Jobs Summit: Photo Op or Opportunity?
Thomas A. Kochan is the George Maverick Bunker Professor of Management at the MIT Sloan School of Management and co-director of the Institute for Work and Employment Research. He is co-author of Healing Together: The Labor-Management Partnership at Kaiser Permanente (Cornell University Press, 2009).
When the President convenes his Dec. 3 "Jobs Summit," he and the participants have a choice: Will they simply pose for another one-shot photo op - or will they seize the opportunity to lay the groundwork for a new social contract between workers, business, and government, one that will ensure that workers are not left out of the economic recovery.
Getting wages moving again now and setting the stage for well-paying, sustainable jobs in the future requires a broad fix of labor-management relationships and structures that have been broken for three decades. The President needs to use this historic occasion to break the ideological stalemate over the legitimacy of unions and to replace outdated labor law and systems with productive, 21st century models.
Current data on jobs and wages show why such long overdue fixes matter not only to working families, but to the entire economy. Unemployment is at a quarter-century high and, according to the Congressional Budget Office, will remain above 10 percent in 2010 and 9 percent in 2011. Unless stronger actions are taken, up to 20 percent of the nation's human capital will remain unemployed, underemployed, or out of the labor force for the next three years. That is an unacceptable outcome that will further delay and weaken economic recovery. After all, nearly 8 million jobs are required just to replace those lost since the beginning of the recession.
Wage data are equally unacceptable. Average worker incomes remained flat or fell during the recession. Nor did they grow over the seven years of the past economic recovery. Indeed, workers have been getting a declining share of the productivity they helped create for the past three decades. Because consumption accounts for 70 percent of the U.S. economy, a wage-less recovery is a weak and unsustainable recovery.
A number of ideas to create jobs and increase wages are already on the table. These include a work-sharing proposal that would provide unemployment benefits for reduced hours of work, an employer tax credit for creating new jobs, use of TARP funds to provide credit for small business, additional stimulus funds for local and state governments, and expanded investments in infrastructure and other construction.
These proposals are all worth considering, though none is a silver bullet. But more than backing any specific proposal, the President needs to call upon workers and their unions and associations to work in partnership with employers - especially those receiving taxpayer support -- to build the high-performance workplaces and work processes that are needed to generate high productivity and high service quality.
For starters, the President should announce his support for speedy passage of a reframed and expanded Employee Free Choice Act, which is currently stalled in Congress. He should call for a bill that not only restores workers' ability to join a union and gain access to collective bargaining, but also one that transforms labor-management relations in ways that get wages again growing in tandem with productivity and economic growth. Provisions should be added to the Act to create a national labor management advisory council to oversee implementation of the new law and to provide advice on how to promote productive, innovative, and cooperative labor management relations.
Despite all the ideological posturing, workers and business, and the economy, would all benefit from passage of such a revamped act. Evidence from manufacturing, healthcare and other industries shows that major financial and technological investments pay off in high productivity only when they are matched with state-of-the-art workplace practices and cooperative labor-management relationships.
Labor, business, community, and government leaders must also work together at local levels to translate stimulus funds for infrastructure repair, weatherization, and green jobs into projects that are completed on time, on budget, safely, and that generate job and career building opportunities for women and underrepresented minorities.
None of this will happen easily or quickly. But if the upcoming jobs summit sets the right tone and stage for an era of productive and innovative labor-management relations, it will deserve to be recorded as a historic achievement, not just a political footnote.
By Thomas A. Kochan: