Working Indiana - Working for Democracy and Justice

Nobel prize winning economist Amartya Sen argues that a key measure of “development” is human freedom.  Yet, in America, one of the most “developed” countries on the globe, labor market conditions persistently restrict the freedom of workers at nearly every level and the claim might be advanced, without much exaggeration, that American workers are among the least free by Sen's measure and certainly less free than the World War II generation.  Antiquated legal norms persist in defining the work relationship.  The phenomenon is the subject of Karen Orren’s book “Belated Feudalism,” in which the author argues America has never really dismantled the ancient feudal structures that dominated labor relations in the middle ages.  Tellingly, the now dominant form of employer/employee relationship in the United States is known as the “master-servant” relationship.  It is a fragile arrangement, from the employee’s point of view, in which a job lasts precisely as long as the employer wishes so long as he or she does not transgress a handful of federal and state laws aimed to protect only the very most elementary of human rights.  If Norman Ware’s account of labor conditions in the antebellum 19^th century are correct,[Norman Ware, The Industrial Worker 1840-1860] the relationship has suffered a regressive turn as a result of the transformation from a rural, agrarian population, to a wage-based, industrial, one.  Ware observes, for example, that the shoe makers of Lynn, Mass., were able to weather depressions because they remained members of rural communities.  Workers in these decades were, in fact, wary of a shift away from autonomy, of becoming “wage slaves.”  As a result, before the advent of full scale industrialism, Ware notes, lay-offs frequently had the aspect of vacations as workers returned to their smallholdings to await the business uptick that would provide them new opportunities to work for wages.  ““The more highly industrialized this community (Lynn, Mass) became, the more completely the worker was divorced from these subsidiary sources of livelihood, the more unemployment became a specter where it had once had some of the characteristics of a vacation.”

In contrast to those (in retrospect) halcyon days, today’s working household is sustained entirely by a mix of credit and cash, almost always supplied by the at-will employer with further crippling dependencies engrafted in the form of employer provided health care and pension.  There is no return to Eden if an American worker is downsized, right sized or simply kicked out of work.  In Indiana, the most a displaced worker can anticipate is 26 weeks of woefully inadequate unemployment insurance—that is, if the employer does not dispute his right to it.  If otherwise qualified and able to prove overseas outsourcing, that same worker can ask the DOL to double his/her unemployment under the Trade Adjustment Acts but in any event the worker is on the dole, requesting benefits, bearing the awful scrutiny of skills inventories and the humiliation of presenting him or herself for re-employment whether psychologically ready or not.

Traditionally, wage earning American workers organized around working conditions including, but not limited to, wage rates, hours of employment, seniority, and the like.  Successful campaigns resulted in the creation of a worker organization (a union) and a collectively bargained contract with protections for jobs tailored to the workplace.  Now, however there is reason to believe American workers and their representatives need to entertain what physicists call a “paradigm shift.”  Recent studies of job tenure indicate that the 21^st century American labor market is likely to be transforming itself into what Austrian political economist Gunther Schmid calls a “transitional” one.  The DOL has variously predicted that American workers will face job transitions about once every three years in the new, globalized, economy with as many as three “careers” to train for in a work life.  According to Johns Hopkins,[http://hrnt.jhu.edu/cmp/webPDFs/ManagingStress.pdf] job loss ranks as one of the most stressful events in life, meriting a slot just behind “major illness.”  The predominance of the at-will employment relationship suggests that work transitions, under current law, will remain among the most stressful experiences in contemporary life because states have not adapted services to a transitional labor market.

In Indiana, the jobless now may apply for unemployment compensation over the internet.  Services are extended to unemployed workers through Indiana’s WorkOne centers.  Through “Work Keys,” workers have their skills “assessed” and receive "appropriate" training or direction, a benediction proffered by the State.  This “top down” treatment of unemployment merits reassessment if unemployment is transformed by economics from a temporary to a permanent feature of work life.  Schmid counsels taking “the intrusion of risk management as a ‘moral opportunity’ to reconsider where the new balance between solidarity and individual responsibility might lie,” [Gunther Schmid, “Social risk Management through transitional labour markets, Socio-Economic Review (2006)] and argues for “uncoupling” social insurance from the employment relationship.  The Europeans have dedicated an entire web site to posting scholarly papers discussing the transitional labor market [http://www.siswo.uva.nl/tlm/]  The Netherlands has accepted work-life balance as the central focus of reform; as a consequence, Dutch workers are permitted to save up to 12% of their wages to a total of 210% of annual income free of tax.  Details of the Dutch program are found at http://internationalezaken.szw.nl/index.cfm?fuseaction=dsp_rubriek&rubriek_id=391813.  The resulting savings may be used for a wide variety of reasons ranging from care-giving, through education to sabbaticals.  In the United States several states have passed legislation establishing Lifelong Learning Accounts (LiLas).  Senators Cantwell and Snowe have proposed Senate Bill S 26 to establish a federal demonstration program for such accounts.  LiLas, while not as ambitious as the Dutch program, are free of tax under the proposed federal program until distributed, can receive cash contributions from employers or employees or both, and supplement existing programs supportive of worker education, training or apprenticeship programs.

The clear advantage of refocusing policy on the life-course and work life balance is a promotion of individual liberty and freedom of choice.  One of the ironies of American life is its often blind belief in and adherence to marketplace norms—everywhere but in the labor market.  Perhaps by investing in transition rights we can restore some of the freedoms the Lynn shoemakers lost and, for once, provide enrichment to human capital.