Tom Kochan

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  • 12 Nov 2017 4:48 PM | Mike Lillich (Administrator)

    “Our MIT President L. Rafael Reif wrote an excellent op-ed in the Boston Globe urging that we find ways to use technology to invent and improve the future of work.  It serves as a call to action, one I hope we will now take up with gusto at MIT and elsewhere.” 

    -- Tom Kochan


    By L. Rafael Reif  


    First published online in the Boston Globe


    In a recent Pew study, 72 percent of Americans report feeling either worried or very worried about “a future where robots and computers can do many human jobs.” Seventy-six percent believe that economic inequality will grow worse in such a future. 

    As president of an institute with “technology” in its name and national service in its mission, I take these concerns seriously. Every past technology wave ultimately produced more jobs than it destroyed and delivered important gains, from higher living standards and life expectancy to productivity and economic growth. Yet many fear that this time the change may be so fast and so vast, and its impact so uneven and disruptive, that it may threaten not only individual livelihoods, but the stability of society itself. 


    Fortunately, this outcome is not inevitable — and the future is in our hands. Indeed, deliberate, coordinated action is what smoothed such transitions in the past. If we want the advance of technology to benefit everyone, however, we need to take action right away: We must proactively and thoughtfully reinvent the future of work.


    Simply understanding the problem is a challenge; interestingly, experts still disagree on exactly which groups and regions are losing jobs primarily to automation, how quickly such impact will spread, and what interventions can help. To build sound, long-term policy on something this important, we cannot rely on anecdotes. Government, foundation, and corporate leaders need to invest in better data now.


    In the meantime, we must act on what we do know and make progress wherever we can. For instance, CEOs across many sectors face a painful quandary: They have to lay off people whose jobs have disappeared, while they have job openings they can’t fill because they can’t find people with the right training and skills. This mismatch is bad for everyone: Lives are derailed, families and communities damaged, business opportunities lost.


    Technology itself offers one path to a solution: In fields from robotics and cybersecurity to supply chain management, many universities, including MIT, are pioneering “MicroMasters” and other online credentialing programs to provide top-quality, industry-relevant skills, in a form recognized by leading employers, at a fraction of the price of traditional higher education. For people with industry expertise who need to become proficient in digital or problem-solving skills, including teachers seeking to prepare their students for the future, an answer could be “continuous uptraining,” a system that would allow every employee to devote significant time — every week, every month, or every year — to acquiring fresh skills. If educational institutions, employers, and employees imagine and refine a solution together, continuous uptraining could become a crucial tool to help individuals adapt to relentless change.


    Reinventing the future of work needs to be a whole-society effort — and finding long-term solutions will require ideas and initiative from every quarter. Could educators make sure that every graduate is computationally literate? Could institutions like MIT do better at guiding students to balance efficiency with other human values in choosing the problems they work on and how they design solutions? Could workers help develop automating technologies, to create complementary machines that make humans more effective and efficient instead of obsolete? Could corporations use some profits achieved through automation to invest in developing those whose jobs automation has erased? Could unions help shape more relevant and accessible apprenticeship and uptraining programs? Could government develop educational incentives that would motivate firms to locate in hard-hit regions? I believe the answer to all those questions can and should be yes — and I’m certain we need many more and better ideas, too.

    If options like these sound too big or too expensive, let’s remember that ideas like universal public education, the GI Bill, and the post-Sputnik focus on science education met exactly the same resistance. However, it was such broad, far-sighted investments in human development — by the nation, for the nation — that allowed the country to mitigate the immense pain caused by previous technological and societal earthquakes.


    Automation will transform our work, our lives, our society. Whether the outcome is inclusive or exclusive, fair or laissez-faire, is up to us. Getting this right is among the most important and inspiring challenges of our time — and it should be a priority for everyone who hopes to enjoy the benefits of a society that’s healthy and stable, because it offers opportunity for all.


    In this work, those of us leading and benefiting from the technology revolution must help lead the way. This is not someone else’s problem; it is a call to action. Technologies embody the values of those who make them. It is up to those of us advancing new technologies to help make certain that they do not wind up damaging the society we intend them to serve.


    At MIT, we are deeply engaged in defining the current problem and forecasting challenges ahead. And we are urgently seeking allies who want to join in developing creative, collaborative solutions — and in building a future in which technology works for everyone.


    L. Rafael Reif is president of the Massachusetts Institute of Technology.

     

  • 22 Dec 2016 12:47 PM | Mike Lillich (Administrator)

    By Thomas A. Kochan


    With the passing of William J. Usery on December 10th America lost a patriot, labor and employment relations lost an icon of the post-World War II industrial relations system, and we all lost a role model as a highly respected mediator and ambassador for collective bargaining.


    It is worth reflecting a bit at this juncture in our history on what Bill and his generation of leading professionals stood for. He worked his way up in the field as an effective union representative who was so respected by his management counterparts that one of them (I believe it was future Secretary of Labor Bill Hodgson) recommended him for the post of Assistant Secretary of Labor in Nixon’s Republican Administration. He went on to serve with distinction in two higher posts in Republican Administrations, Director of the Federal Mediation and Conciliation Service and Secretary of Labor. 


    He also made the transition from advocate and government service to become the “go to,” mediator for the toughest labor management disputes of his era.


