In his New Yorker article, “State Of The Unions”, James Surowiecki records the steady decline in popular favor of the labor unions. He notes that whereas the Great Depression of the 1930s invigorated the modern American labor movement, the current Great Recession has crippled it.
Seventy-five years later, in the wake of another economic crisis, things couldn’t be more different. The bailouts of General Motors and Chrysler saved the jobs of tens of thousands of U.A.W. workers, but were enormously unpopular. In the recent midterm elections, voters in several states passed initiatives making it harder for unions to organize. Across the country, governors and mayors wrestling with budget shortfalls are blaming public-sector unions for the problems. And in polls public support for labor has fallen to historic lows. The hostility to labor is most obvious in the attacks on public-sector workers. But there’s also been a backlash against labor generally. In 2009, for the first time ever, support for unions in the Gallup poll dipped below fifty per cent.
Part of this anger results from the fact that unions have focused on better pay and fringe benefits for members like health care and pensions and their success in achieving this. Union workers, on average, get paid more than their non-unionized counterparts—most estimates put the difference at around fifteen per cent—and that wage premium widens during recessions.
It is hard to blame unions for focusing on benefits when managers have been grabbing an obscenely large and usually unjustified share of the economic pie, as I highlighted in yesterday’s post: Executive pay: What’s wrong with this picture?
The deeper problem for unions
Yet the deeper problem for the unions is something more worrying: the economic pie isn’t growing. Essentially the unions are playing a zero-sum game in relation to a declining economic pie. It’s hardly surprising that they lose out in this battle.
The most important and urgent task for unions is to shift their attentions from getting better pay and benefits and instead focusing on pushing for what will grow the economic pie, i.e. moving management from the 20th Century and Capitalism 2.0 into the 21st Century and Capitalism 3.0.
So long as a company is getting the kind of results that a Walmart or a GE is getting, the workers are always going to get a poor deal in terms of monetary rewards. And the jobs themselves are likely to be lousy.
It’s only when a firm is experiencing the kind of exponential growth that an Amazon or an Apple is experiencing that the economic pie will be large enough for the workers to benefit. And an added plus: when the work is focused on delighting clients, the jobs themselves tend to be more satisfying.
Critics will no doubt say: isn’t that management’s job to manage? The answer is that of course it is. But the sad fact is that management is managing things very badly and running their companies faster and faster into the ground, as the rapidly declining life-expectancy of firms in the Fortune 500 shows.
When the generals are mismanaging the war, it’s time for the troops to make their voice heard.
When the ship is sinking and the captain is busy consuming the cargo, it's time for the crew to get together and suggest a change of course.
The unions need to educate themselves about the decline of tradition management and become promoters of the reinvented management that can grow the economic pie and so provide a good living for all the citizens.
Learning about the reinvention of management
For those who would like to learn more about the history of dying age of Capitalism 2.0 and the future of management (Capitalism 3.0), you can read my synthesis of recent books on the subject, The Death—And Reinvention—of Management. Or you can read the books themselves, such as The Power of Pull by John Hagel, John Seely Brown and Lang Davison, or Reorganize for Resilience by Ranjay Gulati, or The New Capitalist Manifesto by Umair Haque, or Leadership in a Wiki World by Rod Collins, or my own book, The Leader's Guide to Radical Management: Reinventing the Workplace for the 21st Century.
I wonder what laborers reaction. They must be really happy.
Posted by: models in london | January 30, 2012 at 05:17 AM