Rachel Schneider & Jonathan Morduch: Why do people make the financial decisions they make?

Deep within the American Dream lies the belief that hard work and steady saving will ensure a comfortable retirement and a Financialbetter life for one’s children. But in a nation experiencing unprecedented prosperity, even for many families who seem to be doing everything right, this ideal is still out of reach. In The Financial Diaries, Jonathan Morduch and Rachel Schneider draw on the groundbreaking U.S. Financial Diaries, which follow the lives of 235 low- and middle-income families as they navigate through a year. Through the Diaries, Morduch and Schneider challenge popular assumptions about how Americans earn, spend, borrow, and save—and they identify the true causes of distress and inequality for many working Americans. Combining hard facts with personal stories, The Financial Diaries presents an unparalleled inside look at the economic stresses of today’s families and offers powerful, fresh ideas for solving them. The authors talk about the book, what was surprising as they conducted their study, and how their findings affect the conversation on inequality in a new Q&A:

Why did you write this book?
We have both spent our careers thinking about households and consumer finance, and our field has reams and reams of descriptive data about what people do—savings rates, the number of overdrafts, the size of their tax refunds. We have lots of financial information but very little of the existing data helped us understand why—why people make the financial decisions they make, and why they get tripped up. So we decided to spend time with a group of families, get to know them very well, and track every dollar they earned, spent, borrowed, and shared over the course of one year. By collecting new and different kinds of information, we were able to understand a lot of the why, and gained a new view of what’s going on in America.

What did you learn about the financial lives of low- and moderate-income families in your year-long study?
We saw that the financial lives of a surprising number of families looks very different from the standard story that most people expect. The first and most prominent thing we saw is how unsteady, how volatile households’ income and expenses were for many. The average family in our study had more than five months a year when income was 25% above or below their average.

That volatility made it hard to budget and save—and it meant that plans were often derailed. How people were doing had less to do with the income they expected to earn in total during the year and more to do with when that income hit paychecks and how predictable that was. Spending emergencies added a layer of complexity. In other words, week-to-week and month-to-month cash flow problems dominated many families’ financial lives. Their main challenges weren’t resisting temptation to overspend in the present, or planning appropriately for the long term but how to make sure they would have enough cash for the needs they knew were coming soon.

The resulting anxiety, frustration, and a sense of financial insecurity affected families that were technically classified as middle class.

How does this tie into the economic anxiety that fueled Trump’s election?
The families we talked to revealed deep anxieties that are part of a broader backdrop for understanding America today. That anxiety is part of what fueled Trump, but it also fueled Bernie Sanders and, to an extent, Hillary Clinton. A broad set of the population feels rightly that the system just isn’t working for them.

For example, we met Becky and Jeremy, a couple with two kids who live in small town Ohio where Trump did well. Jeremy is a mechanic who fixes trucks on commission. Even though he works full-time, the size of his paychecks vary wildly depending on how many trucks come in each day. This volatility in their household income means that while they’re part of the middle class when you look at their annual income, they dipped below the poverty line six months out of the year.

One day we met with Becky, who was deciding whether or not to make their monthly mortgage payment a couple of weeks early. She had enough money on hand, but she was wavering between paying it now so she could rest easy knowing it was taken care of, or holding onto the money because she didn’t know what was going to happen in the next couple weeks, and was afraid she might need the money for something else even more urgent. She was making decisions like this almost every day, which created not only anxiety but a sense of frustration about always feeling on the edge.

Ultimately, Jeremy decided to switch to a lower-paying job with a bigger commute doing the exact same work – but now he’s paid on salary. They opted for stability over mobility. Becky and Jeremy helped us see how the economic anxiety people feel is not only about having enough money, but about the structure of their economic lives and the risk, volatility, and insecurity that have become commonplace in our economy.

