On this Bring It In podcast episode, 1Huddle’s CEO and Founder Sam Caucci sat down with Andy Stern, author of Raising the Floor and Former President of the Service Employees International Union. He currently serves as its President Emeritus.
On this episode of Bring It In season one, Stern sat down with 1Huddle’s CEO, Sam Caucci, to share some timely perspectives and advice for all leaders as the world still grapples with the impacts of COVID and a changing workforce.
Audio available on Apple Podcasts, Spotify, and Google Podcasts.
Below are some of the insights Andy shared during our chat, edited for length and clarity. You can find more Bring It In podcast episodes here.
Sam: So Andy, I guess to start, in your book, Raising The Floor, which is one of our favorites at 1Huddle and sits on the shelf, you talked about some companies aren’t lowering the ceiling, they’re raising the floor. What does that mean?
Andy: Well, I think it’s trying to figure out a sustainable employment relationship that is not only sustainable for the business, but also sustainable for the employees so that we’re trying to imagine that a job provides a level of income security or economic security for people in their families and not just think this is all the government’s problem to fill things in. And also appreciate that sometimes trying to think a little bit more about the world from a worker’s point of view solves some of your retention and upgrading upskilling rather than just turning people over in kind of a low wage nation.
Sam: When you talk about skilling up efforts or re-skilling, or up-skilling, how are we doing as a nation when it comes to skill development?
Andy: I would say pretty terribly. We have 103 government programs that focus on retraining, upskilling, some general, some focused on vets, some focused on people with disability, but completely uncoordinated.
We have employment offices who are really more set up to provide benefits and they are training opportunities or re-skilling. And I’d say we’ve seen a big trend amongst companies of sort of offloading what a lot of companies used to do in house, which is, GE for instance, was famous for training schools and bringing managers along. IBM always said we never get to lay people off. We’re always gonna bring people up.
But I think more and more people have just decided let’s replace one workforce with another when we can find the skills rather than retraining the people we have. I think that’s been a big shift and not necessarily a good one for workers.
Sam: What do you think about responsibility for job training? Between universities and academia, municipalities and government, individuals, corporations, who should be carrying on more or being more active in that process?
Andy: I happen to believe employers are probably best suited to at least design the system, if not execute it because every business is unique. Every business has special skills they require. And sometimes when we go to a community college or a training program and teach generically, people look at that and say, just forget everything you learned there. We’re going to teach you how we do it here at company X.
And so to me, the jobs exist in companies, and the question should be, how do we create a system that gives companies what they need? How do we incentivize doing in-house where appropriate? How do we, as Google just recently did, define a set of skills that people can be trained for that guarantee you entrance at least into the job pool other than college or some other kind of training program? How can we be as responsive to the businesses and the changes in skills that are constantly going on? I just think there’s a big issue and we’ve designed this without a lot of the employer being integral to the situation and therefore workers are spending a lot of time getting trained for things that in the end, don’t get them a job.
Sam: Yeah, you wrote “we have too many 20th century solutions for 21st century problems”.
Andy: Yes. And I do think what Google just recently did, which is to sort of replace college requirements with skill requirements that probably meets employers needs even more because college is a degree, it can come in many shapes and forms and quality, but skills that are measurable for specific kind of jobs or whether it be in software or nursing or other kinds of care professions, I think you can train and certify people, and that can be a lot more specific and important to an employer than I have a college degree in philosophy or I have a college degree in science and somehow that’s supposed to qualify me for a whole range of jobs where I don’t think employers look at it that way, that much anymore.
Sam: Right. What with the SEIU I’m sure you’ve seen and looked at all types of job training programs. I’ve even recently been able to do some work in the city of Newark and kind of get firsthand looks, looking up closely at different apprenticeship programs and different technical schools and offerings that they have for local folks. What makes a great training program?
