Proposals for a universal basic income, such as Andrew Yang’s “Freedom Dividend,” may have dire consequences for blue-collar workers who just want a job, Greenhouse says.
Faced with the looming disruption of millions of jobs by AI, several prominent voices in tech — including Facebook co-founder Chris Hughes and 2020 presidential candidate Andrew Yang — have embraced the potential benefits of the government giving people a “universal basic income”: Here’s some money, no questions asked. As a result, they say, workers in the service industry and gig economy won’t have to work such crazy hours, freeing up time for them to pursue artistic and entrepreneurial projects that could one day be valuable.
But longtime labor reporter Steve Greenhouse — formerly of the New York Times and most recently the author of Beaten Down, Worked Up: The Past, Present, and Future of American Labor — says expecting everyone to become an entrepreneur is “delusional.”
“I understand the idealistic sentiment behind it, that if jobs for 30 million Americans disappear and there’s nothing else for them to do because we’ve become so automated, are they just going to rot without any jobs?” Greenhouse said on the latest episode of Recode Decode.
“I probably have been in touch with more blue-collar workers and workers without high school education than Andrew [Yang],” he added. “And a lot of them just aren’t entrepreneurs. And they need some income. So, you generally hear universal basic income should be $1,000 a month, $12,000 a year. You know, all I could say is good luck trying to live on $12,000 a year.”
On top of that, the existence of a universal basic income may encourage conservative lawmakers to further cut social safety net programs such as Medicaid, Social Security, and food stamps, Greenhouse predicted. The solution, he proposed, is to involve workers directly in the discussion and for companies to consider cost-cutting alternatives to layoffs such as “work sharing,” in which employees still receive benefits but work a three- or four-day week with decreased pay to match.
Noting the stark disparity between wages and corporate profits, he also suggested that letting workers elect members of a company’s board of directors would also have a real impact on decisions about automation and compensation.
“I think the easiest way to change it in a substantial way would be to pass legislation that allowed workers to be on boards, because that would change the conversation,” Greenhouse said. “Workers would not have the majority, but I think it would pressure boards to be more attentive to worker concerns and maybe corporations would stop fighting against unions so hard.”
Below, we’ve shared a lightly edited full transcript of Kara’s conversation with Steve. Listen to the full interview by subscribing to Recode Decode with Kara Swisher wherever you get your podcasts, including Apple Podcasts, Spotify, Google Podcasts, and TuneIn.
Kara Swisher: Hi, I’m Kara Swisher, editor-at-large of Recode. You may know me as someone who believes if you want to be productive, you have to get eight hours of sleep every week, but in my spare time I talk tech and you’re listening to Recode Decode from the Vox Media Podcast Network.
Today in the red chair is Steve Greenhouse, who has reported on labor and workplaces for the New York Times for more than 30 years, so he’s seen a lot of changes. He’s also the author of a new book called Beaten Down, Worked Up: The Past, Present, and Future of American Labor. Steve, welcome to Recode Decode.
Steve Greenhouse: Great to be here.
I’ll get to your book in a second, but I want people to get a sense … You’ve been covering this for 30 years. The changes in the workplace are probably rather significant over the last 30 years. How did you start? People like to know people’s backgrounds to get an idea of how they got to where they got.
I went to Columbia Journalism School.
Then I went to work for the Bergen Record in northern New Jersey for three years. I wasn’t terribly happy there. Then I went to NYU Law School, finished up there, but while at law school I thought, “Being a journalist is much more fun than being a lawyer.”
Yeah. Well, that’s an easy one.
I figured if I can get a job at the New York Times or the Washington Post, I would do that.
Oh, aiming high, all right.
Well, I had been a copy boy at the New York Times right out of college and a few editors thought I was a “smart young lad.” I did very well in law school and they thought they’d take a chance on me. I started as a business reporter covering the steel industry, which remains very, very relevant.
I was writing about the crisis in American steel from imports and debates over tariffs. This is in the early ’80s.
Then I was the Chicago/Midwest economics correspondent for the Times for three years. Then I must’ve done something right. Then I was in Paris for five years for the paper, which was like a lifelong dream, to be a foreign correspondent in Paris. I covered the collapse of communism. I covered the European Union. Then I was in Washington covering economics for a few years, then covering the state department for a few years. I got tired of writing about abstract policy.
I wanted to write about flesh-and-blood human beings again. I applied for the labor beat and all these friends of mine said, “You are out of your mind.”
Why did you do it? What was your … There’s flesh-and-blood people everywhere. Why labor?
Because it was open. I grew up in a family where my father was vice president of his local teacher’s union. I grew up listening to Pete Seeger and Leadbelly and Woody Guthrie. I was interested in people. When I was covering the steel industry, I read a lot of stories about steel plant closures and how that affected Michigan and Illinois and the quad cities. I’ve always been interested in policy issues and social issues and real people. The labor beat, for me, was really good. Some friends told me, “It’s the least sexy beat. You don’t want it. You’re going to fade away. You were in Paris. You were in Washington. You have a great career.”
I said, “There are” — then — “130 million workers in the United States, and if I can’t find lots of good stories to write about them, then I’m deficient as a reporter.”
I really revived the beat and people thought, “Well, this is a great beat,” because there’s so many great stories of …
Yeah. When you were covering the steel industry, what would you say your most striking story was then? What was the themes of what you were writing? Because the steel industry sort of represented the changing America. We had this workforce that was manufacturing in the middle class, or the working class, the blue-collar workers, car makers, things like that. That was sort of the narrative for US labor as we moved from farming to manufacturing.
I started at the Times in 1983 as a business reporter, and I was covering the steel industry. That was right after the horrendous, horrible 1980-81 recession and plant closings were going crazy.