One of the most interesting insights from your book is that while these families are struggling, they’re also working really hard and coming up with creative ways to cope. Can you share an example?
Janice, a casino worker in Mississippi, told us about a system she created with multiple bank accounts. She has one bank account close to her she uses for bill paying. But she also has a credit union account where she has part of her paycheck automatically deposited. This bank is an hour away, has inconvenient hours, and when they sent her an ATM card, she cut it in half. She designed a level of inconvenience for that account on purpose, in order to make it harder to spend that money. She told us she will drive the hour to that faraway bank when she has a “really, really need”—an emergency or cost that is big enough that she’ll overcome the barriers she put up on purpose. One month, she went down there because her grandson needed school supplies, which was a “really, really need” for her. The rest of the time, it’s too far away to touch. And that’s exactly how she designed it.

We found so many other examples like this one, where people are trying to create the right mix of structure and flexibility in their financial lives. There’s a tension between the structure that helps you resist temptation and save, and the flexibility you need when life conspires against you. But we don’t have financial products, services, and ideas that are designed around this need and the actual challenges that families are facing. This is why Janice has all these different banks she uses for different purposes—to get that mix of structure and flexibility that traditional financial services do not provide.

How does this tie into the conversation we’ve been having about inequality over the last decade or so?
Income and wealth inequality are real. But those two inequalities of income and assets are hiding this other really important inequality, which is about stability. What we learned in talking to families is that they’re not thinking about income and wealth inequality on a day-to-day basis—they’re worrying about whether they have enough money today, tomorrow, and next week. The problem is akin to what happens in businesses. They might be profitable on their income statement, but they ran out of cash and couldn’t make payroll next week.

This same scenario is happening with the families we met. We saw situations where someone has enough income or is saving over time, but nonetheless, they can’t make ends meet right now. That instability is the hidden inequality that’s missing from our conversation about wealth and income inequality.

How much of this comes down to personal responsibility? Experts like Suze Orman and Dave Ramsey argue you can live on a shoestring if you’re just disciplined. Doesn’t that apply to these families?
The cornerstone of traditional personal finance advice from people like Orman and Ramsey is budgeting and discipline. But you can’t really do that without predictability and control.

We met one woman who is extremely disciplined about her budget, but the volatility of her income kept tripping her up. She is a tax preparer, which means she earns half her income in the first three months of the year. She has a spreadsheet where she runs all her expenses, down to every taxi she thinks she might need to take. She budgets really explicitly and when she spends a little more on food one week, she goes back and looks at her budget, and changes it for the next few weeks to compensate. Her system requires extreme focus and discipline, but it’s still not enough to make her feel financially secure. Traditional personal finance advice just isn’t workable for most families because it doesn’t start with the actual problems that families face.

What can the financial services industry do to better serve low- and moderate-income families?
The financial services industry has a big job in figuring out how to deal with cash flow volatility at the household level, because most of the products they have generated are based on an underlying belief that households have a regular and predictable income. So their challenge is to develop new products and services—and improve existing ones—that are designed to help people manage their ongoing cash flow needs and get the right money at the right time.

There are a few examples of innovative products that are trying to help households meet the challenges of volatility and instability. Even is a new company that helps people smooth out their income by helping them automatically save spikes, or get a short-term “boost” to cover dips. Digit analyzes earning and spending patterns to find times when someone has a little extra on hand and put it aside, again automatically. Propel is looking to make it much easier and faster for people to get access to food stamps when they need them. There are a number of organizations trying to bring savings groups or lending circles, a way of saving and borrowing with friends and family common everywhere in the developing world, to more people in the United States.

There is lots of scope for innovation to meet the needs of households—the biggest challenge is seeing what those needs are, and how different they are from the standard way of thinking about financial lives and problems.

Jonathan Morduch is professor of public policy and economics at the New York University Wagner Graduate School of Public Service. He is the coauthor of Portfolios of the Poor (Princeton) and other books. Rachel Schneider is senior vice president at the Center for Financial Services Innovation, an organization dedicated to improving the financial health of Americans.

