How to Build a Strong Economy: Education or Unions?

On May 15, The Chronicle of Higher Education reported that

The American higher-education system has long been seen as a leader in the world, but confidence in its future and its enduring value may be beginning to crack along economic lines, according to two major surveys of the American public and college presidents conducted this spring.

The surveys, conducted by The Pew Research Center and The Chronicle, reveal few surprises to those of us who have been paying attention to the latest crisis of higher education, but several points underscore the different views of the purpose of higher education among education professionals and between those with degrees and those who have not gone to college . For example, of the 1,055 presidents of colleges and universities across a broad spectrum, including four-year, two-year, public, private, and for-profit institutions, respondents are split roughly in half on whether colleges should be about work force preparation or “intellectual growth,” and the responses fall along a predictable axis, with four-year institutions arguing for the latter, and two-year and for-profits advocating the former.

Equally interesting is the difference between college graduates and those who have not (or have not yet) attended college in their responses to the same question on the mission of higher education. According to Pew, those who attended college more often believe that the mission of college is intellectual growth, while those who have not feel it should be work-force preparation. As significant are the responses, across all educational levels, to the question of what a young person needs to succeed in the world: a college education comes in third, behind a “strong work ethic” and the ability to get along with people..

The Chronicle survey addresses President Obama’s statement in last year’s State of the Union address of a national goal that the U.S would lead the world in degree attainment by 2020, so that we can lead the global workplace. The assumption that America will regain its competitive edge simply by awarding more college  degrees seems naïve, , particularly when the same respondents to the Chronicle survey report overall “lower quality” of preparation on the part of incoming students. Indeed, few of the college presidents surveyed think the goal is attainable: only three percent believe it is “likely” that the U.S. will achieve this benchmark, while 50 percent say it’s not likely.

Compounding the problem is that, even if this goal were achieved, a college degree is not a guarantee of gainful employment, though university marketers often suggest it is. Just last week, Catherine Rampell of the New York Times cited a study by Andrew Sum of Northeastern University that shows that only 55.6 percent of 2009 college graduates are working in jobs that require a college degree, while the other 44.4 percent are almost evenly split between working in jobs that require no degree and not working at all.  In the current economy, and as Sherry Linkon and Jack Metzgar have suggested in their analyses of predictions about job growth in the service sector, in the long run, college degrees are clearly not the answer for everyone.

Indeed, in his response to Obama’s aspiration, Brookings Institute fellow Grover J. ‘Russ” Whitehurst noted:

Germany has a stronger economy than France but half the percentage of young adults with a college degree.  Further, France has increased its percentage of young adults with college degrees by 13 percentage points in the last 10 years whereas Germany’s output of college graduates has hardly budged, yet the economic growth rate of Germany has exceeded that of France over this same period.  Obviously increasing educational attainment is not a magic bullet for economic growth.  Education credentials operate within boundaries and possibilities that are set by other characteristics of national economies.  We must attend to these if more education is to translate into more jobs.

And what are those “other characteristics” that might generate a stronger national economy? The answer is ironic, especially as governors in Ohio and Wisconsin are pushing anti-union bills through state legislatures. According to several studies, one of the conditions of strong economies like Germany’s is not increased degree attainment but strong unions and worker protections.

Marc McDonald suggests that when looking at two of the world’s nations with the lowest jobless rates, Germany and Japan, what emerges is a common factor of heavily unionized workforces:

Take a look at two of the most heavily unionized nations in the world: Germany and Japan. Both nations are thriving and have jobless rates far below the U.S. rate. Both nations still have large manufacturing sectors, which are heavily unionized. And both nations are exporting more than ever—even to low-wage nations like China. (Japan, for example, is one of the few nations on earth that has enjoyed a trade surplus with China much of the time in recent years)… Not only are Germany and Japan heavily unionized, both nations have strong pro-worker laws that back up their labor movements. In both nations, for example, it’s virtually impossible to fire full-time workers. Mass layoffs are very rare in both nations.

While many would balk at the suggestion that the U.S. emulate Japan, with its notorious reputation as a stressed out, all-work economy, McDonald notes that, on average, Japanese workers work fewer hours than their American counterparts and enjoy greater benefits. McDonald argues that because workers are protected within these economies, the companies that employ them must think beyond the immediate and develop long-term strategies, rather than short-sighted policies that focus solely on short-term growth and quick shareholder gains.

