DLC - Democratic Leadership Council
Democratic Leadership Council Home
Search Tips 



PrintPrintable Version of this Article

Send this Article to a FriendSend this Article to a Friend

Related Links ''Freedom to Organize''



Ideas




Political Reform
Interest Groups

DLC | Blueprint Magazine | October 18, 2006
Change, Or Be History
Book Excerpt

By Andy Stern

In a new book, Andy Stern, president of the Service Employees International Union, argues that the U.S. labor movement, business leaders, and policymakers in Washington must all adapt to the profound changes occurring in the global economy. The labor movement must operate worldwide, he says. Meanwhile, business leaders must press for reforms in America's health and retirements systems, and lawmakers must remember that a rising tide is supposed to lift all boats, not just the yachts. Here is an excerpt.
Table of Contents


Adapted from the book A Country That Works: Getting America Back on Track
by Andy Stern
(Free Press, 2006)

See also: Freedom to Organize


America is a gift. For generation after generation, from every corner of the Earth, people have come to America's shores expecting to work hard, hoping that their work would be valued and rewarded. And more significantly, Americans have expected that their children would be better off economically than their parents.

The American Dream has helped create an economy and a middle class that have been the envy of the world. And remarkably, despite a Civil War, two World Wars, innumerable natural disasters, recessions and depressions, the emergence of an industrial economy, massive changes in technology, and the leadership of 43 very different presidents, the American Dream has been preserved. That has been the greatness of America.

But profound changes and new forces are now threatening the American Dream. We no longer live in our parents' or grandparents' economy.

Joseph Schumpeter, an influential Austrian-born Harvard economist in the mid-20th century, described the essential element of capitalism as the process of "creative destruction." From time to time, creative destruction revolutionizes the economic structure from within. An innovation comes along that changes the economic system and in the process destroys the old ways of doing things.

We live in such a time, and it is not just employees bouncing around among employers. Companies are undergoing a whirlwind of reconfiguration. They are created, merged, taken private, made global, joint ventured, spun off, and forced out of business or out of the country in increasingly short time intervals.

After the Great Depression, American society agreed on an unwritten social contract that "a rising tide," as President Kennedy said, "lifts all the boats" -- and he wasn't talking just about luxury liners. Economic growth, increased productivity, and rising profits translated into improved living standards for most Americans. We prospered together. When the market wasn't working effectively, two primary forces intervened to help the market distribute gains relatively equally: the government and labor unions.

The federal government adjusted the economy to produce greater fairness, raising the floor for the poor, not the ceiling for the wealthy. By setting progressive tax policy, raising the minimum wage, and creating the Earned Income Tax Credit, government helped to more evenly allocate the proceeds of the economy.

Unfortunately, government, as we have learned, can also promote unequal distribution: The policies of the Bush administration that have phased out the estate tax, provided dividend and capital gain tax relief, and added corporate loopholes have lowered individual tax rates disproportionately for the wealthy. That has accelerated the widening of the income gap. In fact, from 2003 to 2005, the only group to see its wages grow faster than inflation has been the wealthiest 5 percent of Americans.

The trickle-down theory has been thoroughly discredited as our economy has poured so much money into the wealthiest 1 percent without any real income growth for most workers. According to a report by the Federal Reserve Bank, 10 percent of Americans owned nearly 70 percent of the nation's wealth in 2004. The largest block of that wealth -- 34 percent -- was owned by only 1 percent of the population. What's more, that top 1 percent saw its share of the nation's wealth climb significantly from 1989 to 2004, while the bottom half saw its share diminish in the same period.

But now the world is changing, fast. The economy has changed, business has changed, and yet union leaders have mostly stayed the same. As a result, the labor movement is paying the price -- as are American workers. Since the founding of the AFL-CIO in 1955, union membership has declined from one out of three workers to one out of eight and, in the private sector, to only one out of 12.

Today, American workers need help. But it is not only unions that are clinging to the past. Politicians, trapped in the 20th century, are unable to break away from the ties that bind them and enact meaningful reforms. They fail to understand that Americans do not wake up pondering whether they are in a red or a blue state.

They wake up wondering how they are going to roust their kids out of bed, get them downstairs, feed them, and get them off to school, and still get themselves to work on time. Laden with ever-increasing debt, they worry about whether they are going to earn enough money to pay their bills. They are concerned about what will happen to their savings if they contract a devastating illness. They wonder how they are going to care for their parents who are, thankfully, living longer, but are also needing more time and attention.