Elizabeth Anderson: Is your workplace a dictatorship?

AndersonOne in four American workers says their workplace is a “dictatorship.” Yet that number probably would be even higher if we recognized most employers for what they are—private governments with sweeping authoritarian power over our lives, on duty and off. We normally think of government as something only the state does, yet many of us are governed far more—and far more obtrusively—by the private government of the workplace. In Private Government, Elizabeth Anderson argues that the failure to see this stems from long-standing confusions. These confusions explain why, despite all evidence to the contrary, we still talk as if free markets make workers free—and why so many employers advocate less government even while they act as dictators in their businesses. Recently she took time to answer some questions about her new book.

Most contemporary discussions of work focus on wages, benefits, and unemployment.  You want to focus on the power of employers over workers.  How does that matter for workers today?

EA: Millions of workers in the United States labor under humiliating and abusive conditions. Most poultry workers, for example, aren’t allowed to use the bathroom during their shift, and are told to wear diapers to work. The vast majority of restaurant workers suffer from sexual harassment. Managers scream at warehouse workers when they can’t keep up with the grueling pace, or get injured on the job. They search workers’ bodies and personal property, and listen in on their conversations with co-workers. These conditions aren’t inherent in these types of work. The aren’t like the dangers that firefighters unavoidably face. They are imposed by employers. Employers can do this because they have power over workers and can threaten their livelihoods if they don’t submit. This kind of unaccountable power is objectionable even when workers are paid decently. Many professional and managerial workers who enjoy good pay are pressured by their bosses to contribute to political candidates their bosses prefer, and know that their contributions are being monitored. Workers up and down the organization chart are bullied by their bosses. It’s high time that we drew attention to these problems.  Work doesn’t have to be this way.

You claim that current political discussions confuse government with the state.  Why is that a point of confusion, and why is it important to distinguish the two?

EA: Politicians are constantly telling people that “the government” is interfering with their freedom.  What they mean by “government” is the organs of the state—the Federal government, or agencies of the 50 states. This way of talking misleadingly suggests that if we only got the state out of our hair, we’d be perfectly free to lead our lives as we choose.  It masks the fact that other kinds of governments, with unelected leaders, also rule our lives. The workplace is a type of government, and bosses are the rulers of this government. It’s important to recognize this reality, because managers often regulate workers’ lives far more intrusively and minutely than state governments regulate the lives of ordinary citizens. Most workers are not free under the government of the workplace, because they have no voice, no representation in that government. State regulation of workplaces can actually make them more free by setting constraints on what their bosses can do to them—for example, barring harassment and discriminatory treatment.

You’re concerned about the conditions for workers today.  Yet you begin your discussion with the Levellers of the mid-17th century.  What can we learn from them?

EA: The Levellers were a group of egalitarian activists in mid-17th century England. They advanced a way of talking about free market society as liberating for workers. They saw that the state was not the only government that ruled their lives. As small craftsmen, they were also governed by the monopolistic guilds. Freeing up markets meant ending monopoly control, which would enable craft workers like themselves to be their own bosses, and expand the ranks of the self-employed. Other 17th and 18th century figures, including Adam Smith and Tom Paine, similarly believed that freeing up markets would open the way to nearly universal self-employment. Lincoln carried that vision into the mid-19th century. The Industrial Revolution destroyed their ideas of how free markets would make workers free. It bankrupted self-employed craftsmen and forced them to submit to bosses in big factories. We still talk today as if markets make workers free, forgetting that this idea depended on pre-industrial conditions. The originators of free market ideas were vividly aware that wage workers were subjected to the arbitrary rule of their employers, and thought that free markets would make workers free by enabling them to escape rule by bosses. Today, talk of how markets make workers free is magical thinking, masking the reality that bosses govern their lives.

How do you think the governance of the workplace can be improved?