Andy: Well, I’d say the basic thing that makes a great training problem is that people invest their time and or money to actually find a job. This is not, is the training program great. But it’s like in the end, people have made an investment and there should be some expectation that the training program is either hooked up with a government or an employer that gives you some access to be considered for a job, or is it with a set of skills that are marketable?
For a long time we trained lots of people to be hairdressers and truck drivers at a time where we didn’t need more of either. We probably do need more truck drivers right now, but that’s a different set of circumstances, but to me, a great program is something that leads to a set of skills that can get you a job, which means that the employers have to consider those skills relevant. Not some academic institutions, feel like, well, these skills are important for people to have and employers look at it and say, you can have empathy and you can collaborate, but in this job, what you really need to do is understand software programming. And on another hand, if you’re in customer service, maybe empathy and collaboration and people skills are a lot more important. So to me, a great training program is one that gives you the skills to get a job, which means it has employers who look at this trading program and consider it to be the kind of skills and people that they want to hire.
Sam: COVID really impacted folks on the frontline who are already at a disadvantage when it comes to access to the same fancy job skill training programs that everybody else might get access to. What are you seeing that COVID is accelerating in this moment that maybe it was already a trend that we were heading towards?
Andy: Well, I think it’s clearly accelerating using technology to replace a lot of white collar kinds of activities. When people can’t get together and work together, it’s a lot easier just to get a software package to solve a lot of problems with accounting or things that people used to think work better because people work together. But when people are all isolated, sometimes it’s better to do that.
Obviously zoom has changed the nature of the need for business travel and people working together in offices. But I think for low wage workers, what it actually did more of was just show how, although we value the services that were provided and most of us couldn’t have gotten along without delivery or without people working on the subways or driving a taxi, if you had to get somewhere or doctors or nursing home workers, there’s no reward in those jobs.
So we have people, we call essential workers. A lot of us can have the privilege of staying home and being safe, but in the end, they have no ability to protect themselves economically. And I think we just learned that they’re essential on one hand and they’re not paid very well on another.
And all of that then leads to questions about health status, health equity, living in communities where you’re crowded in departments, therefore spreading the disease more quickly. And so it was just a whole cycle of problems that I think we saw about being poor and working and being poor.
Sam: You made a great point, it’s like the discussion is so heavy on work from home is here to stay, but it’s wild when we don’t think about the percent of the US workforce that are frontline, that can’t work from home.
Sam: That dominates a headline, and we’re talking about the future, trends are here to stay when, like you mentioned,work from home is just not something that is just beyond the reach for a lot of workers.
Andy: My book is called Raising the Floor for the specific reason that the discussion normally is not about low wage service workers in restaurants or food stores or Uber drivers, nursing home workers. Their life is just not economically secure.
The famous statistic about how half of America doesn’t have $400 in cash in case of a problem is real. As you said, as usual, the discussion about working from home is income-based and class-based, it is not a question that the nursing home worker or the home care worker or the grocery store worker is going to be working at home. They’re going to make it possible for everybody else to work with them.
Sam: Yeah. I mean, that’s a good point. That kind of leads us into UBI, and with universal basic income, what do you say to business owners as to why they should educate themselves about the benefits of UBI?
Andy: I think we need to appreciate which no one likes to talk about the fact that very successful companies have large percentages of the workforce receiving public benefits. So if people say we spend too much on welfare, I say, well, then raise the minimum wage to $20 an hour and no one will qualify for Medicaid, no one to qualify for food stamps, because people would be making enough money from their employers to compensate.
And that’s not true for everyone not every employer can afford to do those things, but we have lots of very successful employers like Walmart that still have people on public benefits. So one issue is what’s our responsibility to not have the government subsidized companies, because they don’t pay enough money to people.
And it just burdens our tax system. When companies don’t distribute fairly to at least have a floor that’s high enough to generally speaking, keep people off public benefits. One. Two is, which I think we’re now seeing with kids, we talk about our kids are important for them and we want to not create a poverty cycle and have people who have no opportunity to continue to have no opportunity.
