A New Golden Age for Labor?

Maybe. Smart Businesses, Workers, and Unions Will Get It. Others Will Not

 

The New Normal

 Probably the most overused phrase of the past year was “the new normal.” That has been such a hot topic for good reason. Something as fundamentally earth shaking as this pandemic comes along very rarely. To be honest, we haven’t a clue as to what will change fundamentally and at what pace.

Nevertheless, with all the unknowns still shaking out, it appears glaringly obvious that the labor market has changed profoundly, and likely forever. Perhaps the labor shortages we see in so many sectors now will define that new norm for the foreseeable future. If so, the potential and the risk for everyone involved are significant. Who will be the winners and who the losers?

 Ugly Myths and Stereotypes Persist

 The #1 ugly myth is that people did not come back to work simply because of the federal government’s unemployment plus up, granted to ease people’s burdens and help restart the economy. I still hear it often. I was in a long checkout line just the other day and heard a frustrated customer say to a friend, “Looks like no one wants to work here, either.” This is a wrong conclusion on several grounds.

First, if a modest plus up in unemployment funds yields a total better than what people were earning at some jobs, the problem is not the plus up – it’s the lousy wages. Who would not take an opportunity to put more food on the table AND avoid doing a job they hated at a workplace that treated them poorly?

But even at that, the effect of the plus up proved to be minimal on the labor market. Several state, following Republican orthodoxy, cut the supplemental payments early, convinced everyone would humbly come back to work immediately. The effect was near zero.

So What Is Going On?

 As we often say, its complicated. But not really that much of a mystery.

First, lots of people died (and still are, at the rate of about 1,700 every day). Close to a million Americans have died of this thing. Estimates I have seen are that something like 250,000-300,000 of those who died were working adults. That is a lot of absences to absorb.

Second, millions survived an infection, but were struck severely enough to be out for weeks. Some also developed long-term effects that keep them out of the work force.

Third, childcare has almost disappeared or is out of reach financially for many families. Add to that the on again, off again opening of schools, with millions of kids staying at home in an unplanned delay in opening schools.

Fourth, many moved to new fields suddenly open to them (hiring shortages are all over the country, in effectively every category) or are trying to start their own businesses. The pandemic led to a reevaluation of life for a surprising number of people. This is one of those BIG impacts no one saw coming.

More than a few concluded they did not want to go back to what they had before. It was now or never to take the leap. Surely some will fail and may come back to where they were before. But I would not count on many doing so.

Fifth, for the aforementioned reasons, record numbers of other people retired earlier than they might have otherwise. Some did not want to risk further exposure, others decided they were ready to turn a page in life.

The Times, They are Changing

The overall impact of all this is impressive. My community is probably typical. For every person currently drawing unemployment, there are more than three job vacancies out there. Employment of available people is at near record highs.

It does not take much of a shift in a full employment economy to make for big shortages. Retirements for example are at record levels, but not by huge margins. A few thousand more departees, given everything else going on, has a disproportionate effect. Welcome to the new world.

 About Organized Labor – A New Day?

Labor unions are at their highest public approval in generations, and they are starting to score some wins in places getting organized, despite ferocious management opposition. As a part of this reexamining their lives, it appears a lot of people don’t want to take it anymore, and they are finally figuring out unions are how you make those corrections.

This could become a new golden age for labor, with new understanding of what we mean by essential workers and what it takes to keep people on the job. A decent work environment and a good compensation package are becoming the new norm for businesses that want to do well.

Not to get sidetracked into something we have harped about in this space before, but a realistic national minimum wage, adjusted by region and changed by economic data rather than legislation would make life a lot easier for workers and for businesses.

 Smart Businesses and Dumb Businesses

 Smart businesses will figure this out, recognize it is a new day, and get ahead of events. No less a banner of business than Fortune magazine recently had a fine article saying exactly that. Pay a LOT more and create a work environment wherein people want to stay. Treat a stable workforce, with internally grown management, as the key asset it is. Costco does that. Amazon does the opposite. Over the long term, I think the Costco model proves out.

 Dumb businesses will continue to see labor as only a cost element. They will continue to be short staffed, with poor output the results. More than a few will go under. They will seek to pay only a little more when forced by the market to do so, not likely even keeping up with inflation. They will wonder why they keep losing employees. The German Model

 Smart Unions and Dumb Unions

 The smart ones will see this as the opportunity it is. They will start by ensuring workers get the data presented to them clearly – as union membership went down over the last few decades, workers (both blue collar and white collar) lost economic ground. A good union will look after its member and do so in a spirit of working with management when they can and pressuring them when they cannot.

The Germans have long had a working model like this, with Unions having seats on corporate boards. These unions see the long-term health of the companies where their members work as key to a better future. They do not see their mission as bleeding companies dry. They take the long-term view.

The dumb ones will simply play up class warfare, pick fights they are unlikely to win in “Right to Work” states with poorly planned worker recruitment campaigns. They will be the stereotypes of greedy unions that conservatives and some managers love to talk about.

A Brighter Future for All?

In a better day, we have more thoughtful workers, more enlightened managers, and unions that are partners to prosperity. The post pandemic economy, in all its trouble and turmoil, offers a gateway to that kind of future.

Labor and management will always have some tension and different priorities; that is not always a bad thing. But they can share more than we have traditionally expected of either party. It will be most interesting to see how many are smart enough to grab that brass ring.

Hey, Here’s a Thought!

Just as a footnote: Boy, do we ever need immigrants! Much of the American economy thrived for decades on immigrants, including those here illegally. They just wanted to work. Trump and company dried up that pool and the economy is paying a terrible price.

A civilized, sophisticated guest work program, including options to be managed at the state level as this blog has mentioned before, would solve a host of problems for migrants, managers, and consumers. It would also dry up much of the illegal immigration.

A smart country would have such a policy, passed into law by an intelligent, functioning legislators. Oh, wait a minute – never mind.

          Bill Clontz

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