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Raising the Floor
How a Universal Basic Income Can Renew Our Economy and Rebuild the American Dream
By Andy Stern
With Lee Kravitz
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In 2010, troubled by watching families chase the now-elusive American Dream, Andy Stern began a five-year journey to investigate how technology will impact jobs and the future of work. Stern, formerly the head of the nation’s most influential and fastest-growing union, the Service Employees International Union, investigated these issues with a wide range of CEOs, futurists, economists, workers, entrepreneurs, and investment bankers who are shaping the future.
The sobering assessment that emerged from his research-across the political spectrum, from libertarians at the CATO Institute to the leaders of the progressive left-is that this time is different: there will be meager benefits that come with full-time work and fewer good jobs overall. Facing such a challenging moment, Stern’s solution is fittingly bold: to establish a universal basic income by eliminating many current government programs and adding new resources. At once vivid, provocative, and pragmatic, Raising the Floor will spark a national conversation about creating the new American Dream.
IN 2010, I seemed to be at the top of my game: leader of the country’s largest and most influential union, a central player in the most significant piece of social legislation since the establishment of Medicare, and appointed by President Barack Obama to sit on the bipartisan Simpson-Bowles Commission to propose an answer to the country’s long-term deficit problems. Despite this, I stepped down that year as president of the Service Employees International Union (SEIU).
From the mainstream Washington Post to the conservative Wall Street Journal, the media speculated as to why I had decided to leave SEIU at the height of my power and influence. RedState, a conservative journal, claimed that I was resigning because I was bored with having to spend time on the day-to-day contract battles that are a union’s bread and butter. “You’d probably be bored, too, if you had taken a relatively obscure union of janitors and doormen and turned it into the largest and most powerful private-sector union in America . . . put a president of the United States into the Oval Office . . . and fulfilled one of the union movement’s main objectives: nationalized healthcare.” It suggested that I was itching to conquer new frontiers: “Does hanging out with a bunch of janitors and nurses’ aides and arguing with their employers sound like a challenge any more?”
RedState couldn’t have been more wrong. Those janitors and window cleaners, those doormen and security guards, and those nurses’ aides and home- and child-care workers were the people I care about most: nothing motivates them more than the American Dream—the promise, to anyone who works hard and plays by the rules, of a good and secure livelihood and a better future for their children. When I was elected president of SEIU in 1996, that sacred American Dream still seemed possible for the people I was privileged to serve; by 2010, it had been replaced by paralyzing anxiety.
My goal at SEIU had been to build a union that could win victories for workers in the twenty-first-century global economy. Unions as a whole moved glacially. They looked backward instead of forward for solutions, and they seldom took risks. I sought to make my own and other unions more relevant in an era of declining membership and laws that had made it harder for unions to organize. In order to do that, I rocked the boat and pursued new ways to organize workers and make their influence felt in the halls of Congress, where the laws restricting unions were made.
I didn’t resign from SEIU because I was bored. Rather, after nearly fifteen years at the helm of SEIU, I had lost my ability to predict labor’s future. To be an effective leader, you need to be able to look twenty, thirty, even forty years down the road. That way, you can envision the future you want to create and plan back from it, instead of simply reacting to events as they occur. John L. Lewis, president of the United Mine Workers, had been able to do that in the 1930s. Walter Reuther, head of the United Auto Workers, could do that in the 1950s and 1960s. And I could do that in the 1990s and early 2000s. But, by 2010, the economy was changing and fragmenting at such warp speed that I couldn’t see where it—or labor—was headed. Without a clearer vision of the future—of the world in 2025 or 2040—I couldn’t develop the inner compass needed by a leader who seeks to bring about major social change, and I was out of good ideas.
