Labor: Cost of a Commodity or Commitment to a Covenant?

by Rev. Craig B. Mousin, university ombudsperson, DePaul University

Skeptics of applying Catholic Social Teaching (CST) to employment practices often debate whether CST’s aspirations conflict with the purported high cost of labor, and therefore, cannot be implemented within the budget constraints of market competition. That debate was highlighted last fall in the October 20, 2014, New York Times. An article noted that Whole Foods, which was facing increased competition and the threat of reduced growth, had announced the Implementation of an advertising campaign stressing its values that distinguished it from competitors. One ad proclaimed, “We want people and animals and the places our food comes from to be treated fairly. The time is right to champion the way food is grown and raised and caught. So it’s good for us and for the greater good. . .” 1

On the previous page, another article discussed robots replacing Wall Street traders on the fixed income trading floors because computers can determine prices far faster than humans. Noting that automation previously had distinguished losers from winners among banks, the article explained that executives “at all the banks say that they will not let a sentimental attachment to existing employees prevent them from modernizing their business.”2 

One industry threatened with low-cost competition returns to its values and emphasizes fairness to its employees. The other, fearful of loss, characterizes concern for employees as sentimental and not necessary for success. In last spring’s Update, we inquired why CST does not play a more important role in the debate on the commodification and polarization of jobs.3  If raised at all, skeptics counter that labor costs consume excessive portions of institutional budgets and institutional stewardship necessitates jettisoning employees to ensure bottom-line success.

Although not specifically addressing CST, Zeynep Ton counters those conclusions in The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs & Boost Profits. 4 Ton, who teaches at the MIT Sloan School of Management, critiques the skeptics (who see jobs only as costs to be slashed) for perpetrating the “bad jobs problem.”5   She explores the world of low-cost retail corporations. With labor costs a significant portion of the expense line, management seeks the lowest possible labor costs by minimizing training, reducing the number of employees, and scheduling part-time employees with irregular workweeks. This strategy links low employee costs to low prices, thus purportedly improving the bottom line. Hence, the bad jobs problem. In effect, employees become one more commodity to rearrange on the work floor, much as the goods they stock on the shelves. Her book provides Catholic employers who integrate CST into the workplace with new practices to avoid similar pitfalls and, instead, participate in the good jobs strategy.

Ton claims retailers that best serve their customers, their employees, their communities, and their shareholders distinguish themselves by following a good jobs strategy that “combines high investment in employees with a set of operational decisions that deliver values to employees, customers, and investors.”6  Ton demonstrates that companies that have outpaced their competitors based on the good jobs strategy achieve this success because “well-paid, well trained employees create even more wealth than they cost.”7  The good jobs strategy entails four intentional operational choices that must all be met: offering less, standardizing and empowering, cross-training, and operating with slack. Such operational choices emphasize investing in employees who return the investment with initiative and loyalty. Good jobs strategists view their employees “as the key to the company’s success—not only in word but in deed.”8

Although higher education is not low-cost retail, dire forecasts intensify the need to manage costs appropriately at all institutions. Ton’s findings provide an alternative view of how to address those competitive forces. Significantly, many of her conclusions coincide with decisions made by those who have integrated CST within Catholic institutions of higher learning. In short, employers who act to recognize and foster employee dignity characterize Ton’s success stories. One finds within her descriptions elements of CST formulated over centuries and based on biblical and theoretical concepts that reveal kernels of CST’s grounding principles subsequently developed within Catholic mission and values.