    He and the other giants of his time were respected and trusted by business and labor leaders and by Republican and Democratic Presidents because they saw their ultimate task and responsibility as one of serving the long term interests of the nation by making collective bargaining work for all its constituents—workers and their unions, employers and the larger business community, and economy and society.  Partisan and short term swings in power were issues to be dealt with in practical ways not opportunities to attack or destroy the legitimate interests of the other party. 


    When we created the LERA (IRRA) Lifetime Achievement Award in 2000 Bill Usery joined his peers John Dunlop, Malcolm Lovell, Lois Gray, and Ted Kheel as our inaugural recipients.  We could not have done better.


    Paula Voos, Richard Freeman, Paul Weiler, Bill Gould, and I saw live and in person Bill’s mediation skills and the mutual respect he and John Dunlop had for each other when we served together on the Dunlop Commission. From time to time one or more of us in our cabal would raise an idea that our Chairman found to be too “pie in the sky” and not worthy of serious consideration only to hear Bill (sometimes with his other good friend Doug Fraser) chime in with a quip or story that would get John to back off and let the discussion proceed. True mediation: Not endorsing a counter idea or proposal but getting it on the table for serious discussion and review.  And, the night Bill hosted a dinner with us in Baltimore he insisted I try the Baltimore crabs—“best in the world so don’t pass up this opportunity.” I did and am now a fan, both of those crabs and of the legacy that Bill and his generation of true professionals leave to us.


    Will we ever again see a time of such mutual respect across partisan and interest lines?  Will we ever again see the qualities of respected Secretaries of Labor like Usery, Dunlop, Shultz, Wirtz, Goldberg, Marshall, and other put to work in public service?  These are among our serious worries today.  Perhaps we should borrow and adapt a mantra from the legendary Mother Jones:  “Pray for the Dead but Fight Like Hell for the Future [Living].”


    Tom Kochan

    December 22, 2016

  • 17 Nov 2016 12:38 PM | Mike Lillich (Administrator)
    By Thomas A. Kochan

    First published online by The Conversation: https://theconversation.com/election-rage-shows-why-america-needs-a-new-social-contract-to-ensure-the-economy-works-for-all-68296

    The recent U.S. election exposed two major intersecting fault lines in America that, if left unchecked, could soon produce an era of social and economic upheaval unlike any in our history. 


    First, it revealed deep divisions across racial, ethnic and gender lines that led to a surge in hate crimes last year, particularly against Muslims. Addressing this will require a sustained effort to heal these growing divisions and will be very difficult to resolve without strong leadership and a renewed willingness to listen to each other’s concerns. 


    Second, it gave voice to the deep-seated frustrations and anger of those who feel left behind by economic forces and fear their children will experience a lower standard of living than they did. 


    The key to resolving this fault line – and the focus of this article – lies in mobilizing all sectors of society to work together to create good-quality jobs and get wages rising again for all. In short, America needs to build a new social contract based on mutual respect and attuned to the needs of today’s workforce and economy.


    What do I mean by that? A social contract is what ties together the main stakeholders of an economy, its workers, business leaders, educators and government, and ensures each group meets it obligations to each other while also pursuing its own goals. Workers, for example, want good wages and careers and have an obligation to work productively and contribute to the success of their enterprise. Employers have to balance the expectations of investors, employees and customers. 


    Unfortunately, America’s social contract broke down in the 1980s when the gap between wage growth and productivity growth first started to appear, creating the conditions that spawned the frustrations we saw on the campaign trail this year. With the election of Donald Trump and a Republican majority in Congress, we should suffer no illusions that the process of building a new one will be led from Washington. 


    But as history teaches us, most social and economic shifts that improve lives don’t actually begin with a national policy anyway. 

    Thousands of spectators cheer as over a quarter million marchers show support for the National Recovery Administration (NRA) in a parade on Fifth Ave. in New York City on Sept. 13, 1933. AP Photo

    ‘Laboratories for democracy’

    Supreme Court Justice Louis Brandeis famously called states our “laboratories for democracy,” places where innovations and social movements are born and tested for their ability to address emerging tensions and show how to turn them into national policies.


    That was how America’s last social contract, which grew out of the New Deal, began. The policies that composed it didn’t start with President Franklin Delano Roosevelt’s signature legislation establishing unemployment insurance, social security, disability pay, collective bargaining and minimum wages. 


    Rather, workers themselves laid the groundwork in the first few decades of the 20th century, when Sidney Hillman, then the leader of the Amalgamated Clothing Workers Union, organized immigrants and developed the basic principles of collective bargaining. 


    States like Wisconsin, Massachusetts and New York, pressed by labor activists, enacted unemployment insurance, minimum wages and overtime protections. John R. Commons, who taught at the University of Wisconsin, has been called the intellectual father of the New Dealbecause he and his students helped shape and study these state-level innovations. They then went to Washington to help President Roosevelt write them into the laws that helped end the Great Depression and laid the foundation for an expanding middle class.


    Changes like this rarely if ever begin in the corridors of power. They begin with just a few people, such as Susan B. Anthony and Carrie Chapman Catt, who led the suffragettes movement to get women the right to vote.