Right, decimating communities.
The big story was the huge plant closings and the huge layoffs. Then there was the big debate about whether to impose tariffs. I did this story in southwest Illinois, where there’s a big steel plant right in the middle of soybean fields. They were kind of slapping tariffs on Europe and limiting steel from Europe and the Europeans were retaliating against our farmers. It raised many of the same issues as today where the farmers were being screwed by efforts to help the industry.
Another group, right. When you were looking at that changing narrative, manufacturing had long taken over farming. That was the last jarring, I guess, shift in labor. A lot of Silicon Valley people talk about that now, the shift from farming to manufacturing, how much better it was and that the next era is going to be better, that it’s going to be like that and we don’t even understand it. I’ll get to that in a minute, but when you were … thinking about the manufacturing, the narrative had turned dark, the idea that manufacturing anything in the United States would not happen, that it would move abroad, that there was nothing we could do about it.
In the ’80s, that narrative hadn’t yet taken hold. 1979 was like the peak of the American economy in many ways. We had 19-and-a-half million manufacturing jobs and we had this horrible recession. We really started feeling the bite of imports, cars from Japan, cars from Germany, lots of steel.
Over the next 10, 15 years, the number of manufacturing jobs declined from 19.5 million all the way down to 12.5. We lost more than around 40 percent of our manufacturing jobs. Then people realized after a few years, this is really serious. Our manufacturing sector is really shrinking. The number of jobs is shrinking, partly because of imports, partly because of offshoring, partly because of greater efficiency.
I think that has forced us as a nation to really start thinking about, well, is manufacturing as great as we thought? There’s been a real … I write a lot about the labor movement and workers. As a result of the crisis in manufacturing, a lot of corporations really started squeezing, fighting unions very hard, fighting workers very hard, fighting …
There’d been basic compensation packages that our middle-class manufacturing workers had, yes.
That had been negotiated, right. You named several things of the decline in manufacturing. Is there any one or was it all of them together, tariffs, offshoring, bringing in imports? What do you imagine rapacious companies would …
I think it was certainly imports, but I thought it was also globalization in general, with the internet, with the digitalization, it became much easier for a garment manufacturer or a refrigerator manufacturer to produce overseas rather than in the United States. I think that really hurt tremendously. There’s been a study showing that permanent normalized trade relations with China, which was enacted under Bill Clinton, ended up costing us 2 million manufacturing jobs. Clearly NAFTA cost … I’ve spent a lot of time in the Midwest writing about a whole, whole lot of plant closings.
It’s depressing as hell, but very important. I know a lot of people said NAFTA didn’t hurt our manufacturing. I kind of call BS on that because I wrote about a lot of plants that closed and moved to Mexico.
Right. Was there anything that the country could have done at the time, or was this just an inevitable result of globalization and that companies … I want to get into this new business roundtable idea of shareholders in a second, but was there anything that we could have done to prevent that, or was it just the inevitable …? Consumers want lower prices. Consumers want goods that are easy to get and easy to source and so do companies.
Two answers to that. Jimmy Carter tried this half-hearted effort to prop up a few steel companies, but we’re a very free-market economy and he got a lot of grief for that.
We could have done more of what China did and what the European Union did, kind of subsidize companies that were hurting, but much more than that, we have this philosophy of profit maximization with focus on shareholders.
And shareholder attention.
Again, I wrote lots of stories about companies laying off 2,000, 5,000, 10,000 people and the company … Yes, some companies are really losing money and really have to cut costs, but sometimes they went overboard to try to impress Wall Street because Wall Street’s really impressed when you chop your head count.
I think there was too much focus on the shareholders and not enough on the workers and on the communities. With the announcement two days ago about, “We’re not going to …” The Business Roundtable, a group of CEOs from the 200 largest companies saying, “You know folks, after all this soaring income inequality, after all these layoffs, after decades of wage stagnation, you know folks, maybe we focused too much on profit maximization.”
It’s nice that they’re saying that. It’s not clear to me that they’re going to do much about it. It might just be lip service in public relations. Let’s hope they mean it. I’ve tweeted out that if they really, really mean that they shouldn’t focus so much on shareholders, they should ask President Trump to repeal the $1 trillion tax cut for corporations.
Let’s use that money to stimulate the economy to avoid recession or to deal with the homeless crisis on the West Coast and in New York.
Talk about that, because … I call it the “fuck you, Milton Friedman” moment, but I don’t think it is. I don’t think it is in any way. I was interested in why they’re doing that now. To me, I mean, my partner who does Pivot with me, Scott Galloway, thinks it’s because they’re scared of the pitchforks, that this income inequality issue has become so severe that they are worried. The rich are worried about other repercussions.
I think it’s part of the pitchforks. I think a lot of businessmen, maybe while they’ll support Donald Trump publicly, deep down they really don’t love him and they think he doesn’t respect business and he doesn’t respect the rule of law and he doesn’t respect our wonderful norms of democracy and free speech.
Well, he is the king of Israel, so …
They’re really uncomfortable with him. They realize that there’s this big backlash kind of against corporations. When Trump ran and won in the middle west, he really had a very pro-worker message. Then there are things like the banks causing the great recession, the financial crisis of 2009, Purdue Pharma and that total disaster in opiates, and I forget the name where he like raised the price of certain pharmaceuticals like 15, 20, 25…
Oh, that guy, Martin whatever his name is, yeah.
Plus, we see the stock market reaching records month after month, year after year, generally. Corporate profits will generally be near profits, but near records, but after inflation, wages have really gone almost nowhere for 30 or 40 years. It’s good that Jamie Dimon and the Business Roundtable realized …
This is the CEO of JPMorgan.
