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Title: Change%20the%20Worker,%20the%20Job,%20or%20What?

Change the Worker, the Job, or What?
  • Joel Rogers
  • University of Wisconsin-Madison
  • JR Commons Center (COWS, MIP, MSC, CSI), Apollo,
  • Institute for Progressive Policy Research
    symposium on Working Out of Poverty A
    Progressive Labour Market, London, May 8, 2008

What Im going to talk about
  • US situation, and high road strategy
  • Examples
  • Some policy takeaways

I made some slides for you
Like this slide.
And this one.
I really wonder about power point sometimes
Productive Democracy
  • Social Democracy NeoLiberalism Product
    ive Democracy
  • Economic Strategy Effective demand Inequality Ef
    fective supply
  • Social Contribution Enabled but Required Strongl
    y encouraged not required but not enabled and
  • Equality of opportunity Thick Thin Deep
  • State/Civil Society Relation Active/distinct Passi
    ve/distinct Active/integrated
  • Privileged Govt. Branch Executive Judiciary Le
  • National/State Relation Affirmative
    national Limiting national Progressive federalism
  • Redistributive Peak Late in life None Early in
  • Asset Redistribution No No Yes
  • Tax Strategy Progressive on Regressive on Tax
  • private income private income
  • Trade Strategy Strategic Unprincipled Goal of
  • protection free trade development, not
    integration per se
  • And So On
  • High freedom, opportunity, contribution and
    wide ownership and democratic power a consistent
    story/narrative/frame/etc. that asserts democracy
    as a source of productivity and invention, not
    just morality, and organizes politics to realize

US situation
US inequalities
  • Top .1 percent of households take 22 percent of
  • Top .1 percent take 9 percent, about double that
    in UK (4.7), more than five times that in France
  • About a fifth of adults in private sector working
    for poverty wage jobs or less about a third at
    less than 1.5 times that
  • About half of these dead-end jobs (i.e, with no
    serious prospect of advancement) almost all
    pretty limited
  • Minimum wage going to 6.55 (7/08) in current
    dollars, was nearly 10 in 1968. Productivity has
    more than doubled since then
  • Very little antipoverty effort, outside the EITC
  • Welfare reform famous but very limited
  • Crazy levels of deregulation and ideology
    trumping evidence
  • Taxes low, getting more unequal, not sustainable
    given infrastructure, education, health care, and
    declared military needs

The end of shared prosperity
Index 1973100
The end of shared prosperity
Index 1973100
Same story, upside down

Country Total tax receipts as of GDP Country Total tax receipts as of GDP
Australia 30.6 Luxembourg 41.8
Austria 43.9 Mexico 16.0
Belgium 45.7 Netherlands 42.1
Canada 38.2 New Zealand 35.6
Czech Republic 40.4 Norway 41.6
Denmark 50.4 Poland 35.2
Finland 46.2 Portugal 34.3
France 45.8 Slovak Republic 35.3
Germany 37.7 Spain 35.1
Greece 37.1 Sweden 52.2
Hungary 39.2 Switzerland 34.4
Iceland 36.3 Turkey 31.3
Ireland 32.3 United Kingdom 36.3
Italy 43.3 United States 28.9
Japan 26.2 EU average 41.6
Korea 23.6 OECD average 37.3

Normalized tax rates by quantiles, 1960/2004
Revenue outlays as GDP, 1962-2015
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10 US Metros and Non-US economies
Germany 2.4T, UK 1.7T, France 1.7T, Italy
1.6T, Brazil/Russia 1.5T, Canada/Korea/Mexico
3.51 trillion
Switzerland Turkey Sweden Taiwan
Saudi Arabia Austria
Poland Norway Indonesia Denmark
South Africa

3.42 trillion

An iron law of urban decay?
  • Incomes rise and investment moves out
  • Revenues decline
  • Public goods deteriorate
  • Middle class flees
  • Tax base erodes
  • Poverty concentrates

Or a wasting of obvious assets?
  • Big
  • Strategic location/regional linkages
  • Population and firm density, with agglomeration
  • Buying power and complementary skill sets,
  • Infrastructure (ports, airports, other
    transportation networks)
  • Higher wages/productivity
  • More easily organized
  • Lower waste
  • Centers for research, education, health care,
    knowledge economy, finance, business
    services, hospitality, etc.
  • More diverse, tolerant, attractive to youth and

High road low road
  • Two ways to compete high road and low road.
    Ones good for workers and the others not. Ones
    sustainable and the others not. Ones socially
    accountable and the others not. Both are