    Unfortunately, the social contract broke down in the 1980s amid deregulation, attacks on unions, growing globalization and a deep recession that decimated Rust Belt manufacturing industries. The failure to replace it is a root cause, I would argue, of the wage stagnation, anger and political divisions the election brought to the fore. 

    President Roosevelt signed the Farm Relief-Inflationary Bill, which gave him extraordinary powers over monetary inflation as part of the New Deal, on May 12, 1933. AP Photo

    Workers at the forefront

    With the election in the rear-view mirror, it is now time to begin the long process of building a new social contract that fits today’s economy, workforce and society, one that gives a genuine voice to the frustrated and channels their anger into action.

    The good news is we are already well on our way, with many grassroots innovations across society that, if accelerated and expanded, could identify and shape its key features. The workforce itself is leading the way, with the help of labor organizations, community coalitions and what we might call “worker-centered entrepreneurs.” 


    Consider the Fight for 15, referring to efforts to secure a US$15 minimum wage. Its first visible victory was achieved in 2015 in Seattle. The strong public support there sent shock waves around the country, leading another 18 states to increase their minimum wages, including four in last week’s election


    These developments also pressured traditionally low-wage companies like Wal-Mart, McDonald’s and the Gap to increase entry-level pay above the required federal or state minimums. IKEA has gone a step further in committing to pay a “living wage” (as calculated by a MIT research tool) in all its U.S. locations.


    Other new advocacy groups like Coworkers.org are using information campaigns and social media and other technology-aided apps to induce companies like Starbucks to reform scheduling practices to provide more advance notice and certainty over work schedules. 


    Unions and worker centers around the country are battling wage theft(failure to pay minimum wages or overtime), expanding training programs to more women, minorities and immigrants and supporting efforts to promote “common sense” economic strategies that provide good entry-level jobs, wages and career ladders. 


    Finally, a number of entrepreneurial ventures are emerging around the country such as the Workers’ Lab, an incubator that supports start-up nonprofits that are specifically designed to build new sources of bargaining power for worker and contractors. For example, Uber drivers in New York City and Seattle are beginning to organize into unions and guilds to gain a voice in the terms governing their compensation. 

    Out of these and still yet-to-be-invented strategies may emerge a techno-savvy, grassroots labor movement for the next generation.

    Activist like this one helped convince four more states to increase their minimum wages this year. AP Photo/Andrew Harnik

    How business can help

    Business leaders, for their part, are beginning to get the message that the era of prioritizing shareholders over all else needs to end. None other than JPMorgan Chase CEO Jamie Dimon, one of Wall Street’s most respected titans, said last summer that he would raise his employees’ wages because doing so is a good long-term investment


    He and his peers should use the same logic when they advise clients. By emphasizing long-term investing, they could help end the short-termism that has held back corporations from investing in workforce training and research and development – so essential to job creation.


    Wall Street could also help lead the way and perhaps in concert with labor by creating infrastructure funds to help rebuild our roads and bridges, generating a good rate of return for their investors and the economy. Leaders from many groups – including President-elect Trump – recognize the need and value of repairing the nation’s infrastructure. This is a perfect opportunity to demonstrate the power of bipartisanship, public-private partnerships and business-labor cooperation.


    Some main street business leaders are already doing their part by competing on the basis of high-productivity, high-wage strategies that research shows achieve both strong profits and create and sustain good jobs for American workers. 

    Jamie Dimon said he gave his workers a raise because he believes doing so is a smart investment. Photo by Paul Morigi/Invision for JPMorgan Chase & Co./AP Images

    The role of education

    In today’s knowledge-based economy, education leaders need to be counted as among the key stakeholders critical to building and sustaining a new social contract. 

    They and some philanthropic leaders active in funding education innovations are embracing what evidence tells us: There is nothing more important to educational attainment than a good teacher. And in states as diverse as Massachusetts, New Jersey and Illinois, teacher unions and education leaders are working together to expand learning time, support teacher development and encourage online courses aimed at helping workers refresh their skills in a world of fast-paced change. These efforts should be extended across the country. 


    If knowledge is power, then these educational innovations will equip today’s and tomorrow’s workforce with the tools they need to meet the challenges they are bound to experience over the course of their careers.

    Seeds of a new social contract

    So these are some of the seeds I see growing into a new social contract that restores hope among the marginalized.


    What’s needed next is to bring these different stakeholders together to learn about what works and how to inform national policymakers so that successes can be spread. 


    We are doing just that in an effort to make MIT a place where leaders of these innovations come together to share experiences, stimulate research needed to document their successes, failures and lessons, and figure out ways to diffuse those that work to broader settings. 


    We started a “Good Companies-Good Jobs Initiative” with the Hitachi Foundation and are supporting efforts to improve relations and better manage and resolve workplace conflicts, such as through meetings, workshops and online courses. Our aim, as we expand these efforts, is to serve as a catalyst for further innovation to show our leaders what a new social contract might look like.


    More than anything else, we all should continue to encourage local activism, protest and innovation. If history is a guide, that’s what it will take to eventually get leaders in Washington to listen and do their part to address these problems.

  • 27 Jul 2016 6:58 AM | Mike Lillich (Administrator)

    By Thomas A. Kochan


    First published online by WBUR.


