June 2003, Vol. 126, No.6
Unions' future in America
Welfare's social provisions
Growth in poor countries
Book reviews from past issues
Unions' future in America
The Future of the American Labor Movement. By Hoyt N. Wheeler. New York, NY, Cambridge University Press, 2002. 278 pp. $65/hardback; $23 paperback.
Despite the current recession, the rate of unionization continues to decline in the United States (currently down to 13.2 percent in 2002 according to the Bureau of Labor Statistics latest survey). At the same time, the number of books devoted to discussing the direction of labor unions seems to proliferate. One of the more recent is Hoyt Wheeler’s review of the past, present, and future of organized labor in The Future of the American Labor Movement.
The book begins with a survey of current strategies being employed by labor unions. Like a good taxonomist, Professor Wheeler begins by defining ideal categories of unionization: Pure and Simple Unionism, Militant Radical Unionism, Cooperationist Unionism, Social Democratic Unionism, and Reformist Unionism. Having identified and defined each of these categories, he then proceeds to discuss the major trends affecting workplace relations, including lean production methods, autonomous work groups, downsizing, contingent employment, employee ownership, and the rise of the service sector. Next he looks at how unions in the ideal categories described above have reacted to changing work relationships, both presently and in the past. This includes a look back at the Knights of Labor from whose strategies he sees lessons for today’s unions.
While much of this information is already widely known, his chapter on the Carolina Alliance for Fair Employment (CAFE) is an interesting illustration of what he calls reformist unionism. CAFE operates in South Carolina, a traditionally hostile territory for organized labor. In this atmosphere, the organization has not attempted to directly involve itself in collective bargaining but rather act as community organizer and facilitator for groups of unorganized workers who have grievances against their employers. Born out of the struggle to organize J.P. Stevens, much of this work leads the group into the realm of politics and worker rights education rather than traditional labor-management relations. Professor Wheeler teaches at the University of South Carolina, and his intimate knowledge of this group is amply demonstrated in this chapter of his book.
After devoting a chapter to trade unionism in Europe, he synthesizes the lessons from the past and present into a chapter on unions in the 21st century. As might be concluded from his emphasis on both the Knights of Labor and CAFE, he envisions a much broader approach than evidenced currently by traditional American labor unions. This approach would incorporate traditional union activities such as collective bargaining with political activism, worker education, employee ownership of firms, and stronger ties with trade unions in other nations around the world.
Criticism of Professor Wheeler’s book lies not in its facts, nor in its conclusions, which represent a pretty conventional list of suggestions offered by academics concerned about today’s American labor movement. Rather, the book’s shortfalls are identified by the author’s own words. First, he consciously chooses to focus on private sector unions precisely because they are more endangered than those in the public sector. This means that he excludes from consideration that section of organized labor that has nearly three times the penetration of unions in private industry.
More importantly, in the first chapter of the book, the author defines what he calls the New Deal model of industrial unionism with its emphasis on a large manufacturing-based homogenous workforce. While recognizing that this environment no longer describes the American workplace, he somehow believes that unions organized in this environment can successfully transition to the current work culture, despite all evidence so far that shows their failure to make the transition.
As with other authors on this subject, Professor Wheeler sees organizational reform of both unions and political institutions as the answer. Never is it suggested that workers themselves may no longer share the values that unions have promoted and the environment in which organized labor thrived in past decades. Despite the conflicts between labor and management, traditional employers and workforces shared a commitment to the workplace. The conflict may have been over the terms of employment and the power and control of that workplace, but neither side disputed that a social contract stood, usually in an unwritten form, connecting the two sides. Both sides identified the workplace as a social bond as much as a source of income was paramount to their needs. Many of the conditions that have been cited in this book (contingent workforces, downsizing, and even the role of work in people’s lives) have systematically undermined this social contract. Increasingly, the data suggest that unions represent a culture that apparently appears to be irrelevant to workers’ lives, even in times of relative job insecurity. The Future of the American Labor Movement suggests institutional reforms as the solution, rather than examining whether workers still value the motivations that supported union activity in the past. In today’s workplace, the issue may no longer be how to reform unions, but rather how to convince workers themselves that an organization centered in the workplace is relevant to people where work itself may not be central to their life or their identity.