And yet, when people don’t have money and income, parents, we all know the advantages you have if you happen to be privileged like me and your kid has a problem, you can find extra help, or you can send them to summer camp or you can supplement his education with tutoring. For parents who can barely buy books, we’ve sort of trapped them in poverty.
And so I’m glad we’re creating a floor for children, almost a universal basic income for children with the child tax credit thar The American Recovery plan just approved, as another place of time to raise up, at least people with parents to a level that we’re not having their kids suffer quite as much because they don’t have money.
But I think the bottom line is what combination of minimum wages and what combination of cash as opposed to all these other benefits should exist in society so that people who are doing responsible things like raising their family or taking care of their parents or are working every day, but not a jobs that pay as much as they should are not poor?
With this, it’s a distribution problem that we’ve mal distributed the success of companies and too often, then we’re placing the responsibility on the government to pick up the benefits that aren’t being provided and/or we’re paying the price with kids and generations of children who are starting off behind that may never catch up.
So all the training and things we do with the backend can never make up for all the knowledge you’re supposed to gain from zero to three, when so much of your development occurs. So I think there’s a lot of reasons for society to want to create some kind of floor that people who work or people who do something important, like caring for kids or caring for parents just aren’t poor.
Sam: Just makes me think about what you said, there’s that employer and employee bond is weakening, and it’s almost, if you’re not listening and educating yourself and thinking about these things and it’s not even just C level, I think it’s also the middle manager in the workforce who’s maybe it got a more direct opportunity to mentor, coach or impact the day logical worker.
Andy: Yeah. I mean, I would say we have not put a lot of value in most companies. That’s not to say every company, just to sorta see people’s career paths, have them at least understand what a career path could look like and then have the mentorship or the training or the clarity if you invest your own time that you can get another step up.
The hospital industry in New York now has a very clear set of programs on how you can go from a home care worker to a nurse’s aid, and how you can go from a nurse’s aide to a licensed practical nurse then a registered nurse and even to a doctor right there.
And they support you because they’ve decided that the best way to keep retention is to train the current workers they have, that the nurses who they bring in from the outside work for a couple of years, then they move to the suburbs or they go to another situation. But people that have been in the system for a long time, who they invest in, don’t tend to just pick up and go once they get trained, because they’ve already made a several five-year 10-year commitment to being an LPN, and now they’re training to become a registered nurse. And when they get there, they stay
It’s longer term employees who get promoted are probably more worthwhile to train than shorter term employees where employees just say, I’m going to train them for the next employer. Like in tech, they’re going to move from job to job, to job because they have skills that are in demand and they sort of bargain their way, not up in the company, but bargain their way by jumping, getting a raise when they go to their next.
But there’s a lot of people who are committed to companies who, with a little bit investment aren’t going anywhere, particularly when employers treat them decently. And I think we just overlook a whole group of people when we’re looking for the hot shots that we hire in and then we watch them leave because they had a lot of other choices. And then we’re always looking to recruit more people and it just becomes a treadmill, it never sorta ends until we sort of figure out there’s a whole group of employees who are committed to the company who may not be as hot shot on a short term, but definitely have the potential to be really key members of a team if someone wants to invest in them.
Sam: It’s just like infrastructure in the physical sense. Right? How do you build infrastructure inside of your organization in order to develop and engage workers? Up in tech, the up and to the right motion that you want your financial model, how do you do that with every worker?
And I was shocked to read that, pre COVID in America, we have the worst employee turnover rates in the world. I mean, I guess in any industrialized country, it was like 28%.
Andy: Yeah. I mean, low wage workers are seen as disposable. No one really invests in them. I mean Amazon and people have done a little bit better recently, but I’ve been very interested in watching KKR in their manufacturing purchases, have all done profit sharing as part of their acquisition, and you do begin to think about, how do you give people a stake?
