Tuesday, April 04, 2006

Thomas Palley on the split in US labour.

Disorganized Labor
Thomas I. Palley
April 03, 2006
(Thomas Palley runs the Economics for Democratic and Open Societies Project. He is the author of Plenty of Nothing: The Downsizing of the American Dream and the Case for Structural Keynesianism. His weekly economic policy blog is at www.thomaspalley.com)

For the last year there has been a widening split in the ranks of American organized labor. This split risks hardening as the new Change To Win coalition increasingly takes on the complexion of a rival labor federation to the AFL-CIO.

Thus far, the argument has focused on union organizing efforts and how unions should be structured. Yet in many ways the split is without purpose, because the AFL-CIO is already largely on the same page as the CTW coalition regarding these issues. All agree that stepped-up organizing efforts are needed and that unions should merge where feasible. This agreement isn’t surprising, since CTW leaders have been powerful members of the AFL-CIO’s executive council for the last decade, where they have profoundly influenced federation policy.

In that light, the split is simply the result of frustration at inability to reverse union decline. That said, there is one major difference in priorities—but it remains out of focus and has not received the attention it deserves. That difference concerns the significance of economic policy and politics in union strategy. It’s an issue that does not warrant a split, but it does warrant prime time and could even provide the frame for a galvanizing debate that jump-starts the entire union movement and changes national politics. This crucial debate can be framed as “sliced bread” versus “the box.”

The “sliced bread” strategy comes out of the Service Employees International Union (SEIU), which is a major force within the CTW coalition. Late last year SEIU launched the “Greatest Idea Since Sliced Bread ” competition, asking ordinary Americans for their ideas about promising policy initiatives. The goal was to launch an unprecedented national conversation about how to strengthen the economy and improve life for working men and women and their families.

The competition was jazzy and attention-grabbing, reflecting the imaginative and innovative characteristics that distinguish SEIU. But “Sliced Bread” was much more than a one-time competition. It was also a statement about where unions should be headed. From the sliced-bread perspective, unions must find those economic initiatives that people want and are both important and doable. The challenge is to work within the existing system, and find a new place for unions.

This view results in talk of “partnering with our employers” and of unions cooperating with outsourcing as long as outsourced workers are organized. When it comes to globalization, there is no going back and unions must adapt innovatively to the new environment, say the CTW leaders. The critical argument is that the core parameters of the economic system are given, and unions have to live and work within those parameters. Only later, after unions have rebuilt themselves, can these parameters be revisited and changed.

The CTW “sliced bread” framework contrasts with "the box," which is an entirely different framework that has gradually emerged at the AFL-CIO—and whose political implications are still being digested. The box depicts workers as boxed in on all sides by the new economic order. Imagine a square whose sides are labeled globalization, less-than-full employment, small government and privatization and labor market flexibility. Private-sector workers are pressured by globalization, which allows corporations to put them in international competition with oppressed low-wage workers. Public-sector workers are pressured by small government and by privatization that places them in competition with private-sector workers.

Both groups are pressed by less-than-full employment and labor market flexibility. Less-than-full employment is where the Federal Reserve enters, putting a floor on unemployment—the Fed views unemployments levels around 6 percent as acceptable in the name of price stability. Labor market flexibility strips workers of employment and social protections, degrades the minimum wage and makes union organizing near impossible.

A box perspective leads to radically different conclusions. The current system has unions running just to stay in place. As quickly as they organize new workers, companies ship existing union jobs offshore. Manufacturing was first to feel this, but in future many parts of the service sector also will. From a box perspective, the problem is systemic and the goal is to change the system—not to adapt to it.

Right now, corporations have workers boxed in. The challenge is to reverse the situation and put CEOs and corporations in the box, as did the institutional innovations of the New Deal. That task is easier said than done. Not only must the economics of corporate globalization be discredited, but new affirmative arguments for an alternative must also be put forward. Keeping score of the failures of today’s global economy is part of the job, but only part. Unions must also provide a compelling alternative to free market rhetoric and ideology, a task that has barely begun.
The CTW "sliced bread" and AFL-CIO box perspectives imply markedly different road maps. The former grudgingly accepts today’s economic structure. Consequently, the policies that determine the structure of the economy and the economic ideas that drive these policies are not the key issue. Instead, organizing is, and the belief is that organizing can be successful regardless of structure. Moreover, since ideas and policy are not on the critical path, unions can even reduce engagement with Washington and party politics.

In stark contrast, the AFL-CIO box demands immediate system change, and that in turn requires new economic arguments that can change policy and politics. Organizing cannot succeed without this change because it is the structure of economic arrangements that is tearing the heart out of unions. Changing the economic policies that shape the economic structure is therefore critical. At the political level, it forces a profound intellectual break with the current Democratic Party elite, since “Rubinomics,” the economics of the Clinton administration, is the box. This is a dramatically different political strategy from reduced political engagement.
Where next? As of the moment the split looks to be festering. This is a tragedy. We need a head-to-head debate on these issues, not a split within organized labor. Meanwhile, for the AFL-CIO the challenge is to break with the Democratic Party elite without splitting the party, as that could hand victory to Republicans, whose version of the box is even more extreme.


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