Like many of our politicians, business leaders cannot find the courage to call for much-needed changes in our health care and retirement systems -- changes that are also necessary for business to remain competitive in a global economy. They hope to escape the full weight of these problems, in part by morphing their companies from distinctly American corporations into multinationals for which the United States is just another market, or by shifting responsibility and cost to their employees.

If I have learned anything in my years as a labor leader, it is that you can't drive into the future by looking in the rear-view mirror. You either change and make history or stick to the status quo and become history. America is in desperate need of a bold, future-oriented vision, a thoughtful plan for a country that works. We need new ideas and a collaborative, nonpartisan approach.

There are solutions all around us; we just need the courage to accept that change accompanies the answers.

The global economy presents enormous challenges, but America has a vast reservoir of knowledge and the talents to conquer those challenges. Will the leadership come from immigrants marching on the streets for the American Dream, or from bloggers and DJs fueling a youth movement, or from a new political party? Or will an existing party wake up to the truth and speak its convictions? Will the 2008 presidential candidates offer a new vision for America's future, or will traditional adversaries from business, labor, and government have the guts to come together to stake out a new course for America?

My purpose now, as president of the Service Employees International Union, is to help galvanize the forces for change. We have to do it, and we have to do it now.

Unions, particularly industrial unions, were created in reaction to the rough-and-tumble class-struggle world of the early part of the last century. Unions helped create the American middle class. They bargained for employer-based health care and defined-benefit pensions and fought for the interests of all Americans. They helped create much of America's safety net. Not a bad run.

Henry Ford, a leading industrialist of his era, understood the correlation between the economic achievements of employees and employers. Ford's basic equation for America to flourish was, "One's own employees ought to be one's own best customers." He continued, "Paying high wages is behind the prosperity of this country."

Anyone who might long wistfully for a return to the New Deal policies of 1935 should consider that America today is as far from the time of FDR as the New Deal was from Abe Lincoln and the Civil War. America is at a profound crossroads. Our nation and citizens have to make difficult economic choices with serious long-term consequences. These decisions matter. We can ignore it. We can be the "blind men" trying to suppress it. We can fight it, and no doubt, sooner or later, get run over by it. Or, we can embrace change and help shape it.

The world needs global unions. Workers across the globe are frustrated with their inadequate emerging relationships with new multinational corporate employers. Individual workers certainly don't have the power to bargain effectively for themselves one worksite at a time. National unions by their very nature are not built to have the strength to successfully address their members' issues when they operate in only one country of a global employer. Global unions would have the reach and strength to get the job done for workers everywhere.

SEIU is ramping up to operate on a global stage; we are learning the pitfalls and exploring the opportunities. We think about the new avenues opened up by global campaigns. For example, unions with high-wage members and strong financial assets can pay strike benefits to low-wage workers in countries with less-endowed unions who walk off their jobs with a common multinational employer. The opportunities are endless: Imagine simultaneous protests on service contractors' global clients or outsourcing strikes to countries where strikes are legal and will not provoke government retaliation.

Employers now have a worldwide hiring hall, and global campaigns now have worldwide points of leverage. Global unions are in their infant stages, but several factors are helping them to mature more quickly than anyone would have imagined: the growing consolidation of corporations and the budding solidarity among unions within sectors, in part accelerated by employers resisting union relationships.

What Americans wish for is not that complicated and, luckily, the answers surround us. What is missing is the passion and national political will, the great winds of change, to shape a new American plan for our economy -- a way for America to ride the unending waves of change safely to shore.

Americans should pause and take the time to appreciate the glory and grandness of our future. Humanity faces a quantum leap forward, and we are engaged in building a remarkable new civilization from the ground up. No single generation has ever been offered such possibilities; we should seize them with passion and zest.

That is the panorama for America's future. Yet, how far into the distance can our country see? To the next election or farther, to the next generations? If the first six years of this new century are any measure, America is forsaking hard-working Americans.

Leaders of all parties, occupations, associations, and institutions have so far failed to come together to harness the energy of our times. Yes, change is inevitable, but progress is optional.

Andy Stern is president of the Service Employees International Union