Yeah, sorry, the CEO of JPMorgan Chase and the head of the Business Roundtable realized we have an image problem here and we have a substantive problem here. I think this is an important first step to announce that we have a problem. Now we have to see what they will do about it.
Give a little walk back in history, because you’re talking about this new book, is what … This was not … The corporate profit maximization was a relatively new thing, because what they’re going back to, what they’re talking about is how it used to be, that corporations felt they had some sort of relationship with the employees, with the community, with the country, and everything like that. This is sort of going back to the future kind of thing.
Yeah. During World War II, corporations and workers in labor worked very, very closely together because we had a common enemy, the Nazis, the Axis powers. Going into the 1950s and 1960s, unions were strong; I think this partnership, this sense of cooperation, really continued. It was kind of an era of managerial capitalism where the manager ruled and they worked in the same building or next to the factory. They were friendly with workers and wanted to treat them well.
In the 1970s, we started having some serious economic problems with the 1973 and 1979 oil shocks. Come the 1980s, the horrendous recession in ’80-81, the real beginning of the flood of imports, and companies said, “We’ve got to really get more serious on fighting unions and getting wages down and getting our profits up.” Then that was the age of Milton Friedman, saying, “You know, corporations, you have to focus on profit maximization, just on your shareholders.”
”Screw the community, screw the workers, you have one group you’re supposed to serve: shareholders.” That really prevailed during the 1980s in many ways. Then there was sort of a backlash again. In 1990, the Business Roundtable issued a statement saying, “You know folks, maybe we’ve been too focused on profit maximization and shareholders. We have to worry about our stakeholders, workers, and the community and the environment.”
Oh, we’ve been here. I didn’t realize that.
Seven years later, they totally reversed themselves and they said, “No, no, we had it wrong. We have to focus on shareholders. Everyone else is a derivative factor, the community will trickle … “
It will trickle down to people.
That was from 1990 to 97. Why the big reversal? Milton Friedman’s philosophy became all the more important, Michael Jensen and also Ivan Boesky and all the takeover raiders, they really intimidated a lot of companies.
Right, the raiders.
Boesky and Friedman were saying, “If you want to keep your job, you better focus on maximizing profits and shareholder value.”
Right. One of the things … The reason I ask that is because a lot of people feel like tech is the thing that got it, that got it. In ’97 was when tech sort of started to really rise in importance in our society and in terms of these companies becoming … Right now, I think the top companies are all tech companies, or the top … the trillion dollar companies, Amazon, Apple, Google, all the others. I don’t think Google’s reached a trillion yet. But people tend to blame tech, too. I think it was an adjunct onto already existing problems, but I blame tech for a lot of things, as you know. But talk a little bit about that, when that shift happened.
I think the shift from 1990 to 1997, I don’t think tech was so prominent in the overall overarching intellectual discussion yet. It was starting to take off. Silicon Valley, the entrepreneurs, the investors, they focused a lot on new technologies and maybe weren’t so concerned about laying off workers. A lot of it was like minimizing head count.
Now we’re seeing with like Uber and Lyft and DoorDash, there are all these tensions that these huge tech companies, if we may call them tech companies, just don’t treat their workers fairly enough. We’re seeing these huge fights between these tech companies and the workers and raising public policy issues. Are Uber drivers or Lyft drivers employees who should …
The gig economy.
Yeah, the gig economy. Should they receive benefits? Should Uber and Lyft help provide them with health insurance and Social Security? If they’re employees that can unionize; if they’re defined as independent contractors, they can’t. DoorDash was doing something truly outrageous, which I argue shows the lack of fundamental respect that a lot of corporations have for workers. DoorDash was basically stealing tips from workers who were making $8, $10 an hour, and it’s like …
Yeah. Well, what’s interesting in tech is they respect some workers and pay them exorbitant amounts of money and bring them into the economic … As things go up, everybody benefits, and then others not so much. There was a really interesting thread on Twitter about an employee who was at WeWork in the early days, who didn’t get any shares. What they were selling to people was the idea that you’re going to get shares and therefore that’s how you’re going to benefit by the sweat of your own brow, so to speak. No sweat is involved here whatsoever, but that’s the idea.
Let’s talk a little bit more about how tech has shifted. I want to get into AI. Well, let’s talk about the extent of the future, where things are going, but there’s no doubt tech has sort of inherited the idea where the workers are not the key part of the … the innovation is, more than anything. At the same time, they have rewarded some of their workers exorbitantly.
Tech is kind of a bifurcated thing. If you’re a software engineer, you can get a very good job. There are kids graduating with BAs and engineering degrees, bachelors in engineering degrees, masters in engineering, and they’re making $150, $200,000 a year. That’s pretty damn good, and so tech has been great for the folks who have the knowledge …
And stock options and everything else.
Yeah, and stock options, but then a lot of the workers, the grunt workers, who maybe help fabricate chips or help make this auto part, are being replaced by robots.
Or make kombucha or do their massages.
Yeah, and the whole service economy that’s serving a lot of these wealthy Silicon Valley folks, they’re making eight, nine, 10, $12 and they’re struggling to get by. And then, we have all these concerns, McKinsey says we’re going to lose 20, 30, 40 million jobs to AI and robots. Some professors at Oxford say it’s going to be … Basically, we’re going to lose one-third of our jobs. Other folks say that’s total BS. There’s been all this talk of robots and AI, but our unemployment rate now is 3.7 percent.
I mean, I’m concerned that … There’s this important discussion on the future of technology, robots, and AI. There are all these conferences about it, and workers are hardly part of the discussion. There’ll be two billionaires up there on the stage, and three millionaires, and six … And two Silicon Valley angels and no worker representatives. Who’s going to be hurt most by all this? Workers.
