Stern's call for collaboration with the bosses

Book review of Andy Stern's
"A Country That Works:
Getting America Back on Track"

by Pete Brown

(CV #39, January 2007)


"The market's unhinged"
A bureaucrat's bio
Playing the political field
An enlightened capitalism?

. Andy Stern is the president of SEIU, one of the largest unions in America, and one of the main leaders of the Change To Win labor federation, which was formed a couple years ago by unions that defected from the AFL-CIO. Stern's new book gives his political perspective and explains why he split from the AFL-CIO.

. Stern's perspective can be roughly grasped from the title and subtitles of his book. A Country That Works is a play on words, meaning both "an efficient country, a country that functions" and "a country in which labor plays an important role and is properly rewarded." Stern approaches everything from a patriotic American standpoint, but his perspective is that America would be better off -- meaning richer, more powerful, etc. -- if the work of the average American (for example, members of SEIU) were more richly rewarded. To this end Stern proposes a set of reforms which boil down to taxing the rich, which Stern calls "getting them to pay their fair share", and increasing government spending for programs that benefit the working masses and help them advance their social status (education, health care, internet subsidies, etc.). This is what Stern means by "getting America back on track." To help argue for these reforms Stern has some exposure of present economic conditions. These conditions are summed up in a second subtitle: "Something's wrong with a country that helps the rich get richer while most Americans get the squeeze."

. Stern is correct that "something is wrong." And his exposure material is accurate as far as it goes. The book's main defect is Stern's method of solving problems. This is based on a superficial, patriotic analysis of American society, coupled with a desire to find "workable," "realistic" solutions to problems -- meaning solutions acceptable to corporate America. Stern sees some of the symptoms of capitalism but doesn't grasp that capitalist profit-making is the main, underlying problem. So he proposes a series of quick fixes he thinks corporate leaders will be happy to endorse. Assuming they're nice, friendly, patriotic Americans just like Stern, why wouldn't they want what's best for America? In reality, of course, the corporate leaders won't agree even to cheap reforms without pressure from a mass movement. But instead of doing the hard work of building a new, independent movement of the working class, Stern thinks he can get his reforms implemented by appealing to the capitalists' "good sense."

. If Stern were some bourgeois do-gooder, there wouldn't be much harm in this. If he could get the leaders of Wal-Mart, etc. to agree to some reforms that benefited workers, that would be fine. And to the extent that he failed, nothing would be lost -- no harm done. The trouble is, being in a position of influence in the labor movement, Stern's viewpoint influences millions of workers in a very reformist, patriotic direction. Stern specifically wants to steer workers away from more radical politics and working to build an independent political movement based on class struggle.

"The market's unhinged"

. The first section of Stern's book describes the present situation. Chapter One, "A Country That Doesn't Work", exposes current economic conditions. In this chapter Stern talks about the stagnation of workers' wages, lack of health insurance, etc. Despite the growing American economy, workers are not participating in the growing wealth. Stern sums up the situation in the phrase, "The market has come unhinged." This expresses his belief that the free market is not working the way it should. It doesn't properly reward work. Further on Stern will propose a set of government reforms to regulate and guide the market.

. Actually there is much dissatisfaction and unease among workers today because of the way they're getting screwed by the market. This is shown by the agitation at Delphi and the extensive organizing campaigns among some sections of the work force, especially the lowest paid. But Stern doesn't discuss the question of how to channel this dissatisfaction into a rousing mass movement.

. In Chapter Two, "Globalization Is For Real," Stern describes his trips to China. These trips had a big influence on Stern in opposing the narrow nationalism of other AFL-CIO leaders. Impressed by China's rapid economic growth and the potential of a Chinese workers' movement, Stern argues that China cannot be ignored. Stern tries to show in this chapter that he is a hip, post-90s modernist who understands the importance of world trade. He doesn't go into the specifics of arguments within AFL-CIO circles, but it's clear he wouldn't be sympathetic to calls to cut off trade with China.

