The End of Pluralism

Note: Below is selected text from my LERA Presidential Address delivered at the 78th Annual Meeting in Minneapolis (May 30, 2026). You can watch the full address in this LERA presidential address video 

---

The 1930s ushered in a new era of labor policy in the United States under the banner of “The New Deal.” Many pieces are likely familiar to you, such as social security, the Fair Labor Standards Act, and for private sector labor relations, the National Labor Relations Act that was passed in 1935. But of course new federal legislation and policies didn’t emerge from a vacuum. The passage of the NLRA was the culmination of various twists and turns, including a number of important strikes in 1934. This includes the West Coast longshore and San Francisco general strikes, the southern textile strikes, and the Minneapolis Teamsters strike (Bernstein 1970; Millikan 2001).

If you went to the Lynx game on Wednesday night, or have had dinner in the warehouse district, you’ve been walking in the shadows of armed battles from the Minneapolis Teamsters Strike. I found this really cool map where someone overlaid existing Minneapolis landmarks onto the 1935 neighborhoods. We’re in the central business district, which a University of Minnesota sociology professor labeled as including “shady hotels” in 1935 (Schmid 1937, p. 361). 

Map by Tessera Design; photos from the Minnesota Historical Society.

As best as I can determine, during the intense Teamsters Strike, The “Battle of Deputies’ Run” in May 1934 occurred just next to where the Target Center is now located, just a couple blocks from here (Minneapolis Tribune, May 22, 1934). Two months later, Bloody Friday occurred a few blocks north, in what’s still known as the warehouse district (Minneapolis Tribune, July 21, 1934). The Citizens Alliance, which is what the employers called their anti-union open shop organization, reportedly planned this attack in the original Radisson Hotel that stood where we are today (The Organizer, July 21, 1934).

I think it’s fair to say that these events helped usher in the National Labor Relations Act a year later, which provides the foundation for private sector U.S. labor relations, and the model, later on, for public sector labor relations, too (Budd 2025). I think it’s important to appreciate that this system is not just a set of laws and practices. It’s also the embodiment of essential, foundational ideas that are different from, for example, the belief in unregulated competition that characterized policy-making before the New Deal. In industrial relations lingo, these foundational ideas are called “pluralism” (Budd 2025; Budd, Kammeyer-Mueller, and Pohler 2026). 

Pluralism believes that labor markets favor employers, who typically have deeper pockets than individual workers. Pluralism believes that labor is more than a commodity, and that worker dignity and workers’ rights are essential. So pluralism embraces the need for labor standards, like minimum wage laws or laws regulating AI and work, and the need for institutions like labor unions to give workers collective voice. 

But in some respects, pluralism is conservative. It mostly draws a circle around the work sphere and doesn’t pay deep attention to interconnected social inequalities. It doesn’t reject capitalism, and instead, in the words of John R. Commons, seeks to “save Capitalism by making it good” (Commons 1934, p. 143; Kaufman 2003). So pluralism sees both employers and employees as having legitimate interests in the employment relationship. This is where the “pluralism” label comes from: the employment relationship includes multiple stakeholders whose interests are legitimate, even when they conflict with the goals of others—akin to a pluralist political system.

I love this illustration’s representation of pluralism (Survey Magazine, February 7, 1914). The employment relationship is a bargaining relationship, as captured by the pendulum. But this isn’t a radical portrayal of a value system that prioritizes capital or labor. Negative outcomes are portrayed when either is too strong. And the best outcomes result when the pendulum is close to the middle, and both sides benefit. 

Source: Survey (February 7, 1914)

Balancing the power and interests of employers and employees is central in pluralist thought. That is, the system should try to strike a BALANCE (Budd 2025). Because both sides have legitimacy. So labor law, for example, tries to balance property rights and labor rights, even if both sides are often unhappy with where the lines are drawn. More generally some might even say we’re trying to balance efficiency, equity, and voice. Or maybe just one person says that (Budd 2004). 

So now we’re going to skip over my entire career and jump to “The End of Pluralism” today. I see at least two dimensions to this: 1) Destruction of pluralist institutions, and 2) Confronting deeply-embedded inequalities.

Let’s start with the first one. Of course, there has always been resistance to recognizing unions and bargaining with them. The original Radisson hotel that Curt Carlson purchased was right where we are today, and though torn down and rebuilt in 1982, this property was a Radisson hotel until just five years ago. Until 2013 it was owned by Curt Carlson’s company, not franchised.