If you’re doing an IPO for Uber, why wasn’t 5% set aside for the drivers right into a fund that could have generated dividends that could have been decided if you’ve been here a certain number of years, or you worked a certain number of hours, we’re going to give you a dividend, off the appreciate appreciation, or we’re going to give you some investing rights in some of the stock, but we don’t do much to give people at the lower end a sense that they had a stake as opposed to doing, if you want to get a raise, go somewhere else. But who about how long you’re at McDonald’s or Starbucks or any other place. And, it’s very hard in franchises or places with lots of workplaces to really do a lot of training when you have 32 people in a Starbucks or something. It’s hard to create systems that work.
So people tend to either find out there’s a better job at Starbucks as a manager, or they get some skills as an assistant manager and go over to the subway or some other place where they can get a better job because they don’t see a career path that really works for them. I’m not saying it’s easy. I’m just saying it fosters a lot of turnover.
Sam: And in the franchising, we brought up franchising, I’ve been disheartened at times to talk to businesses that are franchise models, who maybe use labor rules as a way to justify not investing in workers our hands are tied, we can’t do this, we can’t do that. What can you do or should be doing?
Andy: I think there’s two. One is, do you really want to solve the problem, or do you want to complain about the problem and use it as a kind of shield, to not be dealt with. I mean, there’s no question that McDonald’s franchisees don’t have as much power as McDonald’s writ large . There’s been some tentative and not great efforts amongst the franchise owners and the unions in this case to sort of say, what should we expect, the standards that McDonald’s should have and then how do we make sure that the resources are available to the franchisees to pay a higher wage or do things, just to say, it’s not my problem because McDonald’s takes too much money or Uber takes too much money and there’s nothing I can really do is not really a great solution.
But now I do think this ownership question, becomes In certain places, a really important question, if you want to lower turnover. And, I would hope to see a country where we actually really incentivized ESOPs or profit sharing at the lower end because I don’t think people are leaving for a more fulfilling job.
I hate to say it, it’s not like people look at, I’m going to work at the restaurant. Now I’m going to work at Amazon delivery. Now I’m at Whole Foods, and it’s like, it’s just a great job. I’m so glad I left. It’s like, that’s a pretty mediocre job, but it pays more, the hours are better. I have more flexibility, or my boss isn’t a jerk.
If people felt like if I stayed here 10 years, I would have some real money potential, 40 or $50,000, which would be a lot of money for people built up into a retirement or a profit sharing, you would get a different level of commitment, but the idea that we’re going to make these jobs great jobs, that, I represent all the workers who work in my apartment building when I was president of SEIU, they were in, they’re paid incredibly well. No one would tell you it’s the job of a lifetime in terms of interest, right? Doing the recycling every day, working the front desk or the package room, now we’ve made it a good job pay wise, and people aren’t going to leave because why leave a good paying job that might be boring at times for a low paying job that’s boring at times? It doesn’t make any sense. So. Yeah, it’s not like we should create a belief that every job can be euphoric and self-actualizing, but at least you shouldn’t work and be poor.
Sam: Totally. I have a selfish question for my own development. 55% of the workforce now is gen Z/millennial. It’s probably a little few ticks up above that now. As an entrepreneur, as a talent leader, what advice do you have for me and others out there for how we can get more involved? Obviously you’ve advocated at the highest levels.
I think I read, I don’t know how many dozen, 50, 60, 70 times you were in the white house during the first few years of President Obama‘s. You’ve been in very important rooms, fighting the fight. What should I and others be doing?
Andy: I would say, particularly at this moment of history, it’s not the most comfortable thing to do, but odd couples, so to speak, work. I mean, what made Obama Care possible was that my union was in one coalition with the business round table and national Federation of Independent Business and ARP, another coalition with the pharmaceutical companies, another coalition with the health equity groups and other coalition with the single payer groups, because we all believed in a series of principles, even though we knew when it came to legislation, we all wouldn’t agree, but then we all agreed there needed to be a change and here were the principles for the change. I say this to people now about labor law reform. It was very interesting that Marco Rubio endorsed the union position and Amazon election.