EA: I argue that workers need a voice in how the workplace is governed.  Other measures, such as making it easier for workers to quit, and laws protecting workers’ privacy and off-duty activities from employer meddling, can certainly help. But these can’t substitute for workers having a say in how the workplace is governed. Labor unions once gave voice to more than a third of American workers. These days, outside the state sector, few workers are represented by a union. Yet unions are not the only way that workers can have a say in workplace governance. In Europe, so-called co-determination, in which workplaces are jointly managed by owners and workers, is common. I make the case for exploring different ways workers could have a say, to open up a topic that is hard to frame in today’s impoverished political discourse.

What inspired you to write this book?

EA: I have long been interested in the lived experience of workers, particularly those at the bottom of the labor market. Their experiences are unjustly neglected in today’s public discourse. It should be a major public outrage that so many workers today are denied bathroom breaks, and suffer innumerable other indignities that almost no politicians talk about! Instead, a common response of politicians and the managerial class is: if you don’t like it, then why don’t you quit? The freedom of workers is just the freedom to quit. The inadequacy of this response should be glaring. But today’s public discourse doesn’t help us see why. My research on the history of egalitarianism uncovered the reasons why public discourse is so inadequate, and motivates alternative ways of talking about workers’ complaints, so they can be taken seriously. In the United States, it’s normal to complain about government regulation interfering with our freedom. Once we recognize that employers subject workers to their own dictatorial government, it’s easier to sympathize with workers’ complaints, and think about remedies.

Elizabeth Anderson is the Arthur F. Thurnau Professor and John Dewey Distinguished University Professor of Philosophy and Women’s Studies at the University of Michigan, Ann Arbor. She is the author of Private Government: How Employers Rule Our Lives (and Why We Don’t Talk about It).

Masters of Craft: A trip to the butcher

In today’s new economy—in which “good” jobs are typically knowledge or technology based—many well-educated and culturally savvy young men are instead choosing to pursue traditionally low-status manual labor occupations as careers. Masters of Craft by Richard Ocejo looks at the renaissance of four such trades: bartending, distilling, barbering, and butchering. Check back each week for a post by the author on one of these jobs. This week, learn more about butchering. 

Ocejo“Hi, can I help you pick something out?” asks Ted, a counter worker at Dickson’s Farmstand Meats, a whole-animal butcher shop, to a customer. It’s a simple question, common in all types of retail stores. But this customer, a woman in her early 40s, walked into the shop with a surprised look on her face, and has been staring at the shop’s fifteen-feet-long display case for thirty seconds, wandering from end to end. She says she’s not sure, and takes a step back as she notices another customer next to her has a question.

“How would you prepare lamb steaks?” he asks Ted.

“In a hot, hot pan, both sides. You want it to be rare. It really has that funky, lamby flavor to it.”

The customer orders two arm chops. Another comes in and goes right to the beef section.

“No skirts left?” he asks.

“I don’t think so, but let me check,” replies Ted, who then he asks Giancarlo, one of the butchers, to look in the walk-in refrigerator. There are none.

“OK, what else do you have that’s like it?”

“Um, well, we have the feather steak and the sierra. They’re [from] a different part of the animal than the skirt. Sometimes the sierra’s left on the rib eyes as a flap of meat, but when it’s taken off it’s sierra steak. I think it has more flavor than skirt and it’s a good alternative.”

When a customer walks into a typical neighborhood bar, barbershop, or butcher shop (or meat counter Ocejoat a supermarket), it doesn’t take very long for what they see to “make sense” to them. Most of these businesses are set up in similar and familiar ways, and the routines for ordering are pretty standard. But the special businesses that I studied, like Dickson’s, disorient the senses of customers and clients. Craft cocktail bars are dark with sweet smells and sounds of forceful drink shaking. Upscale men’s barbershops accentuate the vintage imagery of classic shops, or feel like hunting lodges, complete with taxidermy. And whole-animal butcher shops feature tray upon tray of meat, with strange cuts of all shapes and sizes. The owners of these businesses want first-time entrants to feel like they’ve stepped into a different world, and to check their expectations at the door. And more than the décor and other sensory stimulants, it’s the workers and their brand of service that really turn the visit into a unique experience.

