Working Papers

WP #01
Living Wage Campaigns: A Step In the Right Direction
Jared Bernstein, Economic Policy Institute, Washington, DC

Labor economists have explored the causes of the relative and absolute wage losses experienced by low-wage workers since the late 1970s. While conventional wisdom considers technology-induced demand shifts that favor higher skilled workers to be an overarching reason for increasing wage inequality, a solid body of literature points to an erosion of the role played by labor market institutions, such as labor unions and minimum wage policies, in strengthening the bargaining power of low-wage workers. In this context, living wage campaigns have emerged as a policy prescription to counteract the increasing inequality of economic outcomes and to raise the earnings of low-wage workers.

In this paper, Jared Bernstein of the Economic Policy Institute explores living wage campaigns, defining living wages and the two forms of living wage ordinance models, exploring the potential effects of living wage laws, and discussing evaluations of the living wage ordinance passed in Baltimore in 1994. Bernstein concludes that, while the city contract model of living wage ordinances appears to create few, if any, economic distortions, it affects relatively few workers and thus fails to significantly raise the incomes of low-wage workers in a given region. These ordinances do, however, clearly raise the earnings of covered workers without lowering their employment opportunities. Although raising the earnings of low-wage workers by restoring institutional pressures on employers is a living wage campaign’s primary goal, a secondary goal is organizing low-wage workers. In this regard, living wage campaigns may help to offer low-wage workers a forum for raising issues of economic inequality and fairness at a time when the effectiveness of traditional labor market institutions is waning.
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WP #02
Temporary and Contracted Work: Policy Issues and Innovative Responses
Francoise Carre, Research Program Director, Radcliffe Public Policy Institute, with the assistance of Pamela Joshi

One of the most compelling developments in the American economy in recent years is the growth of nonstandard employment relationships between employers and their workers: temporary work, short-term work, and alternative arrangements. Often called “contingent work,” these arrangements are the most extreme examples of the forms of employment that a volatile labor market is likely to generate, including a greater likelihood of multiple job shift over a worker’s career. The conditions facing these workforces underscore the limitations of the current system of employer-based social protection, of work-site based worker representation, and of public mechanisms for job matching and brokering. These concerns apply to the entire workforce, as it experiences a shift in the employment relationship that has governed the American labor market since World War II.

In this paper, Françoise Carré of the Radcliffe Public Policy Institute explores the challenges to policy making posed by these new arrangements. Her presentation begins with an overview of the policy issues that need to be explored, including how to facilitate job transition, earnings maintenance and stability, as well as how to gain access to protection through labor and social regulations and to representation structures for workforces that experience transience and irregularity in their employment relationships. Carré then turns to a description of nonstandard arrangements — the kinds of employment relationships formed, the causes for their growth, and the range of worker experiences — followed by a discussion of the current environment for policy around these issues. A series of innovative responses have developed from several sectors: unions, worker associations, community groups, and private businesses. Through her work at Radcliffe, Carré has identified the responses that these innovative intermediaries have developed to nonstandard work and describes these approaches here. She concludes with a series of questions that, when answered, will assist policy makers in developing appropriate responses for improving conditions for nonstandard workers.
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WP #03
New Labor Market Intermediaries: What’s Driving Them? Where Are They Headed? Background Paper and Conference Summary
Richard Kazis, Jobs for the Future

Background Paper
The collaborative efforts, consortia, and networks that have emerged in recent years to improve the functioning of local labor markets represent an exciting development. However, taken together, the vast range of these initiatives is also confusing, since very different approaches are frequently lumped together under one category as new “labor market intermediaries.” Why is this experimentation occurring? What does it signify? And where is it most likely to lead? Answering these questions requires differentiating among these varied institutional innovations.

Prepared as a background report for a meeting of the Working Group on America’s Next Generation Labor Market Institutions, this paper by Richard Kazis of Jobs for the Future provides a framework for conceptualizing new labor market intermediaries, understanding their respective strengths and weaknesses, and assessing their ability to respond to a range of labor market challenges. Kazis develops this framework using three approaches: analyzing the economic changes that pose the labor market challenges and opportunities driving new intermediaries; presenting a categorization of emerging institutions; and discussing the prospects and policy implications of current efforts.

Conference Summary
The Task Force on Reconstructing America’s Labor Market Institutions convened representatives from a range of intermediary projects and members of the Task Force’s Working Group on America’s Next Generation Labor Market Institutions to explore the potential of these new intermediaries to serve as national models for improving labor market outcomes. Although the organizations represented pursued a range of strategies and operated under very different auspices, they fell into three general categories: existing institutions that have adapted to address current labor market needs; new models for organizing multi-employer institutions; and community-based projects that seek to balance community needs with employer interests.

