private sector

Amazon Workers: The Struggle For Human Rights And Workplace Dignity

Our guest authors today are Norman and Velma Hill, lifelong activists in the Civil Rights and Labor movements. Norman Hill served as the president of the A. Philip Randolph Institute from 1980 to 2004, the longest tenure in the organization’s history. He remains its president emeritus. His wife of 60 years, Velma Murphy Hill, was an assistant to the president of the United Federation of Teachers, during which time she led a successful effort to organize 10,000 paraprofessionals working in New York public schools.  She was subsequently International Affairs and Civil Rights Director of the Service Employees International Union.

One of the most gratifying aspects of living a long life is realizing that the best history refuses to stay put as history. Nearly 60 years ago, we stood among the quarter of a million people gathered at the Lincoln Memorial as civil rights activists and organizers of the monumental 1963 March on Washington.

What many may need to be reminded of today is that this demonstration of soaring speeches, righteous demands, and the power of broad-based and racially diverse coalitions, were as much about the second decade of the 21st century as they were about the midpoint of the 20th.

The movement’s leadership, characterized in iconic figures like Martin Luther King, Jr., Walter Ruether of the United Automobile Workers union, and A. Philip Randolph, himself a storied labor leader, could not then specifically see a behemoth employer called Amazon, or a valiant struggle of thousands of its warehouse workers in north-central Alabama. But men and women like King, Ruether and Randolph could see, with crystal clarity, the inextricable binding of economic insecurity with the most persistent, virulent forms of racial discrimination and disparities of justice and opportunity. They understood, as we do, that free and independent labor unions are essential to this nation’s democratic society.

The Challenge For Business: Improve Education

Our guest author today is Stanley Litow, Professor at Duke and Columbia Universities, where he teaches about the role of corporations in society, and the author of The Challenge for Business and Society: From Risk to Reward. He formerly led Corporate Social Responsibility at IBM, where he was twice selected as CEO of the Year by Corporate Responsibility Magazine.

America's political climate is, in a word, toxic. The left and the right, which usually agree on nothing, seem to agree on one thing: animosity toward the sins of the private sector.

It's remarkable how American businesses are now portrayed as a major cause of many of our society’s ills: income inequality,the looming skills gap, education’s failure to prepare workers for the jobs of the future, and a shredded social safety net. That's the main reason that many prominent American business leaders of the Business Roundtable spoke out last week about businesses’ need to make a commitment to all stakeholders, not just their shareholders. It’s a necessary step, in my view. The new awakening, which many companies have already been embarking upon, demonstrates a willingness not to just placate their shareholders but recognize a corporation's responsibility to the broader community, a stable environment, improved schools and their employees. This is an imperative for communities but also for the business bottom line.

What, exactly, is a responsible company?

Perkins And The Benefits Of Collaboration

Our guest author today is Stan Litow, a professor of Public Policy at both Duke and Columbia University. He is a former deputy chancellor of schools in New York City, former president of the IBM Foundation, a trustee of the State University of New York, and a member of the Albert Shanker Institute’s board of directors. His book, The Challenge for Business and Society: From Risk to Reward, was published this year.

This July, the U.S. Senate and House of Representatives, after a dozen years of inaction, unanimously passed legislation to update the Federal Career and Technical Education law. By doing so, Congress increased funding for Career and Technical Education to nearly $1.3 billion in the coming year. The law is called the Perkins Act, named after a former member of Congress. It can go a long way toward addressing America’s skills crisis and providing many of our young people with real economic opportunity. Given the contentious Washington climate, broad bipartisan support for Perkins—including strong private sector, labor union and education backing—is truly noteworthy. But as we consider how this happened, it brings to mind another action that took place more than 80 years ago involving another Perkins: Frances Perkins.

On the 25th anniversary of Social Security, Frances Perkins, America's first cabinet member to be a woman, said "It would not have happened without IBM." Many who saw her on film were surprised. President Roosevelt was usually critical of the private sector. What had IBM to do with Social Security? Actually a lot. After the bill to establish Social Security was signed, the Labor Department under Perkins had to implement it. She sought outside help to design an implementation plan, yet everyone she approached said it would take years. When she approached Tom Watson Sr., IBM's CEO, she got a different answer. His team of engineers told him it might be possible to implement it sooner, but it would require the investment of several million dollars (about a hundred million in today’s dollars) to create what they called a "collator."

Learning Versus Punishment And Accountability

Our guest author today is Jeffrey Pfeffer, Thomas D. Dee II Professor of Organizational Behavior at the Stanford University Graduate School of Business. We find it intriguing, given the current obsession with “accountability” in education reform. It is reprinted with permission from Dr. Pfeffer’s blog, Rational Rants, found at http://www.jeffreypfeffer.com.

People seem to love to exact retribution on those who screw up—it satisfies some primitive sense of justice. For instance, research in experimental economics shows that people will voluntarily give up resources to punish others who have acted unfairly or inappropriately, even though such behavior costs those doing it and even in circumstances where there is going to be no future interaction to be affected by the signal sent through the punishment. In other words, people will mete out retribution even when such behavior is economically irrational.

Public Apples, Private Oranges: A More Ripened Look

In a previous post, I criticized articles in the USA Today and elsewhere (all citing data from the conservative Cato Institute), which claimed that federal government workers earn almost twice as much as private sector employees (including salary and benefits). I argued that en masse comparisons of public and private sector workers don’t tell us much, since the jobs that comprise the two sectors are very different.

For a more useful comparison, we need to understand not only that most public sector workers are professionals, but also that they tend to be more experienced, and more quickly promoted, than the typical private sector employee. For example, a lead research scientist will earn more than his or her staff scientists, whether they are working in the public or the private sector. So, if public sector employees in a given occupation tend to be more experienced or have more authority or responsibilities, they will appear “overpaid” even though they are not.

So, how does the public/private wage gap look when we compare professionals in the two sectors by both occupation and experience/responsibilities?

Public Apples, Private Oranges

Hardly a week goes by during which an editorial or column in a major newspaper doesn’t comment on how public sector workers are making a killing compared with their private sector counterparts. Recently, as a result of the "edujobs bill," there has been even more of this chatter than usual about “overpaid” government workers with “bloated benefits” and “fireproof” positions. Some of these commentaries even purport to present “evidence."

Earlier this week, for instance, a piece in the Washington Examiner cited data showing that average compensation (salary plus benefits) for federal government workers was roughly twice that of private sector workers. Sound remarkable? Not so much.

This “argument” is akin to comparing the compensation of employees at IBM versus WalMart. You are talking about two very different groups of jobs.