August is a month of respite for Washington. Endless political fights continue but the battlefield moves back to the states and districts of members of Congress.

The traffic and decibel level ease in the capital as people take their summer vacations. The quirk in the calendar this year extended the August congressional recess into the first days of September.

But the Workforce Management beat was busy this week. Organizations on the left and right—the AFL-CIO and the U.S. Chamber of Commerce, respectively—hosted Labor Day briefings. Individual experts also weighed in on the state of the U.S. employment market.

In the midst of the predictable rhetorical tussle over the Employee Free Choice Act, the bill that would make it easier for workers to form unions, there was a surprising moment of convergence between labor-leaning representatives and those who favor management.

It was on a topic that concerns both sides: How to ease worker anxiety about the wrenching changes wrought by global economic competition. They agreed that one answer is to make sure that workers receive their fair share of the productivity gains they produce for their employers.

Productivity is profit. If a company makes better products or delivers better service quicker and more cheaply than its competitors, it will win market share.

But over the last several years, the people who have reaped the vast majority of the gains are executives and shareholders. Wage disparity between the top of corporations and the middle and bottom is accelerating. The resentment of middle-class workers—and voters—has manifested itself in political pressure on Congress to rein in executive pay.

The answer from organized labor is to give workers more leverage through unionization.

“The fastest, the surest and the most effective mechanism for raising workers’ wages is the collective bargaining process,” said Richard Trumka, AFL-CIO secretary treasurer, in a speech at the Center for American Progress in Washington on August 31. “Increasing productivity only raises wages when workers have bargaining power. Take bargaining power out of the equation and you’ll still generate wealth—but it won’t get into the hands of the people who created it.”

Trumka’s answer to this dilemma—passage of EFCA—is anathema to the business community. But he also is using this argument in part to appeal to younger workers he is trying to bring into the labor movement. They are the ones who are the most technologically savvy and will deliver many of the productivity advances that corporations seek.

On September 2, I attended a book launch at the Center for Strategic and International Studies. Grant Aldonas, former undersecretary of commerce for international trade, introduced Globalization and the American Worker: Negotiating a New Social Contract.

Aldonas, principal managing director of the consulting firm Split Rock International and a veteran of Republican administrations, spent part of his presentation focusing not on social contracts writ large but on labor contracts.

He made a similar argument to Trumka’s. Look at Page 18 of his PowerPoint. Aldonas calls for “aligning the interests of workers with the long-term interests of their firms” through “contracts that ensure that workers profit directly from the productivity gains they create.”

Aldonas criticized EFCA as misguided. But he did not trash unions in general.

He asserted that the only way for workers to achieve a higher standard of living is through acquiring the skills demanded in the global economy.

One of the best providers of such training in Aldonas’ view is unions. “Labor makes a much more profound investment in human capital than people realize,” he said. “We ought to honor that.”

Almost everyone agrees on the need to bolster education and training. Business and labor should step away from the battle over EFCA long enough to figure out how they can collaborate to strengthen the U.S. workforce.

It’s hard to assess whether the Richter scale registered higher in Washington or New York after the financial earthquake on Monday, September 29.

The House of Representatives’ narrow 228-205 rejection of a rescue package for the financial markets sent the Dow Jones industrial average down 777 points. The tremors in Washington were even stronger.

Enough House Democrats and Republicans in competitive re-election bids rejected their party’s leadership—and for Republicans it also meant dissing the White House—to deliver a potential body blow to the economy. The kind of bipartisan cooperation surrounding the bailout measure rarely fails.

Proponents said the grave problems facing financial institutions would impact Americans’ daily lives. Americans would no longer be able to get auto, car or business loans, for instance. Their retirement savings would be at risk.

That argument didn’t work. What members of Congress—especially those in vulnerable seats—heard from constituents was anger. It was the raw, amorphous frustration that often lights up the phones in Capitol Hill offices.

The primary focus of Main Street’s ire was wealthy Wall Street CEOs who richly benefit even when their firms crash. Americans struggling through the sluggish economy just don’t accept that outcome. 

“People have an image that this money is going to support executives on Wall Street, and what we’re really trying to do is to fix a systemic problem in our economy,” said White House spokesman Tony Fratto in a September 29 briefing.

Initially, Fratto’s boss didn’t even want to put executive compensation into the bailout package. The first proposal from the administration was three pages.

Congress quickly rejected the idea of authorizing with no strings attached up to $700 billion in tax dollars for the purchase of bad mortgage-based assets. After more than a week of negotiations, the bipartisan legislation grew to 110 pages.

It now includes congressional and judicial oversight, relief for homeowners and assurances that the government would be able to profit from the sale of assets that regained their value.

One of the most politically persuasive additions to the measure was limits on executive compensation for firms participating in the bailout.

“The party is over,” House Speaker Nancy Pelosi, D-California, said at a September 28 Capitol Hill press conference. “The era of golden parachutes for highflying Wall Street operators is over.”

Congressional leaders vow that they will try again to pass a rescue package. Rest assured that it will contain executive pay restrictions.

The business community is wary. They argue that boards of directors should make the decision on remuneration based on industry factors and market signals. They say that pay parameters would add a regulatory burden and make U.S. companies less attractive for the best global executives.

If that talent is so valuable, then Wall Street needs to do a better job of demonstrating how it helps Main Street. It has to link high 401(k) returns to brilliant decisions made by leaders of financial companies.

Once again, this is a situation where the cloistered corporate mentality has to loosen up—communicate with everyday Americans about why the CEO is so important.

If companies don’t make this case, then the executive pay reform in the bailout bill is just the beginning. Next year, expect Congress to take another bite out of exorbitant corporate paychecks.