After presenting their respective organizations’ approaches to serving as labor market intermediaries, conference participants discussed the common ground each group shared, as well as the issues that cut across their experiences. The summary contained in this working paper represents the presentations of representatives on the lessons they have learned, as well as the working group’s discussion of the potential for these various strategies to improve labor market outcomes, serve as more than job brokering organizations, and grow through policy intervention to become state, and even national, efforts.
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WP #04, 05, 06, 07, 10
The Task Force, in cooperation with Working Partnerships USA, organized a conference in January 1999 on work, labor organizations, and labor market institutions in the Silicon Valley labor market. Many people argue that the Silicon Valley embodies many of the major changes in the nature of work and employment that are being experienced throughout the US economy. The region thus provides an important context for analyzing many of the issues facing workers and employers, and for understanding the dynamics of labor markets in the new economy. The goal of the conference was to bring a wide range of people together to discuss how the labor market functions in Silicon Valley, the outcomes for workers and for firms, and the implications for public policy reform.

The following five working papers are products of this conference:

WP #04
Why Do Contractors Contract? The Theory and Reality of High End Contingent Labor
Gideon Kunda, Stephen R. Barley, and James Evans, Center for Work Technology and Organization, Department of Industrial Engineering and Engineering Management, Stanford University
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WP #05
Silicon Valley’s New Immigrant Entrepreneurs: Skills, Networks, and Careers
AnnaLee Saxenian, Department of City and Regional Planning, University of California at Berkeley
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WP #06
Preparing for the Information-Based Workplace: Pedagogical Issues and Institutional Linkages
W. Norton Grubb, David Garner Chair in Higher Education, University of California at Berkeley
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WP #07
Silicon Valley Labor Markets: Overview of Structure, Dynamics and Outcomes for Workers
Chris Benner, Working Partnerships, USA
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WP #10
Temping at the Lower End: An Incomplete View from Silicon Valley
Charles N. Darrah, Department of Anthropology, San Jose State University
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WP #08
Union-Nominated Directors: A New Voice in Corporate Governance
Robert B. McKersie, Sloan School of Management, Massachusetts Institute of Technology Union-Nominated Directors: A New Voice in Corporate Governance

The union-nominated director (UND)--a voting board member approved by other directors and, ultimately, by stockholders under the partnership provisions of a collective bargaining agreement--brings the interests of workers to bear as corporate boards of directors deliberate policy. Although it represents a young and evolving role, perhaps the most important reason for investigating UNDs is that they provide a window into the boardroom, where important strategic decisions are made about such matters as mergers, downsizing, and policies with respect to union representation.

By examining the role of the UND, McKersie hopes to further the discussion about who should be involved in the decision-making process at the highest levels of corporations and by what standards the results of these decisions should be evaluated. Based on UNDs’ own accounts of their experiences at several corporations, this paper discusses the primary concerns they have identified: the major dilemma they face in representing worker versus corporate concerns; their effectiveness within management and board councils; their participation in committees; their roles in collective bargaining and union organizing; their ability to effectively relate to a union constituency; their compensation as directors; the issue of confidentiality; the power of a lone dissenter; and the uncertain future of the UND concept. McKersie concludes with a summary of this preliminary evidence on the UND role and reasons for its expansion.
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WP #09
Rebuilding the Social Contract at Work: Lessons from Leading Cases
Thomas A. Kochan, Sloan School of Management, Massachusetts Institute of Technology

Traditional governance systems and employment practices in the United States provide limited opportunities to join directly employee concerns with issues affecting the competitiveness of the enterprise. Instead--by law, custom, or organizational design--strategic decisions and information are made and held by senior line managers and executives, while the impacts of those decisions are addressed after the fact by human resource professionals or by unions in the collective bargaining process.

