Can a new brand of unions help America’s workers? — Thomas Kochan

MIT Sloan Professor Thomas Kochan

MIT Sloan Professor Thomas Kochan

From Fortune

Hardly a day goes by when American unions are not attacked from some quarter: Last week, the Supreme Court weakens unions representing home care workers, one of the lowest paid and fastest growing occupations. This follows another ruling struck earlier last month in which a California judge threw out teacher tenure, due process and seniority rules under the dubious theory they are the cause of persistent inequality in education outcomes. And in 2011, Wisconsin’s governor decimated public sector unions by taking away state and local government employee rights to collective bargaining, reversing a policy in place since 1959.

It’s clear that for years most private sector employers have successfully fought union organizing and collective bargaining using every legal delaying tactic and in many cases illegally firing workers. Wal-Mart  WMT 0.42% ,the nation’s largest private employer, is the most visible case in point. By deploying its union-fighting swat team from corporate headquarters to any store that shows signs of worker protest, it has remained 100 % “union-free.”

The result: Now down to representing only 7% of private-sector workers, America’s unions and collective bargaining are no longer able to provide workers the power they need to redress workplace injustices or achieve a fair share of the economic growth they help generate.

But America desperately needs a vibrant, innovative, growing, and yes powerful, set of organizations that give voice to and represent workers with their employer and in social and political local and national discourse. No democracy in the world has been sustained over time without some independent institution that stands up for and advances worker rights, interests and economic welfare. Moreover, there is an almost perfect correlation between the decline in union representation and the rise of income inequality.

Having said this, we should not be nostalgic. Trying to recreate unions in their mirror image would be both futile and ill-conceived. Instead, America needs to invent, support and grow a new and renewed labor movement that fits the needs of today and tomorrow’s workers and economy.

The good news is a wide range of experiments with new forms of mobilization and worker representation is now underway inside and outside of the labor movement.

Unions in the utility industry, health care and manufacturing industries are using knowledge and skills as the key source of worker power by expanding apprenticeship training, creating partnership with community colleges, vocational schools, and employers to fill the “middle skills” gaps that exist today or will grow as skilled baby boomers retire.

Read the full post at Fortune.

Thomas A. Kochan is a professor of industrial relations, work, and employment at the Massachusetts Institute of Technology’s Sloan School of Management. He is author of the book, Restoring the American Dream: A Working Families’ Agenda for America.

The Volkswagen way to better labor-management relations — Matthew Finkin and Thomas Kochan

MIT Sloan Professor Thomas Kochan

MIT Sloan Professor Thomas Kochan

From the Los Angeles Times

Works councils — elected bodies representing all workers in a plant, both blue and white collar — are acclaimed as one of the best, most innovative features of Germany’s labor relations system. They have been shown to enhance efficiency, adaptability and cooperation. By supporting the use of work sharing (agreeing to reduce everyone’s hours rather than laying some people off), for example, these councils helped Germany experience less unemployment during the Great Recession and a faster, more robust recovery since then.

For years, labor law, labor economics and labor-management researchers like us have urged experimentation with works councils in the United States. Volkswagen and the United Auto Workers are proposing to do just that at Volkswagen’s Tennessee plant. This could be a watershed in American labor relations, one that rejects the outmoded adversarial doctrines that have built up in U.S. labor law and practice. And it signals management and labor support for a new model of cooperation and partnership.

Unfortunately, the National Right to Work Legal Defense Foundation and others are opposing this effort by arguing that such cooperation would violate U.S. labor law’s 1935 ban on sham or “company” dominated unions.

A comparison of German and American labor law makes it clear they are dead wrong.

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Making good = profitable — Managing Sustainable Businesses–Thomas Kochan

MIT Sloan Prof. Thomas Kochan

From off-shoring good jobs to the great and growing income divide, finance-driven decision-making has long been at the core of many of our economic problems. It’s not that financial analysts and operatives are necessarily evil or uncaring – rather, they believe they have a fiduciary responsibility to generate maximum returns for their funds, even when the results have worker and society-unfriendly consequences.

Changing this mindset has proven a tough nut to crack even for union pension fund managers, who are aware of the social consequences of investment decisions. But there are glimmers of hope and interest. On June 7, for example, some of the nation’s largest institutional investors and the biggest single pension fund investor – the California Public Employees’ Retirement System (CALpers) — will hold a conference to explore ways to transform socially and environmentally sustainable investment criteria from a perceived liability to an asset. CALpers has a commitment to responsible investing – for example, it calls for neutrality in union organizing – but it has never figured out how to make such policies systemic. Read More »

Obama and jobs — focus on quality, not just numbers

MIT Sloan Prof. Paul Osterman

President Obama’s job plan has triggered lots of talk if not action. With the economy struggling, any conversation about job creation is good news. But from the President on down, we sometimes pay too much attention to the number of jobs being produced and not nearly enough attention to the quality of those jobs.

In Good Jobs America: Making Work Better for Everyone (Russell Sage Foundation), a book co-authored by me and Beth Shulman being released this month, we document how a very large percentage of American adults today work in jobs that pay at levels below what is needed for a decent standard of living.

The main focus of our book is to show how bad jobs can be made into good ones. We show that education is a necessary but not sufficient element in the solution, that the persistence of low wage work cannot be laid at the door of immigration, and that it is possible to improve job quality without negatively impacting economic growth.

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Debate about public pension plans should include understated funding levels

MIT Sloan Sr. Lecturer John Minahan

As a former pension consultant-turned MIT Sloan professor, I get asked to speak at my fair share of pension conferences. I recently spoke at a symposium for trustees of Taft-Hartley funds, which are pension funds for unionized workers jointly trusteed by union representatives and management. After my talk, something unexpected happened: the audience gave me a hearty round of applause. This was unusual because often when I speak at these events, it seems people want to throw things at me.

Allow me to explain. I worked for over a decade in the pensions industry, and during that time and since, I’ve observed intense politicization around whether public (state and local) pension plans are adequately funded, and especially whether the actuarial rules for determining how much funding is necessary are up to the task. On one side are plan sponsors and actuaries who say that, based on traditional actuarial methods, the funds are in decent shape; and on the other side are economists (and a few actuaries) who contend that traditional actuarial methods understate and obfuscate the pension commitments state and local governments have made, and that the plans are in far worse shape than is generally acknowledged.

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