In 1989, Local 17 of the Hotel Employees union—the union still representing workers here today—filed charges accusing this Radisson of surface bargaining. An  Administrative Law Judge ruled against Radisson (Radisson Plaza Minneapolis, George F. McInerny, Administrative Law Judge, 1990). The NLRB ruled against Radisson (Radisson Plaza Minneapolis, 307 NLRB No. 10, 1992). Rather than bargaining with Local 17,  Radisson challenged the previous rulings but lost in Federal Appeals court (Radisson Plaza Minneapolis v. NLRB, 987 F.2d 1376, 1993). That’s still not the end. After more refusals to comply, the NLRB General Counsel filed a petition for contempt penalties against Radisson, more than five years after the initial charges were filed by Local 17. 

There were a number of union rallies, including a sit down demonstration in the driveway of Curt Carlson’s home. I appeared in a 1994 video supporting the workers (Labor Education Service 1994, starting at 18:48), and given that I’m giving this presidential address in the very same hotel, I can’t resist showing 20 seconds of it. 

I heard later on that Curt Carlson wasn’t pleased that a professor—actually, an untenured assistant professor, contrary to what it says in the video—in the business school with his name on it, appeared in this video. 

Clearly there’s a long history of employer resistance to the pluralist bargaining system. But I think today is different. Extreme lawbreaking used to be refusing to bargain like Curt Carlson, or prompting a strike to hire replacements. Now employers are challenging the constitutionality and legitimacy of the NLRB just like it was 1935 (Meyerson 2025). President Reagan fired 11,000 air traffic controllers who were illegally striking. The Trump administration has tried to strip bargaining rights from a million federal workers (Glass, 2025). The hollowing out of the Federal Mediation and Conciliation Service (FMCS) is another attack on pluralist values and a dismantling of a core pluralist institution.       

Let’s turn to the second dimension of my “End of Pluralism” claim: Confronting deeply-embedded inequalities. Again, pluralism isn’t radical, even if it’s attacked as such by some. A pluralist approach to industrial relations largely tries to fix bargaining power imbalances by giving workers the opportunity to choose collective voice…in their workplaces. Inequality is seen as labor market inequality, so a better wage and just cause protections through collective bargaining will solve workers’ problems. This is different from more radical, critical, and heterodox schools of thought that see inequalities as deeply embedded in interlocking societal systems – not just the labor market, but the political arena, the legal system, housing, education, voting, and more (Lee and Tapia 2021; Rubery and Hebson 2018). 

After the murder of George Floyd just 3 miles from here, I spent several years developing and launching a new required core course for all undergraduates in my business school – 1,000 a year. It’s called “Race, Power, and Justice in Business.” I’m embarrassed to admit that I had never really thought about race very deeply in my work before then. A pluralist approach to understanding racial inequality focuses on labor market imbalances, and thus looks to anti-discrimination laws and collective power to redress this. That might, emphasis on “might”, be sufficient if racial inequality was purely a labor market phenomenon. But of course it’s not.

The more I read about systemic inequality and its roots in ideas as well as practices, and its reproduction through interlinkages involving housing, education, health care, voting, work, and more (Darity. and Mullen 2020; McGhee 2021; Trotter 2019)…well, it was hard for me to remain a pluralist. Yes, me, the author of multiple books grounded in pluralism, if not making the case for it (Budd 2004), questioning my own belief system. 

And many unions aren’t remaining pluralist either. It’s well known that labor unions have a complicated history when it comes to racial and gender equality (Zieger 2007; Milkman 2026).  But I think it’s safe to say that the U.S. labor movement has made great strides becoming more inclusive and becoming stronger champions of social justice, including beyond the boundaries of the workplace. 

For example, the labor movement was active in Black Lives Matter protests after the murder of George Floyd. The “bargaining for the common good” initiative is a movement away from pluralism as it seeks to integrate collective bargaining with community alliances to push for structural changes beyond the workplace, such as affordable housing, community-owned banks, and criminal justice reform. “Whole worker organizing” is another trend away from pluralism’s workplace focus (McAlevey 2016). 

And now we get to the winter of 2026 here in Minnesota. As highlighted at yesterday's labor breakfast, the labor movement was a key participant in the anti-ICE actions. The Minneapolis Regional Labor Federation and many local unions endorsed and provided extensive support for the January 23rd Day of Truth and Freedom protests. The national presidents of SEIU, AFT, and the CWA all spoke at the Target Center rally that day. Local unions and federations supported their members and the community throughout this occupation. The hotel employees union that represents workers here at the Royal Sonesta created an emergency food distribution network, which included delivering food to members who were afraid to leave their homes. 

And these weren’t “labor actions” narrowly defined—they were community actions, done with faith organizations, community organizations, and neighbors. In fact, while Minnesota’s largest corporations could only muster a weak PR statement, many small businesses in affected neighborhoods also participated in community and worker support actions during Operation Metro Surge. 

So at the risk of oversimplifying complicated stories, perhaps we could see the era of pluralism in U.S. labor relations as ushered in by the Teamsters Strike in 1934, and ushered out by anti-ICE actions 92 years later. 

