Democracy in America at Work: The History of Labor's Vote in Corporate Governance
48 Pages Posted: 11 Oct 2018
Date Written: September 10, 2018
Can there be democracy in America at work? The historical division between democracy in politics and hierarchy in the economy is under strain. Hierarchical interests in the economy are shifting their model of power into politics, and yet a commitment to revive the law is resurgent. Central examples are the proposed Accountable Capitalism Act, Reward Work Act, Workplace Democracy Acts, and Employees’ Pension Security Acts. They would create a right for employees to elect 40% of directors on $1 billion company boards, a right for employees to elect one-third of directors on other listed company boards, and require one-half employee representation on single-employer pension plans. All challenge long held myths: that labor’s involvement in corporate governance is foreign to American tradition, that when codified in law labor voice is economically inefficient, that the legitimate way to have voice in the economy is by buying stocks, or that labor voice faces insurmountable legal obstacles. This article shows these myths are mistaken by exploring the history and evidence from 1861. The United States has one of the world’s strongest traditions of democracy at work. Economic democracy has not been more widespread primarily because it was suppressed by law. Americans favor voice at work, while asset managers who monopolize shareholder votes with ‘other people’s money’ enjoy no legitimacy at all. The article concludes that, even without federal government, and by recreating themselves as laboratories of democracy and enterprise, states can adapt the current proposals and rebuild a living law.
Keywords: Democracy, Labor Law, Corporate Governance, Codetermination, Accountable Capitalism, Pensions, Shareholders, Asset Managers, Other People's Money, Labor's Capital, Wall Street
JEL Classification: K10, K12, K21, K22, K32, J01, J30, J51, J83, L20, L50, L51
Suggested Citation: Suggested Citation