High Road vs. Low Road Firms
High Road
Low Road
  • Competition based on price, resulting in ...
  • Economic insecurity
  • Rising inequality
  • Poisonous labor relations
  • Little firm commitment to place
  • Environmental damage
  • Competition based on value (distinctive
    performance), requiring ...
  • Continuous improvement/invention
  • Better trained and equipped workers
  • More varied and abundant public goods
  • and producing
  • Higher worker incomes profits
  • Reduced environmental damage
  • Greater firm commitment to place

Some dashboard metrics
  • Value-Added / FTE gt average for its industry
  • Avg. Hourly Wage gt 3 Federal Minimum Wage
  • Hourly Worker Payroll Benefits gt 0.5
  • Healthcare Coverage for gt 85 of Hourly Workers
  • Employer Healthcare Premium gt 5,000 / Covered
  • Employees Using Computers gt 67 of Employees
  • Employee Turnover Rate lt 20

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So whats the basic program?
  • Close off the low road, help pave the high road,
    help workers and firms stuck on the first to roll
    along the second.

Grounds for hope
  • Possible to increase firm productivity
    dramatically, raising wages and promoting
    investment here
  • Huge amount of wasteful consumption can be
    eliminated, increasing disposable income
  • National economy largely regional, and regions
    can be organized to provide the place-specific
    productive infrastructure that adds value,
    reduces waste, and captures the benefits of doing
    both locally
  • Doing (1) (2) in (3) will increase
    competitiveness while grounding the economy
    reducing credible capital exit threats,
    increasing wage and government income, moving
    toward sustainability through democratic action

Very wide variation in productivity
Source Performance Benchmarking Service
Working Class Consumption
  • So why dont we choose the high road?

The basic economics of the firmValue
added/employee drives wages, owner return, and
Reinvestment /
Taxes /
Compensation /
Wages /
Profits /
Value Added / Employee
Qualified workers for quality jobs
Getting to living wage jobs
  • Entry-level employment that prepares workers for
    and connects them to future opportunities
  • Reliable and understood methods of access to
    decent paying sectors jobs
  • Routine career advancement through incremental

Why is that so hard these days?
  • Deregulation, privatization, de-unionization
  • Changes in work organization outsourcing,
    contingent/temporary work, cellular production,
    etc. in smaller establishments, generally in
    service sector
  • End of job ladders, employer-based welfare state,
    industry wage norms

Old world vs. new world
New World
Old World
Training alone wont do it
  • Training alone only creates jobs for the trainers
  • Implausible to get the commitment to training
    needed, based on current returns
  • Employer variation swamps variation in human
  • Many jobs just dont have more rungs
  • Adults more complicated than kids (need to handle
    social insurance and non-actuarial risk)

This said of course you should
  • Ease transitions and access to training
    (modularize, bridge programs, etc.)
  • Establish presumptive career pathways
  • If youre worried about poor adults, get them
    literate, get them tied to credentialing
    programs, fix leaks in the system, measure public
    systems by moving people through critical points
    of transition

(No Transcript)
Another way of saying this the 5 As
  • Adult focused since current workforce is
    tomorrows and the day afters, and because
    returns are clear if tied to demand
  • Aligned across agencies, through the pipeline,
    with employer needs
  • Accessible through the states, to all types of
  • Affordable focus more on adult education, use
    more Perkins Career/Technical Education on
    adults, provide aid for short-term non-degree
    courses, focus TANF and WIA money on adult
  • Accountable measure employment and income
    outcomes, track across agencies and programs,
    guide investment strategically

Demand side strategies
  • Standards (public or private) minimum wage,
    living wage, community benefit agreements, PLAs,
    unionization, community organization, show me
    the money on EWD, etc.
  • Upgrading (public or private) technical
    assistance, extension services, subsidies or tax
    discrimination, productivity bargaining, linkage

  • Partnership of 100 employers and unions
  • Intermediates employers, community, training
    providers, and funding
  • Dedicated to qualified workers for quality jobs
  • Programs in incumbent workers training,
    modernization, and recruitment
  • Has improved the behavior of employers, unions,
    CBOS, and public training system
  • Critical to RSA program under Clinton.
  • Influential nationally in thinking about sectoral

Regional high road partnerships
WRTP roots
  • Manufacturing in the early 1990s (apprenticeship
    a wreck, international competition growing,
    labor-management relations bad to worse)
  • Labor and management leaders agree to work
    together on training and workplace modernization,
    shifting compensation to skills plus, but
    providing those skills more broadly
  • Agree to do this collectively, to have real labor
    market impact and realize economies of scale and
    scope in operation
  • Gradually WRTP builds enough linkages and trust
    to adjust to new workforce issues in the late
    1990s (skills shortages, welfare reform, etc.)

