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This Labor Day, Is the World of Work a More Secure and Lawful Place?

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America may finally be climbing out of a really nasty recession, but things are hardly going back to the old "normal." The way we think about our work lives is going to change in a profound way. This has less to do with legislation - although there will be new laws and regulations - than with the kind of day to day hopes, expectations, and fears that both employers and employees take to the office, store, or factory each morning.

Big economic meltdowns have a way of jolting off track old patterns of thought and action. It happened during the Great Depression when "security' became the watch word for a generation of Americans traumatized by massive and sustained unemployment; 40 years later another big shift came during the serial recessions of the 1970s and early 1980s when New Deal norms were shattered and a Reaganite appreciation of risk, reward, and rapid change came to the fore.

This time around, Americans, high, low and in between, want a set of rules that can make sure that they will not be swindled out of their home, robbed of their retirement savings, short changed by their insurance company, or see their wages and benefits literally stolen by supervisors desperate to keep labor costs in line. Early this year virtually every hard working American was outraged when some big financial institutions paid million dollar bonuses to executives who seemed responsible for bankrupting their firms and wrecking the economy. And though prospects for health care reform remain contentious, a genuinely bipartisan consensus has emerged that no insurance company should be permitted to deny coverage to someone because of their pre-existing medical condition or cut off benefits because a claimant has exceeded his or her lifetime payment cap.

Indeed, what has made this recession different from that of the dot.com bust in 2000 or most of the other postwar recessions is that no one thinks it was a product of just another turn in the business cycle or the mere bursting of a speculative bubble. Instead, Americans from Wall Street to the big box check out counter sense that trillions of dollars and millions of jobs disappeared because a lawless, rule less economy allowed a clever elite to game the system in a fundamentally un-American fashion.

That is why the state is going to play a much bigger role, not only in how we finance houses and health insurance, but in the work lives of tens of millions. Not withstanding the August cries of "socialism" from the tea party crowd, Americans expect the government to pay a role in setting the ground rules and establishing the standards upon which all work is based. We have not figured out a language for all this - President Obama speaks of a new era of "responsibility" but that has not caught on - but clearly the era of radical individualism at work and laissez faire in finance is over.

If the Bernie Madoff scam proved the kind of gut-wrenching scandal that sent thousands of well-off investors scurrying to the feds for compensation and protection, then an even more pervasive set of illegalities takes place in the American workplace every day. A new study, funded by Ford and other foundations, reports that a huge proportion of low wage workers are routinely denied proper overtime pay, are often paid less than the minimum wage, and are deprived of the tips and sick pay they are rightly due. In surveying more than 4,000 workers, researchers found that the typical employee had lost $51 the previous week through wage violations out of average weekly earnings of $339. That translates into a 15 percent loss in pay. A 2005 survey of New York City restaurant workers reported that roughly six out of ten worked without over time pay or through legally prescribed rest breaks. And a national survey the next year found about half of day laborers reported being stiffed out of their pay at least once in the previous two months.

This kind of "wage theft" - the phrase comes from a recent book by Kim Bobo - might well spark a note of kinship among more advantageously placed Americans, the kind of people who have watched in helpless despair as the value of their 401Ks turned South or as the selling price of their home cost them a big slice of their net worth. It has certainly gotten the Obama Administration's attention. Hilda Solis, the daughter of working-class Latinos, who is now Secretary of Labor, has declared "There is a new sheriff in town" when it comes to violations of the American labor law. She has announced that her department will hire 250 more wage and hour enforcement officers.

But it is not just the government that wants or expects new rules and new standards. Wal-Mart, the nation's largest private sector employer, with 1.4 million "associates," has begun to accommodate itself to the nation's new ethos. For years the company was an outright, court-proven violator of the wage and hour laws, routinely deleting minutes worked from pay records, forcing off-the-clock work on hundreds of thousands, and making many more labor through their lunch and rest breaks, a violation of state labor codes. When workers and unions complained, Wal-Mart fought back in the most vigorous and intransigent fashion, blaming selfish lawyers, intrusive courts, and company "enemies" who wanted to protect inefficient competitors.

But late last December the big retailer agreed to settle 63 wage and hour class-action law suites filed in 42 states. The cost: at least half a billion dollars. And it promised to put in place new policies that will prevent a recurrence of such violations. It is hard to say if Wal-Mart's concession signals a new sense of corporate respect for a governmental regulatory role at the workplace - the company has long been the high profile target of environmentalists, unionists, and some Democratic politicians, including Barrack Obama when he was on the campaign trail - but whatever the motivations, this Wal-Mart switch may well be a talisman for an era when the world of work moves toward becoming a more secure and lawful place.