    Donald Trump's claim, at the Republican National Convention, to be the voice of American workers "who work hard but no longer have a voice," wasn't just preposterous — Trump has a history of fighting his workers' efforts to unionize. It wasn't just insulting to the very workers for whom he presumes to speak. It was ignorant.


    Since the New Deal, a core principle of American labor policy — indeed, a fundamental principle of international labor relations — is that workers should have the right to be their own, independent voice at work. The only large industrialized country that believes and acts otherwise is China, where the official trade unions are an arm of the state and the Communist party. That seems to be the direction Donald 


    Trump wants to take U. S. labor relations — a Donald-knows-best, top-down approach. Woe to the workers who might challenge his dictate of what they want and more

    Trump is not just wrong-headed about U.S. labor, he is out of step with the majority of Americans. A 2015 Pew Research poll reported that 62 percent of Americans agreed that restaurant workers should be able to unionize. This number rises to over 70 percent for public employees and to 82 percent for manufacturing workers.


    Unfortunately, Trump’s statement reflects the reality of worker voice in America today: Employers have more to say about whether or not workers are heard at work than do the workers themselves.


    The problem has been decades in the making. More than 20 years ago, a national commission on The Future of Worker Management Relations, on which I served, concluded that American labor law was failing to deliver on its promise to provide workers the ability to form a union and gain access to collective bargaining. A deep ideological divide between business and labor, and a Republican-controlled Congress, doomed any chance of labor law reform.


    In 2008, a study by John Paul Ferguson, an assistant professor at the Stanford Business School, revealed that only one in 10 efforts to form a union between 1999 and 2004 under the National Labor Relations Act’s election processes managed to make it to the first step — the successful negotiation of a contract if management strongly opposed the union.


    The next president and Congress must be committed to fixing and updating America’s labor laws to get wages rising again, reflect workers' wants and needs, and make the U.S. competitive in a global economy.


    An essential starting point: Provide workers the ability to join a union of their choice and gain access to collective bargaining. This is a core promise of U.S. labor policy.

    Today’s workforce doesn’t want to have to fight their employer to improve their working conditions. They want a cooperative workplace where they contribute to improving performance and customer service and then share fairly in the profits they help achieve. A second element of a new labor policy, then, should be to endorse and support labor management relations practices that support good companies and good jobs.

    Labor law also needs to be extended to cover the growing number who fall outside the classification of “employee.” These include those that work for contractors, such as many hotel housekeepers and call center workers; those in franchised arrangements, such as many McDonald’s restaurant workers; and those working as independent contractors, such as drivers for Uber and Lyft. These workers have as much need as regular employees to have a voice in determining the conditions under which they work and to share in the profits they help produce. That is why 

    McDonald’s workers are protesting in many cities and Uber drivers are forming networks, and, in cities such as Seattle and New York City, are attempting to bargain.


    Indeed, there is an enormous amount of creative experimentation emerging around the country with new approaches to worker voice. The fight for a $15 minimum wage is the most visible example. Others include worker entrepreneurs who are developing apps to support workers in finding good quality jobs, mounting petitions to change conditions with their current employer, and using social media to mobilize public support for their efforts to improve or save good jobs. These experiments might well yield models of worker voice created by the workers themselves, not ventriloquist employers or politicians presuming to speak for them.

  • 06 Jun 2016 8:36 AM | Mike Lillich (Administrator)

    By Thomas A. Kochan


    Editor’s note: The U.S. economy added a disappointing 38,000 jobs last month, the smallest number in more than five years, according to seasonally adjusted figures from the Bureau of Labor Statistics. The weak numbers suggest a June interest rate hike – which the Federal Reserve had recently hinted is possible – is now off the table. We asked two of our experts to give us their quick takes on the report.


    First published online in The Conversation 


    We need a clear and credible plan for expanding the economy. It is the uncertainty over the future policies of the next president and Congress that may be the root cause for concern.


    The seemingly good news of the headline that the official unemployment rate declined from 5 percent to 4.7 percent evaporated as soon as we read further to see that the reduction came mostly from a 0.2 percent decline in the labor force participation rate and an increase of 468,000 in those working part-time jobs but looking for full-time work.


    The news got worse when we read that the economy produced a meager 38,000 new jobs in May and 59,000 jobs were subtracted from the prior two months' figures. From March to May, the economy averaged only 116,000 new jobs per month. If the economy can’t do better than this, it will be early 2019 before we finally reach closure on the effects of the Great Recession by getting back the number of jobs lost plus the number needed to absorb the new entrants to the labor force.


    Why do I think uncertainty over the future is a root cause of the problem? Consumer confidence also declined in May. That Conference Board survey found the number of people worried that jobs are hard to find also increased. A University of Michigan Consumer Confidence survey also showed a slight decline, and its authors noted the biggest source of concern is uncertainty over the economic policies the next president will follow.


    Taken together, these data suggest two actions: one a stop-gap available to the Federal Reserve and the other one only the voters can take. The Fed should hold the course by not raising interest rates in June and hold steady as long as these dismal numbers and uncertainty over the future persist. Voters should hold presidential and congressional candidates' feet to the fire by judging them against the credibility of their plans for creating and sustaining good jobs with good wages.


