Labor Day, Not Groundhog Day

By John F. Wasik

On Labor Day, I think about sacrifice.

I think of my mother, who passed on Labor Day two years ago after a long struggle with leukemia. She was well educated, yet left school to marry my Dad and raise my three brothers and I. When she became engaged, she was at Mundelein College (now Loyola University Chicago). She could have done anything in the workforce, although at the time, women were mostly teachers and secretaries (she was one at the time). I always wonder what my Mom would've done if she hadn't gone the 1950s route and ended up in tract home in suburbia with squat lawns and squashed ideals.

Without a doubt, I think my Mom could've been a private investigator with the moxie of Lizbeth Salander in the Stieg Larsson series. While I hated "The Girl wit the Dragon Tattoo" -- I thought it was unrealistic -- readers around the world have been captivated by her character.

I also think about my friend Tom Geoghegan, who just wrote "Were You on the Wrong Continent?" (New Press, 2010). I've known Tom for more than 30 years. We met while he was defending a group of steelworkers from the Southeast Side of Chicago who had lost everything when the phony shell company that owned their mill went bankrupt and couldn't pay a single benefit owed them. Tom sued the company and it's sneaky previous owner -- then International Harvester (now Navistar) -- and won them a modest settlement. Not too far from that mill, thousands of workers had won and lost their jobs. Some even lost their lives fighting for their rights such as the 10 workers who were shot by police at nearby Republic Steel on May 30, 1937, the "Memorial Day Massacre."

For the Wisconsin Steelworkers, who were the subject of more than 200 pieces I wrote for (the long-defunct newspaper) Daily Calumet, the settlement was more than about breach of contract. It was the clear dissolution of the great American social contract. Remember that? It was the unwritten deal that a corporate employer would pay for your health care, retirement and attempt to ensure your well being during a working career. That meant freedom from fear, to paraphrase Franklin D. Roosevelt. It was the New Deal writ large and labor unions were the guarantors.

As a Harvard-educated labor lawyer, Geoghegan is acutely aware of how frayed and tattered the social contract has become. Companies close down factories and wreck communities. The workers are left with little to nothing. Globalization forces the business to find cheaper labor in Mexico, China or Viet Nam. It's a constant race to the bottom if you are in a high-wage country. Well, maybe not, and that's the strange interplay of sacrifice and hope when we look at the future of American labor.

Geoghegan sees the European Model of Social Democracy as a beacon in the Western World. Germany offers a prime example. Once ridiculed for its rigid model of union-management partnerships, huge social safety net and six-week vacations, Germany seems to have evaded the ugliest aftershock of globalism.

In the European "worker-first" system, both mothers and fathers get paid leave after the birth of a child; work weeks are shorter; there's lots of vacation time (three times as much as the US); nursing home benefits, national health care and workers who are not only allowed to work with management -- but sit as active members in boardroom decisions.

Is this the horrible socialist peril that ravaged the Soviet Union? Hardly. Social democracy thrives. The Germans have an export surplus, high productivity, a vibrant manufacturing base and low debt. They didn't suffer from a housing meltdown and their banks didn't need bailing out. Of course, German unemployment is still a problem (although it's a few points lower than the US) and taxes are high, yet look what they get for their public-sector dollars.

In the US, even after health and financial reform, we are still hostage to the private insurance industry (with a lot more consumer safeguards) while the biggest banks have grown bigger still to corner even more investment capital.

What about those big, evil European Unions? In Germany, the unions have protected benefits instead of bargaining them away just to survive. Germans have high savings rates and pension plans not tied to the stock market. "Most Germans have big supplements from collective bargaining," writes Geoghegan. In the US, unionized workers are clinging to mostly government sector jobs. The white collar workforce has to deal with endless work without pay, shrinking benefits and uncertain pensions, which are underfunded to the tune of $260 billion.

If Americans can somehow get around the dual dogma that we must be the world's supercop, suppress unions at all cost and assume that corporate interests have primacy, we might be able to see the light that social capitalism -- profits generated in the public welfare -- could work. Obama has certainly tried, only to run into the relentless buzzsaw of corporate-funded propaganda and misplaced Tea Party rants. So I doubt if Geoghegan will change any minds, but his way of illuminating the disparities between corporate capitalism and social capitalism is nothing less than brilliant.

What of labor in this time of dislocation and torment? Can we hope for a rebound on the heels of a technology boom -- think railroads, telegraph, electricity, internal combustion engines and computers? Is there one great wave of innovation that will efficiently employ capital and demand labor? After all, some seven million jobs were lost during the last decade as capital was funneled into financial and real estate speculation.

Capital is more like water than heat. It will accumulate in the lowest point eventually -- whether that represents the cost of labor, materials or both. Here are a few startling possibilities in the Great Reckoning:


* Maybe the social contract was torn up a long time ago and few of us noticed. I have friends facing lay-offs in once-steady jobs in government and places like IBM (I once thought I would have a steady job with Big Blue). It could be that globalism is forcing more of us to be independent contractors and find specialized niches for our products and services (see Tim Ferris's "The Four-Hour Workweek.")

* We will need to use the part of our minds that thinks spatially, non-sequentially, creatively (in language and numbers) and in images and designs. Do we need new homes, medicines, transportation and factories? Very much so. But what they teach in schools with rote learning and old formulas isn't going to cut it. Labor should be infused with imagination not endless meetings and spreadsheets. Enlightened labor rebuilds assembly lines that are more productive.

* Emotional Intelligence Will be Key. It's not about us anymore. It's about competing with the brightest minds in China, India, Taiwan, New York, San Francisco and Sydney. We will need to transcend our skills and backgrounds to create personalities than can deal with change, not routine. Labor has to be smart and savvy, not repetitive and un-inventive.

* Networking will have to be less about the Internet and texting. We will need to understand how people best function in different situations, cultures, work and education environments. Facebook isn't enough. Google isn't enough. An iPhone and iPad won't make us any smarter if we don't learn from others and build on our mistakes.

* We will need to rebuild our view on capital. There's tremendous value in infrastructure such as clean air/water/food, rail lines, broadband, electrical grids and a hundred other things we ascribe to civilization. None of these things are free and if we don't invest in them, we regress in a social sense. As Richard Florida observes in his essential "The Great Reset," it's "important to spend money on the right kinds of infrastructure." In my way of thinking, all public schools and secondary education are essential infrastructure. As we should have modern airports, we need more funding for education on every level. A tax on speculation and carbon could fund this goal.

We've come to a groundhog day as we evaluate how to best employ our labors and capital. We can either put both in a productive mode of social progress or keep squandering it on financial engineering and debt creation. If we are truly to recognize the exchange of labor for money, it's time to stop looking for magical rodents in holes and start digging in for the next century.

John F. Wasik is the author of "The Cul-de-Sac Syndrome: Turning Around the Unsustainable American Dream."