Re: Pig in a poke?

[Mbindnerdc@aol.com]

Vic,

Let me echo Marc's congratulations.

My best guess is that the best chance for employee-ownership is for a more 
self-conscious efforts by union pension funds to control in the boardroom what 
in past days was controlled at the bargaining table, including converting such 
assets to ESOPs where they hold a majority of the seats in both the ESOP trust 
and the overall Board of Directors.  With this control, they need to run these 
companies in a way that shows that employee ownership works.  Initiatives to 
consider are the shifting of human capital investment from the individual to 
the employee-owned firm (leading to more equal pay as talented but uneducated 
workers are trained to the level they are capable - making workers willing to 
do the undesireable jobs more scarce and therefore worthy of a higher wage) and 
a divorcing of incentive pay from position in the hierarchy to actual results 
(paying for innovation when it happens, rather than paying "innovators" more up 
front).  Do these things and workers and investors will beat a path to 
labor-owned industry's door, forcing everyone else to adopt these structures or 
go out of business.

An area where labor changing its mind could have significant benefits is the US 
social security privatization debate.  If labor insisted that employer 
contributions for all full-time and high-wage part-time workers be equalized to 
an average (rather credited as a match to the employee contribution) and that 
half of any employer contribution privatized go to employee controlled ESOPs 
(with factional representation based on share ownership for labor, management 
and professionals), the right kind of employee-ownership would result.  More 
and more, employees would buy out people like the descendents of Sam Wall - and 
would organize a management/investment type union rather than the traditional 
underdog advocate which you describe so well.

The globalization impact of this is clear.  Once a US branch of a 
multi-national is so purchased, the employee-owners will extend the system I 
described to non-US units, changing the labor market in every country with a US 
multi-national and leading to other democratic structures in these countries as 
the worker-middle class grows.

If "Big Labor" adopts positions such as these, as implements them, corporate 
governance, the debate on social security and the debate on globalization will 
change profoundly. (with conservatives resisting the privatization of social 
insurance at all costs).

Michael Bindner