What does it mean to receive elite service? To be accommodated at an extreme level, to be treated like someone of great importance, and to feel like every immediate need is catered to, even to the point of feeling pampered. We typically think about elite service at places like luxury hotels, upscale restaurants, and high-end retail outlets, like BMW dealerships. These places still exist in today’s cities, but I’ve found that they’ve been joined by a new set of businesses with meanings behind the products, services, and experiences they offer that are also distancing with airs of exclusivity. Unlike their more common versions, craft cocktail bars, upscale men’s barbershops, and whole-animal butcher shops aren’t just selling drinks, giving haircuts, and selling meat. They’re also selling the ideas behind the unique products and services they offer and the experience of consuming them within head-turning, transporting environments.

That’s why having workers, like Ted in the above example, who are knowledgeable and passionate about their industry is essential for these businesses. People who strive to work at a craft cocktail bar don’t just want to create, make, and serve drinks with elaborate recipes. They also want to match customers with a drink that suits their tastes, while informing them of why their drinks taste the way they do. People who work at upscale men’s barbershops don’t just want to do as many haircuts in a day as possible. They also want to show clients how they can achieve a certain style that fits their personalities, lifestyles, and careers. And whole-animal butcher shop workers don’t just want to cut and serve meat. They also want to explain the importance of using the whole animal, the ethics behind sourcing meat locally, and the differences and similarities in taste and preparation between cuts that come from various parts on an animal’s body. The sets of cultural knowledge behind these products and services, which these workers communicate to their consumers through service, are what push these businesses above and beyond their mundane versions. In these places we’re seeing how important providing in-depth, rarefied knowledge has become in the world of consumption.

OcejoRichard E. Ocejo is associate professor of sociology at John Jay College and the Graduate Center, City University of New York. His books include Upscaling Downtown: From Bowery Saloons to Cocktail Bars in New York City and Masters of Craft: Old Jobs in the New Urban Economy.

Masters of Craft: A trip to the bar

In today’s new economy—in which “good” jobs are typically knowledge or technology based—many well-educated and culturally savvy young men are instead choosing to pursue traditionally low-status manual labor occupations as careers. Masters of Craft by Richard Ocejo looks at the renaissance of four such trades: bartending, distilling, barbering, and butchering. Check back each week for a post by the author on one of these jobs. First up, learn more about the art of bartending.

OcejoOn a busy Friday night at Death & Co., a well-known cocktail bar in the East Village, Alex, one of tonight’s bartenders, takes the order of a customer sitting at the bar who just finished his second drink.

“Would you like to order something else?” he asks while taking away his empty glass and cocktail napkin.

“Yeah, sure.”

“OK, you just had a Conference, and remind me of your first one?”

“I had a La Vina.”

“Do you want to stick with rye?”

“Yeah.”

“OK, do you want to taste the peppery notes or the whiskey?”

“Um, more of the peppery flavors.”

Alex nods and gets to work on his drink. After a few minutes he finishes and places it in front of the customer on a fresh cocktail napkin.

“Here we have a variation of a Sazerac, with an ounce-and-a-half of Rittenhouse rye and half-ounce of cognac. Enjoy.”

Common to each of the occupations I studied is that these workers elevate the status of very common, or even lowbrow, products, services, and consumption spaces and experiences through the work practices they use to make and provide them and the interactions they have with their customers and clients. They also often lower the status of products that are generally regarded as having high status, or at least put them on the same level as low-status ones. The first two cocktails the customer in the above example had ordered—the La Nina and the Conference—are both cocktails that feature rye (with sherry and amaro and with a mixture of other spirits, respectively). Rye isn’t typically a spirit that conjures luxury, like scotch or cognac do. It’s an obscure spirit, rarely found behind average bars. Ryes usually have strong, sharp flavors, and are rarely consumed on their own (or “neat”).

