Dateline February 21, 2012 Los Angeles Times: “Labor unions’ man of the hour––As anger against Wall Street runs high, AFL-CIO chief Richard Trumka sees a chance to reverse labor’s long decline.”
“When our members are motivated, when they’re united, no one can turn them around,” said Trumka. To counter a 2011 Pew poll that showed just 45 percent of Americans viewed unions favorably, Trumka is going on the offensive, trying to harness frustration with Wall Street and concerns about income inequality to build broader support for labor.
Trumka has “an impossible task,” said Nelso Lichtenstein, Director of the Center for the Study of Work, Labor and Democracy at UC Santa Barbara. “There is no way in which one leader, no matter how effective, can by themselves alter the structure in which they find themselves. The standard operating procedure of all businesses is to basically do whatever is necessary to avoid unionization.”
This is true as businesses seek to always improve productivity and profitability and whenever possible they strive to curtail, reduce, or eliminate labor worker costs with technological productive capital replacement.
If the labor union movement is truly concerned about income inequality and economic justice, the “labor” movement should transform to an ownership union movement and embrace and fight for new democratic capitalism whereby labor workers are empowered to acquire ownership of productive capital in their companies simultaneously with the growth investments of the companies.
Unfortunately, at the present time the movement is built on one-factor economics––the labor worker. Yet it is the only group of people in the whole world who can demand a just ESOP, who can demand the right to participate in the expansion of their employer by asserting their constitutional preferential rights to become capital owners, be productive, and succeed. The ESOP can give employees access to credit so that they can purchase the employer’s stock, pay for it in pre-tax dollars out of the assets that underlie that stock, and after the stock is paid for earn and collect the capital worker income from it, and accumulate it in a tax haven until they retire, whereby they continue to be capital workers receiving income from their capital ownership stakes. This is a viable route to individual self-sufficiency needing significantly less or no government redistributive assistance.
The unions should reassess their role of bargaining for more and more income for the same work or less and less work, and embrace a cooperative approach to survival, whereby they redefine “more” income for their workers in terms of the combined wages of labor and capital on the part of the workforce. They should continue to represent the workers as labor workers in all the aspects that are represented today––wages, hours, and working conditions––and, in addition, represent workers as full voting stockowners as capital ownership is built into the workforce. What is needed is leadership to define “more” as two ways to earn income.
If we continue with the past’s unworkable trickle-down economic policies, governments will have to continue to use the coercive power of taxation to redistribute income that is made by people who earn it and give it to those who need it. This results in ever deepening massive debt on local, state, and national government levels, which leads to the citizenry becoming parasites instead of enabling people to become productive in the way that products and services are actually produced.
When labor unions transform to ownership unions, opportunity will be created for the unions to reach out to all shareholders (stock owners) who are not adequately represented on corporate boards, and eventually all labor workers will want to join an ownership union in order to be effectively represented as an aspiring capital owner. An ownership union would work collaboratively with management to secure financing of advanced technologies and other new capital investments and broaden ownership. This will enable American companies to become more cost-competitive in global markets and to reduce the outsourcing of jobs to workers willing or forced to take lower wages.
Walter Reuther, President of the United Auto Workers, expressed his open-mindedness to the goal of democratic worker ownership in his 1967 testimony to the Joint Economic Committee of Congress as a strategy for saving manufacturing jobs in America from being outcompeted by Japan and eventual outsourcing to other Asian countries with far lower wage costs: “Profit sharing in the form of stock distributions to workers would help to democratize the ownership of America’s vast corporate wealth, which is today appallingly undemocratic and unhealthy.
“If workers had definite assurance of equitable shares in the profits of the corporations that employ them, they would see less need to seek an equitable balance between their gains and soaring profits through augmented increases in basic wage rates. This would be a desirable result from the standpoint of stabilization policy because profit sharing does not increase costs. Since profits are a residual, after all costs have been met, and since their size is not determinable until after customers have paid the prices charged for the firm’s products, profit sharing [through wider share ownership] cannot be said to have any inflationary impact on costs and prices.”
Unfortunately for democratic unionism, the United Auto Workers, American manufacturing workers, and American citizens generally, Reuther was killed in an airplane crash in 1970 before his idea was implemented. Leonard Woodcock, his successor, never followed through.
Richard Trumka now has the opportunity to seize the reins of leadership and follow through on Walter Reuther’s realization of the need to broaden ownership of job-displacing productive capital with labor workers participating in the ownership of companies. Trumka should lead the movement in which the majority of Americans , even in the middle and upper-middle income brackets, are simply employees (wage slaves), dependent from pay period to pay period on wage and salary checks for income, to a nation in which people derive sustainable income from what we own, not from what we do.
If Trumka and others can lead the American majority to realize that deriving the majority of our personal income from the ownership of productive capital will benefit productivity increases distributed primarily through dividends instead of through wages and salaries, then technological innovation in the form of automatic and robotic factories and computerized production systems would then be no threat to jobs. Technological innovation would be simply a means for creating income and improving the quality of life through better products and services, while at the same time eliminating pollution and protecting the environment.