But what happens next? Predictions are hard. The only previous LERA president from the University of Minnesota, Dale Yoder, in 1959 predicted that “By 1990, the 35-hour week should be well established, and many employees may enjoy a 4-day, 32-hour week” (Yoder 1959, p. 4) Even if we give Professor Yoder an additional 36 years for this to emerge, his predictions have obviously not come true. But I think Professor Yoder got the most important prediction correct:

“What actually happens in wages, hours, productivity, union membership and public regulation will depend largely on what happens to our ideas about employment and working relationships. Changes in our ideas and ideals are the real determinants of our future in industrial relations” (Yoder 1959, p. 5).

Unfortunately, the two trends I’ve identified push ideas and ideals in opposite directions. The destruction of pluralist institutions is animated by the ideals of unfettered capitalism and individualism, or things even less principled. In sharp contrast, the confronting of deeply-embedded inequalities pushes in a sharply contrasting direction towards ideals associated with social democracy. 

I’m not sure where things will go, but given these clashing forces, it’s likely to be tumultuous. And it might bring on difficult times for LERA if it’s harder to bring different stakeholder groups together. But I’m grateful for everyone working hard to push things in directions that are consistent with the fundamental values of our field, and to develop new ideas and new understandings. My granddaughter, and a few billion other young people, are counting on it. 

References

Bernstein, Irving (1970) Turbulent Years: A History of the American Worker, 1933–1941 (Boston, MA: Houghton Mifflin).

Budd, John W. (1991). Pattern Bargaining, Wage Uniformity, and the United Auto Workers: An Empirical Analysis. PhD dissertation, Princeton University.

Budd, John W. (2004) Employment with a Human Face: Balancing Efficiency, Equity, and Voice (Ithaca, NY: Cornell University Press).

Budd, John W. (2011) The Thought of Work (Ithaca, NY: Cornell University Press).

Budd, John W. (2025) Labor Relations: Striking a Balance, 2025 release (New York: McGraw Hill).

Budd, John W., John Kammeyer-Mueller, and Dionne Pohler (2026) “Competing Frames of Reference on the Employment Relationship and Their Importance for the Study of Work,” in Jonathan Lavelle, Tony Dobbins, Tony Dundon, and Dionne Pohler, eds., New Frontiers and Trajectories in Labor-Management Relations (SIOP Organizational Frontiers Book Series) (Oxford: Oxford University Press).

Carlson, Curtis L. (1994) Good as Gold: The Story of the Carlson Companies (Minneapolis, MN: Carlson Companies, Inc.).

Commons, John R. (1934) Myself (New York, NY: Macmillian).

Darity Jr., William A. and A. Kirsten Mullen (2020) From Here to Equality: Reparations for Black Americans in the Twenty-First Century (Chapel Hill: UNC Press).

Glass, Aurelia (2025) “The Trump Administration Ended Collective Bargaining for 1 Million Federal Workers,” Center for American Progress (May 22).

Kaufman, Bruce E. (2023) “John R. Commons and the Wisconsin School on Industrial Relations Strategy and Policy.” ILR Review 57, no. 1: 3-30.

Labor Education Service (1994) “Turning Up the Heat: The Struggle at the Radisson Hotel,” video produced and directed by Howard Kling and Randy Croce (Minneapolis, MN: University of Minnesota, Industrial Relations Center). Available at https://youtu.be/bi_rKJKhe9w?si=ehpNtvpYPODjD5rX 

Lee, Tamara L., and Maite Tapia (2021) “Confronting Race and Other Social Identity Erasures: The Case for Critical Industrial Relations Theory.” ILR Review 74, no. 3: 637-662. 

McAlevey, Jane (2016) No Shortcuts: Organizing for Power in the New Gilded Age (New York: Oxford University Press).

McGhee, Heather (2021) The Sum of Us: What Racism Costs Everyone and How We Can Prosper Together (New York: One World).

Meyerson, Harold (2025) “A Federal Appellate Court Finds the NLRB to Be Unconstitutional,” The American Prospect (August 25).

Milkman, Ruth (2016) On Gender, Labor, and Inequality (Urbana: University of Illinois Press).

Millikan, William (2001) A Union against Unions: The Minneapolis Citizens Alliance and Its Fight against Organized Labor, 1903–1947 (St. Paul: Minnesota Historical Society).

Rubery, Jill, and Gail Hebson (2018) “Applying a Gender Lens to Employment Relations: Revitalisation, Resistance and Risks.” Journal of Industrial Relations 60, no. 3: 414-436.

Schmid, Calvin F. (1937) Social Saga of Two Cities: An Ecological and Statistical Study of Social Trends in Minneapolis and St. Paul (Minneapolis: MN: Minneapolis Council of Social Agencies).