But bars like Death & Co., where bartenders strive to achieve unique flavors in cocktails by precisely Ocejomixing ingredients, love rye because of all the possibilities it gives them to make interesting drinks. As the customer’s order and Alex’s interaction with him show, rye can be mixed with an array of ingredients to make drinks with new flavors, and bartenders reveal its range of possibilities to their customers, such as by asking customers if they prefer its more “peppery” notes. These bartenders certainly don’t reject sacred spirits like scotch and cognac. They just don’t automatically see them as “the best.” Since their aim is creativity and innovation, they prefer a variety of spirits, especially versatile ones. Taste, then, rather than reputation, is key. They therefore reject the initial lure of popular brands, with their name recognition, advertising, and sleek bottling. What’s inside the bottle is far more important than what’s outside it.

There are parallels in the other jobs I studied. Small-scale craft distillers make many of the unusual products cocktail bartenders use. They often emphasize rare ingredients, such as heirloom grains, and unorthodox production methods, such as barrels of different sizes and wood varieties. Barbers at upscale men’s barbershops consider the simple, straight-to-the-point men’s haircut to be a special, life-enhancing experience, rather than a basic, forgettable necessity. And butchers and counter workers at whole-animal butcher shops laud rare and lowly cuts of meat and meat products, such as the flatiron steak and jerky, for their unique flavors, while downplaying such elite staples like the tenderloin and the filet mignon for their relative blandness.

By making and promoting these distinctions to their customers and clients, these workers engage in what I refer to as “omnivorous cultural production.” With this idea I’m building from a well-known concept in the sociology of culture, namely the “cultural omnivore.” This theory claims that today more and more people are becoming open to consuming cultural products (e.g. music, film, food) from outside of their own social strata. Most commonly, we’re seeing well-to-do folk show interest in and knowledge of so-called “lowbrow” and working-class forms of culture, that had never been considered “good” or “quality” before by well-regarded arbiters of taste. And they do so without compromising their own social standing. So burgers and tacos become the subjects of food trends, while bourbon and rye join the ranks of elite spirits.

A key question is where these tastes come from. How do people learn that a flatiron steak is better than a filet mignon because of its bolder flavor profile? Consumers certainly learn from the media and from their peers and social networks, as much research has shown. But they also learn from the people who work with these products and perform these services on a daily basis in these high-end workplaces. These workers essentially create these tastes through their daily work practices. Taste, then, is not natural, or something that is universal. It’s something that is created, and people learn it in different ways.

OcejoRichard E. Ocejo is associate professor of sociology at John Jay College and the Graduate Center, City University of New York. His books include Upscaling Downtown: From Bowery Saloons to Cocktail Bars in New York City and Masters of Craft: Old Jobs in the New Urban Economy.

In the Interest of Others named co-winner of 2014 Best Book Award, The Labor Project of the American Political Science Association

j10147[1]We are delighted to extend our congratulations to John S. Ahlquist & Margaret Levi. They are co-authors of In the Interest of Others: Organizations and Social Activism which has just been named a co-winner of the 2014 Best Book Award from The Labor Project of the American Political Science Association.

According to their web site, “The Labor Project is a related group of the American Political Science Association. Related groups promote teaching and research in political science, assist in the professional development of political scientists, and sponsor panels and roundtables at the APSA’s Annual Meeting. The Labor Project stands committed to advancing those goals. We support continued research on relevant issues such as the role and influence of organized labor in U.S. elections, Iraq reconstruction, federal whistle-blowing laws, local and state U.S. political representation of workers, neoliberalism, guestworker programs, advocacy efforts, new union strategies, court decisions affecting work, federal policies regarding employment, changes in union politics, political organizations, and labor, work, and employment issues.”