A bureaucrat's bio

. The next few chapters give Stern's personal life story. The basic argument is that Stern's experience provided him with the viewpoint and knowledge to offer up the reforms necessary to "get America working."

. Stern graduated from college with a degree in social work. Hired as a state social worker in the 1970s, Stern began attending meetings of the recognized union, SEIU, and soon became a steward and union activist. Working his way up through the bureaucracy, in the 1980s he was appointed organizing director for national SEIU by its president, John Sweeney. With Sweeney's support Stern carried out successful organizing campaigns, the best known being the ongoing Justice for Janitors. When Sweeney left SEIU to become president of the AFL-CIO in the 1990s, Stern ran for and was elected SEIU president.

. During the late 70s, as an up-and-coming labor bureaucrat, Stern served on various labor-management committees. He doesn't provide any details about this service, which is too bad, because this is clearly where his basic viewpoint was formed. In the late 70s, during the Carter administration, the capitalists began preparing their re-industrialization onslaught against the working class which eventually meant massive plant closings, layoffs, and demands for wage cuts and other concessions. Together with the Democrats in Congress, Carter prepared the working class for the chopping block by proposing legislation that would authorize government-imposed wage controls and mandatory arbitration in wage disputes. Militants of the time fought against these attempts on the part of the capitalists to bring the workers' movement under control. But the AFL-CIO bureaucracy supported legislation such as the Humphrey-Hawkins bill which had that goal. And they supported the establishment of labor-management committees in various localities, regions and industries to promote collaboration between trade union organizations and the capitalists. This is where Stern gained his basic training in class collaboration.

. The way Stern poses things, he developed a new, modern mentality opposed to the old ways of doing things in the AFL-CIO. He specifically criticizes the idea of class struggle, saying "class struggle mentality was a vestige of an earlier, rough-and-tumble era of industrial unions . . . " (pp. 70-71). When he became the leader of SEIU, Stern proudly pioneered new methods of class collaboration with employers. For example he set up methods of resolving grievances by arranging B.S. meetings between union reps and supervisors at Kaiser health plan. When observing such meetings later and hearing how the union reps talked, Stern brags that "As hard as I tried, I could not distinguish the union representatives from the management representatives" (p. 70). But what Stern sees as a great achievement -- getting union reps to talk just like supervisors -- is no doubt regarded as a grave setback by the average Kaiser health plan employee.

. Stern counterposes a commitment to organizing -- building the membership base of unions -- to class struggle, negating the fact that the union movement had made tremendous gains in membership precisely when many union organizers had a strong commitment to class struggle tactics, such as in the latter 1930s. Stern says his focus on organizing led him to split from the AFL-CIO, thereby creating the impression that the AFL-CIO is too much committed to class struggle. This is laughable. Stern himself learned his anti-class struggle tactics in the ranks of the AFL-CIO. His organizing drives rely heavily on "corporate campaign" tactics, to embarrass stockholders and members of the board of corporations rather than trying to really pressure them economically. And Stern learned these tactics as an AFL-CIO organizer.

. Stern goes into the AFL-CIO split in Chapter 5, "Taking It To the Next Level." Stern had overseen rapid growth of SEIU and didn't sympathize with other unions that were shrinking. In this respect he has some sharp critical comments about the labor federation, as:

"It [the AFL-CIO] became increasingly irrelevant to its remaining members, and the signs became obvious that a shrinking movement had become less relevant to the economy and the changes confronting the workforce at the exact time when the disparity of wealth, the decline in health care coverage and retirement security, and stagnant wages demanded labor's relevance even more" (p. 79).

Stern had ideas for carrying on organizing campaigns and thought the AFL-CIO as a whole could support them if it streamlined its organization and devoted more resources to organizing; he also wanted a more centralized hierarchy, which would increase the power of the higher-up union bureaucrats like himself. When these proposals were rejected, he split.