So I stepped away from SEIU and, aside from my work with Simpson-Bowles, I spent the next year healing, recharging, and thinking about new ways I might help the people I cared about. At the end of that year I embarked on what became a four-year journey to discover the future of jobs, work, and the American Dream. My journey coincided with significant economic trends—a jobless recovery and the concentration of more and more wealth in the hands of fewer and fewer people. It took place during an era of political gridlock that devastated the middle class and threatened the economy as a whole. Wages were stagnant. People had to work two or three jobs to stay afloat. Students were coming out of college thousands of dollars in debt and with no substantial job prospects. For them, the idea of owning their own home and creating a better future for their children had become the American Pipe Dream.
Early on, I saw that unions would play only a limited role in shaping the twenty-first-century economy. Not only because unions are typically slow to adapt, but also because the economy is being transformed by new technologies that will automate more tasks and require fewer full-time jobs and marginalize the role of collective bargaining, leaving a dearth of dues-paying union members. Already, the new landscape of work is populated by free agents and temporary workers who have more freedom and flexibility in their work life, but no job security and significantly less leverage with the people and companies who hire them.
My focus turned to larger questions: If there are significantly fewer jobs and less work available in the future, how will people make a living, spend their time, and find purpose in their lives? Also, how can we keep the income gap from growing so wide that it erupts into social discord and upheaval?
I began looking for an idea that could unite all Americans and call us to a higher national purpose. The old American Dream—the one that had spoken so deeply to my parents’ generation, and my own—had been discredited by current events and decades of stagnating wages. We needed a new American Dream—one that offers a vision of the life we can genuinely aspire to, strive for, and pass on as a birthright and inspiration to our children and future generations of Americans.
And if I came upon that unifying idea, my question to myself and others would be, “How can we organize our economy and social institutions so that this new American Dream becomes achievable for everyone?”
Along the way, I came across a potential answer to these questions. I’ll detail what a universal basic income (UBI) is later in this book. For now, imagine a check coming in the mail each month to every single American, whether they work or not, with sufficient money to eradicate poverty and give all Americans the opportunity to achieve their dreams.
But I’m getting ahead of myself again. To appreciate why a UBI may be the most practical solution to our economic problems, and one that most if not all of our country’s political parties can potentially embrace, it will be helpful to know about the perspective I gained while attempting to create major social change during labor’s most turbulent and transitional years.
SEVERAL YEARS AGO, in an interview with Washington Post reporter Ezra Klein, I called the labor movement “the greatest middle-class, job-creating mechanism that we have ever had in America that doesn’t cost taxpayers a dime.”
Here’s what I meant:
There was nothing inherently valuable about taking a pickax, putting a light on your head, traveling down the depths of a coal shaft, and banging that ax against a wall to extract coal. And yet, in West Virginia, coal mining built a middle class. Not because the coal miners had unique skills or went to college, but because they belonged to a union. That was true in America’s steel mills and on its assembly lines, on its railroads and on its loading docks. In the industries that made our economy the envy of the world, private-sector unions turned crappy jobs into ones that promised good pay, generous benefits, and enough job security to give working families the stable middle-class existence at the heart of the American Dream.
Union members weren’t the only workers who benefited. Today, people hardly take notice when a Fortune 100 company like Ford or General Motors negotiates a contract. But in the 1950s and 1960s, labor negotiations were front-page news. If Ford’s autoworkers got a three-percent raise, it set a standard for workers throughout the country that made it much more likely they’d receive an equivalent raise, even if they worked in a grocery store, gas station, or bank.
At the same time, unions exerted considerable political clout and helped to lessen inequality by pushing for a minimum wage, job-based health benefits, Social Security, high marginal tax rates, and other economic policies that ensured that America’s prosperity would be shared.
In 1950, the year I was born, nearly 35 percent of the nation’s workers were unionized. By 1972, when I graduated college, that number had fallen to 27 percent, but unions still represented a solid percentage of the nation’s workers. Today, less than 12 percent of the nation’s workers are unionized, including only 6.6 percent of the private-sector workforce.
My first job after college was as a caseworker for the Pennsylvania Department of Welfare. The social-service workers in our department had voted to become part of SEIU, and they had won the right to collective bargaining. One day, shortly after being hired, I saw a notice on the bulletin board announcing a membership meeting at SEIU Local 668’s office. I went for the free pizza, but stayed because I was fascinated with the work the labor representatives did, and how committed they were to changing lives.