This paper explores the potential for and limits of what individual firms and their employees can do to adjust to changes in the economic environment that threaten the social contracts governing employment relations--the mutual expectations and obligations that workers, employers, and their communities and societies have for work and employment relationships. Through brief case studies of leading firms, the author describes several of the innovative or enduring structures and processes for joining shareholder and employee concerns that are evolving or have been established. The cases span a spectrum of approaches, reflecting strategies in five large firms: Eastman Kodak, Lucent Technologies, Xerox, Saturn, and United Airlines. The paper also provides a description of the nature of the social contract with employees for two competitors--Cisco Systems, for Lucent, and Southwest Airlines, for United. Finally, it contains an account of the cross-cutting themes that emerged from the cases, as discussed by members of the Working Group on the Social Contract and the American Corporation at a meeting in November of 1998.
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WP #11
Minimum-Wage Enforcement and the Low-Wage Labor Market
Howard Wial, Keystone Research Center

America’s low-wage workers have fared poorly during the past two decades. Since the late 1970s, the wages of workers at the tenth percentile of the wage distribution have declined in both absolute terms (adjusting for inflation) and relative to those of middle- and high-wage workers. This paper examines the influence of the enforcement of the minimum wage by the U.S. Department of Labor on the wages of the poorest workers. It concludes that enforcement can and does raise those wage levels for workers receiving subminimum wage, but that the Department faces several problems in ensuring that employers comply with the law.

The resources of the Department’s enforcement arm have diminished over time, whether measured by inflation-adjusted budgets, the number of its investigators, or the number of enforcement actions it has taken. More importantly, the Department also has to work within a system that offers few deterrents to the minority of employers that is bent on violating the law and little compensation to workers who are denied the wages to which they are legally entitled. Wial makes recommendations for improving the enforcement of labor standards in low-wage labor markets, including: increasing penalties, plugging legal loopholes, providing incentives to employers to put enforcement pressure on their subcontractors and competitors, and making it easier for unions and other worker organizations to take collective action to help to enforce the minimum wage.
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WP #12
Portability of Benefits, Job Changes, and the Role of Government Policies
Robert Clark, College of Management, North Carolina State University

Among the most important and valuable employee benefits are retirement plans and health insurance. Yet, changes in the industrial structure of the economy and the composition of the labor force raise questions about the future of long-term careers with a single company and about the need for the portability of benefits for employees. If the American workforce in the twenty-first century becomes characterized by less loyalty between workers and firms, more jobs in one person’s working career, and greater turnover, such trends will have a significant impact on how employers define compensation and the provision of benefits.

Written for the May 25-26, 1999, “Symposium on Changing Employment Relations and New Forms of Worker Representation” co-sponsored by the Task Force on Reconstructing America’s Labor Market Institutions at MIT and the U.S. Department of Labor — this paper examines the portability of pension benefits and health insurance coverage, recent trends in these benefits, and the significant role of government regulations in the provision of portable employee benefits. It addresses questions such as: How will employee benefits evolve in a world of reduced job tenure and increased turnover? How are current trends in the characteristics and provision of pension plans and health insurance altering the portability of such benefits? How do current government policies affect the structure of pensions and health insurance and their portability? Finally, the paper ends with a discussion of the new benefit regulations and policies needed to provide for more portable benefits.
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WP #13
Passion with an Umbrella: Grassroots Activism in the Workplace
Maureen Scully and Amy Segal, Sloan School of Management, MIT

The social context is often neglected in studies of organizational change, while the workplace as a locus of activism receives less attention from social movement theorists than other organizational settings. This paper takes a social movements approach to employee activism regarding diversity and inequality in the workplace. In their discussion, the authors do not seek to differentiate employee activists from quiescent employees but to understand the concerns, language, and tactics of small groups of employee activists when they mobilize.

Undertaken for the May 25-26, 1999, “Symposium on Changing Employment Relations and New Forms of Worker Representation?” co-sponsored by the Task Force on Reconstructing America’s Labor Market Institutions at MIT and the U.S. Department of Labor — this study is based on interviews with 39 activists from 9 grassroots employee groups in a 900-person division of a high technology firm. The authors identify how employee activists pursue changes that question power relations, draw links to broader societal issues, sustain their collective efforts over cycles of involvement, manage risks to their careers and their mission, handle the protection and constraints offered by the “umbrella” of management, and make sense of their accomplishments. They close by highlighting the significance of local, fragmented change efforts. Without being too sanguine about employee activism nor too cynical about its cooling out function, they recommend, theorists should allow a place for piecemeal change.
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WP #14
What Do Non-unions Do? What Should We Do About Them?
Daphne Gottlieb Taras, University of Calgary
and Bruce E.Kaufman, Georgia State University

Non-union representation is a matter of considerable debate in the United States, with arguments both for and against changing American labor laws to permit employee representation to be practiced overtly by nonunion workers and nonunion companies. The National Labor Relations Act (NLRA) currently places significant constraints on the structure and operation of employee representation committees in nonunion companies. Critics of the NLRA claim that its strictures constrain employee voice and inhibit the ability of American companies to form and operate employee involvement and participation programs in nonunion workplaces — to the detriment of both national competitiveness and cooperative employer-employee relations.