The Divine-Human Covenant

In the Genesis stories of creation, human dignity provides the bedrock of CST. The Bible opens when God first dignified work through the works of creation. By creating women and men in God’s image, the tradition finds that dignity exists within the human—not as something that we can give, but only acknowledge and honor. As Thomas O’Brien suggests, “Each human carries the spark of the divine, which endows persons with dignity, purpose, and grace,” thus necessitating treatment as such.9

Management labor lawyers might cringe at biblical words such as covenant, but for Catholic institutions, the good jobs strategy stems from a commitment that respects the covenant of the divine-human relationship. Employees’ dignity will be respected in how they are paid, how they are scheduled to work, and how they are empowered, trained, and given opportunities to contribute to the greater good of the institution. If the debate occurs solely through the market-driven vocabulary, labor is seen as a commodity whose cost must be constrained. When labor costs are seen as a commodity, with the pressure to cut in bad times, the covenant is challenged. This leads to Ton’s theory of the vicious cycle in which employees are poorly paid, poorly trained, and then let go, putting more stress on the remaining employees who then are unable to complete their work or respond to the institution’s needs. Well-trained and empowered employees who have the time to make the best decisions will provide more value to any employer than underpaid, underappreciated, and undertrained employees. Catholic universities and colleges with emphasis on dignity and lifelong learning have also benefitted from well-trained, empowered employees.

Many Catholic colleges and universities were innovative and disciplined when they actualized CST principles in founding their institutions. By adding organizational discipline to those efforts, they prefigured many of the elements Ton finds most necessary to a good jobs strategy. Whether it was expanding access to education, developing new theories of education, or expanding ways to serve the poor, organizational discipline in treating their employees and those they served with a full measure of dignity contributed to their success.

The economic climate challenges all institutions today. Educational costs threaten enrollment. Issues regarding training, part-time employment, and how best to empower employees in the 21st century impact all universities and colleges. CST does not mean that universities and colleges are immune from the economic context. Difficult decisions face leaders. But the history of innovation in responding to historical challenges in the context of CST suggests Catholic colleges and universities can provide new insight that will ensure a good jobs strategy. The innovation that sparked the founding of many of our institutions serves as a strong foundation to offer new responses to the contemporary challenges.

Values for the Long Term

We have long argued in these columns that mission influences Catholic colleges and universities’ employment policies to distinguish our workplaces. Ton asserts that mission acts as a constraint on bad behavior. Convenience store chain QuikTrip appears to have avoided the paralysis other institutions have experienced when defining the proper parameters of an anti-bullying policy. QuikTrip unequivocally states that it will not tolerate abusive bosses or colleagues who trample the dignity of employees. Its values establish the grounds for collaboration among all employees.10

Although recognizing that difficult economic times entice companies to demean dignity or treat labor as a commodity in order to address short-term needs, Ton sees that “the secret lies in values-based constraints. To reduce the temptation to make such trade-offs, these companies have clear values that guide all decisions. . . . These guiding values come from the founders and become so ingrained in the culture that they stay in the company even after the founders leave.”11  If a company violates its values for short-term relief, employees know that the sacrifice will always be made “for the good of the company.”12 Finally, Ton encourages values based higher educational institutions to manage employees and teach students to nourish the good jobs strategy to avoid the vicious cycle resulting from the commodification of jobs.

Although Ton writes in a secular market-based vocabulary, her findings, in part, support what CST has long held about work: that employees should flourish in the workplace. Employers should encourage their people to exercise their skills in order to contribute to the greater good precisely because they are empowered and trained within a mission-oriented institution. Many Catholic colleges and universities have been engaged in this work for years. The good jobs strategy provides support to continue to demonstrate that it works not just for low-cost retail, but

in every workplace.

The opinions expressed in this column are the author’s alone and do not represent those of DePaul University or the Association of Catholic Colleges and Universities.