Bureau of Labor Statistics,
Welfare's social provisions
Diminishing Welfare: A Cross-National Study of Social Provision. Edited by Gertrude Schaffner Goldberg and Marguerite G. Rosenthal. Westport, CT, Greenwood Publishing Group, Inc., 2001, 408 pp. $75/hardcover; $28/softcover.
The task faced by modern society is to resolve the dilemma of achieving both social responsibility and the creativity that guarantees the means of its support. In articles that range from Helen Ginsburg and Marguerite Rosenthal on the quintessential social democratic model in Sweden to that of Phineas Baxandall on the manifest need in Hungary (whose economic collapse meant that a state presumably founded on social welfare could no longer provide it), the authors examine the history and present circumstances of the ‘welfare state’ in nine countries. In addition to the cogent assessment of the question posed by the title, the work is recommended for the wealth of detail that forms a veritable compendium of social legislative history within the countries discussed.
Of particular interest to an American is the greater consensus that Europeans accord the institution of welfare. Gertrude Goldberg in her introduction observes that welfare’s aristocratic origins in the policies of Otto von Bismarck endow the system with an appeal that transcends the vicissitudes of party politics. Welfare antedates parliamentary democracy as it adapts from earlier aristocratic traditions of civil service stewardship. Thus, in patrician Sweden where the civil service had implemented the egalitarian principles of Social Democracy, welfare has only recently been challenged, not by traditional classes but by the global demands of the market model. Its institutional origins probably account for Mark Kesselman’s finding that welfare in France does not appear to be strongly correlated to political party agendas. Nor in the United Kingdom, Jane Millar argues, has the system deteriorated much despite Margaret Thatcher’s opposition. The German historic home of welfare legislation faces current pressure from both the price stability requirements of the nation’s prominence in the global economy and the strains of integrating a former communist state within its borders. Gerhard Bäcker and Ute Klammer note the legacy of the Weimar Republic’s experience in driving what they describe as the dismantling of the welfare state.
Two other countries—Japan and Italy—exhibit features of a welfare system that integrates preexisting social structures. Masami Nomura and Kimiko Kimoto on Japan indicate the uncompensated economic role of the wife. Enrica Morlicchio, Enrico Pugliese, and Elena Spinelli find a similar situation in Italy. On the other hand, the nurturing function of women in Sweden—particularly child and elder care—has received modern recognition as socially useful work because they are taken out of the home and paid by state programs. Unlike Sweden, the wives in Japan and Italy remain only indirectly compensated for their socially sanctioned role.
The architect of the post-Word War II ‘welfare state,’ the model that most clearly comes to mind when describing its ‘golden age,’ is the English statesman Sir William Beveridge. In 1942, he proposed a program for post-war income security that included comprehensive social insurance and national assistance programs. He advocated a full employment program. Social insurance was to be universal, compulsory, and contributory, and the benefits were at the same flat subsistence rates for all. The Beveridge plan was hailed as a landmark in social-security thought with influences throughout every major country in the world.
Aspects of the plan are found in both Canada and the United States occasioned by the duress of the Great Depression. Nineteenth century liberalism informs the prevailing attitudes to the role of government in both countries. Patricia Evans, for example, notes the paradox resulting from universal healthcare: although Canada’s welfare system is considered the more compassionate, it is actually less well-funded than that of the United States. Also, ideological hostility in both countries is muted by welfare recipients, who themselves become a clientele with a vested interest in the institution.
Goldberg concludes that the welfare state is beleaguered. The Bretton Woods collapse and consequent inflationary liquidity caused by every central bank’s scramble for the others’ currency led to today’s primary concentration on price stability. The globalized banking system constrains national fiscal policies required to deal with rising unemployment. That and an aging population have increased welfare costs. Whether rising costs are viewed as a problem within the welfare state or an attack on the institution itself remains to be seen. This collection marshals substantial evidence for a knowledgeable debate on the topic.
