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From labor secretary, six ways to preserve the middle class

Thomas Perez talks unions, family leave with MIT Sloan students

By Kara Baskin  |  May 2, 2016

Thomas Perez

U.S. Secretary of Labor Thomas Perez

With about 260 days left in office, U.S. Secretary of Labor Thomas Perez is focused on “making a middle-class life available to those willing to work hard,” he told students at an April 27 talk at MIT Sloan.

“President Obama believes that businesses who do right by their workers and communities end up being good for shareholders, and I want to spread those best practices across America,” he said, citing both Obama’s record of cutting unemployment and 73 straight months of private sector job growth.

Perez praised Chobani, Shake Shack, and Southwest Airlines for paying a living wage. Chobani, for instance, recently offered workers ownership stakes in the company.

“When workers have skin in the game, it works for everyone,” Perez said. “The dignity of work is about paying someone a fair wage. Our nation should be about rewarding hard work.”

Then, Perez laid out a six-step plan to get there.

Reject instant gratification
Perez urged the audience to reject “false choices,” like only worrying about short-term gains at the expense of long-term vision.

“I remember a Fortune 50 CEO telling me that quarter-to-quarter earnings are one of the biggest forces that makes him think at the expense of long term,” he said.

He urged students to think holistically about investing in workers’ health care and wages for mutually beneficial gains. He cited Henry Ford, who paid his workers a living wage, in part so they could afford to buy his products.

Embrace the American dream
“If you work full time, you shouldn’t have to live in poverty. You ought to be able to feed your family, have access to health care, and be able to save a nest egg so you can retire with dignity,” he said.

Listen to your workers
Workers’ voices are essential, and all employees deserve a meaningful say, Perez said. “I’m a fan of collective bargaining,” Perez said, though he noted that even companies without unions—like Northeast grocery chain Market Basket, where non-union workers forced the reinstatement of a beloved CEO—can model a culture of worker inclusivity.

Pay attention to family matters
“If family comes first, put it in practice. Don’t just pay lip service. We are the only industrialized nation [without] paid federal leave. You should never have to choose between family and work,” he said.

Practice inclusive innovation
Perez expressed caution about the burgeoning gig economy and the risks it poses to unprotected workers.

“We applaud innovation—but innovation can never be an excuse to say, ‘Sorry, the only way I can innovate is to give you no protection.’ That is not sustainable. We need to practice inclusive innovation,” he said. A somewhat new term, inclusive innovation often refers to innovations and development by or for lower-income members of society.

Believe in diversity and inclusion
“A year or so ago, I went to Selma with Obama,” Perez said. “The civil rights movement was about ordinary people doing extraordinary things and marshaling the power of ‘we’ instead of ‘me.’ When we only focus on me instead of we, it’s not who we are as a nation,” Perez said.