WRTP evolution in a decade
  • Worker participants expanded from incumbent to
    future workers
  • Sector expansion from manufacturing to
    construction, healthcare, hospitality, IT,
  • Coordinating role expansion from employers/unions
    to government/community
  • Program expansion from stand-alone project to
    motor of system EWD (economic and workforce
    development) reform
  • Becomes independent of COWS!!

Demand-driven coordination
  • Employers certify job demand
  • Public system and CBOs identify and evaluate
  • Trainers prepare applicants for available jobs
  • WRTP coordinates this and establishes a common
    public presence and agenda
  • Employers get more certainty, government gets
    more leverage on investments, workers get
    opportunity and reward to effort, region and
    industry gets economies of scale and scope in
    coordination in satisfying EWD needs

Example of Milwaukee Jobs Initiative
  • Approximately 2000 placed in full time jobs at an
    average wage of over 10.50/hour plus family
    health benefits
  • 73 of participants still working after a year,
    with 41 at the same or better wage
  • Independent verification by Amp Associates showed
    MJI projects among most cost-effective in country
    at getting and keeping central city residents
    into better jobs

Who got the MJI jobs?
  • Average annual household income was 12,000
  • 90 non-white
  • 32 had high school dipoma
  • 50 had received public assistance

How to start
  • Map the economy
  • Get a picture of sectoral/regional foundations,
    and their supply chains and value flows
  • Benchmark practice to desired value added
  • Identify local barriers to value-added
  • Convene regional table on both demand and supply
  • Offer a value proposition (if you take the HR,
    well help you in these particular ways)
  • Make all subsidies conditional on performance
  • Use your purchasing power throughout
  • Cooperate across programs, regions
  • Support display of best/emerging/mistaken

Waste not, ye surly workers
Working Class Consumption
Typical Household Budget in 28 Metropolitan Areas
Source Barbara J. Lipman, A Heavy Load The
Combined Housing and Transportation Burdens of
Working Families, Center for Housing Policy,
October 2006
More cars or more wealth?
Rebuilding America?
Source Nelson, Toward a new Metropolis
Building contribution to CO2 emissions
Building contribution to CO2 emissions
Building contribution to CO2
Building contribution to CO2 emissions
Building contribution to CO2 emissions
Transportation 32
Residential 21
Buildings 43
Commercial 17
Industrial 5
Industry 25
Source Pew Center on Global Climate Change
Basic idea of Me2
  • Combine a mix of private and public financing
    for comprehensive application of cost-effective
    retrofit measures to Milwaukees building stock,
    with on-bill payment and maximum benefits
    captured locally. Could generate up to 4,300
    person years of employment for measure
    installation (more with administration,
    materials, and multipliers) and save Milwaukee
    residents gt120M annually.

An offer they cant refuse?
  • To buy and install cost-effective energy
    efficiency measures in their homes and businesses
    with no up-front payment, no new debt obligation,
    the assurance that their utility costs will be
    lower, and the guarantee that each customer will
    make monthly payments only for as long as the
    customer remains at that location and the
    measures continue to work.

Me2 work and money flows
  • This is about adding value, reducing waste, and
    capturing the benefits of doing both in smart,
    organized, democratic places. It bets on the
    productivity of democracy. Its about adding
    value, not just values, to the private economy.
    Its about setting the rules for free
    competition, not managing the economy. It
    treats markets as tools, not gods. It doesnt
    throw money at problems, but is prepared to
    make specific scaled investments of proven social
    value.This demands accountability of government
    as well as citizens. It applies the private
    sectors metrics revolution and benchmarking to
    government and public administration. It aims at
    greater government efficiency, which is not the
    same as simply cutting prices. It values
    experiment and learning. It is clear on its
    values but works collaboratively. It is against
    business as usual but for social wealth
    creation. It recognizes the business contribution
    to society, but that of everybody else as well.

Policy takeaways
  • Training wont do it alone, and tends not to do
    well with those most in need you can fix the
    latter problem, but it not enough
  • Demand-side strategies important, and need not be
    limited to minimum wage and social wage
  • Regional aspect important, since thats how labor
    markets are organized
  • Dont diss waste reduction, or not think of it as
    an equity issue
  • This demands a much smarter government, but
    thats gettting easier