Transition Rights: the Evolution of Employee Rights
Link to article
What if losing your job wasn’t a big deal? What if you’re downsized, RIFed, outsourced, laid off, or just plain fired – and you don’t panic, feel like a total loser, get depressed, or go into debt? What if there was no negative stigma involved in losing your job – in fact, what if the idea of “losing” a job became quaintly outmoded, and the idea of making a positive change took its place?
What if you had the freedom to explore what you want to do next, without financial devastation? What if you’re sick of being a lawyer and want to be an organic farmer? What if you’re a bricklayer and want to be a teacher? What if you never had to feel trapped in a job you didn’t like, held hostage by salary and benefits? And what if this were possible?
It can be possible. It’s a concept called “Transition Rights.” Workers would pay into their transition fund much like they now pay into a 401k, with dollars matched by the employer, local or federal government, and possibly also by charitable foundations. So when employees are laid off or just want to change jobs, their transition fund is available.
The idea of transition rights is based in part on the ideas of Amartya Sen, Nobel prize-winning economist and philosopher; Gunther Schmid, a German economist; and Karen Orren, author of “Belated Feudalism.” The basic premise is that workers – whatever color their collars are – should not be treated like serfs, earning their bread at the mercy of the local landlord. If we as a society truly embrace individual freedom and dignity, we must begin to reshape our concept of the employee-employer relationship, which is still referred to in
The average American will change jobs 10 times between ages 18 and 40, according to the Bureau of Labor Statistics. In the
As VerPlanck recently wrote in his blog on the Working Indiana website, “The clear advantage of refocusing the life-course and work-life balance is a promotion of individual liberty and freedom of choice. One of the ironies of American life is its often blind belief in and adherence to marketplace norms—everywhere but in the labor market. Perhaps by investing in transition rights we can … provide enrichment to human capital.”
Tags: Alan VerPlanck, Amartya Sen, Belated Feudalism, CAEL, Council for Adult and Experiential Learning, Gunther Schmid, Karen Orren, Lifelong Learning Accounts, Northeast Indiana Central Labor Council, Senate Bill S 26, Tom Lewandowski, transition rights
June 26th, 2008 at 6:18 am
Boy, can I see a conservative backlash coming to this idea in the US. Anything that loosens the control of the working class from the managerial class is anathema to them.
Of course, you need a job that gives you enough income to put some away in the account. This wouldn’t be of much use to someone at Wal-Mart, say.
That’s not to say that it’s a bad idea. Far from it. It’s a wonderful idea.
June 26th, 2008 at 8:05 am
I agree. This would be a beneficial addition to existing hardship withdrawal rules for 401(k) plans. In a new world order where pensions, health insurance, and second chances are ancient history, workers have never gotten anything in return for the removal of their safety nets. Transition funds that help with education and housing costs will go a long way toward keeping families stable during far-too-prevalent jobless periods.
June 26th, 2008 at 10:56 am
RESPONSE TO ‘RETRAINING’ FOR NEW CAREER
The only problem with this ‘retraining’ concept that has been talked about to death for decades is that in reality it just doesn’t work in the real world — especially for today’s highly educated and experienced middle-age white-collar workers. Unfortunately, unless employers are willing to change their attitudes about hiring mature workers, I don’t see much hope in this ‘retraining’ concept taking hold. Besides, today’s 50 plus employees are often-times the last to be hired and the first to be fired in today’s labor market that continues to place a premium on youth over maturity and experience. Unfortunately, this form of cheap labor in an effort to preserve the corporate bottom line is the fuel that feeds this proverbial fire.
Even our former Secretary of Labor Robert Reich keeps espousing about retraining to the American people while ignoring the fact that employers just aren’t interested in hiring older workers who have years of experience and often times are at the peak of their careers making top salaries.
In 1996, despite being complimented by my former boss on my sales, communication, writing and people skills (two weeks earlier) — I found myself once again being replaced by a much younger man who (ironically) lasted only two-weeks in my former Sales Management position within this high tech corporation.
After a fruitless year of job searching, I realized that I needed to make a drastic career change and headed back to graduate school to fulfill a life-long dream. I ended up graduating at the top of my class with highest honors (GPA: 4.0, Summa Cum Laude and Merit Scholar)after earning both a Master of Arts degree (M.F.A.) in Creative Writing and Master of Fine Arts degree (M.A.) in English & Writing (considered a ‘terminal’ degree in the writing field).
Despite having previous writing experience and being published, I was constantly confronted with “You’re overqualified!” – i.e., the favorite euphemism of Corporate America which in translation is the code phrase for “You’re too old!”
After unsuccessfully looking for a writing position on-and-off for six-years during a severe recession and following the aftermath of 9/11, like thousands of middle-age white-collar workers today faced with age discrimination, I accepted early retirement in 1996 at the age of forty-nine.
June 26th, 2008 at 12:42 pm
For the sake of fair journalism, let’s disclose that nonprofit CAEL employs lobbyists to push for Senate Bill S 26 and makes its living managing employers’ LiLAs.
