Stakeholder voices

A Call for Innovation in the Labor Movement: A Q&A with David Rolf

Elisabeth JacobsJanuary 19, 2021

 

David Rolf

David Rolf is a member of the WorkRise Leadership Board. Rolf is a labor leader, organizer, writer, and speaker working to build the next American labor movement. He is the founder and president emeritus of SEIU 775, a local affiliate of the Service Employees International Union (SEIU) that represents more than 45,000 long-term care workers in the Pacific Northwest. Previously, he was vice president of SEIU International. Rolf has led campaigns that helped organize hundreds of thousands of minimum-wage home care workers and helped lead the nation’s first two successful campaigns for $15 minimum wages in SeaTac and Seattle. Since pioneering such wins in 2013 and 2014, more than 22 million people across the country have won raises because of the Fight for $15 campaign. He is author of The Fight for Fifteen: The Right Wage for a Working America and a Roadmap to Rebuilding Worker Power, published by the Century Foundation. Rolf is a graduate of Bard College.

In this conversation with WorkRise Deputy Director Elisabeth Jacobs, Rolf shares thoughts on the connection between growing inequality and stagnating economic mobility of US workers, the need to expand and amplify worker power, and how the US labor movement can be reinvigorated. This interview has been edited and condensed for clarity.

Elisabeth Jacobs: Tell me how you have been thinking about the labor market and the economy and where workers fit into the story?

David Rolf: Prior to the pandemic, we had the lowest unemployment on record in decades, the tightest labor markets, growing capital markets, rising productivity, 40 years of growing GDP—a lot of positive things. And incredible growth in executive compensation. Yet, most Americans never shared in any of the economic growth that happened after 1975.

What we’ve essentially seen over the last four decades is a divergence between the growth of the economy and the growth of personal income for the bottom 90 percent of income earners and how that relates to the rising costs of living. Between the prices of goods such as housing, health care, and higher education rising with the incomes of the top 1 percent and stagnation of wages among the majority of workers, we’ve essentially reordered our economy so that it’s working against most American households. This isn’t a problem limited to historically excluded communities or communities in multigenerational poverty; it’s now a majoritarian problem.

EJ: How do you see income inequality relating to upward economic mobility? If we want to spur mobility, do we need to tackle the inequality piece first?

DR: I don’t know how you think about them separately. The historic levels of inequality we’re experiencing make upward mobility almost impossible. Right now, we have less intergenerational social mobility than Europe does, and it’s no longer true that most Americans can expect to earn more than their parents. To be fair, most Americans don’t stay up night worrying about the academic concepts of equality, inequality, and economic mobility. They worry about whether they can pay their bills, if their job will be there, if their health care is going to be there, or if their kids will be able to afford school. One thing we have to acknowledge is that there’s no way to address mobility unless we address the incredible levels of inequality in our society.

EJ: You mentioned a turning point in the 1970s. Can you say a little bit more about how we got here?

DR: The 1970s were when “trickle-down economics” or market fundamentalism (PDF) became the new governing philosophy of American economic policy. During the decades immediately following the Second World War, we saw unrivaled economic growth in the country, and the distributional outcomes of that growth were approximately equal across income groups. We then turned the whole thing into reverse, following the wrong leaders and wrong theories and passing the wrong laws and policies. After a failed resistance to the New Deal, economic conservatives successfully implemented their ideas beginning in the 1970s. This is what led to an era of deregulation, privatization, and a decline in unionization. It also gave rise to the idea that shareholder value supremacy in corporate governance was the best way to produce broadly shared prosperity.

We essentially conducted a 40-year laboratory experiment on Americans to see if those hypotheses were correct, and they turned out not to be. This set of decisions was made by leaders of both political parties in board rooms of companies, and it ended up transferring an estimated $50 trillion of national income away from working people, toward the owners of capital.

If a strong labor movement is able to effectively enforce minimum standards that all competitors must adhere to, then it does not require acts of moral courage by individual executives, which may not be appealing in the short term.

EJ: Going forward, are there clear alternatives to what we’ve been doing for the past 40 years that are supported by data? Or do we still need to collect evidence on new ways of doing things?

DR: We can look around the globe at economies to see who has succeeded and who has failed. In general, if you find a country with relatively high overall rates of taxation for a robust role for government and high levels of collective bargaining coverage, you’re going to find they correlate with good jobs, relatively low levels of inequality overall, and floors that prevent people from experiencing life-threatening poverty, even when they fall into the hard times or when the economy turns bad.

Maintaining our level of inequality is a long-term recipe for slow economic growth. When literally two-thirds of Americans or more aren’t financially healthy, expecting them to save and invest in the future or even to be good consumers or tax-payers in the moment is an unrealistic expectation. These levels of inequality are, in other words, not only bad for families and individuals, they’re bad for markets and for the rich, too. If one side of market economics doesn’t have money to spend on goods or services, then you don’t have anyone to sell your goods or services to, and you can’t engage in sales, accumulate wealth, or employ people.

EJ: Regarding union relationships, what should employers be doing? How should they be seeing their roles in interacting with both workers and society as a whole?

