Magazine article Management Review

Reich Smokes Peace Pie with Labor and Management

Magazine article Management Review

Reich Smokes Peace Pie with Labor and Management

Article excerpt

During the Reagan-Bush era, the U.S. Department of Labor was little more than a bureaucratic backwater, rarely consulted on major economic policy matters.

All that has changed since Robert Reich, Harvard political economist and Oxford classmate, close advisor and personal friend of President Clinton, was installed as Labor Department head. Under his aegis, the agency has become a policy and political hotbed of controversial proposals designed to create the high-skill, high-wage workforce that the Administration believes to be critical to make American businesses more competitive.

If American companies are to remain globally competitive, Reich believes, they must stop trying to compete on price alone. Cutting payroll or holding down salaries and benefits is shortsighted, he believes, since there will always be competitors that can find cheaper sources of labor offshore.

Instead, Reich wants industry to retool the skills and creativity of American workers--which he terms one of the few corporate assets that can't easily be replicated overseas. To effect this, the Administration is pushing a series of proposals that emphasize employee training and management/worker cooperation and that are designed to increase the effectiveness of American workers by creating the high-performance workplace that many management gurus believe will be the wave of the future.

Underlying Reich's proposals is an interesting dichotomy: Key to the Administration's plan for American competitiveness is a strong labor movement as well as a strong business environment.

The past decade has not been a good one for organized labor (see cover story, page 9). President Reagan ushered in an era of hard-line tactics when he fired striking air traffic controllers in 1981. Since then, labor has grown increasingly concerned by management's ability to hire replacements for striking workers, and late last year, the National Labor Relations Board's decision in the Electromation case raised union concerns over employee committees (see MR April, page 54).

All Aboard

Under Reich, however, the Administration's stance toward organized labor has substantively changed. "Appointing Robert Reich as Labor Secretary clearly linked labor's fate to the nation's economic future," contends Jo-Ann Mort of the Amalgamated Clothing and Textile Workers union. "Without more liberal labor laws, the chances for labor's resurgence are almost nil." She believes that unless workers have genuine input into work reorganization, "and unless they feel reasonably secure about job security, pensions and the possibility of retraining, they will be reluctant to take the risks that come with modernizing U.S. industry."

Already, the Administration has unveiled a series of proposals designed to strengthen organized labor. In addition to signing the Family and Medical Leave Act, which goes into effect this month (see story, page 45), the Clinton Administration has called for passage of a striker replacement law, increasing the minimum wage, creating a national youth apprenticeship program, and repealing state "right to work" legislation. Clinton also has organized a blue-ribbon commission to overhaul the nation's labor laws and considered lifting the ban on rehiring striking air traffic controllers who were fired by President Reagan in 1981.

All these actions will help level the playing field between workers and management, according to Administration officials. However, there is also a political agenda at work.

"Union leaders have been among the most dedicated supporters of the Democratic Party," points out political analyst Seymour Martin Lipset of the Progressive Policy Institute, considered by some Washington watchers to be the Administration's think tank of choice. "The decline in union density has been one of the Democratic Party's weaknesses in presidential contests." The same percentage of union members are still voting for Democratic presidents, according to Lipset, but since there are fewer union members, the voting bloc is losing strength. …

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