recertification programs that ensured more exposure to new technologies and teaching methods? Ignoring painful realities will not fix systemic problems; people may be more open to engaging unions in the process if they were assured that union behavior more honestly reflected a true commitment to quality education.

Neither unions nor reformers are automatic losers in this fight; it is not a zero-sum game. But sacrifices need to be made. And from all perspectives, most people would agree that Michelle Rhee is not far off in her message of "Students First," however far off she could go in practice. Ms. Rhee said recently at an AU talk, "We know what works," and that may be true -- but now when we discuss moving forward, if it is really is about students first, then it is also about what's next. It's time to stop vilifying teachers' unions, and it's time for teachers' unions to recognize that so long as they continue to protect bad teachers, they both undermine the legitimacy in their arguments and public trust in unions more generally.

Tarsi Dunlop is the Director of Operations at the Roosevelt Institute Campus Network.

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