    Nothing short of that will overcome the uncertainty and lack of confidence that is holding back the economy from reaching its full potential.



  • 27 May 2016 12:29 PM | Mike Lillich (Administrator)

    By Thomas A. Kochan


    Editor's note: First published on May 23, 2016, online by WBUR's Cognoscenti.


    Last week, Sen. Elizabeth Warren unveiled a comprehensive set of proposals to provide basic employment policy protections and income security benefits to those working in the so-called “gig” economy and others in subcontracted or franchised arrangements. Whether one agrees with her specific ideas or not, the nation owes her a debt of gratitude for putting these issues front and square on the table for a discussion that is long overdue.


    The gig economy, best embodied by Uber, Lyft and Task Rabbit, may account for less than 1 percent of the workforce, but it has sparked a debate over what to do about all those who make their living outside of standard employment relationships.


    Standard employment relationships are ones in which there is a clearly defined and identifiable employer that is responsible for complying with the range of employment laws put on the books since the New Deal: unemployment insurance, Social Security, minimum wage and overtime rules, and the right to unionize and gain access to collective bargaining. To be clear, the vast majority of American workers, about 85 percent to be exact, still work in this type of employment relationship.

    No worker should fall through the cracks.

    – Sen. Elizabeth Warren


    But the last decade has witnessed increased erosion of this model, with the growth of subcontracting, outsourcing, franchising, on-call, temporary and, more recently, gig economy workers. Between 2005 and 2015, the number in these nonstandard work relationships increased from 10 to 15 percent.


    So we know these types of work are growing at a substantial rate. If we also count those working part-time jobs, the number of people who are partially or fully excluded from the safety net and standard employment rights might exceed 25 percent.

    Warren posed a fundamental question: Why should these workers be excluded from the protections and benefits and minimum standards afforded traditional employees?

    Her answer:

    “I believe we start with one simple principle: all workers–no matter when they work, where they work, who they work for, whether they pick tomatoes or build rocket ships–all workers should have some basic protections and be able to build some economic security for themselves and their families. No worker should fall through the cracks.”

    Sen. Warren proposes three strategies for filling in these cracks.

    1. Provide portable basic benefits — Social Security, insurance against catastrophic loss, and sick and family leave — for all workers.

    2. Extend the right to organize a union or other form of collective voice and protect everyone from retaliation or discrimination for exercising those rights.

    3. Ease the paperwork burden and responsibility for administering these benefits from employers by allowing unions or other groups to provide retirement savings plans and other benefits to workers at a fair price.

    She noted that other important steps also need to be taken, starting with enforcing the laws already on the books. Recent studies have shown, for example, that as many as 25 percent of low wage workers in retail and food services are paid less than the minimum wages promised by federal or state law, and three-fourths were not paid overtime due them.


    Labor laws are supposed to provide workers fair access to collective bargaining, yet when management resists, workers have only about a 10 percent chance of gaining a union and a collective bargaining agreement.


    Other laws need to be streamlined and made easier for employers to enforce. The best (or worst) example is that employers face as many definitions of who is an employee as there are laws governing worker rights. Each agency responsible for enforcing its law has its own definition. No wonder misclassification cases abound and are extremely hard to both defend and prosecute.

    Labor laws are supposed to provide workers fair access to collective bargaining…


    Sen. Warren rejected another idea being floated recently, namely to create a middle category between employees and independent contractors that would allow employers to offer some benefits to contractors without affording them employment status. That approach offers employers incentives to move more regular employees into this “middle” category; it is a full employment act only for lawyers eager to advise and litigate where this new middle line should be drawn.


    Sen. Warren’s approach simply says that all who work should be protected by our basic worker rights and covered by the benefits society deems essential for workers and their families to thrive.

    This may not be the only way to achieve the sensible and fair goal of providing everybody who works, regardless of who controls their pay and working conditions, these basic protections. If there are better ways to do so, let’s hear them. But the good news is a concrete set of ideas is now open for debate.

  • 24 Mar 2016 1:37 PM | Mike Lillich (Administrator)

    By Thomas A. Kochan


    (First published online (https://theconversation.com/how-to-transform-workers-campaign-rage-into-better-jobs-and-wages-56790) by The Conversation on March 24, 2016.)


    The presidential campaigns deserve some credit for finally voicing some of the deep frustrations and anger felt by American workers who have lived for decades in an economy that works for those at the top but not for them and their families.

    Thirty years of wage stagnation, the loss of one-third of the nation’s manufacturing jobs since 1970, a failure to generate enough quality jobs and career opportunities for young workers and unacceptable levels of income inequality are now coming home to roost.


    It is not surprising that the angriest voices are coming from working-class men and young people who have entered the workforce in the last decade, the two groups that have lost the most ground and feel they have no one standing up for them and no control over their future.


    And one of the main reasons for these trends is largely missing from the campaign trail: the loss of bargaining power and any means of having a voice at work.

    Unions now represent only about seven percent of the private sector workforce, and recent attacks on public sector unions are now leading to their decline as well. The Supreme Court will soon decide whether or not to further weaken public employee unions by eliminating rules requiring nonmembers to pay their fair share of the costs to represent them.

    But angry rhetoric will not put the economy on a path that works for the disaffected and disenfranchised. Instead we need to address the root causes of workers’ frustration and their economic decline. And to do that, I would argue, we need to fix our broken labor policy.