Trotter, Jr., Joe William (2019) Workers on Arrival: Black Labor in the Making of America (Oakland: University of California Press).

Yoder, Dale (1959) The Outlook in Industrial Relations (Minneapolis, MN: University of Minnesota, Industrial Relations Center).

Zieger, Robert H. (2007) For Jobs and Freedom: Race and Labor in America since 1865 (Lexington: The University Press of Kentucky).

Employment Relations in a Post-Industrial Post-Democracy Era?

If one had to come up with a shorthand for the values of the field of employment relations, a strong contender would be “industrial democracy.” For starters, employment relations scholars seek to understand the rules of the workplace. Organizations are therefore seen as industrial governments that can be autocratic, technocratic, or democratic. The employment relations ideals of fairness and self-determination are best served by the democratic form of industrial government (“industrial democracy”) in which unilateral, unchecked managerial authority is replaced by orderly rules, participatory rule-making, checks and balances, and due process in dispute resolution. That (non-Marxist/critical) employment relations scholars see the employment relationship as analogous to a pluralist political society in which multiple parties (e.g., employers and employees) have legitimate but sometimes conflicting interests reinforces the preference for decision-making and dispute resolution processes that respect a diversity of rights and interests.  

The main vehicle for delivering industrial democracy has typically been labor unions  because imperfectly competitive labor markets and capitalist legal systems favor employers over individual employees. Labor unions that are legally and financially independent of management are the needed counterweight to managerial power, and are therefore necessary for giving employee voice legitimacy through the negotiation and enforcement of collective bargaining agreements. Consistent with this thinking, labor unions have a long history of promoting collective power as a way to bring democracy to the workplace, and to strengthen political democracy by creating independent and responsible rather than subordinate and repressed citizen-workers. 

We’ve already seen what happens to employment relations and labor unions when the “industrial” part of industrial democracy disappears. That is, the decline of manufacturing and traditional blue collar occupations have paralleled the steady decline in private sector U.S. union density. Though the relationship isn’t necessarily causal, it’s hard to deny that labor unions have struggled as the nature of the economy and the workforce have shifted, and probably not coincidentally, the size of the field of employment relations has simultaneously declined.  

But clearly there should be an important space for post-industrial worker voice as well as for employment relations scholarship. Unions are experimenting with different representation strategies, new institutions (especially worker centers) are emerging to give non-traditional workers a voice, and employment relations scholarship is broadening beyond a traditional focus on labor unions.

But perhaps a new challenge looms…the decline of support for democracy. In “The Democratic Disconnect” (Journal of Democracy, July 2016), Roberto Foa and Yascha Mounk report disturbing trends from individual responses to the World Values Survey. For example, 26 percent of U.S. millennials characterize choosing leaders in free elections as unimportant and 24 percent indicate that democracy a bad way to run a country. These percentages are significantly higher than those reported by older generations. Similarly, 72 percent of Americans born before World War II say that it’s essential to live in a democracy, but among millennials that percentage plummets to 30 percent.

I incorporated these statistics into a presentation I made earlier this month entitled “Two More Problems Facing the Field of Employment Relations, and the Need for Inclusion” at the annual conference of the Labor and Employment Relations Association (LERA). To be honest, I did this primarily to be provocative, and maybe we shouldn’t place much weight on attitudinal surveys. But other indicators keep popping up. In "Why Republicans (and Trump) May Still Win Big in 2020 —Despite 'Everything'," Grover Norquist outlines how the Wisconsin strategy to eviscerate public sector unions (via Act 10) provides a desired model "for Republican political dominance" because "if Act 10 is enacted in a dozen more states, the modern Democratic Party will cease to be a competitive power in American politics" (Ozy, May 28, 2017). In other words, Norquist is championing a blueprint for one-party politics. Other examples consistent with a decline in support for democracy include trends toward greater restrictions on free speech ("Under Attack," The Economist, June 4, 2016) and toward increased support for dictatorships ("America’s Foreign Policy: Embrace Thugs, Dictators and Strongmen," The Economist, June 3, 2017). 

The industrial change was a compositional one, not one in fundamental values. But if support for democracy is truly declining, this could be much more damaging for industrial democracy and for the field of employment relations. The tendency to defer to strong leaders in the name of efficiency and expediency is even stronger in business than in government. If democracy isn’t robustly supported in the political arena, it will presumably be even harder to generate support in the workplace. If achieving post-industrial workplace democracy has been a challenge, imagine the challenge of post-industrial post-democracy. 

So what's to be done? I don’t think there are any easy answers. We need to monitor these democracy-related trends, and if they are real, they need to be reversed. The industrial democracy values of employment relations continue to need champions. Whether post-industrial or not, the values and value of industrial democracy need to be explicitly recognized, not taken for granted.  

