Andy Stern: The New Boss

Not long ago in America, organized labor ruled the roost. In the 1950s, one in three Americans had a union job and bosses like Jimmy Hoffa were household names. But today labor is losing clout fast — about one in 10 Americans is in a union.

Correspondent Lesley Stahl profiles Andy Stern, a man who says he's going to bring labor back to life and pull millions of Americans out of poverty along the way. Stern is president of SEIU, the Service Employees International Union, the second largest in the country.

For his talent at recruiting new members, Stern has been described as the most important labor boss in America. As you'll see, Andy Stern is a new breed of union boss.

He's as far from a blue-collar tough-guy chomping on a cigar as you can get. At 55, he's smallish, in good shape and Ivy-league educated.

He shows up to walk picket lines, even small ones. Jimmy Hoffa didn't do that. No organizing job is too mundane, including handing out flyers and making calls.

Stern has built SEIU into the fastest-growing union in the country, with its cult of purple. But while it has been thriving, much of labor has been shrinking.

Asked why the 90 percent of Americans not in a union should care, Stern says: "When unions were strong, they raised everyone up. Look at what's happening in America. The gap between the rich and the rest of the population is growing so wide and so fast that even Alan Greenspan says it threatens democratic capitalism."

"So, you think if more people join unions, that gap would necessarily have to turn around and start shrinking? Is that what you're saying?" Stahl asks.

"I think unions are the best anti-poverty program that America's ever had," he replies.

And that seems to be Stern's central motivation: lifting the very lowest-paid service workers into the middle class. So the face of his union isn't a burly auto-worker, it's people like Maria Velazquez, who runs a daycare center out of her living room in Chicago.

Velazquez says she is taking care of 16 children, all of whom come from low income families.

SEIU membership is mostly Spanish-speaking, female, minority and immigrant. What's amazing here in Illinois is that by going door to door, SEIU was able to organize 49,000 other women like Maria who run day care centers.

After 10 years of recruiting and lobbying, Illinois agreed to a union contract, giving the women a 35 percent raise and health care during the next three years.

"I think I'm going to win the Nobel Prize because I think I can finally prove that Ronald Reagan is wrong, George Bush is wrong. Wealth does not trickle down, it trickles up," Stern said at a rally.

One of SEIU's big successes in trickle up economics is janitors. You'd think a janitor like Emmanuel Tanis, who works in an office building in New York, would make minimum wage. But he's in SEIU and, with overtime, Tanis made $53,000 last year.

"So what do you think you would earn if you weren't in the union?" Stahl asks Tanis.

"I don't think I would earn nothing," he replies, laughing.

But while he fights like a tiger for service workers, his critics complain Stern shows little concern for manufacturing jobs.

"Here's one of the biggest raps we've heard against you: that you are willing to give up, totally give up on the jobs that have been lost to globalization. What about the jobs that are leaving?" Stahl asks.

"I think I have — you do have," he replies.

"You're not going there. That's someone else's problem," Stahl says.

"No, I think you fight to try to keep in there, just like we fight every time an employer wants to close a hospital," Stern says. "On the other hand, you have to understand the train has left the station of globalization. More will go on. And the question is, is: how do you make sure American workers' jobs, who are still in our country, you know, are jobs that work is valued and rewarded."

Stern spent 10 years as a leader in the AFL-CIO, arguing that the federation's priorities were misguided. He was frustrated that so much money went into supporting political candidates instead of into recruiting new members.

So last summer, Andy Stern did what insiders thought was unthinkable: he marched six million workers out of the AFL-CIO, cutting it by 40 percent, and created a new federation called "Change To Win." The split left the AFL-CIO reeling and it had to cut its budget by 25 percent.

"If you'd stayed in and fought from within, wouldn't the whole labor movement have more clout?" Stahl asks.

"I tried everything I knew how to do for 10 long years," he says. "And the only thing that changed was American workers were doing worse at the end. That isn't the kind of labor movement that anyone needs to be part of."

He says the world changed, but the labor movement didn't keep up with the times. And didn't reach out.

"Whole new industries in Silicon Valley grew up in front of our eyes. New jobs were created and … people never went there. You can't stand still. You can't hold on," Stern explains.

He lashed out at the union bosses for riding around in chauffeur-driven cars and flying around with Democratic senators. Stern never rides in a limo.

Divorced now, he lives modestly in an apartment with his teenage son, Matt. How can you tell a big time union boss lives there? A labor contract is tacked up on Matt's door with the rules of the house.

Stern says three years ago he suffered a tragedy that shattered his life: the death of his 13-year-old daughter, Cassie.

