The Limbo of Labor

U.S. workers are doing better today than they were in 1990. But they can only envy the lives led by their counterparts in the 1960s.

In the Washington Post, columnist Robert J. Samuelson divides the past century of labor into three phases. He writes that during the first, which lasted until the 1930s, “there was no federal unemployment insurance or union protection. Workers were fired if they offended bosses or the economy slumped; they quit if they thought they could do better. Turnover was high.”  During the second, following World War II, “health insurance, pensions and job protections proliferated. Factory workers laid off during recessions could expect to be recalled when the economy recovered.”

Today, notes Samuelson, we have a mix. “The private safety net is shredding, though the public safety net (unemployment insurance, Social Security, anti-poverty programs, anti-discrimination laws) remains,” he writes. “Workers do best when strong growth and tight markets raise real wages. On Labor Day 2013, this prospect is nowhere in sight.”

Samuelson’s three phases track closely those laid out by Peter Drucker in Managing in a Time of Great Change. Drucker noted: “The workers of 1900—and even of 1913—had no pension; no paid vacation; no overtime pay; no extra pay for Sunday or night work; no health insurance (except in Germany); no unemployment compensation; no job security whatever.”

By the 1950s, he wrote, they had achieved “extensive job security; pensions; long, paid vacations; comprehensive unemployment insurance or ‘lifetime employment.’ Above all, they had achieved political power.” But by the 1990s, “both the blue-collar worker and his union were in total and irreversible retreat.”

Today, the service sector is fast replacing manufacturing, which is worsening the plight of unskilled laborers. “The escape hatch—the productive and therefore well-paid jobs for poorly educated and poorly skilled people in making and moving things—is closing rapidly,” he noted in Managing for the Future.

This didn’t mean nothing could be done. The key to providing dignity and rising wages was for managers to learn how to make service workers more productive, just as they had learned to do for manufacturing workers. “The task is known and doable, but the urgency is great,” Drucker wrote. “To raise the productivity of service work cannot be done by governmental action or by politics altogether. … It is, in fact, the first social responsibility of management in the knowledge society.”

What do you think would get us closer to “strong growth and tight markets” for today’s laborers?