Industrial Relations Sadly Chuckles on the Eve of the Election

It’s hard to find many people happy with the choices in tomorrow’s U.S. presidential election. Setting aside the troubling personal qualities that have been so apparent, it’s difficult not to be leery (at best) of Trump’s populism-at-its-worst and Clinton’s elitist-insider-insularity. If only both sides had paid more attention to industrial relations values and institutions over the past several decades rather than actively destroying them (Reagan, Thatcher, Walker, etc.) or just giving them lip service (Clinton, Obama, etc.), then maybe we wouldn’t be in this mess.

Industrial relations values embrace the sanctity of human dignity for all workers and their communities, and respect the needs of stakeholders with distinct interests and unequal power. This means that markets—whether labor, financial, or otherwise—don’t work for everyone, and the sanctity of free markets should be rejected. Industrial relations institutions therefore seek to bring a greater balance to the marketplace to help them work better for all by balancing efficiency, equity, and voice, often in collective rather than atomistic ways. The classic example is collective bargaining which (ideally) brings solidarity to the workforce and empowers them with a voice, but requires bargaining, often at a local level, in which a business’s needs can be addressed and balanced with workers’ interests.  

But for whatever set of complicated reasons, these industrial relations values and institutions have been weakened over the past several decades, and the academic field of industrial relations has shrunken as well. Instead, individualism, personal responsibility, and free market thinking dominate. Workers were assured that the benefits of free trade, deregulation, and increased financialization would trickle down and lift all boats, and that everyone would have the opportunity to work with purpose and meaning if they adopted the right mindset.

Instead, many have been left behind as illustrated by the sharp increase in inequality since the 1980s, and we live in polarized and polarizing times. Economic insecurity seems to frequently bring out the worst in people. And thus we have a distasteful form of populism that seeks to blame other workers and shut others out rather than building solidarity, respect, and inclusion. And we have anti-elitism which becomes anti-intellectualism and contempt towards science, education, and the arts as well as towards good government. Again, rather than bringing society together, fault lines emerge.

At a fundamental level, this disaffection is what industrial relations seeks to avoid. The construction and maintenance of institutions that provide checks and balances would have provided greater equity so people don’t feel left out, and greater voice so that people feel more on equal footing with the elites. But this would have required an embrace of industrial values around solidarity, inclusion, voice, pluralism, and compromise rather than individualism, self-interest, and free markets driven by insider elites.

Perhaps the consequences of the marginalization of industrial relations are now coming home to roost. On the Republican side of the aisle, the threat to the Republican establishment presented by the popularity of Trump has arisen out of disaffection with the Republican Party’s inability or unwillingness to replace the earlier industrial relations system with something that provides equity and voice instead of just individualism and free markets. On the Democratic side of the aisle, the skepticism towards another Washington insider is similarly rooted in policy making that has been top down rather than inclusive, and seemingly benefiting financial interests more than worker and community interests. Indeed, were the seeds of each's side demise planted, at least partly, by their own marginalization of industrial relations? 

Those who embrace the industrial relations ethos are probably thinking “I told you so.” But it’s a sad chuckle indeed.

‘We’re All in This Together’: The Multi-Stakeholder Imperative for Healthy, Balanced Employment Relationships

Last month I had the pleasure of participating in a European Union (EU) Presidency event in Riga, Latvia, organized by the European Foundation for the Improvement of Living and Working Conditions (Eurofound) in cooperation with the Latvian Saeima (Parliament). Eurofound is an agency of the European Union whose mission is to provide information, advice, and expertise that helps create better living and working conditions in Europe. Visiting Riga was a fascinating cultural experience, and this was magnified by being the only full-time academic on the event’s program and the only non-European in attendance.

The event marked the launch of Eurofound’s 3rd European Company Survey Overview Report. Consistent with this and with the “Competitive Europe” priority of the Latvian EU Presidency, the theme of the day was “Workplace practices: Creating win-win arrangements for companies and employees” (in Latvian, “Darba organizācija: Uzņēmumam un tā darbiniekiem piemērotu modeļu meklējumos”). Videos are available in this Saeima news release.

The theme of my remarks was “‘We’re All in This Together’: The Multi-Stakeholder Imperative for Healthy, Balanced Employment Relationships.” Trying to create win-win employment relationships has been going on for at least 2,000 years. This suggests that it’s important, but also difficult. Otherwise, we either would have given up by now, or figured it all out! So why is this so important? From my perspective, it’s because the best employment relationships will be win-win-win: they serve workers and their families (win #1), organizations (win #2), and society (win #3). Moreover, the benefits from healthy employment relationships are far-reaching, and include economic gains, physical and psychological health, civic and political participation, and social inclusivity. This requires balancing multiple objectives in the employment relationship (objectives that I simplify as efficiency, equity, and voice).