    Workers are increasingly demanding higher minimum wages after decades of stagnation. Reuters


    Decline of unions


    Recent studies estimate that 20 percent or more of the current wage inequality is due to the decline of unions and worker bargaining power.

    But perhaps because of the public’s ambivalence toward unions, none of the candidates has laid out a strong and positive vision or strategy for rebuilding workers’ bargaining power in ways that fit what they want now or that can be successful in today’s economy.


    Any strategy for rebuilding bargaining power has to start with fixing a broken labor law that no longer provides workers access to collective bargaining. Today, if management resists worker efforts to organize (and they nearly always do), less than one in 10 union organizing efforts results in a collective bargaining agreement.

    The odds are so stacked against workers and unions that few see trying to organize as a viable option.

    The ways to fix this aspect of labor law are well-known: strengthening penalties against employers or unions that violate the law, shortening the time required to hold an election to determine if a majority votes for union representation and having a neutral arbitrator set the terms of the first contract if one party or the other stonewalls the process.



    Ford’s partnership with its workers, led by Chairman Bill Ford, center, helped it recover without taking a bailout. Reuters


    Labor management partnership


    But these reforms have been impossible to get through Congress in the past, and as stand-alone proposals will be equally difficult in the future.


    They need to be combined with provisions that promote the forms of worker-management relations that have demonstrated their value in generating and fairly sharing productivity and economic growth. It’s also important that they support the new ways workers are finding a voice.


    The labor-management partnership in place for nearly two decades at health care provider Kaiser Permanente, for example, is a model for the type of modern labor management relationship. It both promotes improvements in patient care and organizational performance and ensures workers share fairly in the economic savings they help generate.

    Our research group tracked the evolution of this partnership from its inception. We found that Kaiser Permanente is a leader in use of union-management sponsored front-line teams that focus on improving health care delivery, a leader in use of electronic medical records to keep people healthy and out of hospitals, and pays industry leading wage and benefits.


    Ford, the only U.S. car company that avoided a government bailout, has a similar partnership, which helped it recover from losing US$17 billion in 2006 to making $7.4 billion and paying each union member $9,300 in profit sharing in 2015.

    A modernized labor policy should encourage such partnerships fitted to the needs of different industries and occupations.


    Modernizing labor law also will require extending protections against discrimination 

    and opening it up to people working in the diverse array of organizational settings today, not just the nonsupervisory employees in traditional employment relationships currently covered by the 1935 vintage labor law.


    A growing number of workers are employed in subcontractor or franchised arrangements (think McDonald’s) in which the employer who controls their work and future is unreachable. Those classified as independent contractors in the so-called platform or “gig” economy (think Uber drivers) are likewise excluded and have no legally protected means of organizing or engaging the executives who set their fares and control their access to customers.

    All these groups need protection from discrimination if they try to mobilize and seek to negotiate with whoever sets their terms and conditions of employment.



    Efforts to organize Uber drivers is at the forefront of the future labor movement. Reuters


    Keeping up with the times


    A forward-looking labor policy will also need to recognize and support the many innovative initiatives under way that are attempting to help workers who prefer to move to a better employer when faced with unfair or unacceptable practices at their current workplace.


    Indeed, a growing number of “apps” are coming along that support worker mobility. Examples include those being incubated through the Workers Lab, Turkopticon for those choosing who to work for on Amazon’s Mechanical Turk and Sherpashare and other groups providing drivers comparative information on earnings opportunities at Uber, Lyft and other platforms.


    Further experimentation with these innovative efforts will test the viability of using information and transparency as new sources of worker power. Those experimenting with these new approaches deserve to be protected from discrimination for raising their voice.


    I would go further and open up the law to encourage experimentation and evaluation of these emerging efforts. Let these worker entrepreneurs show us new ways to harness technology in support of today’s workforce.

    Shaping the future of work


    I believe that American workers are thirsty for a positive vision and strategy that restores workers’ ability to have a constructive voice at work and that provides enough real power to regain a voice in shaping their future.


    So it is time for those who seek their support to abandon the divisive and negative rhetoric that feeds their frustration and instead propose a viable way forward. Perhaps the best way to invent the next generation labor policy is to listen to workers themselves talk about what they want, need and are trying to do to regain control of their destiny at work.


    So let me end with an invitation: we will be taking up these and other issues in how to Shape the Future of Work in an MITx online course starting next week. Join us in this course and see what real workers – young, midcareer and beyond – are saying about their visions for the future of work and the future of worker representation.

    This is just one way we can deliver their message to the candidates desperate to gain their support.



  • 04 Jan 2016 8:47 AM | Mike Lillich (Administrator)

    By Thomas A. Kochan


    First published in The Conversation:

    https://theconversation.com/outlook-for-2016-middle-class-woes-hopeful-on-wages-the-fear-factor-52194


    The year 2016 could be the year the country ends its 30 years of wage stagnation and begins attacking income inequality.


    The strengthening economy, along with the growing frustration that many are not sharing in it, has elevated wages to the top of presidential campaign debates, while workers and their advocates are already taking direct actions to press for wage increases.