McDonald may be on to something in his suggestion that as corporations —  and increasingly universities — clamor for the “flexibility” that non-union and non-tenure workplaces promise, they may be embracing a short-sighted strategy. Writing in Harpers last year, Thomas Geoghegan, urges Americans to “Consider the Germans,” and in so doing he counters the claim that what American employers need is greater flexibility and fewer fetters that come with worker representation. In considering the ways that Germany continues to thrive in high-market manufacturing he notes:

All my life as a labor lawyer I have read the same thing in The Economist, about the United States and its wonderful labor-market flexibility. What they mean is: Unlike the Germans, U.S. working people are completely powerless. But it’s precisely because of our labor-market flexibility that we can’t compete. Our workers have been flexed right out of their high-wage, high-skill jobs and into low-wage, low-skill jobs. That’s bad for the workers, of course, and it’s also bad for the economy. The German model—with worker control built into the very structure of the firm—keeps bosses and workers in groups, rubbing elbows with each other, and sometimes just elbowing. It creates a group interaction that over time builds and protects what economists like to call human capital, especially in engineering and quality control. It’s precisely this kind of valuable capital that our atomizing “flexible” labor markets are so good at breaking up and dispersing.

Both McDonald and Geoghegan share the belief that while America obsesses (with good reason) over China, that the model to emulate is that of Germany, with its strong secondary education system and clear worker rights’ laws.

What’s the connection between the value of a college degree and the economic impact of unions?  Just this: if our goal as a nation is economic growth, then we might do better to focus on the rights and status of workers rather than on getting more people to go to college.

Tim Francisco, Center for Working-Class Studies

Welcome to the Informal Economy

It’s graduation season, and while commencement speakers encourage graduates to work hard and pursue their dreams, most new grads are worried about finding a decent job.  All their professors can suggest is that students use internships to gain valuable work experience and be prepared to have five jobs by the time they are 35.

Here’s the reality, grads: things are worse than you fear.  When you’re 35, you could still be looking for a good job. You’ll have a family to support, your salary could well be lower than you expect, and you’ll receive little or no pension contributions or health care benefits. Taken together, episodic work with little opportunity for advancement and poor wages and benefits reflect the characteristics of work life once found largely in the informal economy but now becoming all too common in the formal economy.

According to UNESCO, the informal economy involves the largely unregulated exchange of goods and services and is characterized by intermittent employment, short job ladders, and substandard wages and working conditions.  Historically, the informal economy has referred primarily to workers paid under the table, like many nannies or home health care aides, itinerant workers, and those involved in black market exchanges. But increasingly, the conditions of the informal economy are being experienced in the formal economy, though they are generally ignored or hidden by such glossy terms as consulting, internships, subcontracting, and privatization.

The economic crisis is pushing more people into the informal economy. USA Today reported that in 2010 only 45.4% of Americans and 66.8% of men had jobs. Both statistics are among the lowest on record, and now the United States has a lower share of prime age men in the work force than any other G-7 nation. According to David Brooks, writing in the New York Times, this is the result of early retirements, work disability, the decline of manufacturing jobs, and poor job fits in the new economy. Regardless of the reasons, the number of unemployed and underemployed people, who are most likely to participate in the informal economy, is growing in every sector and profession as the recession/regional depression continues. Many of those who do not have jobs are finding ways to support themselves, at least minimally, within the informal economy.  They have no choice.

At the same time, employers are taking advantage of desperate, young, less expensive workers, often hired on a temporary or contract basis, who are displacing older professional and non-professional workers or simply allowing companies to avoid committing to permanent hires.

As companies resist hiring full-time workers, and as young workers clamor for any possible job opportunity, internships have become increasingly significant in American business, and informal economy conditions apply to many internships.  According to the Economic Policy Institute, 1 to 2 million people today work as interns in the United States, and most are either unpaid and poorly-paid. In his book, Intern Nation, Ross Perlin reports that internships usually don’t conform to labor regulations, contribute to socio-economic inequalities, and rarely provide a useful job ladder – conditions that are typical in the informal economy. Offering college credit in lieu of an hourly wage does not necessarily mean that employers are free to ignore wage and hour restrictions. The U.S. Department of Labor has begun to take note of these problems and plans to increase regulation of unpaid internships nationwide.

