By Charles J. Whalen
December 18th, 2008

President-elect Barack Obama won last month’s election partly by
addressing the anxieties and aspirations of America’s working families.
Since then, some observers have expressed concern that a nominee for
Secretary of Labor was not announced as part of his economic team.
Indeed, Labor Secretary could be the last cabinet-level post filled.
The timing of the Labor appointment is not all that important, however.
What matters more is the agenda that Obama outlines when he announces
that selection.

After surveying the broad labor and employment relations landscape
for more than a half-dozen years as editor of LERA’s Perspectives on
Work, I can appreciate the challenge Obama’s advisers now face. It is
not easy to craft an agenda for the field that economist Robert Hoxie
long ago described as affecting “practically every social pie that is
baking,” especially with the nation in the midst of an economic crisis.
At the same time, those realities only highlight the need for an
aggressive and optimistic labor agenda. My recommendation? Pursue a
four-part strategy centering on employment opportunities, retirement
security, workplace partnerships, and employee rights.

Jobs

In the wake of the worst U.S. job-loss numbers in 34 years (released
on December 5), it is clear that expansion of employment opportunities
must be this agenda’s highest priority. Yet jobs would deserve top
billing even without the recent employment report. Accepting the
Democratic presidential nomination in August, Obama stressed that the
purpose of his candidacy was to keep alive the American promise that
families can pursue their dreams through hard work. Unfortunately, jobs
have been moving offshore at an increasingly rapid clip for about a
decade – and there is no reason to expect the trend will soon change on
its own.

In fact, offshoring is likely to get worse thanks to educational
advances abroad. Recent estimates indicate that one out of every four
jobs in the U.S. economy is capable of being sent overseas. The first
wave of this trend hit mainly low-skilled manufacturing workers; the
second wave affected customer-service workers, data enterers, and
professionals in fields such as computer programming; the current wave
is threatening even the most highly educated scientists and engineers.

Economists initially dismissed the offshoring problem by arguing
that good jobs will replace those that move away, but no more. Richard
Freeman of Harvard University and Alan Blinder of Princeton University,
for example, have both recently expressed concerns about this problem.
They should be concerned; many of the nation’s fastest growing
occupations often pay poverty wages. Among the job titles expected to
experience the most employment growth in the next few years: cashier,
food-service worker, nursing-home attendant, and janitor.

The employment challenges facing the Obama administration extend far
beyond stabilizing the financial system and preventing a deep
recession. The fundamental needs are to spur the growth of domestic
jobs that pay family-supporting wages and to ensure that Americans have
access to the education and training such jobs require.

Retirement

In addition to expanding employment opportunities, the incoming
administration must renew the nation’s commitment to retirement
security. After decades of hard work, Americans deserve to retire with
dignity. If current labor-market trends continue, however, today’s
workers will have shorter retirements than those who retired a
generation ago, despite longer life spans and years of robust
productivity growth.

Retirement has become a prime example of what Jacob Hacker of Yale
University calls “the great risk shift:” Financial risks are shifting
away from companies and government and toward individuals who are often
least able to bear them. The security of defined-benefit pensions has
given way to the uncertainty associated with defined-contribution
plans. Retiree health benefits are being cut back and even eliminated,
forcing many seniors to either continue working or retire with
inadequate health insurance. And calls to “fix” Social Security
threaten to reduce that system’s payouts at a time when they are more
important than ever due to pension erosion and shrinking household nest
eggs.

The current “risk shift” threatens the wellbeing of seniors and
exacerbates national economic instability. It is time to find a
sensible path toward greater reliance upon social insurance – that is,
toward spreading economic risks in a way that enhances retirement
security (which, of course, must include healthcare security). A little
creative thinking by policymakers should be able to reconstruct a
system that reliably combines such insurance with individual
responsibility. (LERA member Teresa Ghilarducci, author of When I’m
Sixty-Four: The Plot Against Pensions and the Plan to Save Them, is one
of many academics engaged in such thinking.)

Partnerships

An aggressive labor agenda must also promote workplace partnerships.
In recent years, workers have been treated increasingly as a cost to be
minimized, rather than as a valuable business partner and a source of
competitive advantage. Instead of fostering workforce commitment and
pursuing joint worker-management problem solving, today’s employers all
too often think of labor as merely a “spot market” commodity – like
strawberries or crude oil; many companies seek not only to outsource
work whenever possible, but also to adjust employment levels with every
short-term change in business conditions.

In fact, economic theory and business history show that competition
through innovation, quality and customer service are often more
effective than low wages and price competition alone. This is certainly
true in the global steel and automobile industries, for example, much
to the chagrin of many U.S. managers and workers. (It is even true in
the case of Wal-Mart, which competes partly by paying low wages and
scrimping on employee benefits, but also by maintaining a highly
innovative system of inventory management.) Competition by some means
other than price can almost always be enhanced by partnerships between
managers and workers, and government policy can play a vital role in
encouraging employers to pursue these and other elements of “high road”
employment relations.

Unions

Employee rights must also be a focus of the Obama labor agenda. This
month marks the 60th anniversary of the United Nations’ Universal
Declaration of Human Rights, which includes the right of workers to
form unions to protect their interests. In the United States, the
National Labor Relations Act and other laws give workers the right to
organize and engage in collective bargaining. The reality, however, is
that lax enforcement renders much of this legislation ineffective.

Organized labor endorses a proposal called the Employee Free Choice
Act, which enables union recognition on the basis of authorization
cards – a “card check” instead of a secret-ballot election – and
permits arbitration of a union’s first collective-bargaining agreement.
As an alternative, William Gould, a Stanford Law School professor and
former chair of the National Labor Relations Board, suggests reforming
and expediting ballot-box elections and ensuring adequate remedies for
labor law violations. Either way, labor law reform is overdue, and
America’s working families will be counting on the incoming
administration to protect these and other worker rights.

Defining Moment

A labor agenda focused on employment opportunities, retirement
security, workplace partnerships, and employee rights does not
comprehensively address the anxieties and aspirations of America’s
working families. Still, it represents an agenda brimming with hope and
change. At this defining moment in our nation’s history, America
deserves nothing less.

Charles J. Whalen is editor of LERA’s Perspectives on Work, a visiting
fellow at the Cornell University School of Industrial and Labor
Relations, and executive director (associate dean) and professor of
business and economics at Utica College. In the late 1980s, he taught
economics at Hobart and William Smith Colleges; in the mid 1990s, he
was a resident scholar at the Levy Economics Institute at Bard College;
in the late 1990s, he worked with corporations and labor unions to
promote enterprise success and regional development as part of Cornell
University’s Institute for Industry Studies; and in the early 2000s, he
provided regular analysis and commentary on the U.S. economy as
associate economics editor at BusinessWeek. He recently edited New
Directions in the Study of Work and Employment (Edward Elgar, 2008) and
was elected to the LERA Executive Board earlier this year.