—Solidelle Fortier Wasser
Bureau of Labor Statistics,
New York region
Growth in poor countries
The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics. By William Easterly. Cambridge, MA, The MIT Press, 2001, 342 pp., $29.95/cloth.
William Easterly’s book, The Elusive Quest for Growth, provides an overview of the work that has been done in the field of economic growth in poor countries. The main point of the book is to address the problems that policymakers must face in order to be successful in helping developing countries out of their poverty. In his view, the growth-oriented policies failed to yield the desired results because these programs were based on theory in developed markets, which poor countries lacked.
This book would appeal to anyone interested in development policy or understanding why poor countries have such a hard time catching up to developed nations. This would include both proponents and critics of globalization. The author’s intuitive explanations help capture the goals of development policy and in understanding the empirical work without burdening the reader with technical jargon. He is able to keep the reader’s attention by inserting colorful stories after each chapter, putting a face on the problems of poor countries. At the same time, he also offers amusing personal anecdotes of his time in these countries.
The book begins by describing early policy prescriptions that have generally failed to get poor countries out of poverty. Throughout this book Easterly maintains a theme, which he asserts as the primary reason for why these so-called solutions did not work: that these policies did not address appropriate incentives for growth. In the development arena, the three most important parties are third-world governments, third-world citizens, and aid donors. Without addressing the incentives that drive each group, none of the prescribed programs would be successful.
Regarding one of these so-called panaceas, improving the educational system, the author shows how past programs neglected to take into consideration incentives that drive people to pursue more education. While it is commonly accepted that education greatly improves the chances of economic growth, these initiatives failed to bring economic growth to poor countries. According to the author, when poor governments force education on individuals without addressing incentives to invest in the future, the lack of opportunities within the nation to utilize higher education creates an environment of apathy among parents and teachers. Easterly cites empirical work that shows little or no relationship between economic growth and education levels, which counter popular belief. Those that go off and earn degrees usually leave for higher-paying jobs abroad—the "brain drain" phenomena.
Among the more controversial policies was the birth control issue. In the spirit of Thomas Malthus and Paul Erliche, birth control’s original aim was to help reduce population growth in poor countries to avoid mass starvation. According to Easterly, the solution of distributing birth control devices has not proven to make the plight of poor countries better. In general, he points out mixed evidence of the relationship between population and output growth. Again, this program did not address the incentives problem because the policy assumes an unmet demand for birth control. Because the cost of birth control is relatively cheap, Easterly suggests that policymakers should focus on policies that more directly address economic growth—policies that, if successful, would help solve the population-growth problem anyway.
Concerning adjustment loans, the author reveals that lending institutions often face perverse incentives in making these loans on the condition that the borrowing nation adjust their policies according the terms of the aid agreement. Easterly describes a game between the lending institutions and poor countries where corrupt officials know that threats to discontinue aid lack credibility because of the lender’s solicitude for the poor. Also, some of these institutions feel the need to make these loans to justify budget increases funded by member nations. Debt-forgiveness policies also present a similar scenario. Instead of bringing growth to a developing nation, these incentives create a cycle of deception and further debt.
These are among the many failed policies that Easterly points out in his book and, for the most part, explain why growth in poor countries has eluded policymakers over the last half century. Moreover, institutions common to poor countries also serve as great obstacles to change. Easterly spends the second half of the book discussing these obstacles that include corruption, poor government programs and policies, poverty traps, and even bad luck. While the author readily admits that it is much easier to point out mistakes of previous policies than to devise the best plan, a fix-all solution is not likely and probably impossible in the future.
Despite pointing out the flaws of the current approach to development policy, the author maintains an optimistic tone. He even shows that not all attempts at growth fail miserably, using examples of growth that occurred even in the most unlikely of circumstances. At the same time, the author attributes the outcome partly to luck or path-dependent growth. In this book, Easterly pointed out the major problems that all three players in the development arena must address before proceeding with this quest. He does a masterful job of presenting critical issues faced by policymakers in steering developing countries toward growth.
Division of Labor Force Statistics,
Bureau of Labor Statistics
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