Another growing category of informal workers is home-based caregivers. While some work through employment agencies, home-based employment is largely unregulated and dominated by non-white and female workers who earn low wages and no benefits. As more families need help caring for young children, disabled family members, and aging parents, demand for home-based care services has grown. Personal home and health care employment now exceeds 3 million and is projected to be the largest sector of new job growth between 2008 and 2018, with 1.1 million new jobs.  In the last decade, these workers have won union organizing and bargaining rights, but Steve Early reports that there is bi-partisan support among many current governors to rescind executive orders or pursue legislation undermining these workers’ attempts to improve their working conditions.  As a result, their wages will decline, their working conditions worsen, and they will sink even deeper into the informal economy.

So what is to be done? A number of labor and social justice organizations have formed the Excluded Workers Congress with goal of organizing workers in the informal economy, connecting them with grassroots movements, and developing strategic responses to informalization. They aim to challenge discrimination in the current labor market, build support for ongoing campaigns to improve working conditions, expand labor rights for excluded workers, and advocate for policies that support all workers’ right to organize.

Acorn International’s founder Wade Rathke suggests that there is no quick fix for the informal economy.  Rather than offering programs to retrain informal workers to enter the shrinking formal economy, he argues, we should “embrace the informal economy and engage in survival strategies that provide sustainable livelihoods and community redevelopment.” With short timelines and low investment, communities could organize  “localized informal workshops, training, production, marketing, and sales that can provide dignified, remunerative work for millions.” The work would range from home repair and rehab to food and bio-diesel production to recycling and technical repair services. He also advocates social networking to facilitate the sharing of job information, dispatch, and distribution and micro-lending adapted to broader social and community purposes. Put differently, he thinks the solution to the problems of the informal economy lies in changing the conditions of the work, not the workers.  Rathke wants to make work in the informal economy legal and formalized.

Most certainly, Rathke’s ideas may seem out of the box in advanced economies that often look for quick fixes. But as we in Youngstown know from more than 30 years experience, large-scale, structural economic problems don’t have easy solutions. On the other hand, the solutions Rathke advocates have helped alleviate poverty in developing nations. They may offer a more sustainable model of economic recovery, one that acknowledges significant structural and social changes.

That doesn’t offer much immediate hope for this spring’s graduating class or those being displaced within the formal economy.  The jobs outlook remains bleak.  But their long-term prospects might be better if, instead of normalizing the poor working conditions of the informal economy, we organized to ensure decent wages, reliable pensions, good health care, and greater opportunities for workers across the spectrum.

John Russo, Center for Working-Class Studies

On the Hook: Tony Kushner and the Labor Movement

In 1997, the playwright Tony Kushner was going through some books that had belonged to his grandparents when he came across one by George Bernard Shaw that he had never heard of:  The Intelligent Woman’s Guide to Socialism and CapitalismKushner thought the title was funny, and he played around with it for more than ten years until he found a way to make it into a title for his important new play, The Intelligent Homosexual’s Guide to Capitalism with a Key to the Scriptures.  In 2009 Kushner stopped working on iHo (Kushner’s nickname for it) to mount a new production of his Pulitzer Prize winning Angels in America, but he brought iHo back to the stage this spring, in New York, where it most certainly belongs.  After previews in March iHo had its official debut at the Public Theater on May 5 to mostly rave reviews.

Kushner’s play caught my attention because the central character, Gus Marcantonio, is an Italian-American longshoreman,union man, and communist, age 73, with one failed suicide attempt under his belt.  The play takes place as Marcantonio wrestles with whether to kill himself as the dramatic personal lives of his three grown children and their lovers/spouses/partners unfold around him.

It is no accident that Marcantonio is a longshoreman.  The longshoreman is the stage artist’s ultimate working-class symbol, especially for the generation that came of age in the 1950s.  In 1950, Arthur Miller and Elia Kazan wrote a never produced screenplay about a longshoreman called The Hook.  Kazan went on to direct Budd Schulberg’s ode to the longshoremen, On the Waterfront.  (And for the real story behind On the Waterfront—the story about how the screenplay emerged much more out of Schulberg’s admiration for the longshoreman’s labor priest than out of Kazan’s spite for his political enemies, see James Fisher’s riveting On the Irish Waterfront).