. Stern did oversee rapid growth in the size of SEIU. Stern trades on this experience as his main credential in putting forward a program of reform, that he knows how to get things done. And it's true that SEIU has been growing while other unions like UAW were shrinking. But partly this was just a matter of being in the right place at the right time -- SEIU's membership base was in the service industries that were rapidly growing, while manufacturing was shrinking. Stern self-promotes his and SEIU's organizing strategies, but sometimes these were just commonsense ideas, like hiring Spanish-speaking organizers to deal with the large and growing number of Hispanic workers. A large part of SEIU's growth was also due to merger and consolidation, most importantly with 1199, the East Coast hospital workers' union. This was a good idea, but it didn't involve any increase in union membership. Some of SEIU's growth was due to raiding or at least organizing in disputed territory, as for example against AFSCME and the California Nurses Federation. And some of Stern's successes in organizing new employers was due to simple horse-trading, agreeing to support corporate political/legislative goals in exchange for employers' recognition of SEIU as their bargaining agent.

Playing the political field

. Stern also criticizes the AFL-CIO's political attachment to the Democratic Party and their beleaguered hope that success could only come by

"electing friendly politicians who would in turn improve labor laws. . . . It was the old chicken-and-egg question: change the political process before you could grow stronger or grow stronger to change the political process. Unions had been waiting for a long time for Democrats to rescue us. Despite four Democratic presidents since the AFL-CIO's inception, and decades of a Democratic-controlled Congress, the union movement had steadily lost members. Hitching our fate to politics and Democratic politicians had proved to be a losing strategy for American workers". (p. 93)

. Here and later Stern has some sharp criticisms of the Democrats. At political conventions and other meetings Stern has seen close-up the class nature of Democratic Party leaders, how they hobnob with the biggest bourgeoisie and pay no attention to workers' demands. He goes beyond Thomas Frank (author of What's the Matter With Kansas?), who criticizes the Democrats for allowing themselves to be perceived as elitist but still upholds the Democrats as the party of the masses. Stern says it isn't just a matter of perception; they are elitist.

. Stern wants labor unions to be independent of the Democrats. But this isn't a call to build an independent movement to the left of the Democrats. Far from it; Stern's idea of "independence" is being in between the Democrats and Republicans, playing the bourgeois electoral game for who can make the best offer. And once having made an electoral commitment, Stern doesn't hold back from supporting his favorite bourgeois politician. He brags that SEIU spent $65 million during the last presidential campaign supporting John Kerry, and that SEIU members did much of the phone-bank work, etc. trying to turn out a pro-Kerry vote. This is after Stern had criticized the elitism of the Kerry Democrats.

An enlightened capitalism?

. In the last couple chapters Stern gives his ideas for reform. Chapter 8, "Don't Let Them Fool You," concentrates on ideology, on Stern's general arguments for why reform is possible and necessary. Then Chapter 9 gives his political prescriptions.

. In Chapter 8 Stern disproves a number of misleading arguments or "diversions". Much of this is just a plea for better government statistics to highlight the plight of the average worker. For example Stern criticizes the "average wage diversion", that statistics about "the average wage" divert attention away from the stagnant wages most workers receive by making it look like wages are actually increasing. This is because the "wages" of stockbrokers, CEOs and other corporate executives are lumped in with the wages of factory workers and janitors. Discussion of the "growing economy diversion" criticizes economic statistics about growth in GDP which make it sound like the economy is getting better for everyone when in fact growth in GDP is occurring simultaneously with growth in poverty and inequality. Stern also criticizes the "market diversion", the idea that the free market if left to itself will eventually solve the problem of unequal distribution. In fact, he recognizes, free markets make it worse.

. Chapter 9, "A Plan for a Country That Works," contains Stern's plan for controlling and regulating the market so it will better reward workers. First, on payroll and income taxes: Stern advocates getting the rich to pay more in taxes and using that to exempt workers who make less than $50,000 a year -- or, if more tax income is generated, exempt those who make less than $100,000. Stern is somewhat loose about exact numbers, but the main idea is clear: tax the rich more, tax the workers and poor less.

