Wise Advice For The Labor Party

by Mike Steketee - The Australian

Robert Reich, secretary of labour in the first Clinton administration, prolific author and much-quoted authority on work and the economy, has some ideas about where the Labor Party goes from here.

Like how it can win back its working-class base and turn industrial relations from a negative to a positive. Like how to turn the politics of morality from a debate on private issues such as abortion and gay marriage to questions of public morality, such as the obscene payments to chief executives for sacking many of their staff to cut costs and boost short-term share prices.

Actually, as Reich has been telling Australians during a visit here over the past week, he does not presume to tell Australians what they should be doing. The prescriptions he offers are for the ailing Democrats in the US. But the more you hear him speak, the more striking are the parallels.

Reich is worth listening to not only because he brings the fresh perspective of the outsider to the Australian policy debate. Professor of social and economic policy at Brandeis University, founder and national editor of The American Prospect magazine, author of 10 books, including the seminal The Work of Nations, he is one of the US's leading liberal intellectuals. It says something about Mark Latham's priorities that he did not make time to see him in Canberra yesterday or even attend Reich's afternoon tea with Labor MPs.

Labor is continually on the defensive on industrial relations, forced into opposing attacks on trade union power and further freeing up the labour market. According to Reich, debating labour market deregulation offers a false choice. "If you frame the issue as free market v regulation, then the argument is already over because, given globalisation, given technological change, inevitably you have to move towards deregulation," he said in an interview with The Australian.

"But that should not be the choice. We should be talking about ways in which society should be supporting people, enabling them to have decent family lives." The debate should shift to the stress of longer and longer working hours, greater and greater job insecurity and falling real incomes for many.

Also false, says Reich, was presenting the debate as one about economic efficiency v equity. "Working people who are more secure in their roles as family members are better workers," he says. "Companies that treat their workers as assets to be developed, as opposed to costs to be cut, do better.

"Investing in education and job training gives you a workforce that is better able to adapt to a changing global economy and is more productive. That does not lead to less efficiency, it leads to more efficiency."

Policies canvassed by Reich include better child care, early childhood education, parental leave and income tax credits for lower income earners. Labor and the trade unions campaigned on most of these issues before the election. But they are not the policies voters remembered because Labor's big policy pitches were elsewhere, such as tax cuts and welfare to work initiatives, including taking benefits from some lower income earners.

The Democrats, said Reich, had taken for granted the 40 per cent of working Americans who used to constitute its base vote. Instead, it had concentrated on the 20 per cent in the middle -- independent, swinging voters, generally living in better suburbs -- and tried to appeal to them with policies such as balanced budgets, ending welfare and expanding international trade. "The problem was that these policies said nothing to the average working-class person who was seeing his or her job pulled out from under them," he said.

But what was the appeal of the Republicans to these voters? Reich's answer is that George W. Bush changed the subject from his negatives -- the economy and Iraq -- to the four "Gs" -- "god, guns, gays and true grit in opposing global terrorism". In other words, Bush, like John Howard, went behind enemy lines to capture a sizeable part of the working class, including by fanning resentment against the "elites".

"The problem for the Democratic Party is that it has not really had the courage of its convictions," said Reich. "It used to have a very clear story and that was about helping the little guy and the average working person do better." The Democrats were the party of social equity, social justice and civil rights.

Despite his many policies, John Kerry failed to project passion and moral vision, argued Reich. The Democrats should have declared unequivocally that governments had no say on private morality but had a big role to play on questions of public morality. "When CEOs of major corporations loot the companies, award themselves tens of millions and fire a third of the workforce, that is a violation of public trust -- an issue of public immorality," he said. "When we have a large and ever-growing number of workers who are employed full-time, yet not earning enough to support their families, that is a moral issue.

"The Republicans talk about family values in terms of personal morality or immorality. The true meaning of family values is giving the family the kind of support that they need to take care of their children and raise them well and for adults to have at least a minimally adequate degree of security. That is what the Democrats ought to be saying."

Last week, Reich launched an initiative by Unions NSW (formerly the Labor Council) to promote a moral debate around industrial relations, including by seeking the support of the churches and the religious Right in politics. Family First senator-elect Steve Fielding, for one, is receptive. "You can have a great job but if your family is falling apart, your work is going to decline," he told The Australian.

Reich says there are "tremendous opportunities" in these areas. Labor should be listening.