But why is this so hard to achieve? The event participants indicated a number of reasons, but as the lone academic on the program, I highlighted the importance of ideas. Creating win-win employment relationships, designing effective human resources practices, and crafting supportive public policies are not just about the specific practices involved in those important actions, they are also about the mental models, frames of reference, or ideologies that support those practices. And not all ideas about the employment relationship support the pursuit of balanced relationships. Approaches that are firmly rooted in whatever the market will bear are more about organizational interests; approaches grounded in critical thinking prioritize worker interests. We need HR professionals, worker advocates, and policy makers to embrace ideologies that seek to align employer and employee interests while respecting both sets of interests as legitimate. So again, we don’t just need the “right” practices, we also need the right ideas behind them.

I’m also beginning some research with colleagues from the University of Newcastle in Australia as to why it’s so easy to deviate from the “right” practices and mental mindsets. It requires hard work to avoid slipping away from these ideals, but I’ll save that for another posting.

In conclusion, the parties to the employment relationship need to work hard to make it healthy, win-win, and balanced, and to sustain these win-win-win employment relationships. So they need support from many sources, including insights from Eurofound’s European Company Survey. And they also need to be mindful not only of their practices, but also about their ideologies.

Real Leaders Shouldn't Need $63 Million in Tax Help From Their Company

One of the hottest topics in business schools and in business is leadership. Business schools are expected to provide a range of leadership development opportunities, and their graduates—after interviews that  invariably emphasize leadership potential or accomplishments—then enter corporate leadership development programs. Companies spend large sums on leadership training, and numerous consultants and organizations provide services for furthering developing corporate leaders.

It’s probably safe to say that these efforts are not aimed at creating command-and-control,  transactional leaders. Rather, something deeper is being sought, such as the widely-popular concept of transformational leadership that occurs when “one or more persons engage with each other in such a way that leaders and followers raise one another to higher levels of motivation and morality” (James MacGregor Burns, Leadership, Harper & Row, 1978). Or consider this description of purposeful leadership:

It is about having clear values and demonstrating a commitment to living those values. It is about modeling positive attitudes and behaviors that others wish to emulate. It is about building a sense of community where people feel that their work is important, that they are important, and, as a result, they are inspired to perform at the highest levels. (Training Magazine, October 16, 2013)

Medtronic, a leading medical devices company, says of its executives and leaders:

We are proud of our reputation for attracting and developing some of the brightest leaders in the medical technology industry. Strong leadership is vital to achieving our goals and fulfilling our Mission to alleviate pain, restore health, and extend life.

Our executive leadership team members serve as role models. Not only do they provide strategic oversight and motivation, they also contribute to the collective good of the company and the industry – by serving on Inclusion Councils, leading volunteer efforts in our communities, and collaborating with industry peers to improve healthcare policies.

Medtronic further describes its mission as follows:

Written in 1960, our mission dictates that our first and foremost priority is to contribute to human welfare. Over a half-century later, the Mission continues to serve as an ethical framework and an inspirational goal for our employees around the world. It guides our day-to-day work and reminds us that our efforts are transforming the lives of millions of people each year.

Sounds great. But actions speak louder than words. Medtronic has found itself in hot water over its recent decision to move its corporate headquarters from Minneapolis to Ireland to avoid billions in taxes on money it holds overseas. This move has upset long-term shareholders who will now have to pay immediate capital gains taxes. And then this week, Medtronic disclosed that  it will pay its top executives (pronounced “leaders”) $63 million to compensate them for special excise taxes they face.

A Medtronic spokesperson told the StarTribune, “The company believes these individuals should not be discouraged from taking action that they believe is in the best interest of Medtronic and its shareholders.” By making these payments, Medtronic’s top leaders will be able to “focus on what is in the best interests of the company, and not on their personal finances.”

But wait a minute. Read that again while thinking of the corporate emphasis on leadership (sometimes even ethical leadership). This hardly paints a picture of transformational, purposeful, role-model leaders, and even less so of ethical leaders. Worried about their personal finances? The CEO made over $8 million last year. Are these “brightest leaders” so easily led astray by their own paydays? Shouldn't transformational leaders be able to rise above their narrow self-interest? With or without an ethical duty to do so?

Or has the culture of executive pay become so obscene that it fuels its own fire? Indeed, research in behavioral economics has shown that financial incentives can crowd out intrinsic motivators. So maybe it’s true that personal finances trump deeper leadership qualities when executive pay is so high. But adding more fuel to the fire doesn’t seem like the answer. If companies truly believe their own rhetoric about leadership, it’s time to reign in executive compensation, open up corporate governance, share the wealth more fairly, and demand that corporate executives truly be leaders.