In 1955, Arthur Miller returned to the docks with his one-act play, A View From the Bridge, about an Italian longshoreman, Eddie Carbone, who falls so obsessively in love with his own niece that he has her fiancé, who is an illegal immigrant, deported back to Italy in a jealous rage.  Ostracized by his community for betraying one of his own countrymen, Carbone kills himself with his dock hook.  The play was revived last spring on Broadway.  And then in 1957, Martin Ritt, who later made his mark on labor film history with Norma Rae, directed a little film about a friendship between a black and white dock worker (played memorably by Sidney Poitier and John Cassavetes) called Edge of the City.  In 1962 Sidney Lumet directed the film version of Miller’s, A View from the Bridge, filming it partly in Red Hook (Brooklyn) and partly in Paris.

My point with this history of the postwar longshoreman on stage and screen is that Kushner cares about what happened in the 1950s, too.  Through his unrepentant communist longshoreman character Kushner suggests that the world that our fathers (and mothers) made in the postwar era is with us still.  The Cold War may be over, but the debate over what capitalism is, as both a social and economic system, and how damaging it can be is not.  Kushner’s longshoreman character is also a bit of history rewritten, since the union movement in the 1950s became mostly detached from the communist movement, as unions were pressured, internally and externally, to purge communists from their leadership ranks.  Kushner’s play invites us to ponder: What if McCarthyism had never happened?  What if the left had been able to grow in power and prestige alongside the US labor movement, which continued to be surprisingly militant far into the 1950s?

Kushner’s play not only provokes these questions, but in a bizarre real life drama that unfolded during the first week of May, Kushner himself became embroiled in a McCarthy-era-like scandal during which an important union came to his defense.  The board of the City University of New York (CUNY), at its monthly meeting on May 2nd, rejected a proposal to grant Kushner an honorary degree from John Jay College.  The decision was provoked by the outspoken complaints of a CUNY board member, Jeffrey Wiesenfeld, who accused Kushner of being rabidly anti-Israel.  Kushner immediately responded with an angry letter, and dozens of faculty (and graduate students) who are members of CUNY’s Professional Staff Congress (PSC) snapped into action, organizing a facebook page and a letter writing campaign.  One week later, after a veritable tsunami of protests, emails, letters, blog posts, and editorials on Kushner’s behalf, the CUNY board met again to overturn its decision.  When the students of John Jay College graduate on May 29th, at Madison Square Garden, Kushner will be there to receive his honorary degree.

Here in the rustbelt, the Kushner affair might look a little bit like New York inside baseball.  Many of the key players are in and of the Big Apple (like former mayor Ed Koch, Yeshiva University professor Ellen Schrecker, CUNY board member Jeffrey Wiesenfeld, who grew up in the Bronx, and Kushner himself, who was born in Manhattan).  But, in fact, both the Kushner affair and Kushner’s play iHo are pungent reminders of the power and importance of unions when it comes to cultural production and academic freedom.

Kushner himself noted the connection between the union themes in iHo and the faculty union, the PSC, that came to his defense, in a recent interview on Democracy Now.

When I got to the Public Theater on opening night there was a group of people standing outside with picket signs, and as I was approaching I thought, oh, god no, it’s going to be one of those groups calling me an anti-Semite, some sort of horrible picket, and I got up there, and they were faculty members from various schools at CUNY, political science professors…about 8 or 9 of them, from the PSC, and they were there picketing against Wiesenfeld and what had happened with the Board of Trustees, and that was a lovely and heartening thing…and since the play was dealing with labor unions and pickets, there was a certain consonance there.

As we continue to see the reverberations from the midwest’s “union spring,” and as the attacks on public sector and other unions continue, I offer this reflection on the importance of unions to more than just bread, butter, and the bottom line.  When I consider the Kushner affair, and Kushner’s current play, I am all the more moved by the swift, powerful, and righteous actions taken by the CUNY Professional Staff Congress.  We must defend the rights of unions so that unions can, in turn, defend us when we find ourselves on the hook:  whether we are on the docks, in the classroom, or on the stage.

Kathy M. Newman

Paul Ryan Breaks the Rules

Cardinal Rule: A fundamental rule, upon which other matters hinge. Wiktionary

If you’re engaged in any type of activity that involves the development and implementation of a strategic plan you run into them all the time: Cardinal Rules.  Know them, abide by them, and your strategy may well succeed.  Ignore or violate them, and your plan will almost certainly crash and burn.  In football, for instance, avoiding turnovers is a cardinal rule. In warfare the rules warn against being outflanked by the enemy and outrunning supply lines.  Those of us who plan and execute political campaigns live by this one: “Don’t write the other guy’s commercial.”