1 Stuart Elliott, “Whole Foods Asks Shoppers to Consider a Value Proposition,” The New York Times, October 20, 2014, B5.
2 Nathaniel Popper, “Shouts on Bond-Trading Floor Yield to Robot Beeps,” The New York Times, October 20, 2014, B1, B4.
3 “Polarizing, Precarious and Perplexing” in Update, The ACCU Newsletter, Association of Catholic Colleges and Universities, Vol. XL, No. 1, Spring 2014.
4 Zeynep Ton, The Good Jobs Strategy: How the Smartest Companies Invest in Employees to Lower Costs & Boost Profits (Boston: New Harvest, 2014).
5 Id. at 3.
6 Id. at 7.
7 Id. at 15.
8 Id. at 16.
9 Thomas O’Brien, “Human Dignity in a Technological Age,” in Thomas O’Brien, Elizabeth W. Collier, Patrick Flanagan, Good Business, Catholic Social Teaching at Work in the
Marketplace (Winona, MN: Anselm Academic, 2014), 36
10 Good Jobs at 116-17.
11 Ton at 194.
12 Id. at 197.

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Polarizing, Precarious, and Perplexing

The dignity of each employee at a Catholic college should influence decisions about allocating resources and determining policies.

By Rev. Craig B. Mousin, university ombudsperson, DePaul University

Precarious work is a worldwide phenomenon,”1 concludes sociologist Arne Kalleberg, who defines precarious as work that is “uncertain, unpredictable, and risky from the point of view of the worker.”2

Kalleberg subsequently wrote in Good Jobs, Bad Jobs that not only do we face a worldwide tragedy of precarious employment, but that work itself has become polarized with an expanding gap dividing those who have good jobs from those who have bad jobs.3  Kalleberg explains that good jobs offer more than simply adequate compensation, but also job security and a place where one can develop a “life narrative” from work.

Today, precarious work has spread to many occupations within all sectors of the economy.4 The threat to the very existence of one’s job negates many of the benefits that work typically provides. Simultaneously, as the majority of the workforce has seen little increase in wages over the last several decades, the middle class has diminished and income inequality has grown, further polarizing the workforce.

Although few might doubt that globalization, economic recession, and structural changes have made work more precarious in recent years, Kalleberg’s review leaves one with a perplexing question: Where is the voice of Catholic Social Teaching (CST) in the contemporary workplace?

A Notable History 

Although Kalleberg echoes ideas found deep within CST regarding human fulfillment through work and the importance of work for an individual’s self-esteem, the contemporary public discussion surrounding precarious work finds little recognition of CST’s historical contribution to the reduction of precarious work in the early 20th century through the Great Compression of the mid-20th century, when employment in the United States led to periods of reduced inequality.

In the 1940s, after many of the New Deal’s labor reforms had been enacted, President Franklin Roosevelt praised Msgr. John A. Ryan’s service in raising the goals of CST in support of those reforms: “With voice and pen, you have pleaded the cause of social justice and the right of the individual to happiness through economic security, a living wage, and an opportunity to share in the things that enrich and ennoble human life.”5

But Ryan did not advocate his religious perspective alone. Ryan credited the Catholics who, as early as 1500, had begun to argue for the role of government to regulate employment and relief for the workers.He celebrated the work of Frederic Ozanam, one of the principal founders of the Society of St. Vincent DePaul in the early 1800s, who had argued for a living wage and government encouragement of workers’ associations to negotiate on behalf of workers.

The poverty of France and the lack of respect for the dignity of workers and their families caused much of the precarious nature of employment under such an economic system. Ozanam joined with other French Catholics who sought to navigate between the unprotected employment of workers nder laissez-faire economics and complete regulation by socialism and communism. Subsequently, Pope Leo XIII’s Encyclical Rerum Novarum, influenced in part by those French Catholics, developed CST’s distinct path to recognize the role of capital while upholding the dignity and rights of workers and provided a strong foundation for Ryan’s advocacy.  

In Policy and Practice

It may be that scholars talk within their spheres of influence and business leaders speak within their language of the workplace, and never the twain should meet. Yet, Catholic colleges and universities would seem the best place to breach the barriers by providing a workplace that is an effective laboratory of CST in action. CST’s foundation in the dignity of each person—who is not a commodity, but a member of the human community created in the image of God—provides one starting point. Above all considerations, the dignity of each person—each student, staff, and faculty member—should influence daily decisions about allocating resources and determining employment policies.

