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Renewing the Social Contract, Reclaiming the Dignity of Work and the Rights of Workers September 1995 Bishop John H. Ricard S.S.F. Auxiliary Bishop of Baltimore Chairman United States Catholic Conference committee on Domestic Policy This Labor Day finds the American economy shifting, churning, and adapting to new realities. Even as our economy continue to expand from the lastly recession creating millions of new jobs, it is reported that most Americans have seen their income decline or just hold even.  Young people with only a high school education are at a marked disadvantage. As they enter the workforce, they start jobs paying some 30 percent below similar jobs of the late 1970's. Indeed, wages for most Americans who have only a high school education have deteriorated. Families must work longer hours with more members of the family in the workforce just to keep pace. Income for middle-class families stagnates. From the shipyards of the East, the steel mills and auto plants of the Midwest, the textile mills of the South, to the high tech aerospace industries of the West, American companies, American people and American workers find that the "old ways" of working or doing business no longer exist. For too many,. The assumed social contract between employer and employee has been replaced by "survival of the fittest." Once our economy depended almost totally on the land. Each farmer, or more likely a family, could live off the lend. Now agriculture employees jut 1.6 percent of the American workforce. Then the industrial revolution developed the factory where many people prospered within the structure of manufacturing. In the last 25 years, the manufacturing sector, which helped many workers join the middle-class, has lost millions of jobs and now appears on the decline.  Change has brought us from the agricultural age, to the manufacturing age, to the still evolving service/information age. This emerging sector beginning to dominate the American economy brings challenges both to the workplace and to workers. Today, the economy relies increasingly on our knowledge   especially scientific knowledge   our capacity for interrelated and compact organization, as well as our ability to perceive the needs of others and to satisfy them. More than ever, our work is work with other and our work is work for others: it is a matter of doing something for someone else. While our nation still grows huge amounts of food and till manufactures a vast number of goods, it relies more and more on "high technology" rather than human brawn to provide our daily bread. This new technology is freeing for many; but other face serious problems, all associated with economic change. The fact is that many people do not have the ability to make an effective and dignified contribution in this new economy. They don't have the sophistication or basic knowledge wich would enable them to express their creativity and develop they full potential in this new environment. Without additional training and education there is no way for them to enter this network of knowledge and intercommunication. Catholic social teaching increasingly recognizes the positive value of the market and of enterprise within society, but always places it at the service of the person. "The modern business economy has positive aspects. Its basis is human freedom exercised in the economic field, just as it is exercised in many other fields.  Economic activity is indeed but one sector in a great variety of human activities, and like every other sector, it includes the right to freedom, as well as the duty of making responsible use of freedom." The economy is only one part of the human experience, not its sole determinant. It like other aspects of society, must work to build the common good. As Pope John Paul II notes, Catholic teaching envisions a society of work freely chosen, of enterprise, and of participation. He envisions a society not directed freely chosen, of enterprise, and of participation. He envisions a society not directed by, or directed against, the market; but where society and the government appropriately  regulate the economy to guarantee that the basic needs of the whole society are satisfied. Business, as the Pope reminds us, is not just "'a society of capital goods;' it is also a 'society of person' in which people participate in different ways and with specific responsibilities, whether they supply the necessary capital for the company's activities or take part in such activities through their labor." More than 92 percent of the American workforce work for someone else. A vast amount f corporate restructuring took place in the late '70's and through the 1980's when American productivity lagged and wages followed. But since 1982 the stock market has exploded   increasing more than 400%, at the same time it is reported that the average wage has fallen about 15%. The market has responded to record corporate profits produced by robust gains in worker productivity and other factors. This renewed growth in productivity in the last few years has been accompanied by, not the traditional increase in wages, but an actual decline in real wages. This decline of wages and benefits for working people in the United States over the last ten years has resulted in the largest gap between the rich and poor in the industrialized world. The so-called "downsizing," or some suggest "rightsizing," of corporations has brought about not just the elimination of jobs, but the remaining work often pays less, is part-time, and without health care or a pension. All of this has resulted in significant increases in the number of working families with children falling into poverty. In fact a majority of poor Americans live in households with workers, most of whom have no health insurance or pension. The minimum wage is now some 26 percent below its average for the 1970's when adjusted for inflation. Instead of sharing in the expanding economy created by rising productivity, many workers have come to depend on the Earned Income Tax Credit which has been raised three times since the mid-80's. Recently an investment banker worried that "we face a real risk right now of dramatically increased social tensions and political upheaval if wages don't begin to catchup with the productivity curve." The purpose of business in this new economy remains the same as other economic enterprises: to seek a profit by providing a service to the larger community and fulfilling the human needs of the people involved in the business. But John Paul II warns "profitability is not the only indicator of a firm's condition. It is possible for the financial accounts to be in order, and yet for the people   who make up the firm's most valuable asset   to be humiliated and their dignity offended. Besides being morally inadmissable, this will eventually have negative repercussions on the firm's economic efficiency... Profit is a regulator of the life of a business, but it is not the only one; other human and moral factors must also be considered which, in the long term, are at least equally important for the life of a business." Business ownership entails moral responsibilities to the larger society that requires it to create opportunities for work and add to the common good.  In Economic Justice for All, the bishops pointed that work is so important that "all who can work are obliged to do so." John Paul II in Centesimus Annus adds this corollary: "The obligation to ern on's bread by the sweat of one's brow also presumes the right to do so. A society in which this right is systematically denied, in which economic policies do not allow workers to reach satisfactory levels of employment, cannot be justified from an ethical point of view, nor can that society attain social peace." As America produces less tings, products, manufactured goods, etc. and produces more ideas, services, and intangibles the nature of businesses and work changes. Those who possess skills, technology, and know-how become as important as landowners in years past. Work must not only provide for our own needs, but those of our families, our community, our nation, and all humanity. A person is due   at whatever task, in whatever job, by the very fact of their humanity   both the possibility to survive and the possibility to contribute to the common good. The old adage "an honest day's work for an honest day's pay" implies a social contract between an employee and employer. It also recognizes the responsibility of employers and society to workers. Society must affirm this contract by ensuring that everyone who can work has the opportunity to do so. On the other hand, every business   regardless of its size, function, or organization   must respect the basic human rights of workers which include a living wage sufficient to support a family, old age and unemployment, and the right to organize and bargain collectively.  On this Labor Day, we call on leaders of business and labor, government and other mediating organizations to reflect on the human consequences and moral dimensions of our changing economy. All must seek to renew the social contract which offers dignity to workers and puts work at the center of our national economic life.    Papal Social Encyclicals   Other Catholic Social Teachings General Articles of Interest  Catholic Worker Connection Msgr. George Higgins  Home Page E-Mail: Fr. Sinclair Oubre