In 1977, I ran for president of Local 668. The woman who would later become my wife ran for secretary-treasurer—on the opposing slate. I was lucky enough to win. And, at twenty-six, I became the youngest president of my local and, I believe, of any major local in SEIU history. I spent the next thirty-three years organizing workers, negotiating contracts, and helping SEIU grow from 400,000 to 2.2 million members during a period when union membership nationally fell from 23 percent to less than 12 percent of the nation’s workers.
What had happened to diminish labor’s overall numbers and power?
In 1981, when three thousand members of the air traffic controllers union went out on strike, President Ronald Reagan dismissed them from their jobs, ushering in an era of anti-union activities by corporations that poured millions of dollars into union-busting practices while lobbying Congress to get rid of or weaken unions so they could reduce labor costs. As corporations stiffened their resolve, unions became more hesitant to strike. In 1970, two years before I joined SEIU, there were 371 strikes in the United States; in 2010, the year I retired from SEIU, there were only eleven.
The decline in manufacturing jobs, coupled with the emergence of globalized supply chains across every industry sector, contributed further to the downward trend in union membership. Heavy industries such as steel and auto had been labor’s sweet spot since the 1930s, but now they represented a much smaller part of the US economy. And globalized supply chains meant that multinational corporations could search for the lowest-cost suppliers and outsource formerly American jobs to China, India, and other developing nations.
As illustrated in the chart below, the decades-long decline in union membership has followed the same trajectory as the decline in the middle-class share of the nation’s aggregate income. In other words, as union membership has declined, income inequality has gotten worse.
In a speech he gave at the Greater Omaha Chamber of Commerce Conference in 2007, Ben Bernanke, the chairman of the Federal Reserve, attributed 10 to 20 percent of the rise in income inequality to the decline in unionization. In an econometric study of data from advanced economies during the years 1980 to 2010, the International Monetary Fund came to a similar conclusion: “On average, the decline in unionization explains about half of the five percentage point rise in the top 10 percent income share. Why? Because as unions weaken, workers have less influence on the size and structure of top executive compensations.”
In 1965, CEOs earned twenty times as much as the average worker; today, they earn nearly three hundred times as much.
Historically, SEIU members made more than their nonunion counterparts, even for the same jobs in the same city. The union’s strength made sure that our members working as janitors and nursing aides shared in their company’s success—and that the executives and shareholders of their companies didn’t get an even more outsized portion. And yet society-at-large seemed unaware of unions’ role in leveling the playing field and keeping executive pay from going through the stratosphere. People who grew up during the Reagan years could be downright hostile to unions. As older workers retired with union-negotiated benefits, the younger workers who replaced them didn’t understand or appreciate the history and purpose of unions; hence, there was less empathy and public support for our accomplishments.
In my twelve years as SEIU’s organizing director, we became the nation’s fastest-growing union; by the time I was elected president in 1996, we had 1.4 million members. During my acceptance speech that year at our convention in Chicago, I told the fifteen hundred delegates why I wanted to make SEIU even stronger: “I refuse to accept that our children will be the first generation in history to do worse than their parents. I want my kids to grow up and leave home able to support themselves—without having to work three jobs. I don’t want them to be afraid to get sick because they don’t have health insurance. Or to grow old because they don’t have retirement security.” Then I turned to my two children and said: “Matt and Cassie, I love you. For you—and for the sons, daughters, nieces, and nephews of everyone in this hall—this union is going to fight like hell.”
I said these words with fierce optimism and hope. As the new century neared, SEIU was facing life-and-death challenges from the powerful forces arrayed against labor as a whole, including employers who were no longer local but regional, national, and even global in scope. “With every passing day, giant corporations—Kaiser, Hospital Corporation of America, ServiceMaster, and ABM—are growing bigger, more powerful, and more greedy,” I told the crowd. “And unless we make the tough decisions to become smarter and stronger, they will eat us up and spit us out before we even know what’s hit us.”