For example, the government’s attempt to discourage undocumented immigrants from working led Congress to establish the employer’s duty to collect and file I-9 forms documenting employment authorization, with risk of substantial fines for noncompliance. The legislation enacting I-9s was highly contentious and also challenged CST’s nuanced understanding of welcoming the sojourner and care of the immigrant. Although most Catholic institutions have not quarreled with their duty to comply, the implementation of the I-9 process and the fear of noncompliance may negatively affect lawful immigrants or persons who may be perceived as foreign-born, while also causing undue stress to employees charged with ensuring compliance. Engaging CST through implementation of the process would honor the dignity of all involved while still ensuring legal compliance.

CST not only assists in determining the effect of the process on human dignity, but also raises the question of how religious institutions operate in a secular society. As Martin Marty and James Serritella warn, “Primarily, religious bodies should not put aside their theology and doctrine when entering the secular area, but should instead make sure that their religious polity is internally clear and in the forefront of consideration when adopting legal structure or drawing up legal documents.”6

Although Marty and Serritella were speaking specifically about how religious institutions might organize themselves under U.S. law, their advice bears following in formulating policies and practices. How do our attorneys, compliance officers, financial experts, and managers interpret their respective professions in light of CST? Do we ask prospective trustees if they understand how to reconcile CST and their fiduciary duty to our institutions? Have we developed a vocabulary that gives voice to CST within the workplace?

For example, laws initiated in the New Deal era legislating the normal work-week permit exempt employees to work extra hours without the necessity of overtime pay. Recently, the federal government raised the question whether some employers have abused the intent of these laws by classifying too many employees as exempt. In addition, even properly classified exempt employees face the challenge of working too many hours beyond what the legislation may have intended. Engaging CST in a conversation about the purpose of work and the flourishing of each employee, along with the appropriate balance with home and community commitments, would start to address concerns about abuse of the system.

Going Beyond Business

A recent Wall Street Journal article suggests that the business world is catching on: “Lately, . . . some CST evolved from extremely challenging times. Today, the great disruption caused by precarious work in a polarized society necessitates a new response.

A recent Wall Street Journal article suggests that the business world is catching on: “Lately, . . . some big investors have worried [that] increasing income and wealth gaps threaten the economy’s ability to expand.  For their part, Catholic colleges and universities could provide an additional example of how inequality and precarious work diminishes the effectiveness and success of our workplaces. CST has consistently stressed that inequality has costs, not just to economics, but to the realization of human dignity in the workplace. Will our practice merge with our vision in earning an invitation to the discussion?

The opinions expressed in this column are the author’s alone and do not represent those of DePaul University or the Association of Catholic Colleges and Universities.

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1 Arne L. Kalleberg, “Precarious Work, Insecure Workers: Employment Relations in Transition,” American Sociological Review 2009 74:1, 14, http://asr.sagepub.com/content/74/1/1.

2 Id. at 2.

3 Kalleberg, Good Jobs, Bad Jobs: The Rise of Polarized and Precarious Employment Systems in the United States, 1970s to 2000 (NY: Russell Sage Foundation, 2011) 3.

4 Id. at 86.

5 Rt. Rev. Msgr. John A. Ryan, Social Doctrine in Action, A Personal History (NY: Harper & Brothers Publishers, 1941) 281.

6 James A. Serritella, Thomas C. Berg, W. Cole Durham, Jr., Edward McGlynn Gaffney, Jr., and Craig B. Mousin, eds., “Religious Polity,” in Religious Organizations in the United States, A Study of Identity, Liberty, and the Law, (Durham, NC: Carolina Academic Press, 2006) 104.

7 Justin Lahart, “Worry Over Inequality Occupies Wall Street; Gulf Between Haves and Have-Nots May Hurt Economy,” Wall 

Street Journal (online), 10 November 2013.