Happy Labor Day.

UPDATE
A column appeared in yesterday's StarTribune with the headline "Medtronic had no choice but to cover the excise tax." I disagree. If someone wants to argue that the payments are justfied because they serve some purpose, then that's fine. But Medtronic certainly has a choice. Now why does the column think that these payments are a good choice? An alternative way to avoid this extra tax is to allow the executives to exercise their options early. But according to Medtronic, this would “undercut Medtronic’s compensation philosophy of ensuring that executive officers hold long-term, performance based compensation." And the columnist then writes, "the next problem would have come the morning after closing, when the CEO and nine other executives came to work without any stock options." This brings me right back to the point of my initial post: Should we call someone a leader if they require millions in stock incentives to look beyond their own self-interest? Shouldn't a true leader be able to lead even in the absence of such strong (some might say, obscene) incentives? And what kind of culture have we created such that these incentives are not only acceptable, but are seen as essential?

Update: Creating Publicly Valuable Outcomes in the Work Sphere

Almost a year ago I blogged about my participation in a University of Minnesota conference on "Creating Public Value in a Multi-Sector, Shared-Power World" ("Implicit Public Values and the Creation of Public Value: The Importance of Work and the Contested Role of Labor Unions"). My conference paper has been going through the review process for a special issue of Public Administration Review. The referees all pushed me to take a stronger stand. Here is my new conclusion.

In any consideration of public values, public policies to create publicly valuable outcomes, and related issues, work is too important to be overlooked. My article therefore considers the range of public values on work. Some see work as a commodified, economic transaction best left solely in invisible hands of the labor market or in the visible hands of corporate and public sector managers. But this is an excessively narrow view of work and its importance. A more appropriate view embraces work as a fully human activity necessary for a community's reproductive as well as productive activities that has deep importance for our individual and collective material and psychological health as well as for the quality of democracy and other social relations (Boyte and Kari 1996; Budd 2011). Consequently, work must be seen as a public activity, and institutions such as labor unions are important and necessary for creating work-related publicly valuable outcomes.

In some cases, labor unions can add economic value, but their key contributions are toward economic fairness, not efficiency, as well as toward democratic values in the workplace and in society--that is, equity and voice more than efficiency. In these ways, the key values of organized labor and other worker advocates align with other perspectives that embrace definitions of public values that go beyond economic conceptions (Benington 2011; Bozeman 2007). Following Benington's (2011: 45) definitions, labor unions can contribute to social and cultural value ("adding value to the public realm by contributing to social capital, social cohesion, social relationships, social meaning and cultural identity, individual and community wellbeing") and political value ("adding value to the public realm by stimulating and supporting democratic dialogue and active public participation and citizen engagement"). And to tie this into broader philosophical traditions, it is the ideals of inherent human dignity rooted in secular, humanist, and spiritual belief systems, not the ideals of economic efficiency, that provide the moral foundation for preventing the complete commodification of workers in a materialist, utilitarian world (Budd 2004; Peccoud 2004).

However, the creation of publicly valuable outcomes is a complex, multi-layered process with many intersecting actors. While labor unions have a strong track record of success in promoting equity and voice when conditions are right, their ability to achieve equity and voice is highly contingent on the choices made by union leaders and other actors within particular socio-politico-economic contexts. Unfortunately, the current environment severely limits the U.S. labor movement's ability to create publicly valuable outcomes (Rosenfeld forthcoming). In the private sector, globalization as well as corporate financialization strategies to make profits through financial transactions rather investing in their workforces have eroded labor's bargaining power while legislative campaigns organized by the American Legislative Exchange Council and other conservative groups have further weakened unions through the passage of right-to-work laws and other policies. While there are pockets of vibrancy, private sector union density has dropped to less than 10 percent. Public sector union density has been more stable at around 37 percent, but public sector unions lack bargaining rights in many jurisdictions and have also been put on the defensive in recent years, especially by Republican governors rescinding or aggressively limiting bargaining rights for state employees in Indiana, Missouri, Wisconsin, and elsewhere.

It is therefore not a surprise that labor's share of national income has been falling, not only in the United States but on a worldwide basis (International Labor Organization 2013). So how to create publicly valuable outcomes in the key sphere of work? A host of public policies could promote a better balance between efficiency, equity, and voice (Befort and Budd 2009). Organized labor could experience an upsurge (Clawson 2003). Worker centers and other new, typically community-focused, institutions of worker voice--what has been called "alt-labor" (Eidelson 2013)--can seek gains for nonunion workers through education, protest, lobbying, lawsuits, and other means, especially in situations where formal union recognition is very difficult to achieve.