By the time we gathered for our 2000 convention in Pittsburgh, SEIU had added more than 300,000 new members, including 74,000 home care workers in Los Angeles and 10,000 school workers in Puerto Rico. We had become the largest labor union in the AFL-CIO—larger than the Teamsters, the Steelworkers, the American Federation of Teachers, the United Auto Workers, and the American Federation of State, County and Municipal Employees.
We couldn’t have chosen a more historic town to celebrate that achievement. It was here, in 1935, that United Mine Workers president John L. Lewis called for semiskilled workers in the automobile, rubber, glass, and steel industries to organize and join the Congress of Industrial Organizations (CIO). At the time, the American Federation of Labor (AFL) consisted mainly of small, craft-based unions that ignored and even looked down upon industrial workers. Lewis understood that the future of the labor movement lay in organizing these semiskilled industrial workers. Twenty years later, in 1955, the CIO would merge with the AFL, and together for the next two decades they would help raise the living standards of millions of American families and pave the way for blacks and women to enter the economy and middle class.
I asked the delegates in Pittsburgh to join me in writing the next great chapter in labor’s history. The manufacturing economy of Lewis’s time had given way to the service economy of our own. Instead of adhering to the outmoded practice of negotiating labor contracts one facility, one city, and one employer at a time, I urged them to work towards negotiating regional and national industry-wide contracts. I underscored our other historic goal—to gain the political power we’d need to elect a president of the United States who’d be pro-labor and work for significant healthcare and labor law reform.
By organizing entire industries—for instance, building services, healthcare, and child care workers—we could win fights that no local could ever win alone. And that was especially crucial in the emerging global economy. In New York City and elsewhere in the US, our janitors and security officers worked in buildings owned by global financial interests and foreign pension funds. The two largest security companies in North America—Securitas and Group 4—were based in Sweden and the UK. Two of the three largest school bus companies in North America were based in Great Britain. And the services industry worldwide was increasingly dominated by three multi-service outsourcing companies: Sodexho, based in France, operated in seventy-six countries; Compass, based in Great Britain, operated in ninety countries; and Aramark, based in the United States, operated in nineteen countries around the world.
“Today’s global corporations have no permanent home, recognize no national borders, salute no flag but their own corporate logo, and take their money to anywhere where they can make the most—and pay the least,” I said at our 2004 convention in San Francisco. “When you look at it and all the historic challenges before us, I’m sure some of you [will] join me in wishing we could go back—back to the days when unity in your local union was enough to win better contracts with a local employer, or when a single local union could elect the politicians that affected their jobs. Back to a slower time without global communications when our bosses were down the street and not in London or Paris, and when jobs in public service and healthcare were secure and not targeted for outsourcing and benefit cutting. But we all know that world is gone—it’s gone forever—and any organization that fails to adapt will be gone forever as well.”
As a loose trade association of sixty-five separate and autonomous unions, the AFL-CIO didn’t have the organizational strength and unity to lead labor into this globalized future. For example, there were fourteen different unions trying to organize healthcare workers, and unions in disparate industries that dealt with the same employer didn’t coordinate or cooperate, which undermined their efforts to win better contracts for their members. At my urging, SEIU and four other unions called on the AFL-CIO to consolidate the smaller unions into twenty larger ones that were each devoted to a single sector of the economy. “Can This Man Save Labor?” That was the question BusinessWeek asked on its September 13, 2004 cover, next to a photo of me. “Service Employees President Andy Stern has radical plans to remake the US labor movement,” it said. “Will other union leaders go along?”
Five months later, the AFL-CIO rejected our plan. Along with six other unions, SEIU left to form our own federation, which we called “Change to Win.” Our goals included much of what we had been trying to do at SEIU: consolidate smaller unions into a few large ones, encourage unions to organize on an industry-wide basis, put our members’ interests, not parties or politicians, as the core of our political activities, and put the emphasis on organizing new members because there is power in numbers. We achieved many of our objectives, but ultimately we could not find the political will or shared strategy to execute some of our key principles. By 2014, only three of the founding unions remained in the federation.