Right? So, let’s … Before we get into that, where … Right now, the American worker, among the many issues, is that things have become digitized. People are … Just before AI gets here, before automation gets here, before robotics gets here in heavy doses, self-driving cars, which will have a big impact, all of these things. Right now the state of the American worker has this idea of a gig economy, which has sort of been pushed by technology because people want to order anything. And again, just the way consumers like cheaper goods, or cheaper whatever, clothes, or a $99 dress or a $9 dress versus how much it should really cost. They’re not thinking of the implications every time they hit an app. What they’re doing is they’re creating … What is the state right now, from your perspective, of the American workers? And sort of by far … Talk about the sort of levels of American workers right now.
So, there are … The top 10 percent generally do very well. They’ve been getting fairly steady wage increases. The bottom … The middle and the bottom 10 percent to 50 percent haven’t been doing very well at all. The bottom 10 percent have done better than expected because of all of these Fight for $15 and all of these states have …
This is a $15 minimum wage.
Yeah, $15 an hour. And all these states, they’re raising the minimum wage. But generally, for the past 20, 30, 40 years, the folks in the bottom 50 percent haven’t done well, haven’t done well at all. The folks in the top 10 percent have. If you’re an engineer, if you’re a knowledge worker, you’ve generally done well — unless you’re an adjunct professor. But if you’re a service worker working in a nail salon or as a waiter, you’re often not doing very well.
I agree with you, Kara, one of the big issues now is the rise of the gig economy. There are millions, tens of millions of workers who are freelancers, contract workers, as independent contractors, temps, and their lives have gotten very herky-jerky, unstable.
Without benefits, without …
Yeah, and I think one of the biggest issues facing America today, and it’s hardly discussed, is going to be gazillions of Americans retiring without enough money to live in retirement because they have gig jobs and they’re not going to get Social Security, they’re not saving enough. As you say, there’s a big health insurance problem, a lot of gig workers don’t have health insurance with their job. There’s one party that’s trying to create a safety net for them on health and a whole other parties trying to take away the health safety net from them.
I was a reporter in France for five years, I covered all of Europe, and people there take universal health coverage for granted, and it’s great. Here, there are lots of people without health coverage, lots of people go … Elizabeth Warren originally made her name as a Harvard professor studying bankruptcy, saying that one fifth, one-third of people who file for bankruptcy do so because of some health crisis.
Of a health issue. I was just struck by a number that I think I quoted last night, Google has 112,000 full-time employees but 120,000 contractors. This idea of contracting, even if at the high level, has really taken hold among tech companies, which use it indiscriminately across all their different things, from cooks to … And they … They’re sort of a second-class citizen of these economies.
I often think as a student of corporate America that CEOs are like lemmings, they follow fads. For a while it was diversify, diversify, diversify, then it was concentrate on your core business. Then it was shed this and shed that. And now it’s minimize headcount, minimize loyalty to your workers. You don’t want to feel bad if you have to lay them off. So, there’s this huge focus now on minimizing the size of the workforce, minimizing headcounts. So, we’re seeing a huge number of temps and contractors, even for some very important jobs.
Again, I think this is having a profound effect on the workforce. It’s created a lot more stress for a lot of workers. I was a reporter at the New York times for 31 years and I see a lot of people who go from … Every three months they’re bouncing to a new job. How do you raise a family like that? How do you buy a house like that? How do you save up for retirement on that? For me, these are some of the most profound issues facing America today. But instead, we’re beating up on immigrants rather than facing what I believe are the really big issues facing American workers and the American populace.
What they tend to say in Silicon Valley and other places and it’s sort of infected … Although I don’t think they’re new ideas, is that these people want this flexibility. I have to sit through so many times when I’m sitting with Uber people or Lyft people or whoever, it’s all of them. It’s not just a few of them, it’s all the DoorDash, it’s the Postmates. “The people like this flexibility. They’d like to be able to pick and choose what they want. They get the freedom of these jobs.” That’s their thing, that’s their …
I hear Silicon Valley people saying that, but you look at polls by academics that show the workers in part-time jobs or in temp jobs, if they had their choice, would they want a full-time regular job or to have an insecure part-time or temp job? They want real jobs. People want security and stability.
Yes, there are the writers and the artists and the musicians who are struggling to make a living, and yes, it’s good for them to drive Uber for 10 or 15 hours. But a lot of Uber drivers I speak to, they want to be considered real employees and they want benefits. A lot of them say they want a unionize now. Uber says, “Well if you’re employees then we’re going to fix your schedule for you. You won’t have flexibility.” I think that’s BS too.
Yeah, me too.
The drivers want to drive when there’s maximum business out there and they’ll do that. In my book, I quote an Uber driver in Seattle who said, “Uber has very much cut rates there.” And he says he’s working 60, 70 hours a week. This driver said, “The flexibility they boast about evaporates as the pay goes down. There’s not much flexibility if you have to drive 10 or 12 hours a day.” So, for the musicians and the writers who need a little extra income, yes, there’s flexibility for them. But if you’re doing it as a full-time job, you want to drive the two rush hours and there isn’t much flexibility.
It’s also a way, which I think is really interesting … Casey Newton of The Verge, who is part of Vox Media, wrote these stories about the contractors that they’re hiring to do things like deal with hate speech and ugly content and things like that. What I found striking about that story, besides the appalling nature of these people’s … What they have to do with their … It’s like cleaning up toxic waste, essentially, mental toxic waste, is that one, they aren’t paid very well. Their working conditions are kind of shitty. And then that they don’t work for these companies.