Written for the May 25-26, 1999, “Symposium on Changing Employment Relations and New Forms of Worker Representation,” co-sponsored by the Task Force on Reconstructing America’s Labor Market Institutions at MIT and the U.S. Department of Labor — this paper provides a background for discussing the potential of nonunion representation through an account of its history, use in contemporary practice, and policy implications. The first section, the “Introduction,” includes a comparison of the treatment of nonunion representation in U.S. and Canadian labor laws. The second section reviews the empirical findings on nonunion representation and summarizes both the key points of agreement and the areas that have sparked controversy in America over the legalization of nonunion representation. The authors find that in the long-run, nonunion representation works best when practiced in the shadow of a viable union organizing threat. The third section demonstrates that many U.S. employers are already practicing forms of nonunion representation that are contrary to the language of the NLRA. Finally, the paper’s fourth section discusses the authors’ recommended policy changes: they believe NLRA Section 2(5) should be amended to allow collective action by nonunion employees, but in tandem with changes in other sections of the NLRA that bolster the ability of nonunion employees to exit ineffective nonunion plans in favor of unions. Because they found from their research that nonunion systems operate best when they exist in the shadow of a viable union threat, the authors believe it is vital that any softening of the nonunion representation ban be accompanied by changes that increase the ability of workers to join bona fide unions. Moves to make nonunion representation lawful must not jeopardize the nation’s already low levels of unionization.
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WP #15
The Strategic Initiatives of the CWA: Organizing, Politics, and Collective Bargaining
Rose Batt, Harry C. Katz, and Jeffrey H. Keefe, Cornell University

This paper, prepared by Rose Batt, Harry Katz, and Jeffrey Keefe for the “Symposium on Changing Employment Relations and New Institutions of Representation,” describes the Communications Workers of America’s (CWA) aggressive “triangular” agenda involving organizing, politics, and collective bargaining activities, which was developed in response to the challenges of massive industrial and technological restructuring. The activities in any one of these three dimensions often interact with and complement activities in another dimension. This linked agenda arises out of the natural interactions that surface across issues in today’s economic environment. In addition, such triangulation provides a way for the union to counteract the power imbalance that has been created by industry restructuring. The CWA was able to coordinate its activities effectively across dimensions because it had a legacy of such linkages, which were stimulated by historical factors, including the quasi-public sector nature of the former Bell system.

As the authors explain, although the CWA has done a masterful job of broadening its vision and strategies, the union has suffered overall membership stagnation. In its core sector, telephone services, the CWA has only been able to sustain sizeable representation among residential service providers and has not been able to organize those employers in the cable, cellular, Internet service provider, and long-distance sectors, which aggressively oppose unionization. Thus, the organizing challenge remains critical for the union, even as organizing activities increasingly interrelate with the union’s regulatory and collective bargaining efforts.
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WP #16
Regional Workforce Development Strategies in “Company Towns”: The Rochester Case
Susan Christopherson, Department of City and Regional Planning, Cornell University

In metropolitan areas throughout the U.S., regional economic development is on the agenda, and the question of economic competitiveness is particularly alive in the City of Rochester, which has lost thousands of jobs since the mid-1980s due to the downsizing of its major employers: Xerox, Bausch and Lomb, and especially the Kodak corporation. A close look at responses to downsizing in Rochester is valuable for two reasons: (1) it provides evidence of how downsizing may, in fact, increase the dependence of firms on the local labor market; and (2) it demonstrates how approaches to regional economic development emerge from the history of social and economic relations in a local setting. This history both defines what measures are perceived as being possible and points to the types of solutions that can be proposed to realize economic restructuring.

In this paper, commissioned for the “Symposium on Changing Employment Relations and New Institutions of Representation,” Susan Christopherson explores the case of Rochester, based on interviews with local employers, employees, and representatives from community groups and public-sector organizations. Christopherson first provides a brief overview of the corporate paternalism that has characterized the relationship between Rochester’s major employer, Kodak, and the local community and then explores the impact of downsizing and economic restructuring on the region’s labor market. Restructuring has weakened the region’s economy, and responses have emerged to attempt to offset local losses, including: efforts to upgrade skills that maintain the paternalistic status quo; and tentative movements toward a competing model that recognizes the need for collaboration among firms and a commitment to workforce development outside the large firms.
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