    The “fight for $15“ minimum wage battle is the most visible form of direct action, one mounted by a coalition of unions and community groups. It has already succeeded in raising wages in 14 states or localities and is on the 2016 agenda in 15 additional cities or states.


    Across the country new forms of worker organizing are emerging, including a number that are putting information technologies to work to support workers.


    Uber drivers are raising their voices in class action suits and union organizing drives, and apps like Sherpashare, Glassdoor and others are providing workers the data needed to separate good from bad employers. Watch for more “worker-centric” apps to emerge using information and transparency as new sources of bargaining power while unions use collective bargaining and public pressure to keep forcing low-wage firms like McDonald’s and Walmart to keep raising wages.


    A growing chorus of business leaders, from start-up entrepreneurs to Wall Street veterans and social investors, is challenging the corporate focus on maximizing short-term shareholder returns in recognition that companies can produce long-term value for shareholders and provide good jobs with good wages.


    The year 2016 will see increased debate over how to make these companies the norm, not the exceptions.


    But the best way to fulfill my prediction that 2016 will be the year America starts turning wages around would be to elect candidates who will support and translate these examples into national policies capable of building an economy that works for all.


  • 11 Dec 2015 7:36 AM | Mike Lillich (Administrator)

    By Thomas A. Kochan


    Discussions about the future of work are clearly in the air.


    This week, Secretary of Labor Tom Perez is convening a three-day symposium on the issue. Simultaneously, the Brookings Institution hosted a discussion about the implications of the “gig” economy for work and employment policy. At MIT, we are also planning a similar conversation for early next year.


    And in Silicon Valley, leaders of high-tech companies and worker advocates have recently started discussing new ways to offer benefits to contract workers following several high-profile cases in which Uber drivers and others have sued to be considered regular employees and gain the accompanying benefits.

    All this couldn’t come at a better moment, but time is of the essence. Unless talk leads to actions to change the course of the economy and labor market, the next generation of workers is destined to experience a lower standard of living than their parents – the opposite of the American Dream.


    I share a deep concern that is motivating this flurry of discussion. This concern for the next generation is the major theme in my current research, book and online MIT MOOC (massive open online course) devoted to Shaping the Future of Work. The central challenge we face is to update our employment policies to catch up with changes in the economy, workforce and employment structures.

    How can we do it?


    Confronting our problems head-on


    My hope is that everyone participating in these discussions is ready and willing to face our problems squarely by putting on the table the tough choices and changes in strategy and behavior America needs from labor, business and government to turn things around and build a better future for the next generation.


    I’ve been in far too many soft-minded discussions that avoid the tough issues. It is always easier to agree on the need for better education and training or to cheerlead the practices of leading companies without asking how do we make these the norm rather than the exception. We need to go beyond these polite discussions.


    We have to address the fact that so many young people have been scarred by starting their careers in the “lost decade” when wages weren’t rising even for college graduates and 40% of those with bachelor’s degrees started out underemployed, working in jobs that neither utilize their education nor provide further training and development opportunities.


    The evidence shows workers who start their careers this way have a very hard time getting on track to higher-paying job opportunities.

    Here are three of the tough questions that need to be front and center in these discussions, each of which will call for big changes in labor, business and government strategies.


    How do we rebuild worker bargaining power?


    The primary challenge facing workers and the economy is how to end the 30 years of wage stagnation and reverse the income inequality that is holding back economic growth.


    Bargaining power in the heyday of rising wages (prior to 1980) came largely from unions threatening strikes and spreading collectively bargained wages across firms within industries. Those sources of power dried up in the 1980s.

    Today workers, supported by future unions and professional associations, need to use their knowledge and skills as a key source of power. This requires two things. First, workers will have to gain and periodically refresh the skills they need to remain competitive in their labor markets over the full course of their careers. 


    Second, organizations and technical “apps” are important to mobilize them and help them move jobs from bad to good employers.

    The ability to exit workplaces with below standard employment practices may be as important a source of power for the workforce of the future as direct bargaining to change those practices was for workers in the past.


    This means that labor organizations have to build the capacity to support and maintain members' skills and provide the information, portable benefits and mobility supports needed to move from one employer to another over the full course of their working careers.


    Various groups are working on “apps” to provide information on good and bad employers. Putting them to use to mobilize workers and enforce high-quality employment practices may just be the next generation workforce’s best source of bargaining power.


    How do we get more employers to take the high road?


    Employers beware. These discussions will also not be easy on you.


    You will be challenged to end the era of financialization of the American corporation that now has dominated for 30 years. The American economy can no longer afford to let corporations fixate on maximizing short-term shareholder returns at the expense of other stakeholders, particularly employees.


    This was not the corporate mantra of the era when wages moved in tandem with productivity. The good news is a large body of research has shown how to compete on the basis of high productivity and high wages, and yes, we all have our favorite visible examples of companies that do this, such as Southwest Airlines, Costco, Kaiser Permanente, SAS and, our New England favorite, Market Basket.


    The key question for discussion here: how do we go from these examples as the exceptions or outliers to make them the norm in business?

    This will require more than cheerleading. It will require broader use of alternative forms of corporate governance, from employee stock ownership to benefit corporations to cooperatives and, perhaps, to bringing workers’ voices directly into corporate boardrooms.


