A New Social Contract for Work
September 1, 2017
Sep 1, 2017
5 Min read time
This Labor Day, it is not enough to speak out against Trump's many injustices. We must also begin laying the foundations for working together in the post-Trump era, whenever that arrives.
This Labor Day we could join those speaking out against Donald Trump’s many hypocrisies, chief among them the preposterous notion that he represents the American worker. We could point out that he is further dividing an already divided country, turning to Wall Street tycoons as his key economic advisors, advocating for the elimination of health insurance coverage for the poor in favor of tax cuts for the rich, rolling back overtime regulations, abandoning requirements that investment agents focus on the interests of the retirees that hire them, and appointing a Education Secretary who attacks public education, teachers, and their unions.
We must lay the foundation for what will need to be done in the post-Trump era, whenever that arrives, to repair the damage and regain the trust of workers.
We could go on, but a better approach is to lay the foundation for what will need to be done in the post-Trump era, whenever that arrives, to repair the damage, regain the trust of workers, and unify employers, unions, government leaders, and all who share the responsibility for shaping the future of work. We can do so by laying out a positive vision and strategy built around a simple narrative: a new social contract for work capable of meeting the expectations and obligations that workers, employers, and society in general hold for work and employment.
A new and fresh approach is long overdue. It is now all too apparent that America is paying a severe penalty for failing to address several decades of growing income inequality and stagnant wages and deep social and political divisions between the winners and losers from globalization.
And things could get worse. If we don’t turn the digital revolution into an opportunity to increase the number of good new jobs it could offer, the gap between the haves and have-nots will grow. If we let this happen, the legacy we will leave for our children and grandchildren is a lower standing of living and the prospect of more violence.
The good news is thanks to innovations happening around the country we can see how a new and more inclusive social contract might be built.
First, more businesses must embrace “high road” strategies that do good for shareholders and employees and their communities. This means competing through innovation and high productivity that are achieved by and in turn support paying fair wages; eliminating workplace discrimination; investing in worker training; and aligning compensation and incentives via profit sharing and employee stock ownership.
High road strategies also involve empowering workers on the job by giving them greater discretion and autonomy, being open to their suggestions on ways to improve processes and services, and resolving problems before they fester into hardened views that lead some to blame other groups or self-serving corporate leaders for their problems.
These strategies can work. There is a great deal of empirical evidence that shows high road companies in sectors from airlines, to manufacturing, to retail perform as well and sometimes better than low road companies. Consider Costco. Many of its store-level employees make upwards of $20 an hour, it has a remarkably low turnover rate for a retail business, and the warehouse giant regularly ranks as one of the best places to work. Last year the company, which is sixteenth on the Fortune 500 List, posted record sales. Southwest Airlines is another example. It offers one of the most generous employee benefits packages in the airline industry and also ranks high in customer satisfaction. It, too, reported a record profit last year. In New England, we have seen how much support employees, customers, and communities are willing to give to high road companies like Market Basket.
But there are not enough companies like Market Basket, Costco, and Southwest—and that is a problem. We need to create a tipping point that forces low road firms to move toward the high road. Some of the pressure must come from employees: workers ought to leave low road firms in search of better jobs elsewhere. (This is easier to do in a tight labor market like the one we are in now.) Some of the pressure must come from customers: shoppers should reward firms that take the high road and stop patronizing ones that don’t. And some of the pressure must come from shareholders. The small but growing number of so-called social impact investment funds that now hold firms accountable for their employment practices need to become the norm, not the exception.
Businesses should embrace “high road” strategies that do good for shareholders and employees and their communities.
The second element of this social contract requires filling the void left by the decimation of American unions. Workers want to have a voice in shaping how they work, how problems are resolved, and how their companies are run, but the standard channels for worker voice, unions, and collective bargaining now cover only about 10 percent of the workforce. Of course, we cannot just recreate unions in their old image because the economy and the workforce have changed. Instead, we need different forms of engagement and creative modes of collective bargaining that enable workers to contribute to economic improvements in their workplaces and share equitably in the gains they help generate.
We are already starting to see movement in this area. Coworker.org, which allows employees to start campaigns to improve workplace policies, is a prime example. It was instrumental in getting Starbucks to improve its scheduling practices. Walmart employees, meanwhile, have their own group, OUR Walmart, which leverages artificial intelligence to help employees ask questions, build communities, and solve problems. The highly successful “Fight for $15” minimum wage campaign may illustrate the new forms of public negotiations at the local and state level needed to make progress on specific issues.
The third contribution must come from innovators and educators who design new technologies and prepare the workforce for the future. These two tasks must come together so that the workforce is both prepared for and involved in shaping how new technologies are designed and used to solve big problems and support good jobs. Leading AI labs like IBM Watson are already using this approach to support how physicians, nurses, and other healthcare professionals do their work. At the local level digital fabrication labs are being built in poor neighborhoods to bring manufacturing back using the next generation of technology and incubators are supporting women and minorities to bring new and more healthy food and related services to those who need them the most. In rural areas like Wisconsin Rapids, local foundations like Incourage are bringing leaders together to identify the new business opportunities that fit with the natural and human resources that can serve as their source of competitive advantage.
It is essential that government contribute to this new social contract. The way to end the gridlock in Washington is to learn from innovations occurring in local and state governments that are tackling the tough problems of healthcare reform, raising the minimum wage, providing paid family leave, and strengthening vocational and technical education. So this Labor Day let us look beyond Trump by unifying the country around an inclusive vision and strategy to work and prosper together.
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September 01, 2017
5 Min read time