WE HAD CONSIDERABLY more success achieving our goals in the political arena. SEIU supported Barack Obama in 1996 when he was a candidate for the Illinois State Senate, and in 2002 when he ran for the US Senate. In 2006, when he was considering running for the presidency, he asked if we’d consider supporting him again. “It depends,” I told him. “Any candidate seeking our support needs to produce a universal healthcare plan and a way to pay for it. They also need to spend an entire day walking in the shoes of one of our members so that they can better understand the challenges facing workers and working families.”
On August 9, 2007, Obama worked alongside SEIU home care worker Pauline Beck as she took care of eighty-six-year-old John Thornton, a former cement mason who lived in Alameda County, California. Obama prepared breakfast for Mr. Thornton, then mopped the floor, did the dishes and laundry, and made his bed. Mr. Thornton was an amputee, and throughout the day the senator helped him get into and out of his wheelchair. At the end of her workday, Pauline went home to take care of a grandnephew and two foster children who didn’t have families of their own. Obama said that she helped him to realize the importance of paid sick leave for the entire workforce. “Heroic work, and hard work. That’s what Pauline is all about,” he would say four years later at the White House, with Pauline standing at his side as he announced his support for a law to extend overtime pay protections and a guaranteed minimum wage to the nation’s home care workers.
SEIU became the first major union to endorse Obama in 2008. Our political action committee spent $71 million to elect him president, and we deployed an “army” of 100,000 SEIU volunteers to knock on doors and make phone calls on his behalf.
Between January and July of 2009, the logs of the Obama Administration show that I visited the White House twenty-two times, the most of any person who didn’t work on the White House staff. I was there to help the Administration devise a strategy for healthcare reform, SEIU’s key issue. For me, the battle was personal. My daughter Cassie had died eight years earlier after complications from spinal surgery. She was thirteen years old. If we had had a better healthcare system, “Cassie might still be here with me,” I told friends. In my most despairing moments, I imagined her standing by my side, with a sign that said “Healthcare for All.”
In September of 2009, we set up a “war room” in Washington to push for the president’s legislation as it worked its way through Congress. SEIU locals across the nation pushed hard for healthcare reform. On March 23, 2010, following the historic bill signing, the president came over and hugged me and said: “Without SEIU members and your stories and your lobbying and your demonstrations, this would not have happened.”
BECAUSE OF SEIU’S successes and my role in creating the Change to Win Federation, I had become an increasingly polarizing figure within the labor movement. The leaders of other labor unions didn’t like that SEIU was bucking the tide and growing so fast or that I had more access to President Obama than they did. I also faced a revolt within my own union from leaders who wanted to hold on to their independence and traditions despite evidence that workers who worked for the same employer or in the same industry were stronger together.
Our best shot at strengthening labor nationally was the Employee Free Choice Act, which would have made it easier for workers to join and organize unions by eliminating the waiting period and secret ballot (which favored management) and allowing workers to organize a union simply through a majority sign-up. After working so hard to get President Obama elected, I was disappointed that he didn’t fight harder for the Employee Free Choice Act. (Healthcare reform was clearly a higher priority for him.) In an ideologically divided Congress, the bill was doomed without his vocal support.
I had watched too many labor leaders stay far too long. When I announced my resignation as president two years before the end of my term, I said on video to SEIU’s 2.2 million members: “There’s a time to learn, a time to lead, and then there’s a time to leave. And shortly, it will be time to retire . . . and to end my SEIU journey.” I was fifty-nine years old—and tired. I kept thinking about my father. When he was sixty-four, he learned he had cancer; four years later he was dead. His death still weighed on me. So did the realization that I hadn’t fully mourned the losses of my daughter and marriage. Instead, I had thrown myself into my work—into fighting to win for workers. I needed to stop running—to take stock of my life, and do the even harder work of healing. I was burnt out and, as I noted earlier, I had run out of new ideas, I had lost my feel for the future.