DR: On one hand, we have seen how it is possible for employers, even in relatively low-wage industries, to become high-road employers. On the other hand, voluntarism has its limits, and this is where standards come into play.

For example, if you’ve got three convenience stores in your neighborhood and one of them triples their wages for their employees and the other two don’t, chances are, you’re going to see price increases by the good guy, and you’re not going to see correlating price increases by the other two companies. So, foot traffic is probably going to migrate into the lower-cost stores because most Americans don’t have extra money to pay higher prices for everyday items. If a strong labor movement is able to effectively enforce minimum standards that all competitors must adhere to, then it does not require acts of moral courage by individual executives, which may not be appealing in the short term.

There are standards that all employers have to adhere to in the US, standards around minimum wage—not very high ones—or around child labor that are built into every company’s business practices. Ultimately, there are things companies can do right now: pay more, be better employers, be more transparent on scheduling, make sure line workers and subcontracted workers have access to the same benefits executives do. And we’re seeing movement in this direction now by some major firms. But, at the end of the day, unless you’ve got an enforceable minimum set of standards across industries, across geographies, we continue to risk a race to the bottom.

EJ: I’m curious to hear your thoughts on the gig economy and how we should be thinking about the role of worker voice and organized labor among workers in the gig economy?

DR: So long as power is held in the executive suite and the board room and workers don’t have power, we’re going to continue to see the same direction that we’ve seen since the 1970s. In the gig economy—as in traditional sectors and industries—power is held by shareholders rather than workers.

There are multiple types of power, too. First, there is economic power that certain high-demand, specialized professions wield. Secondly, there’s bargaining power. It goes without saying that a Stanford-educated money manager working on Wall Street is going to have a lot more individual bargaining power than someone working in a service industry where little training is necessary. This is where unions have played an important role—uniting workers with little individual power to make collective demands. And finally, there’s political power, which was primarily associated for most of the 20th century with unions.

American workers don’t have any of those three kinds of power right now, and unfortunately, the labor movement has shrunk for a number of reasons to only represent 6 percent or so of private sector workers in the United States. All three types of power are ultimately necessary if we’re going to rebuild worker earnings, spending power, and family financial security. Without worker power, we can’t build a functional middle-class that can look forward to the future and do things like save, invest, form families, and become engaged and active civically.

EJ: What are your thoughts on how certain industries that were previously disregarded are now being deemed essential during the pandemic?

DR: Clearly, the pandemic has stripped bare what essential workers were already experiencing: incredibly high levels of financial precarity, insecurity, and instability. We might be in a moment where public attention is focused on essential workers, but with every moment comes open questions about whether there is a sufficiently well-organized civil society and a set of institutions to take advantage of a moment and whether there are actionable policy ideas to solve the problem and improve the conditions and long-term prospects of essential workers.

For labor leaders, innovation should become our new religion. We can’t just rely on Congress. Now is the moment for risk, experimentation, and not putting all of our eggs in one basket until there’s evidence that a new model has emerged. Because the union movement is on a long and slow path toward eventual extinction if nothing else happens.

EJ: I wonder if you have thoughts on where organized labor should go in the US, based on your diagnosis of the problem. How should it look different?

DR: I think that there are better models for organized labor, like regional and sectoral bargaining, where shop-floor problems are solved far more collaboratively through works councils, and labor-management conflict is more concentrated at the macroeconomic level. That model would require labor law changes, and unless workers have enough political power to demand those changes, they’re never going to happen. The collective-bargaining model we have where not everyone is covered by union standards ultimately creates incredibly high incentives over time for employers to use political and economic power to become or remain nonunion. This prevents future generations of workers from accessing collective bargain. I think building a labor movement that is far stronger, inclusive, and effective is a better strategy.

I also think that unions should be trying everything at this point, and so should worker-facing movements or not-for-profit organizations. With unions now representing a small and shrinking share of the private-sector workforce, we cannot rely only on union leadership to solve the problem. It’s a bigger problem now, and that means that we should all be thinking about worker power and what form or forms it should take.

For labor leaders, innovation should become our new religion. We can’t just rely on Congress. Now is the moment for risk, experimentation, and not putting all of our eggs in one basket until there’s evidence that a new model has emerged. Because the union movement is on a long and slow path toward eventual extinction if nothing else happens.

EJ: Where do skills and training of workers fit into the larger framework of worker power and the need to expand worker power? Is the focus on skills, training, and the so-called skills gap misguided?

DR: I will say it is both true that the right kind of upskilling and credentialing can have the impact of tightening labor markets within certain fields and driving up worker economic power and that education alone is insufficient without broader changes to economic policy and labor policy. The problem is that we’ve reengineered work so that it is no longer producing family financial stability for most working Americans. I would say blaming lack of education or the purported skills gap neither explains the true origin of the problem nor points the way to the solution. Ultimately, this is about workers having enough power to turn bad jobs into good jobs. That’s what the automobile workers of the mid-20th century had. And it’s what the home care workers in Washington State had when their jobs went from unbenefited, minimum wage jobs to $20-an-hour jobs with pensions, health benefits, training, and career paths.