But these and other methods for creating work-related publicly valuable outcomes are unlikely to be sustained on a wide-scale until there is a stronger consensus on public values that recognize the deep private and public importance of work. As we have seen, however, these public values are highly contested. Analytically, contrasting perspectives on work-related public values are rooted in different assumptions about how the employment relationship works and in different values on the purpose of work. So making these assumptions explicit in order to gain a deeper understanding of the alternative perspectives is valuable for improving the quality of the discourse around work-related public values. In practice, however, there is more at stake than improved discourse. Each of the alternative perspectives prioritizes certain interests over others so debates over public values in the work sphere are inseparable from conflicts over economic, political, and normative power and the resulting material outcomes.

Consequently, there are many voices seeking the moral legitimacy and social support to define public values on work in sharply divergent terms, and the resulting implications for shaping markets, laws, and institutions means that the clashes between different value systems are intense. But the public importance of work for individuals, their families, and our societies is too important to let these challenges deter the quest for publicly valuable outcomes consistent with our public values, whether through the reinvention of traditional labor unions or the development of new organizations and institutions.

Note: to see the details of the references and/or read more, you can download the complete paper.

Implicit Public Values and the Creation of Public Value: The Importance of Work and the Contested Role of Labor Unions

Today is the opening day of a conference on "Creating Public Value in a Multi-Sector, Shared-Power World" hosted by the Center for Integrative Leadership at the University of Minnesota. Using Barry Bozeman's definition, public values are the values of a society that provide "normative consensus about (a) the rights, benefits, and prerogatives to which citizens should (and should not) be entitled; (b) the obligations of citizens to society, the state, and one another; and (c) the principles on which governments and policies should be based." One of my contributions to this conference is to make sure that the issue of work is not overlooked.

It is common to see work primarily as an economic activity that generates commodities, services, and income. From such a perspective, work is largely a private activity that occurs between consenting economic actors in a distinct sphere of life, and the favored work-related public values are those that reflect economic individualism. But this is an excessively narrow view of work. Work can be a source of personal fulfillment and psychological well-being that provides more than extrinsic, monetary rewards. Work is a way to intimately care for others, and to serve others through volunteering, civic service, military service, and other means. On an even deeper level, work can be a source of identity by helping individuals understand who they are and where they stand in the social structure. Work is also a source of freedom from the dictates of the natural world--a way to express creativity and build culture. And many believe that work is not simply a commodity traded in the marketplace, it is something done by human beings who therefore merit a set of workplace standards consistent with human dignity. As a result, work should not be seen as a purely a private affair best governed by the private marketplace. Rather, work should be the subject of public values, and non-market institutions that can create work-related public value should be considered.

My examination of work-related public values and the creation of public value suggests at least three important implications for the broader issue of public values and public value. First, values on values matter. In the work-related domain, definitions of public value and methods to achieve them are highly contested. These sharply contrasting perspectives are rooted in different assumptions about how the employment relationship works and in different values on the purpose of work. As such, there is a not a consensus on the desired public values about work, nor on the best ways for creating public value relating to work. It is important to recognize these different values on values and to make them explicit.

Second, the key values of organized labor and other worker advocates align with other perspectives that embrace definitions of public value that go beyond economic conceptions of public value. In some cases, labor unions can add economic value, but their key contributions are toward economic fairness, not efficiency, as well as toward democratic values in the workplace and in society--that is, equity and voice more than efficiency. Following John Benington's definitions, labor unions can contribute to social and cultural value ("adding value to the public realm by contributing to social capital, social cohesion, social relationships, social meaning and cultural identity, individual and community wellbeing") and political value ("adding value to the public realm by stimulating and supporting democratic dialogue and active public participation and citizen engagement"). And to tie this into broader philosophical traditions, it is the ideals of inherent human dignity rooted in secular, humanist, and spiritual belief systems, not the ideals of economic efficiency, that provide the moral foundation for preventing the complete commodification of workers in a materialist, utilitarian world.

Third, the creation of public value is a complex, multi-layered process with many intersecting actors. Labor unions can create public value by bargaining for economic fairness, creating workplace participatory structures, playing an active role in the democratic process, and pushing for democracy where it does not fully exist. In other words, multiple levels of public value creation are important. Moreover, while labor unions have a strong track record of success in promoting equity and voice, their ability to achieve equity and voice is highly contingent on other actors. Consequently, the intersections with many other actors are very important--corporations, political leaders and political parties, the law, religious groups, other civil society groups, and the like. Additionally, as with all human institutions, there is the potential for excesses and abuses so society should worry about safeguards. And all of this brings us back to the first point--society's actors can differ in their perspectives on what work-related public value is and how to create it, so these intersections and safeguards are contested, conflicted terrain. Unfortunately, it is therefore extremely difficult to make progress on these challenging issues.

Note: you can read my complete paper by downloading it from my website.