President Obama had just appointed me to the National Commission on Fiscal Responsibility and Reform, which would become better known in the media as Simpson-Bowles, after the names of its co-chairs, former US Senator Alan Simpson of Wyoming and former White House Chief of Staff Erskine Bowles. The other presidential appointees were David M. Cote, the CEO of Honeywell International; Alice Rivlin, the former director of the Office of Management and Budget; and Ann Fudge, who had been CEO of Young & Rubicam. The Executive Director was Bruce Reed, who later became the Chief of Staff to Vice President Biden. There were six members of the House and six members of the Senate on the Commission, divided evenly between Republicans and Democrats.
We were instructed to identify policies that might “improve the fiscal situation in the medium term and to achieve fiscal sustainability in the long run.” In eight months of public hearings and deliberations, I received a graduate school-level education in macroeconomics and got a chance to work with Senator Judd Gregg (R-NH) on alternatives to the employer-based retirement system, which was leaving more and more Americans without a pension as companies used the recession to reduce head count and cut benefits. Working on the Commission with Republican Congressmen Jeb Hensarling from Texas and Paul Ryan from Wisconsin, now Speaker of the House, I learned how conservatives view the economy and the world, a lesson that would prove especially useful to me four years later when I considered whether it would be possible to build a coalition to support a universal basic income.
That next journey—the one at the core of this book—would begin with a trip to Silicon Valley to have a conversation about technology and the economy with the visionary entrepreneur who had helped launch the computer and information technology revolutions. How did Intel co-founder Andy Grove see the future?
"[Stern] does a solid job of making his case without waxing too wild-eyed....This is a book eminently worth talking about." --Kirkus Reviews"America has no choice. Eventually we're going to have to raise the floor and provide a universal basic income. Technology will replace so many good jobs that Americans won't have enough purchasing power to keep the economy going without an economic floor to stand on. I urge you to read Andy Stern's provocative and compelling book." --Robert B. Reich, Chancellor's Professor of Public Policy, University of California at Berkeley, former US secretary of labor, and author of Saving Capitalism: For the Many, Not the Few"Andy Stern has spent his entire life fighting for changes that economically help all Americans, and particularly those often left behind. His latest book offers insight into the emerging challenges of new technology and the urgent need to have a real debate and consider hard choices if we are going to provide economic security for all of our families in the future." --Cecile Richards, president of Planned Parenthood of America
- "When a veteran labor leader like Andy Stern argues that we're not going to survive an increasingly jobless economy without a universal basic income, then it's time for the rest of us to listen up. Raising the Floor rests on Stern's long experience fighting for economic justice as well as his years of studying job trends...and it makes an irrefutable case for what might at first seem like a wild idea." --Barbara Ehrenreich, author of Nickle and Dimed"There is no more urgent economic discussion today than the relationship between income inequality, technology, and the future of work. Andy Stern's understanding of this relationship frames a compelling argument for the role of universal basic income in building a better future for all of us." --Tim O'Reilly, CEO of O'Reilly Media"It's a quick read, full of great interviews and down-to-earth observations and is entirely free of economic jargon. It's a smoothie. The book is filled with little surprises that come from Stern's access to people whom we normally see only through thick filters." --Randall Stross author of The Launch Pad, Steve Jobs & the NeXT Big Thing, eBoys, The Wizard of Menlo Park: How Thomas Alva Edison Invented the Modern World, Planet Google, and The Microsoft Way.
- On Sale
- Jun 14, 2016
- Page Count
- 272 pages
- "When a veteran labor leader like Andy Stern argues that we're not going to survive an increasingly jobless economy without a universal basic income, then it's time for the rest of us to listen up. Raising the Floor rests on Stern's long experience fighting for economic justice as well as his years of studying job trends...and it makes an irrefutable case for what might at first seem like a wild idea." --Barbara Ehrenreich, author of Nickle and Dimed