Cheers!

Congratulations Martin Ruhs, Winner of the 2014 Best Book Award for the Migration and Citizenship Section of the American Political Science Association

Martin RuhsThe Migration and Citizenship Section of the American Political Science Association has named Martin Ruhs’s The Price of Rights: Regulating International Labor Migration  the winner of the 2014 Best Book Award in the Migration and Citizenship category. The judging committee lauded Ruhs for his “innovative, rigorous, and very comprehensive treatment of the subject of international labor migration” saying additionally that his “command of knowledge and research skills demonstrates the best practices of scholarship.”

Martin Ruhs is an Associate Professor of Political Economy at the Oxford University Department for Continuing Education and a Senior Researcher at COMPAS. He is also an Associate Member of the Department of Economics, the Department of Social Policy and Intervention and the Blavatnik School of Government. Ruhs’s research focuses on the economics and politics of international labor migration within an internationally comparative framework, which he draws on to comment on migration issues in the media and to provide policy analysis and advice for various national governments and institutions.

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Martin Ruhs is the author of:

The Price of Rights The Price of Rights: Regulating International Labor Migration by Martin Ruhs
Hardcover | 2013 | $35.00 / £24.95 | ISBN: 9780691132914
272 pp. | 6 x 9 | 13 line illus. 16 tables. |eBook | ISBN: 9781400848607 | Reviews Table of Contents Chapter 1[PDF]

Working for the (Labor Day) weekend: PUP’s holiday reading recommendation

It’s been an American tradition for over a century. Here in PUP’s home state of New Jersey, we started celebrating the working man and woman more than 120 years ago. This year, readers can observe Labor Day with a look back at how the workforce has developed in that time.

Nelson Lichtenstein’s State of the Union: A Century of American Labor surveys the history of the American workforce and examines how trade unionism has waxed and waned in the nation’s political and moral imagination, among both devoted partisans and intransigent foes. From the steel foundry to the burger-grill, from Woodrow Wilson to John Sweeney, from Homestead to Pittston, Lichtenstein weaves together a compelling matrix of ideas, stories, strikes, laws, and people in a streamlined narrative of work and labor in the twentieth century.

PUP has j9780691160276ust released a revised and expanded edition of this award-winning book, which includes a new preface and two new chapters by the author. Lichtenstein engages with many of those who have offered commentary on State of the Union and evaluates the historical literature that has emerged in the decade since the book’s initial publication. He also brings his narrative into the current moment with a final chapter, “Obama’s America: Liberalism without Unions.”

Here’s more on this thought-provoking read:

The “labor question” became a burning issue during the Progressive Era because its solution seemed essential to the survival of American democracy itself. Beginning there, Lichtenstein takes us all the way to the organizing fever of contemporary Los Angeles, where the labor movement stands at the center of the effort to transform millions of new immigrants into alert citizen unionists. He offers an expansive survey of labor’s upsurge during the 1930s, when the New Deal put a white, male version of industrial democracy at the heart of U.S. political culture. He debunks the myth of a postwar “management-labor accord” by showing that there was (at most) a limited, unstable truce.

Lichtenstein argues that the ideas that had once sustained solidarity and citizenship in the world of work underwent a radical transformation when the rights-centered social movements of the 1960s and 1970s captured the nation’s moral imagination. The labor movement was therefore tragically unprepared for the years of Reagan and Clinton: although technological change and a new era of global economics battered the unions, their real failure was one of ideas and political will. Throughout, Lichtenstein argues that labor’s most important function, in theory if not always in practice, has been the vitalization of a democratic ethos, at work and in the larger society. To the extent that the unions fuse their purpose with that impulse, they can once again become central to the fate of the republic. State of the Union is an incisive history that tells the story of one of America’s defining aspirations.

 

For a look at the history of Labor Day, including facts about its start, visit http://www.dol.gov/opa/aboutdol/laborday.htm.