It has happened before. The Great Depression was great not just because of 25% unemployment and a decade of underproduction. It was a turning point in American history because of the moral and ideological collapse of an old order that no longer seemed rational, productive or democratic. The same kind of scandals and blunders that have discredited executives at AIG, General Motors, Merrill Lynch, and Countrywide also destroyed the reputations of their early 20th century counterparts, men like the utilities monopolist Samuel Insull or the New York Stock Exchange President Richard Whitney, who ended up in Sing Sing on a charge of embezzlement.

In this world American workers sought a "moral capitalism" - the phrase is that of historian Lizabeth Cohen - that would not only keep the scoundrels out of high places, but more importantly, make their work lives predictable and orderly in an economic system that seemed to breed social and economic chaos all about them. That's why there was an enormous interest in work-sharing schemes in the early Depression years. They seemed fair, rational and moral because scarcity was now to be born in equal measure. In steel, auto, and electrical products executives put workers on a two or three day week; at Kellogg the six hour day was put in place in 1931 and lasted for more than two generations. Likewise, the end of the Saturday half-day of work in the 1930s finally created the weekend as most of us have known it. And the government codified this new world in the 1938 Fair Labor Standards Act, which created a set of work rules for industrial and office workers that for many years came to seem an inextricable part of the corporate order.

Even more important, the New Deal and the new unions that it encouraged sought to "constitutionalize" work in the nation's industrial economy, creating a structure of collective bargaining that not only boosted wages, but which created a system of industrial jurisprudence that mimicked the lawyers, courts, and judges which governed citizenship rights in the larger community. Grievance procedures, seniority lists, job definitions - all those "work rules" that managers found so offensive both then an now - emerged out of an effort by ordinary workers to live by a set of rules that seemed in insure a measure of workplace equity.

The government could not do it alone: then and now the feds will never have enough time, money or people to monitor the life of every factory and office. So in the New Deal system the unions filled the gap. As Walter Reuther, who would become the president of the United Auto Workers, told a government panel in the last years of the Depression, "We know that unless you have rules to govern the relationship of people, both Labor and Management, on the lower levels in the Agreement, unless these rules are explicit, you will revert back to where they pick this guy, not because he has potential, but because he lets the foreman run over him."

When it came to the world of work, the years from World War II through the early 1970s were a law abiding era. Unions, even in garment manufacturing and janitorial services, policed state and federal wage and hour laws; equally important, employers and workers, union or no, expected that adherence to these laws was just another cost of doing business, like paying taxes or the electric bill.

This system began to unravel in the two great recessions that made the 1970s and 1980s so miserable. It was not just that the union movement went into decline or that corporate executives wanted to get out from under what they considered a stifling set of work rules and fringe benefit obligations, but that worker expectations shifted rapidly in the decade that followed the onset of the great stagflation in 1973. Employees still wanted a set of work rules by which to labor, but these were increasingly seen as "rights" based on an appeal to gender, race, or age equality. This way of looking at the world of work filled a big gap that the white, male New Dealers had largely neglected, but it also opened the door to a new kind of lawlessness at the workplace when it came to more traditional labor standards and pay scales. Company executives, especially those hard pressed by competitors at home and abroad, were more than happy to take advantage of the deregulatory climate that both Democrats and Republicans fostered from the late 1970s onward.

Wal-Mart was just the sort of enterprise that flourished in this Reaganite era. It was a company, initially isolated in the Ozarks, in which worker expectations and executive decisions were based not on an effort to "constitutionalize" the world of work, but to make it a site of sociability, evangelical self-sacrifice, patriarchal authority, and visceral hostility to unions and to government regulation of wages or work practices. Managers wanted the flexibility to deploy their workers in the most efficient manner, even if it wrecked havoc with the work schedules of hard pressed clerks and stockers. In time virtually every company in the retail, hotel, and restaurant sectors of the economy would adopt employment norms that ran parallel to the Wal-Mart model.

But that world is in disrepute today. Working Americans are not about to return to the kind of work-a-day world fostered by the New Deal, but they want the security, predictability, and income that the New Dealers understood was essential for both a productive economy and a vibrant democracy. It remains a fight, but on this Labor Day the battle has been engaged.


Nelson Lichtenstein, an historian at the University of California, Santa Barbara, is the author of The Retail Revolution: How Wal-Mart Created a Brave New World of Business (Metropolitan Books)

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