The Future Is Now
§ Deregulate labor. The destruction of worker rights (the right to organize a union, established by the 1935 National Labor Relations Act) is a great failure of regulatory government and a critical factor in the deterioration of wages and working conditions. Union density has declined to 8 percent of the private-sector workforce, yet a poll last year found that 53 percent of workers would like to be represented by a union--if they could. The gap between aspirations and reality is maintained by systematic and often illegal corporate tactics that block workers from exercising their rights.
One answer might be to eliminate the National Labor Relations Board--free the workers of regulation. Federal law and regulators are quite lame in policing the corporate illegalities, but workers and unions are prohibited by law from using effective tactics like secondary boycotts, sit-down strikes occupying workplaces and mass mobilizations. A newly enacted labor law would be grounded in constitutional rights--free speech, freedom of assembly, the Thirteenth Amendment prohibiting involuntary servitude--rather than politically vulnerable regulatory law.
Rethinking labor rights is another opportunity to build bridges across class differences by creating a broader set of rights that apply to all employees, regardless of union status. That would involve basic protections against managerial abuses, and also new rights of self-expression and the right to participate in decision-making within the firm. The best companies already do this, because they know the free flow of information among employees stimulates innovation and efficiency reforms. Labor law effectively inhibits unionized workers from even meeting with nonunion colleagues without the boss's consent.
Ultimately, labor-law reform should encourage an economy of worker ownership in which employees share responsibility for the firm with management and share more equitably in the returns. The top-down corporate structure is a major source of inequality. Does anyone imagine that employees, if they had a voice, would ratify the scandalous executive pay for CEOs?
§ Tax corporate behavior. Major corporations used to be part of the liberal social contract. They were the institutional partners that distributed health insurance, pensions, labor guarantees and other progressive benefits to workers and communities (reimbursed by federal tax deductions). But during the last generation, companies have resigned from this role, turning on their employees and extracting "profit" by expropriating the value that belonged to their workers: wages, pensions, healthcare benefits and good working conditions.
Government has to step in and fill the void to avert social calamity. The old arrangement helped build the middle class, but it was never as good as it sounded. Roughly half the country was left out. Moreover, the voluntary nature gave managements the power to set the terms--and the freedom to break promises--which were challenged only by unions.
Universal health insurance is the most pressing imperative because health costs continue to soar as the burden is shifted to employees. Pensions may become a larger crisis in the long run. The right's twenty-five-year experiment with individual pension accounts has failed, leaving even middle-class workers unprepared for retirement. Instead of tinkering with the failed concept, reformers should create an entirely new national pension: universal, mandatory savings under government supervision that, alongside Social Security, will insure comfortable retirement for all. One model is the pension plan already enjoyed by federal employees and members of Congress [see Greider, "Riding Into the Sunset," June 27, 2005].
Companies need to pay, meanwhile, for their antisocial behavior. They collect hundreds of billions in tax breaks and subsidies, yet abuse society in return--degrading the environment and communities, ignoring the national interest, offloading their obligations. Corporate taxation has declined since the 1960s from more than 20 percent of federal revenue to less than 10 percent. Despite their profitability, scores of major corporations pay zero taxes (some even collect refunds). One plausible remedy is to refashion the corporate income tax as an important new mechanism for enforcing corporate obligations to society. Imagine a reformed tax code that clears away all the corrupted loopholes and sets the basic corporate tax rate higher, at around 45 percent.
Corporations would then be able to reduce their tax liability--perhaps by 15 points or more--by demonstrating that their performance adheres to higher social standards. Does the company, for instance, increase wages for workers in step with its rising productivity, as economists assume, or does it pocket the money for the insiders and shareholders? A positive record could knock several points off the tax rate. Does the company have an egregious history of trashing environmental laws or fraudulent dealings in financial markets? It would be ineligible for reductions. If the company is increasing its American workforce, augmenting pensions and healthcare, encouraging democratic relations with employees, it could be rewarded at tax time. This leverage would penalize bad behavior at the bottom line and reinforce the tattered regulatory laws. The performance ratings would be public--a "market signal" that tells investors and consumers which companies are the white hats and which are the rogues.