. Stern's major reform call is for a new national health care insurance system. His focus is on universal access -- a plan that covers everyone. As specific plans, Stern suggests something like the federal employees' health plan, which makes a variety of private insurance plans available to federal workers. Or another alternative he throws out is extending Medicare to everyone. This would be more like a single-payer plan that would leave out the private insurance firms. But again another alternative is the Massachusetts state plan, which mandates private insurance coverage for everyone. This would be great for the insurance companies, as it would force people to buy minimal coverage at inflated prices, and it would channel state subsidies to the insurance companies. But it would shove the real problem of health coverage under the rug and let it grow worse. In his book Stern doesn't argue for one choice over another, insisting only that the discussion and decisions should begin right away on getting universal coverage.

. Demanding universal coverage is a good idea, but we should also have a clearer idea of what type of plan to advocate, or we might end up getting in a bigger mess than at present. The private insurance industry is driving up costs at an alarming rate, and Stern himself says their administrative costs average 9. 5% while Medicare's administrative costs are under 3%. So it would make sense to advocate a single-payer extension of Medicare. But according to news reports Stern is actually advocating the fraudulent market solution that mandates private-insurance coverage for everyone. Stern has formed a lobbying coalition with some big corporations including Wal-Mart to press for such a program. Apparently this is a result of Stern's class-collaborationist attitude toward private insurers, some of whom have labor contracts with SEIU. So he isn't really as open-minded about alternative plans as he makes out in the book. This is controversial even within SEIU, as some locals advocate a single-payer plan and don't appreciate Stern campaigning for a mandated private-insurance plan.

. Stern is pretty open-ended when it comes to the question of financing a new health insurance system, his only statement being that the system should "allow employers, individuals, and government to share in financing." That's awfully nice of Stern to allow individual workers to share in paying for the system, but workers might prefer a plan like John Conyers' single-payer plan, which would be financed by a 3% tax on employers.

. Stern's other major reform call is for a new retirement system. Again he targets an enormous and growing problem, but his solutions are vague. Stern tries to weave a middle ground between the Democrats' supposed defense of Social Security as it exists and Bush's call for individual retirement accounts. Then he gets into his bureaucratic mode trying to lay down all kinds of rules that individual retirement accounts would have to obey. It never occurs to him that workers and their unions should formulate demands to preserve and strengthen Social Security, nor does he formulate demands that workers should make against their employers for guaranteeing company pensions.

. Stern has a number of other reforms in mind, but in general these all depend on the government generating enough income from taxes to pay for them, and Stern concludes his book with suggestions about new taxes. For one thing, he wants to see taxes on corporations increased. Again he has some good statistics to back up this demand: corporate tax revenues as a share of the federal budget have shrunk from 28% in the 1950s to 21% in the 1960s to 10% in the 1980s to 2% in 2005! Yet in 2005 corporate profits were the highest, as a percentage of GDP, in many decades. Clearly the capitalists are getting away with murder when it comes to avoiding paying for their government. Similarly, Stern calls for higher income taxes on wealthy individuals. But he doesn't envision any struggle, relying instead on collaborationist deals.

. Stern is just brimming with new ideas, many of which are quite possible to implement and some of which are quite necessary for economic growth. But who will pay for them? Will the capitalists agree to pay all these new taxes on their corporate profits and individual incomes? Unlikely; they're more likely to demand new taxes on workers to pay for any new government programs. Stern thinks his enthusiasm for reform will overcome any class differences, the rich happily jumping on board as soon as they realize how patriotic and enlightened his program is. But a scheme of giant class collaboration such as this is unlikely to produce much that is good for the workers. The mandated private-insurance health care plan he advocates would be inefficient and cumbersome, and since Stern is determined to get something the capitalists can sign on to, would probably be financed mostly by the workers themselves. It's not a bad idea to contemplate reforms, but workers' present misery and uneasiness needs to be channeled into a movement, not frittered away on hopes for collaboration with their exploiters. The rise of the workers' own independent movement is the only way that the workers can fight for effective reforms, and it also opens the doors to a large-scale revolutionary movement. <>

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February 25, 2007.