    Tough issues indeed.


    How do we end 30 years of labor policy gridlock?


    Perhaps the toughest question to put on the table is how to end the 30-year gridlock over labor policy.


    We cannot shape the future of work unless we update labor law to provide all workers, regardless of whether they are hourly employees, managers or independent contractors, the ability to organize and negotiate to improve their working conditions. Other employment policies that set the floor on working conditions such as such as minimum wages and overtime, equal employment opportunity, social security, health insurance, etc also need to be extended to those now excluded.


    But let’s be realistic. Congress is so divided today that there is little hope for immediate solutions. Maybe a first step could be taken by building consensus out of these meetings that fundamental change and updating of employment policies are needed.


    Perhaps those participating in these discussions with the labor secretary and in various think tanks and universities could call for an era of policy experimentation. We could ask this administration – or, if necessary, the next one – and, where necessary, the Congress to authorize the secretary of labor to experiment with and evaluate a variety of new approaches to worker voice, a “third way” of classifying workers in the gray area of employee-contractor status and to work in coalition with community, business and labor groups to complement and extend the reach of labor standards enforcement.


    Creating the legal spaces needed to try new ideas like works councils, advisory bodies made up of representatives of all workers and managers in an enterprise, or regional or sectoral negotiations over wages would be a good starting point. 


    Expanded use of the type of statewide and industry-level wage boards pioneered this year by Governor Andrew Cuomo in New York would be another option. So too would giving weight to employment practices that generate high productivity and good wages in choosing among bidders for government contracts.


    Together, actions like these might just unleash the broad-based experimentation and innovation needed to identify the best options for national policy reform when the political forces eventually align to make this possible.

    So let the discussions begin. But let us not avoid the hard issues.

    Stay tuned. I’ll report on what comes out of the labor secretary’s confab and the others to come down the road.


  • 07 Nov 2015 6:02 AM | Mike Lillich (Administrator)

    Today’s strong employment report  is a cause for celebration, at least for now.


    The economy reversed the trend of the past three months by creating 271,000 new jobs. The overall unemployment rate is now at 5%, a seven-year low. Growth was especially strong in the service sector, with professional and business services (up 78,000) and health care (45,000) leading the way, followed by retail trade (44,000) and food services and drinking establishments (42,000).


    The disappointments were no growth in manufacturing, no declines in long-term unemployed and no evidence that those who have given up on finding a job are reentering the labor market.


    So overall three cheers for October! But perhaps it is time to get out of the waiting game each month to see if by chance the economy and labor market had a good or bad month (we are terrible at predicting the numbers, considering those who tried thought the October number would be 170,000 or so).


    I t is time to stop reacting to the monthly numbers and get proactive. Why not set a bold but realistic target to create the number and quality of jobs America needs for the long run?


    Time for a jobs target


    In 1961 President John F Kennedy mobilized the country around his pledge to put a man on the moon by the end of the decade. In doing so, he energized the public, Congress and the private sector to work together to achieve this goal.


    We ought to do the same now by setting a target to create 12 million high-quality jobs by the end of this century.


    That is easily doable: the 12-million target translates into 250,000 per month from January 2016 through December 2019.

    Meeting this target, however, would require a proactive effort from the president, Congress, Federal Reserve, business, labor and our schools, exactly the type of collaboration the American public is calling for in this election cycle.


    The Fed’s tired of waiting…


    The conventional economic advice at the moment might be to urge the Federal Reserve to once again defer on raising interest rates.


    That is probably sound advice, but I’d rather have the Fed say, wait a minute, we’ve done our part to support the recovery. It’s time Congress, the White House, and the private sector play their roles.


    The timing is perfect for Congress and the president to lead the way. The new speaker of the House, Paul Ryan, has a transportation bill on his desk that could be transformed into a broader infrastructure investment vehicle that would garner strong business and labor support.


    He in turn could challenge business and labor to put their own money where their mouths are and commit to jointly funding and overseeing a national infrastructure investment fund. In the spirit of a new beginning, he and the president could sit down (maybe over a good beer brewed in Wisconsin, Ryan’s home state).


    They could also set long-term budget targets for investments in basic research, for expanding the number of initiatives aimed at building the next generation of manufacturing industries and for investing in education and training to fill what industry says is a coming – and in some sectors current – middle skills and technical talent shortage.


    Getting the message


    Setting these targets would have both immediate substantive and signaling effects on private sector decision makers. Business would get the message that good opportunities lie ahead and would start expanding capacity and investments in product development.


    Labor could be encouraged to expand existing apprenticeships and work with industry to create new ones fitted to emerging technologies and occupations. 


    Technical colleges and universities could be challenged to expand their classroom, online and cooperative and internship programs to provide the next generation workforce with the skills industry will need to fill the new jobs.


    hese schools could be incentivized to reach out to the long-term unemployment with course work and links to employers that remove the stigma they now carry when searching for work.


    In short it is time for America to go beyond waiting for the jobs numbers to surprise or disappoint us each month and take the steps needed to produce predictable and sustained growth that meets a consensus target and puts Americans back to work, and perhaps even get wages moving in the right direction again.


    So Mr Speaker and Mr President, go have a beer and see what you can do together. If you want, I’ll buy you both a good Wisconsin brew.



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