News & Commentary

August 16, 2018

Yesterday Senator Elizabeth Warren introduced the Accountable Capitalism Act, a plan to reduce income inequality while still operating within a capitalist framework.  The goal is to make large companies responsive not only to their shareholders, but also to their employees.  Under the bill, corporations with more than one billion dollars in annual revenue would be required to procure a federal corporate charter.  The charter, in turn, dictates that directors must account for the interests of “all major corporate stakeholders” including employees in corporate decision-making.  Employees would also elect at least forty percent of the corporation’s directors, and at least seventy-five percent of a corporation’s directors would be needed to approve any political spending.

In June, Brett Kavanaugh, President Trump’s nominee to fill Justice Anthony Kennedy’s seat on the Supreme Court, dissented from a D.C. Circuit decision finding that a Long Island company with unionized workers had violated the National Labor Relations Act (NLRA) by establishing a spin-off company run by the executive’s daughters that hired non-union workers.  The National Labor Relations Board had found that the new company was the “alter ego” of the original company and was required under the NLRA to bargain in good faith with the union.  A three-judge panel of the U.S. Court of Appeals for the D.C. Circuit affirmed the NLRB’s decision.  Kavanaugh’s dissent was largely based on the fact that the new company was operated by the owner’s daughters, not the owner himself.  Dave Jamieson explains that Kavanaugh’s dissenting opinion follows a pattern of cases in which Kavanaugh has sided with corporations over workers, occasionally as the only dissenter.

Venture capitalist and self-described “zillionaire” Nick Hanauer writes for Politico that Democrats must move to the left if they want to align themselves with the economic interests of America’s center.  Hanauer contends that the “center” some Democrats currently talk about balances the interests of the top 2% against the interests of the rest of the country, resulting in a skewed view of attainable policy goals.  He explains that issues that Democrats have traditionally viewed as “far left,” such as raising the minimum wage to $15, already have majority support and should thus be viewed as centrist.  Hanauer says that Democrats made a mistake when they claimed power in 1992 and failed to rewrite labor laws, instead dismissing the labor movement as a “special interest group” and letting Wall Street dictate the Democratic agenda.  He argues that Democrats repeated their mistake in the early Obama years, when they again had unified government but failed to pass meaningful labor law reform.

The New York Times profiled Muriel Pénicaud, the French labor minister charged by President Emmanuel Macron with overhauling the country’s notoriously complex Code du Travail.  Pénicaud’s goal is to align the country’s labor policies with the Nordic-style “flexible security” model, which gives companies more power to hire and fire workers but provides workers substantial training and support to transition to new employment opportunities.  Pénicaud won concessions after a 300-hour negotiation with major unions and business groups.  She has advocated, for instance, for a firm-level rather than industry-wide collective bargaining model, just as labor advocates in countries with firm-level bargaining like the United States have set their sights on sectoral bargaining.  Pénicaud has faced criticism for seeking to reduce the economic security of French workers while being the richest member of Macron’s cabinet.

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