And now people just want to write him off as a hypocrite. But I thought it was a pretty courageous thing to do. You can decide what it was. And I’ve seen a letter he wrote about some other issues about giving employees more voice. And I would love the ProAct, which is the very important piece of legislation to pass.
It doesn’t seem likely right now in the Senate. So I just think sometimes, like, we need to try to have a little bit more common ground approach. We can fight the good fight and never win. I think we see this now and in trying to make Uber drivers, employees, people who’ve been at it for six years and six years later, the workers have nothing to speak of, and at the same time, there is probably plenty of progress that could have been made, not perfection.
And so, to me, this idea of trying to find people in your space who you wouldn’t normally see as an ally, but for whatever reason, maybe like a universal, basic income, they were libertarians who think that giving cash is better than having more government programs, I wouldn’t agree with him on a lot of things, I happen to agree with him, giving people cash is the right social policy in many cases.
So my situation is in the kind of impact space, just getting together with people like you and thinking you’re going to win, I wish you good luck. Not a lot of winning has been going on. Biden obviously found a way for a momentary great victory, but I don’t think it’s something that’s going to happen over and over again, because reconciliation is unique and a process.
On the talent side, I just happen to believe people would like to be in a place that’s mission driven, whatever that means, that you can go to work and a lot of places where everybody’s trying to make money, and that’s good. Businesses need to make money, but when people feel like there’s a mission attached to it, that’s either some of your time, some of your efforts, some of your thinking is about doing something important, whether it’s for the impact, how you do your work as good for the environment or it’s good because you’re giving people training and feedback and skill that they normally.
So I think doing things that have an impact is really important to talent. The brand becomes important for attracting talent and not kind of an exclusive, politically correct brand, but something that matches the entrepreneurs passions. That if you don’t have to be passionate about everything, you can be passionate about the environment. You can be passionate about giving people time to volunteer. You can be whatever your brand is because it’s the entrepreneur’s heart, I think, makes places more attractive because people like to work for people who believe in something besides making money.
And it’s not like they want to work for places that don’t make money. It’s just, at some point, we all know it is important, not if it’s against your values, it’s better if it’s neutral on your values. And it feels a lot better to say, I work for Sam and Sam’s really making us think about what we can do to lower our carbon footprint or how we can make a bigger contribution to training workers and making sure these videos work in 10 languages because we want to be the company that is aware that everyone doesn’t speak English or Spanish.
Whatever it may be, I think, it becomes really important in recruiting because I think, obviously wages and benefits matter and the business matters, but I think, mission can exist in almost any situation.
Sam: Great. One last question for you. I ask everybody, what is your hope, Andy, for the future of work?
Andy: So my hope is that we create a system that allows people to be economically secure without really being able to predict what’s going to happen, and that we create tools like we did in the pandemic where we created an unemployment system situation with a supplement to it, or we created a universal basic income, or we create expanded healthcare programs that people are okay and we don’t slow down the future of work because people are rightfully resisting change because the consequences to them and their family are great.
So people have to feel that there is a safe and secure way to transition from wherever I am to wherever I’m going. And we’ve been miserable doing that for industrial workers. We’ve been miserable doing it for energy workers, it’s really, ‘you’re done, bring in the new team’.
And people fight like heck. Prisons closing down a private prison. If it’s the best job in your community, of course people are going to fight. And so we just need to create a system that understands that we have to make changes to compete and have the country prosper, but it can’t be at the expense of people. And we need social policy that we don’t have to reinvent every time we have a problem, or we don’t have to predict when our driverless cars or everyday robots are going to arrive but once they do, if they really have a dramatic impact, we have a plan to take care of people.
Sam: Andy. Thank you. That was great.
Andy: All right. Take care, man.
Topics Discussed: Minimum Wage, Government, Employee Benefits, Low Income Families, Training, Minorities, Workforce, Jobs
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