"When she died it broke my heart," he says. "And, you know, it took me a long time to come back. I didn't know if I was going to able to live through it."

He's different now, he says. Not as concerned with whom he might offend. "It just gave me the strength to say, 'Speak out; don't be afraid.' "

One brave thing he's done is pursue a partnership with corporate America. In some labor circles, that's heresy. But he's proud that after SEIU phone operators waged five strikes against the HMO Kaiser Permanente, he got results.

"I pick up the phone. I called the CEO, I said, 'I've never met you before, David Lawrence, but this is a crazy way to do business.' And, yes, we went from a more adversarial relationship to a partnership," Stern says.

A partnership that included a pilot program that gave bonuses to union phone clerks for keeping patient calls short. Designed to help Kaiser reign in costs, it infuriated labor leaders such as Rose Ann Demoro, executive director of California Nurses Association.

"We're talking about someone who's putting their own personal economic interest, a clerk, ahead of that patient's interest because they're going to get more money. We shouldn't put workers in those positions. Not now, not ever," says Demoro.

Other unions have worked out compromises with corporations, like in the auto industry. But Demoro says Stern has gone too far trying to be a buddy to business.

"What Andy has done is to basically go to corporations and ask to be kind of a strategic asset to them and he reinforces and legitimizes what they're doing against working people," she says.

"Your critics say that you can't really stand up for the workers if you're worrying about compromising with the corporation," Stahl asks Stern.

"Well, here's what we know. The members of our union — janitors, security officers — are getting health care while other workers are losing it. The members of our unions are getting raises while other people aren't. The success has to be judged by what's happening to the members of our union," he says.

Since he split with the AFL-CIO, Stern has become a lightning rod.

Some of Stern's critics have called him arrogant, rude, a small peacock. Asked if the criticism hurts, Stern says: "Yeah, I'm human. I don't like people saying things that are bad about me, but this is not an easy job."

But Stern is also known as a street fighter and will use hardball tactics, against companies such as Wal-Mart. Stern may cozy up to some companies, but nothing gets his blood boiling more than Wal-Mart.

Stern says he's not trying to unionize Wal-Mart — at least not yet. He just wants the retailer to pay what he considers a fair share of its employees' healthcare. So last year he spent millions in union money to push through legislation in Maryland that forced Wal-Mart to spend eight percent of its payroll on healthcare. Now he's going after the company in 30 other states.

"Here we have the leading corporation of America. The most profitable corporation in history," Stern argues. "And, yet, when their workers get sick tonight and they go to the hospital, 50 percent chance they don't have healthcare. You and I, Lesley, are going to pay for their healthcare out of our taxpayer's dollars."

Wal-Mart disputes Andy Stern's assertion that only half its employees have healthcare: in a statement to 60 Minutes, the company says when you factor in those who are covered by a spouse's or parent's plan, or by Medicare, 75 percent of their employees have healthcare.

It's not enough for Andy Stern to take on the largest retailer in America, he's now taking on the world. Recently, he was demonstrating with a group of janitors in London.

Like the head of a big company today, he's going global — recruiting without borders. He has moved organizers into nine different countries.

"You like to say, 'Workers of the world unite.' Which sounds, it is Karl Marx. But that's your, that's your kind of slogan now," Stahl tells Stern.

"Well the good news is, Communism is dead," Stern explains. "But the truth is the phrase means a lot because all of a sudden workers in London and workers in the United States are working for the same employer and the same owners."

The janitors Stern rallied with work for GBM, a cleaning company based in London. Stern says GBM's American affiliate, Pritchard Industries, pays his union janitors in New York up to $20 an hour — twice what GBM non-union cleaners make in London.

"How long is it going to take before they come to New York and say, 'Why are we paying such high wages here when we can pay such lower wages in London?' " asks Stern.

Stern says if GBM doesn't agree to accept a union in London, he might ask janitors such as Emmanuel Tanis to go on strike in New York.

"The workers seem to get it," Stern says. "They understand their power comes from being able to join their voices when they have a common employer. It's a lesson the auto workers haven't learned, and it's a lesson other unions haven't learned as well."

"Here you are, we're talking about janitors and you're sticking it to the AFL-CIO, sticking it to the autoworkers union. You almost can't resist," Stahl says.

"Well, what I'm trying to say is that we have to wake up to the fact that we're in a global economy and people have to change," Stern replies.

That's what he's all about: change. His union critics complain he's encouraging a cult of personality. But if his old friends in the labor movement get offended, well, as he has said, it's a tough business. And it's alright with him.
Produced by Denise Cetta