Apparently GOP Representative Paul Ryan of Wisconsin, the architect of a plan that will supposedly reduce the federal budget deficit by six trillion dollars over the next ten years, missed that page in the political strategists’ handbook.  And Democrats everywhere, essentially messageless since November of 2008, are rejoicing, because in calling for the privatization of Medicare the Chair of the House Budget Committee didn’t give them fodder for one ad, he handed them enough material to make a couple thousand.

Speculation abounds as to why Mr. Ryan, a savvy politician who played a key role in the Republican takeover of the U.S. House, proposed a policy sure to raise hackles and howls among seniors and those who soon will be.  Conservative pundits and commentators explain it by saying he’s courageous and laud the plan as bold and groundbreaking.  Liberals question his sanity.

I just think he’s cocky.  He’s obviously certain his party will do a better job of framing the many issues his flawed plan raises and will be able to control the debate over it.  Clearly he doesn’t fear the Democrats at all.

Why should he? President Obama and the party’s Congressional leadership have proven repeatedly that they are incapable of communicating a coherent message to the American people.  Indeed, the mere fact that the Democrats have allowed deficit reduction to become the primary topic of discussion in Washington proves how incredibly inept they are.  At a time when the White House should be attempting to reduce the nation’s stubbornly high unemployment rate and speed up the glacier-paced economic recovery by creating a new stimulus plan, Mr. Obama is instead trying to outbid Ryan and his Republican cohorts in a game of deficit reduction poker.

As a result, things that would help reduce the jobless rate and improve prospects for the working class, like spending on infrastructure, enhanced job training, and more support for higher education are off the table, because both parties are now obsessed with the national debt rather than the mounting debt middl- class families are accumulating as they watch the value of their homes and their real wages fall and the cost of gas, college, and other staples rise.

And while Mr. Ryan’s plan is, as former Reagan budget director David Stockman says, nonsensical and counterproductive to the nation’s long-term best interests, he at least gets credit for being a true believer.  He and his supporters in the Tea Party movement really do believe that the deficit is more problematic than unemployment and the erosion of the American Dream.  They are sincere when they say that slashing tax rates for the wealthy, cutting health care benefits for the poor and the elderly, and turning Medicare over to the insurance industry is the formula for a brighter future.  Sincere, but goofy.

President Obama and the Democrats, on the other hand, have climbed on the deficit reduction bandwagon because they’re once again following the polls rather than their principles.  It’s a disheartening replay of the strategy that eventually undermined the drive for health care reform and set the stage for the 2010 electoral debacle.

In that instance, as many of you will remember, the White House proscribed any talk of a Canadian-style single payer system then ditched the concept of a public option in order to secure passage of a watered down insurance reform bill that’s been an albatross around Democrats’ necks since it was signed.  Not only did the process alienate and disappoint the Party’s base, it provided lots of material for demagogues like Sarah Palin who began ranting about “death panels,” as well as Tea Party adherents who demanded that government keep its hands off their Medicare benefits.  In short, Mr. Obama broke the cardinal rule and wrote the ads that fueled the GOP’s success last year.

Although Mr. Ryan has returned the favor by proposing that Medicare be converted from a government-managed (yes, Tea Partiers, the government has its hands all over your Medicare benefits) entitlement program that provides adequate health care benefits for the elderly to a cash cow for the insurance industry, there’s no guarantee the Democrats have the ability, will, or resources to exploit the gift they’ve been handed.

To do so they must launch an all-out assault on the Republican Medicare boondoggle and sustain it through next year’s election.  The messaging is simple enough—they can start by stealing Sarah Palin’s death panel line, because that’s what the insurance giants will become the minute they’re given the power to make life and death decisions about grandma and grandpa’s medical care.  It will be an incredibly effective attack—if they decide to make it.

On the other side, the GOP, flush with money and, as I’ve noted earlier, cocky as hell, is already running ads in key Congressional districts, including the Ohio Sixth, claiming that Ryan’s plan will save and strengthen Medicare.  The fact that this is an outright lie doesn’t matter, because, as we in the advertising industry know, say anything loudly enough, often enough, and cleverly enough and lots of people will believe it.

It’s a cardinal rule.

Leo Jennings

Jennings is a political consultant who has worked with the Center for Working-Class Studies on research about working-class voters