One of the key parts of these companies are this … A big chunk of their problem is hate speech, is a toxicity, is conspiracy theories, animal abuse, pedophiles, things like … Everything that would just make anybody go crazy. And they put them somewhere else like Tempe, Arizona, or they put them in Tampa. They’re never sitting next to Mark Zuckerberg and sitting next to him in the office, they don’t belong to that company. So, to me, if they sat right next to them and they were paid a living wage, it’d be a very different decision-making process around their algorithms and things like that. It seems to me it would be.
They couldn’t begin to afford the rent if they lived and worked there where Mark is.
No, that’s true, that’s another issue.
So, they’d probably have to pay them four times as much. These workers do very important work and it’s no fun and we owe them a lot of respect for the unpleasant work they do. It’s unfortunate that these companies that are worth a trillion dollars, or close to a trillion dollars, pay all these workers hardly enough to live on.
I wrote this book saying one of the big problems with America today is that there’s been a serious decline in worker power. I argue that worker power has fallen in ways to its lowest level since World War II, even since the Great Depression, and corporate power really dominates the policy discussions, politics. The minimum wage hasn’t been raised in 10 years, the longest time ever, yet Congress rushed out to give 1.5 trillion dollars in tax cuts to corporations and the rich, when corporate profits were already at record levels, when Wall Street was already at record levels, and when the 1 percent already had the highest amount of income since …
Can you explain how that is when we have such low unemployment that workers don’t have power?
I mean, that’s a good question. Statistics show that wages for the average worker have hardly gone up since the 1970s. Now the unemployment rate is the lowest it’s been since the 1960s and that’s great. This year and last year, finally, they have a little more bargaining power than they did five years ago and 10 years ago when the unemployment rate was higher.
But it’s astonishing, I think economists are starting to see this is that, yes, there’s a little bump up in real after-inflation wages, but it’s kind of minuscule compared to what it should be when unemployment is this low. Again, corporate profits are doing great, and instead of pumping their money into wage increases that they promised, they pumped $800 billion last year into stock buybacks.
What would it take to get workers to have more power now? They have never [had it] more easy to organize, never more easy to communicate, never easier to talk your … What your story is, your narrative, which is an important part of unionization, is to talk about what you … Just to get it out there to people. Obviously, Donald Trump’s been pushing the idea that he’s a friend of the workers while rewarding very wealthy people. How do you do that then? What can happen? Is it stacked against them no matter what in the new environment?
I think a lot of tech workers are very well educated.
Yes, they would do walkouts.
They’re used to speaking out and they’re confident and they did that huge walkout at Google about sexual harassment. They really weren’t worried about losing their jobs. I think a lot of elite workers don’t realize how cowed and intimidated and scared and humbled a lot of low-wage workers are, hotel housekeepers, nail salon workers. So, how do you help the workers on the bottom? I have arguments with people who say, we should unionize the workers at Google and Facebook. And I say, “If they’re making $175,000 a year, I’m not sure if they need a union.” And we can debate that.
That’s a fair point.
But if you’re making $8 an hour as a hotel housekeeper in Cincinnati or Houston or New Orleans, yeah, you need something to help lift yourself up. Yes, maybe you could talk to your manager and beg him and nudge him or her to give you a raise to $10, but a lot of times, the squeaky wheel gets pushed out and people are really scared of losing their jobs. So I argue that one of the best vehicles to help low-wage workers is unionization, raising the minimum wage, too. I argue that the overall unionization rate in the nation is down to basically one in 10 workers.
Wow. What was it? It had to be …
It was 35 percent, more than one in three in the 1950s. So, unions are very weak, and that’s why I say Congress hasn’t really passed any true pro-worker, pro-union legislation in many years because corporate lobbyists and corporate donors call the shots. The final chapter of my book really examines strategies, tactics to increase worker power.
Name some of those. What are you …
One thing I think is very broken is the campaign finance system. And conservative editorial pages deride big labor as this horrible monster dominating the system. So, in the 2015-2016 campaign cycle, corporate America spent $3.4 billion, more than 16 times as much as all of organized labor, which spent $240 million in lobbying Washington.
240 million, yeah.
Yeah. Corporations spent about $3 billion a year while labor spends less than one 1/60th as much. So, I think we really need to fix our campaign finance system in a big way to give average Americans, to give school teachers and Walmart workers and steelworkers more of a say. And we could discuss how to improve, how to do public financing.
A second thing I say … A lot of union leaders say, “We’ve got to make it easier to unionize.” That would help workers, but there are a lot of smaller things we could do, but it might be hard. Even if you pass all these things to make it easier to unionize, it might not be easy to go from 10 percent to 12 percent or 13 percent of the workforce because corporations fight so hard against unionization. So, I recommend — again, I was a reporter in France, I spent a lot of time covering the German economy, and it’s funny, American companies say, “If we unionize, we can’t begin to be competitive. We’re going to have to shut our factory …” I covered Daimler-Benz, I covered BMW, I covered Volkswagen. Those are very successful companies. Yes, VW screwed up very badly and they’re heavily unionized. Toyota, Honda, heavily unionized, they’re very successful companies. I do think that the German model where workers elect nearly …
They’re on the boards.
… 50 percent of members on the supervisory boards, that has made German companies, I argue, much more attentive to the concerns.
Competitive, I agree.
They invest far, far more on workers and training workers. They don’t offshore nearly as much as American companies. Tammy Baldwin, senator from Wisconsin, proposed a bill that would let workers elect 33 percent of the board, then someone named Elizabeth Warren saw her and raised her …
I’ve heard of her, she’s got some plans, I understand.
Yes, she has some ideas. She says workers should be able to elect 40 percent of the corporate board. And public opinion polls show that Americans support that by a 2:1 ratio.