Always the devil’s advocate, I see companies replacing their existing tuition benefits with LiLAs, setting their match limit very low and then not contributing at all when money’s tight, just like they do with your 401(k). This would make a LiLA little better than simply setting up a Section 529 plan for yourself under existing laws.
Don’t get me wrong, I’d love to see transition benefits. But how much are they going to give you? As Question Authority notes, you need to be earning discretionary income you can afford to squirrel away. Plus there’s the high cost of education now. To retrain to work as a skilled laborer (fork-lift operator, truck driver, medical technician, etc.) you’re looking at $5,000 and up. IT certification, $20,000 once you take the classes and pay the testing fees. And a college degree? I know my bachelor’s degree cost $100,000, and it means nothing. My friends’ $150,000 master’s degrees qualify them to work as receptionists and file clerks. Tom B., I don’t think they’ll give you enough for the education they’re promising, let alone housing!
I agree it’s time for us to stop being serfs. But the way to do it is to stop acting like serfs and start being our own bosses. Need education? Save up the money yourself. Start a 529 plan. Apply for grants and scholarships. Manage your own life; don’t look to your corporate masters for permission.
June 26th, 2008 at 10:02 pm
What If? (Transition rights) is a great idea. What if losing your job could be like finishing one term and graduating to the next grade in school instead of failing at something?!
June 27th, 2008 at 12:03 pm
I know you’re trying to help and make a positive suggestion, but the “employee-owned accounts used to finance education and training” idea will not work. Would be nice, if it would, but it won’t. Why? The facts don’t favor it. Which facts?
The nation has lost over 4 million manufacturing jobs since the peak in Apr 08 (that’s 23.1%). It’s lost 713,000 information technology jobs since the peak in Mar 01 (that’s 19.2%). For Colorado Springs the percentages are Mfg: 39.3%; IT: 49%. Many of those who lost their manufacturing jobs were told to, and did, retrain for those high tech IT jobs that were to be the future. For what are they to retrain now?
The Advanced Technology Products “Trade” Deficit went from a $38.4B surplus in 1991 to a $53.5B deficit in 2007 with a continuing downward trend. The U.S. is losing not only technological capability, but the jobs that go along with it. For what technology jobs should we retrain now?
Goods Export growth decreased in 2007 by $2.4B/yr compared to 2006, even with a dramatically-falling dollar. The goods trade deficit in 2007 improved compared to 2006 because Goods Import growth fell by $76.4B. The U.S. economy is stalling.
See much more on these trends on my website.
In fact, I believe the U.S. economy is doomed primarily due to what’s called “free trade.” Some say that protectionism would provoke a trade war. I submit that, with a $708B trade deficit in 2007 ($768B in 2006), we’re already in a trade war. And the U.S. has surrendered!
And this is only one problem. The current regime and polices that go back to Reagan have given us authoritarian government, a busted fiscal budget, an exploding “trade” deficit, bursting mortgage and housing bubbles, a devalued dollar, ruinous gasoline prices, high inflation, poisoned toys and tomatoes, a broken military, Iraq occupation war profiteering, a violated Constitution, and a violent disregard for international law.
So, “Stop acting like serfs and start being our own bosses” and get more education? Sorry, that’s nice-sounding rhetoric, but a totally inadequate and failed strategy for fixing what ails those who have met disaster in the “job market.”
With a Ph.D. in physics, MBA, proven manufacturing process and organizational improvement expertise, I too, am overqualified. And with jobs leaving at such a rapid pace, who needs manufacturing process and organizational improvement anyway?
June 28th, 2008 at 1:34 pm
I am afraid I must agree with Bob - only one thing makes me feel better after reading this site, which is to see people with more credentials/expertise than me are not doing well either. My husband, with a superb medical education and years of experiences (who did not make the investments all docs supposedly make), also is another passed-over by our bizarre economy, which overvalues entertainers and superficial people, and wastes tremendous amounts of human capital. I agree with Bob. Something is going to have to change the way opportunities are distributed in this society, and I’m not sure what it will be. I too have seen things changing since Reagan era for the worst, and for reasons not clear to me, even progressive business owners/investors seem largely uninterested in making openings available or supporting their own fellow citizens. It’s only a matter of time till my job is offshored/outsourced/replaced by technology. This society won’t work with masses of us unemployed (I’m also the daughter of a man unemployed 6 years during Great Depression - talk about deja vu again!)
June 29th, 2008 at 4:06 pm
I also agree with Bob.
What he doesn’t mention in his paragraph which starts, “And this is only one problem. The current regime and polices that go back to Reagan have given us…” is wealth redistribution in the U.S. This is covered extensively in the June 30, 2008, special issue of The Nation entitled “The New Inequality.” In this issue, John Cavanagh and Chuck Collins begin their article, entitled “The Rich and the Rest of Us,” as follows: “Over the past three decades, market-worshiping politicians and their corporate backers have engineered the most colossal redistribution of wealth in modern world history, a redistribution from the bottom up, from working people to a tiny global elite. This special issue of The Nation exposes the widespread costs of this rising inequality and offers a blueprint on how to reverse course.” The statistics are staggering. Cavanagh and Collins state, “The richest 1 percent of Americans currently hold wealth worth $16.8 trillion, nearly $2 trillion more than the bottom 90 percent.” The bottom 90 percent. $2 trillion more. Incomprehensible.
