Got A Case Of The Economic Blues?

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.

Now that President Obama and members of Congress have made their annual visits to Labor Day picnics and offered worker-friendly decrees, they have a chance to advance real policies to help assure that the economic recovery reaches beyond financial institutions and major corporations to those who need it most: American workers and their families.

Workers have good reasons to feel left out of stimulus efforts to date. Nearly 20 percent of the workforce is unemployed, unable to find a full time job, or has given up on looking for one. Half have seen wages frozen or cut, even after enduring more than two decades of stagnant wages, shrinking retirement accounts, and rising income inequality. Nearly 90 percent of American workers lack a formal voice at work and those who want one are blocked by labor laws that are outdated and broken.

President Obama gave average Americans hope that they would finally have in the White House someone who would put the needs of working families at the top of the agenda. The President had little choice but to first stabilize the nation's financial system and economy, and those actions have helped reduce the rate of job loss. But if his economic policies are to really pay off, workers and workplace issues must be at the center, not the margins, of Washington policy making.

Far from being seen as merely a sop to organized labor, real action to support workers and their workplaces should be treated as the catalyst for an economic recovery that is broadly shared and sustainable. Two decades of research, for instance, indicates that major investments such as those being made to repair the nation's infrastructure and rebuild and transform the auto industry can reap maximum benefits only if they fully engage workers' knowledge and skills to achieve high productivity and service quality, and by doing so, trigger wage growth.

But because such goals require modern, innovative, and cooperative labor management relations, Congress and the administration must take specific steps that clearly link worker issues to the economic agenda.

Beneath all the heated debate about health care reform, for instance, lies the well-documented reality that health care quality improvement and cost reduction require a high level of coordination, engagement, and teamwork in health care delivery, from doctors and nurses to technicians and service workers. Proven examples, such as Kaiser Permanente and the League of Voluntary Hospitals in New York and Service Employees Local 1199, demonstrate the health care quality and economic benefits that flow from such cooperative, partnership-based, labor management relationships. Such practices should be required of all health care providers, unions, and professional associations.

Other economic sectors receiving public money must be similarly guided by labor management compacts that ensure labor peace and training and job opportunities for all as well as assurances for taxpayers that modern management and labor practices will assure that these projects are completed on time, on budget, and safely.

Rebuilding of the middle class also requires that labor law reform finally be enacted in a way that restores workers rights to join a union and gain collective bargaining agreements.

Again, this is not about some union agenda: The evidence is clear that laws that fail to protect workers' rights are also a serious drag on wage and productivity growth and make true labor-management cooperation impossible. The Obama Administration should actively engage in talks now taking place on Capitol Hill to shape the Employee Free Choice Act into a more acceptable bill by insisting on provisions that foster the kinds of partnership-based labor management relationships that workers want and that are essential if wages are to again move in tandem with productivity and economic growth.

Though it should hardly be necessary, the administration needs to clearly remind the Department of Labor of its historic and fundamental responsibility to vigorously enforce the nation's employment laws. The department must modernize its approach by engaging workers, unions, community organizations, and employers in coordinated, meaningful efforts to upgrade safety and health, wage and hour, and equal employment opportunity practices.

Such actions will enable workers to contribute to and share in the economic recovery and receive the dignity and respect they deserve. And not just on Labor Day.

By Thomas A. Kochan
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