So, why doesn’t that happen? It’s an interesting … It was a discussion I recently had, I think I’m writing about it, actually, putting a worker on the boards of tech companies, for example. Why are they all stacked full of idiot VCs and financiers who literally drive … Who have no value that I can discern in any way?
I expect you to say the answer’s Milton Friedman, but …
Fuck Milton Friedman, that’s what I say these days, but go ahead. You don’t have to.
No, I think America has a tradition of not having workers on the boards and if you succumb to that you’re seen as weak and you want people who are there for profit maximization. I think with what the Business Roundtable, Jamie Dimon, said this week realizing that something is really out of whack. Corporate profits as a percentage of the GDP is at its highest levels since World War II. Worker compensation is at its lowest levels since World War II. Wage stagnation has really been stagnant except a little bump up in the past few years. So things are broken in one way.
I think the easiest way to change it in a substantial way would be to pass legislation that allowed workers to be on boards, because that would change the conversation.
To be on boards, to unionize these …
Workers would not have the majority, but I think it would pressure boards to be more attentive to worker concerns and maybe they … Maybe corporations would stop fighting against unions so hard. I have this line in my book that’s really been picked up, saying, “In no other country do corporations fight as hard to beat back, to cost unions.” And that’s true.
Again, I’ve written stories … I’ve covered the economy in Britain and France and Germany and Italy and Luxembourg and Austria and Sweden, and the companies there work with unions. Maybe they don’t love them, but they see them as legitimate partners. In the United States, I think a lot of companies see unions as kind of the enemy. We can’t work with them, we want to annihilate them, we want to eviscerate them, we want to gut them.
Well, it’s interesting. And tech companies you mention … The minute I mention it, the room clears rather quickly. Like, “Whoa.” It’s a bad thing.
Talk about what’s coming, because I always … The shift is happening much faster than people realize. One is obviously automation, the other is robotics and automation together. The other is AI and the job replacement. There’s a lot of scary stories out there, but at the same time, it’s very clear that … What I always say is everything that can be digitized will be digitized, in terms of jobs. And then there’s lots of other things like self-driving along the edges, which are going to dramatically change our society in terms of … Which are welcome, in many ways. Talk about where you think the American labor force is headed and what … What do we need to do to change with that? Because it’s inevitable that this is happening, whether you like it or not.
I mean, as you know, Kara, there’s this huge debate among economists who are far smarter than me and maybe even smarter than you, I don’t know, who say, “Will AI and robots wipe out 20, 30, 40 million jobs? Will they be 40 million Americans for whom there are no jobs anymore?” And there are others who say …
Or not those jobs.
Or not those jobs. They’ll say, “There won’t …” There just won’t be enough jobs. Others say, “Well, automation technology is not going to wipe out that many jobs and even if it wipes out a lot of jobs, there’ll be other new jobs as …”
Right, that’s the argument. Without any specificity as to what those jobs will be.
As literally coaches or tutors for needy kids in school, or better home care … Who knows? And that is really being played out. But what’s clear is that you’re right, that technology, AI, robots are going to replace a lot of people, and the question is whether they fall out of the workforce without any jobs or whether there are new things for them.
One of the things that’s interesting is they … Some of the jobs should be replaced. We probably should have machines digging coal. People shouldn’t be digging, scrabbling coal and ripping it out of the ground. It just shouldn’t, they shouldn’t, it’s …
And people are going to say we shouldn’t have anything removing coal, because …
Right. Yeah, that’s another issue.
But I’m just saying, lots of jobs, you could say why do we have lawyers doing pattern-matching work when computers do it better? Why do we have radiologists? Like that’s an example given all the time. Why do we have them looking at thousands of slides when AI can do it much better? And it can.
The fact of the matter is eventually, a lot of these jobs that can be digitized, and you can, not just manufacturing jobs and low-labor jobs, but like in San Francisco, we have burger-flipping machines, we’ve got coffee machines. Even though they’re sort of a weird little thing, I think they will be like that. Like, it makes sense. Some of these jobs should be replaced.
I totally agree, Kara.
But: What replaces it?
Again, as you know, there’s a big … So, several answers. Maybe we won’t need, we’ll only need 300,000 less burger flippers or fast food restaurants, so what should those workers do? Should they become unemployed for years and rot, and maybe have, you know, universal basic income for them? Maybe they could become home care attendants, because with the huge rise in the elderly, or with all these needy kids in school, maybe they could become tutors or after-school coaches, or who knows. But it’s unclear whether there will be jobs for them.
And as I said before, workers aren’t sufficiently part of this discussion. So the talk about universal basic income, I understand the idealistic sentiment behind it, that if jobs for 30 million Americans disappear and there’s nothing else for them to do because we become so automated, are they just going to rot without any jobs? So let’s give them universal basic income.
Right. This is Andrew Yang, I just did a great interview.
Yeah, which he talks about the idea is that it frees you up to be entrepreneurial, to be creative.
Yes, but …
If if you remove worry by giving health care and a certain small amount of money, you can actually create more jobs. That’s the idea.
I probably have been in touch with more blue-collar workers and workers without high school education than Andrew.
Yes, than Andrew.
And a lot of them just aren’t entrepreneurs. I mean, it’s nice to think that.
Right. Yes, that is a … I agree.
And they need some income. So, you generally hear universal basic income should be $1,000 a month, $12,000 a year. You know, all I could say is good luck trying to live on $12,000 a year.
And then some conservative supporters of UBI say, well, if we have universal basic income then we don’t need Medicaid anymore, we don’t need Social Security anymore, we don’t need food stamps anymore. If you’re making $12,000 a year on UBI without a safety net, you know, I say we need workers to enter this discussion, because they’re not going to support that.