It’s worse than it was at the dawn of the 20th century.
It took unions (action from groups of people working together–sometimes bloody action; my Dad had stories about the San Francisco waterfront) and governnment (regulation: legislation regarding trusts, banking, taxation, etc., as well as the New Deal) to bust that inequality then. It’s going to take the same now. And it’s going to be harder.
Those of us in the bottom 90 percent who, consciously or unconsciously, believe in the “individual for himself” ethos are going to have to re-examine our beliefs. They tend to foster the idea that job loss somehow has to do with a failure on the part of the individual, and they tend to mitigate against the idea of the necessity of acting together.
I, too, have a story about layoff as a “gold-collar worker” (I was a software engineer in Silicon Valley) and subsequent “over-qualification.” I never belonged to a union in those days.
The ideas in this article about the evolution of employee rights excite me. But I see absolutely no way that employers or government are going to contribute to funds for employees, not in today’s climate. The trend is going in a direction of less and less for employees, and it’s not going to stop. I wish such ideas had been put in place BEFORE Reagan was voted in. But it’s never too late. We just need muscle.
I recently bookmarked the Freelancers’ Union website. I found out about it here. I haven’t looked into it yet. What if…..
June 30th, 2008 at 8:49 am
I LIKE THE IDEA OF TRANSITION RIGHTS
Thanks to all of you for your thoughtful replies. Here is my two cents worth. By way of introduction, I am R. William (Bill) Holland; UP Board Chairman and author of Are There Any Good Jobs Left? Career Management in the Age of the Disposable Worker. (Praeger). Consistent with some of the themes you have expressed, I am working on yet another book, The Narrowing Path to the American Middle Class: Things You and Your Children Must Know (1rst. quarter, 2009?).
My writing and work with United Professionals has focused mainly on answering three questions.
• How is it that downsizings, outsourcing and lay-offs became standard fare for American workers? No, it was not a movement started by President Reagan’s attack on unions; General Electric’s CEO Jack Walsh terminating 85,000 workers or even “greedy” corporations getting greedier. In truth, global capitalism made it possible for the customer to become king. That is, our economy shifted in order to respond to consumer demand for cheaper goods, better returns on investment dollars and more efficient production processes. For a fuller explanation besides my own work, see Supercapitalism: The Transformation of Business, Democracy, and Everyday Life (Robert Reich).
• How has this affected the American economy and its people? When the customer became king, we as employees became subject to the insecurities that come with the workforce restructurings necessary to respond to newly aggregated consumer demand. For its effect on job seekers, see Bait and Switch: The (Futile) Pursuit of the American Dream (Ehrenreich). To get a list of public policy targets, see High Wire: The Precarious Financial Lives of American Families (Peter Gosselin).
• What strategies and actions are required to ameliorate its impacts? These fall into three categories: changes in public policy, individual actions and a combination of the two.
It has been three years since I first sat down with Alan VerPlanck and Tom Lewandowski, the authors of this article on Transition Rights. What struck me then, as now, was the idea that people when given resources and options in a timely manner will make better choices for themselves than any collective entity ever could. Will some people squander their rights away on frivolous and unproductive activity? Sure! But I am willing to bet that some number, who would not otherwise have the opportunity, will create their own transitions and show the way for others. People are smarter than we give them credit for being and that is why I LIKE THE IDEA OF TRANSITION RIGHTS.
June 30th, 2008 at 9:27 am
I really like the idea of LiLAs. I’d support this effort, even though at age 51, I probably wouldn’t benefit from such a program myself.
As an assistant manager in retail, I go over dozens of applications every week. About a third of them are from fellow baby-boomers, looking for a career change; the remaining applicants are high school students, or kids home from college for the summer. Who’d have imagined these two groups of people would be competing for such low-paying jobs?
It’s discouraging to read all the posts about well-educated people out of work. The greedy corporate culture works its way down the line… my own education includes an Associate’s Degree from a local junior college, and the types of jobs I’d normally be vying for (receptionist, administrative assistant, middle-management) are now being looked at by the better-educated folks with higher degrees. That leaves people like me asking “Do you want fries with that?”
July 4th, 2008 at 12:41 pm
I think unemployment benefits, low cost professional development or retraining, guaranteed and portable pensions/social security would considerably ease the stress and stigma of layoffs etc. There still remains the question of ownership and control of strategic manufacturing industries, agriculture, public utilities and energy production, as well as the provision of services such as health care, education, transportation and housing. All of this has to be tied into greenhouse gas reduction, adaptation to climate change and environmental remediation.
I don’t think there is any way to avoid significant government investment and well conceived integrated industrial and social policies, including income and health security. Oh by the way, having the money to do all this depends on ending the war against Iraq and reducing military expenditures.