Yes, because they’re not entrepreneurial, not everyone is. I mean, someone the other day in Silicon Valley told me, “Well, you know, people are just going to all have to be entrepreneurial.” And I’m like, “What?”
Like, you know, I’m pretty entrepreneurial as a reporter, but most reporters really aren’t. Like, for example, in my profession, and it’s a really interesting, like, I don’t, we don’t teach people to be, maybe Americans are probably more entrepreneurial than other people, or more scrabbley, I guess, I guess, but they’re not.
I guess when there’s less of a social safety net — and there’s far less here than in Europe and Japan, you know — that forces people to somewhat be more entrepreneurial. But let’s be real. I think these people, you know, their heads are in the clouds or somewhere. You know, what percentage of small businesses fail every year? A ton.
Most of them.
A lot of these entrepreneurs are not going to be able to support themselves and their families. And you know, if we move towards a more entrepreneurial society, or less secure jobs, more volatile jobs, we need a stronger social safety net, I argue, on both health care and on retirement. And the people who say, “Oh, we’ll all live happily ever after by converting people into entrepreneurs,” that’s delusional, I submit.
And a point I’ve been making now — so we hear a lot about if robots wipe out 30 million jobs, we should have UBI. I say, well, there’s something called work sharing that should be a very important part of this conversation, and it’s hardly discussed at all. I remember during the Great Recession, 2007-2009, when unemployment rose to 10 percent, many companies, many states had provisions that companies can go to a four-day or three-day work week, and the workers are getting paid for three or four days, and they’re getting unemployment insurance on top of that.
And I think a lot of workers who might someday lose their jobs to AI or robots, they don’t want to totally lose their jobs and sit at home and live on $1,000 a month of UBI. They want to continue working. So I argue that all this talk about what we should do for the workforce if all these jobs get wiped out, it should focus much more on work sharing. So maybe companies, instead of laying off 20 percent of their workers, have people work three days a week or four days a week, and that way people will still feel, and be, gainful members contributing to society.
That’s a great idea. So, what other ideas, where do you think things are going? If you had to be a predictor of, you know, these jobs will be gone, what are the jobs that will be created? Do you have any … When I ask that question of tech people that are so cavalier about this, they’re like, “Oh, I don’t know, it will be something.” And I’m like, “Okay.” That’s how they approached the Russians attacking Facebook. So that’s … I’m a little bit worried about that.
About the only jobs I’m sure we’ll increase are jobs caring for the elderly. I have a 93-year-old father-in-law, and the elderly population is going to increase.
Are we going to need more fast food workers? We’ll probably need more delivery people too, because we have more ordering online.
But that means less retail.
And that means less retail, yes, yes.
Which has really gotten decimated.
And you know, and I do think, ultimately, we as a society maybe could go from a 40-hour work week, although a lot of people work 60, 70 hours a week.
But really cut back the amount of hours we work to a four-day week or three days a week, and if things were run in a more sensible way that really served people rather than profit maximization, you know, people could have more time to relax, more time with their families, more time to go on vacation, more time to take care of their aging parents.
But you know, I think companies will say, it’s much more efficient to have our workers working six-and-a-half days, six days a week, than having all these workers working three days a week.
Is there any push to have that happen?
As I said, I’m just amazed that in the discussion about the future of work, with these new technologies, there’s not more discussion of work sharing. I’m the only one I hear saying that, and it just, it’s so obvious to me.
Right, it’s the first time I’ve heard it.
It’s so obvious to me. And like, yeah, it might be uncomfortable for companies, because if you have people working three days a week rather than five days a week, and you have to provide them with full benefits, that costs. But in theory, the companies will be making a lot more money thanks to all these wonderful new technologies, so they could share the benefits of these new technologies with workers.
One of the startling statistics one sees is that when unions are stronger — they’re strongest in the decades after World War II — basically, employee productivity per hour and employee compensation per hour essentially doubled, rose hand in hand, between 1946 and 1973. Since 1973, employee productivity has risen six times as fast as employee compensation.
And you know, one could have a big debate about why that’s happening, when it shows that there’s this disconnect, that there’s companies that had record profits, and while Wall Street has kept climbing, wages have really stagnated.
So, in that scenario, if that was what you’re going to be doing, work sharing, what else needs to be done? Education, obviously.
I think, you know, in my book I write about a fast food worker, a McDonald’s worker in Kansas City. He holds two full-time jobs. He leaves his house at 6 in the morning before his three daughters wake up. He works at one job, then he goes to his Pizza Hut job. He gets home at 12 or 1 am, you know, after his daughters go to sleep, and he leaves again and he doesn’t see them.
And this was a smart … Terence Watts is a very smart guy, and he says people tell him, you should go to college, you should go to college. And he says, I’d love to go to college. I can’t begin to afford to go to college. I have three daughters to raise. And thanks.
And I often tell people, yes, it would be great if everyone could go to college, but we’re still going to need bedpan emptiers, we’re still going to need hamburger flippers, maybe that will be robotized, or someone at the McDonald’s counter, and they shouldn’t starve because they haven’t gone to college. I think we need a good strong floor so that workers in the bottom jobs make a decent living, at least. And I argue with all these people who say they should all get college degrees and then they’ll do fine.
Then they can help themselves.
But a lot of people won’t get college degrees. A lot of people just aren’t equipped to get college degrees.
Right. Well, there’s a great Martin Luther King quote, you know, people say pull yourself up by your own bootstraps, forgetting that a lot of people don’t have shoes, don’t have boots to start with.
Right, exactly, yes.
So what would be the answer? I mean, a lot of Silicon Valley people are always pushing the idea of digital education and at home, and I’m like, “Do you know how tired they are? Like, can they do that?” And then, of course, you know, pummeled by so many other responsibilities, and opiates play a factor, all kinds of things, bad nutrition. It doesn’t even occur to them, the difficulties that these workers face.
So, you know, the fight for $15, it really got off the ground in 2011, 2012.
And Amazon did it first, yeah.
And it was really pushed by the service employees union, you know, which helped elect Obama. And here we are in late 2011, and all the talk is that it’s about austerity. You know, Pete Peterson, the billionaire, by himself, put this whole issue on the map. So we have talk about cutting Medicare, cutting Social Security, and this union says, you know, “What the F? We elected Obama to do progressive things. We haven’t recovered from the recession. The wages are going nowhere. We have to change the conversation. We have to lift wages for those at the bottom because so many are struggling.” So it created this fight for 15, it mobilized thousands, tens of thousands of fast food workers in hundreds of cities.
Its philosophy was that people who work hard should be able to support their families, and not everyone is going to go to college, and not everyone can go to college, so it said, let’s raise the floor from $7.25 an hour, the current federal minimum wage, which has been the minimum wage for the past 10 years and is worth almost 30 percent less than the minimum wage had been. And they said, “Let’s create a $15 floor, because then people can begin to make a decent living.”
And I think we’re a very Milton Friedman, libertarian, free-market nation, and just, you know, let things go wherever they go, and I argue that the floor for many workers is far too low. I argue with all these think tank people making $250,000, $500,000 a year, saying we can’t raise the minimum wage, it’s bad for workers. I want to tell them, “You try to live on $7.25 an hour.” Just the lack of sympathy and concern just really gets me.
Of worker participation. Oh, totally. I’m going to finish up. Two things, because I do focus on tech, what does tech do to help? And what are the things they’ve got to stop doing, that’s hurting? You can start with either.
Sure. I mean, tech can be a wonderful thing. It’s great for connecting people, it’s great for talking to your second cousin in Germany, and if your workers want to mobilize, you know, you could get in touch that way. But I certainly agree with the concerns that there’s too much invasion of privacy, there’s too much, you know, the tech companies don’t do enough to stop the spread of hate.
And for workers, especially in this immigrant …
So tech can be used as a good tool for education. I generally believe that in-class education is better than online education, but in-class education’s often expensive, and it’s, you know, you have to go when the class is held, whereas online education, you could do it on your time, very often. So I think that’s an important tool that can be used to help lift many people.
One of my big concerns about tech, and I think no one foresaw it, maybe no one foresaw this 10, 15 years ago, is it really has polarized our nation and the world in very disturbing ways. And there used to be the fairness doctrine in television that required the evening news to present a balanced approach, and that kind of helped build a consensus in the nation on many issues. And now we seem to be pulled apart by centrifugal forces and it’s hard to know what the truth is. I can’t stand it when people say news media and great honest journalists with huge integrity at the New York Times and the Washington Post are enemies of the people. So, the internet is too often used for hate and division, and I think we have to figure out a way to use it more to unify and create progress for everybody.
The commonalities, workers.
And the last question, one of the things that I’ve been on tech people for is this immigration issue from the beginning, when they didn’t bring it up in their first meeting with Trump I was sort of appalled. That was the one thing I thought these people … half of them in the room were immigrants themselves. That’s the big story of Silicon Valley, founded by immigrants. You know, you could name 10 CEOs, they’re all from another country.
Should they be more attuned to this issue, even if it’s not workers that help them, you know, these highest highly skilled workers? To me, they should be defending all immigrants no matter what.
I agree, comma, but … So, last week Trump spoke at a new Royal Dutch Shell plastics plant right outside Pittsburgh.
Yeah, I saw that. Pay them!
And the company kind of told its workers, you know, 5,000 workers, “If you want to be paid for today, you better show up.” So I think the corporation and the workers and the union, which agreed to this, they’re scared of Donald Trump, because he’s a very vindictive guy, and people worry, and Silicon Valley execs worry, if you get on this guy’s bad side, bad things are going to happen to you. We could see that happening with Jeff Bezos and Amazon. He’s really vindictive.
So I think the Silicon Valley executives, in their heart of hearts, they believe in the importance of immigration. They know that immigrants have done wonderful things for American society, but I think, in their concerns about profit maximization and shareholder value, they don’t want to get on Donald Trump’s bad side by saying, “Mr. Trump, you’re really being too harsh on immigrants. It’s outrageous that you’re separating children from their families. That’s not the American way.”
Yeah, the richest people in the world are victims, in case you’re interested. Whenever I talk to them they’re like, “Well …” I’m like, “You’re the richest people in the world.” You literally … Jeff Bezos is the richest person in the world by a factor of insanity. And to me, for them to troop up there and put their heads down, they’re not at risk. They’re not at risk.
I mean, we could, there’s lots of reasons to criticize Bezos for how he handles Amazon.
But I give him lots of credit for doing a wonderful job at the Washington Post.
Yes, agreed. Agreed.
And being willing to stand up to Donald Trump.
That’s what I’m saying. That’s what I’m saying. They can do it. I’m not … Jeff, of course, is doing that, I think, in a lot of ways, and he did do the $15 minimum wage. I think it was to stave off a lot of things, but I don’t care. He did it.
But I do think a lot of them could … To me, the most powerful people in the world acting like they’re not is just exhausting on so many levels.
And anyways, Steve, this is a really important book. It’s very important to think about these issues, because I think American labor, the way we’re going to work is going to be the most, I think, the most important issue going forward.
This is Steven Greenhouse. He’s with the New York Times. His new book is called Beaten Down, Worked Up: The Past, Present, and Future of American Labor. Thank you, Steve, for coming on the show.
Great to be here.
Author: Eric Johnson