America at Work

Remember when everyone was talking about organizational culture and the idea of building strong cultures to achieve competitive advantage (e.g., Kotter and Heskett 1992; O’Reilly 1989; Tushman and O’Reilly 1997, chapter 5)? Remember Theory Zand Ouchi’s (1981) argument that Williamson’s (1975) description of possible organizing arrangements was incomplete? Ouchi maintained that in addition to achieving coordination and control through market-like mechanisms such as prices and contracts on the one hand, and hierarchies or bureaucracies on the other, there was yet another way of organizing and managing employees, and that was through clan-like relationships among people (e.g., Ouchi and Jaeger 1978), characterized by high levels of trust and stability. More recently, Gittell’s (2003) description of Southwest Airlines is consistent with the idea of achieving coordination through interpersonal trust and mutual adjustment of behavior (Thompson 1967). Gittell argued that Southwest’s extraordinary level of productivity and performance has come through high levels of coordination and control achieved through interpersonal relationships rather than simply through relying on either formal mechanisms or incentives.

The plate tectonics of work in the United States have shifted in the last 30 years, causing changes in the risks and vulnerabilities of worker health. The introduction of information technology in its various forms, the globalization of economies, changes in the nature of the employment contract between employers and workers, the emergence of the service economy, and the entry of women into the workforce all have affected the dynamics of working life for Americans. This chapter explores these changes and the ways they are consequential for the health and well-being of American workers and their families.

It is probably fair to assume that the authors and background researchers involved in the original Work in America report shared a view that a strong, independent, and forward looking labor movement is critical to a democratic society. Unfortunately, three decades later, America is questioning this assumption. Since the publication of Work in America, the labor movement has declined in membership density and power to the point where it is no longer able, despite its best efforts, to provide workers and their families with an influential voice in the affairs that affect their most vital interests.

About 30 years ago, the Work in America (1973) report noted the countervailing trends of growing numbers of women juggling work and family (W-F) coupled with ambivalence over societal support of domestic and caregiving work. Kanter (1977) articulated the “myth of separate worlds” between work and family—the notion that workplaces often are designed as if workers do not have families that compete for their attention and identities during working time.

The study of work and employment in the 1970s was shaped by a widely cited report that took stock of the current workplace and proposed broad changes (Work in America 1973). Some of those changes came under the heading of employee involvement (EI) practices. In this chapter we review research on how EI practices affect job quality and assess the extent to which they have delivered on their promise. Overall, we find that new workplace practices increase employee satisfaction and (on average) increase wages by a small amount. Effects on employee injury rates are less clear. It is also unclear if the small and inconsistent findings across many studies reflect variation in the seriousness of implementation (with many workplaces making few real changes), variation in the quality of the studies and measures, or true variation in effects. We conclude with an analysis of some considerations of policy options.

In this chapter, I review the changes in the U.S. labor market over the past four decades, focusing on the economic trends that have had the greatest impact on work as viewed from the employee’s perspective: wages, hours, job stability, and demographics.

To treat a host of economic ailments—from reducing income inequality and unemployment to boosting productivity and innovation—the favorite prescription of policymakers across the world is more education. This was never more apparent than in the last of the 2004 U.S. presidential debates. First, President George Bush was asked whether he supported raising the minimum wage, which was at its lowest level in real terms since the 1930s. His response was that “the best way to increase earnings for this group was through more and better education.” Later, he was asked what he would do about the growth in the offshoring of U.S. jobs to India and other nations. To this he responded, “We need more and better education.”

In 1973, when Work in America was published, we were just beginning to see the first signs of corporate interest in employee career development. In this chapter, we will make the argument that we are at a similar point in corporate America today. After significant economic and social upheaval dramatically changed the organization of work and careers, companies are once again beginning to appreciate the strategic importance and value of investing in employees’ careers. This time around individuals and organizations have different assumptions and expectations, and both parties face new challenges and enjoy new possibilities for those careers.

Since Work in America (OToole et al. 1973) was originally published, there has been a radical change in the relationship employers have with their highly skilled employees, workers such as scientists in R&D firms, software designers in IT companies, and consultants in professional service partnerships who contribute to the firm through their distinctive competencies, knowledge, and skills. The change is even evident in the approach taken by the U.S. government to the recent invasion of Iraq. This first American war of the twenty-first century has been fought by an army heavily populated by civilian reservists and part-time National Guard members—the result of massive downsizing in the military during the 1990s (Davey 2004; McGinnis 2005).

After World War II, bureaucratic employment relations, rooted in the ethos and institutions of the New Deal, dominated cultures of work for nearly three decades.1 The bureaucratic bargain was simple: As long as firms remained profitable and the economy strong, employers would provide employees with secure jobs in return for effort and loyalty. Since the mid-1980s, three developments have progressively undermined the bargain. First, in the name of efficiency and global competitiveness, firms in the economy’s core have repeatedly laid off large numbers of employees independent of economic cycles. Moreover, for the first time in history, layoffs have targeted significant numbers of managers and professionals (Heckscher 1995; Osterman 1996; Cappelli 1999). Second, job tenure for men has become shorter and labor markets have become more volatile (Bureau of Labor Statistics 1998). The third and perhaps most radical break with the culture of bureaucratic employment has been the expansion of the contingent labor force (Barker and Christensen 1998).

In 2003, just under 6.5 million Americans worked as managers, and they earned an average annual salary of $83,400, while the average for all workers was $36,520.1 The unemployment rate for managers that year was 2.9 percent, less than half the overall unemployment rate of 6 percent. Clearly, managers are a privileged group. But perhaps surprisingly, they are often seen as victims.

Important changes in the business and corporate world over the last two decades have led to important changes in the management of employees and their careers. More rapid restructurings and changes in business strategy, in response to fast-changing markets and the adaptations of increasingly global competitors, have weakened the bonds between employers and employees, especially in the managerial and executive ranks. Further, the paths that individuals take to get to the top of the organization have changed with much less reliance on internal, “grow your own” approaches to talent.

In the last 30 years, there has been a dramatic change in firms’ choices of human resource management (HRM) practices towards what are often labeled “innovative” or “high-performance” practices. These new practices often include greater teamwork, greater participation by employees in decision making, more information sharing among employees, greater training and education, and, often, new forms of incentive pay to complement these changes. In fact, these new practices represent a “technology shock” that is similar to the “technology shock” of new information technologies.

Consider a recent quote from the Wall Street Journal (July 14, 2003): “It’s no longer about what you own or build; success is hinged to the resources and talent you can access.” Unfortunately, recent statistics indicate that American workplaces are not doing a very good job of managing the talent they currently have. ThusOnly 14 percent of American workers say they are very satisfied with their jobs.Twenty-five percent say they “are just showing up to collect a paycheck” (The Stat 2005).From January 2004, to January 2005, 24 percent of American workers voluntarily quit their jobs, a 13 percent rise since the previous year. That figure varies widely by industry, though, with relatively low rates in manufacturing and transportation (roughly 15 percent), and relatively high rates in leisure and hospitality, retail, and construction industries (ranging from about 25–45 percent) (Employment Policy Foundation 2005). To appreciate what that means for an individual firm, consider the number of people Wal-Mart employed at the end of 2004—1,600,000 people (Fortune 500, 2005). Its annual employee turnover rate is 44 percent—close to the retail industry average (Frontline 2005). Each year, therefore, Wal-Mart must recruit, hire, and train more than 700,000 new employees just to replace those who left.Women now outnumber men in managerial and professional jobs, yet many leave even blue-chip employers because they do not feel valued, their companies do not offer flexible-employment policies, or their work is not intellectually challenging. Rather than leave the workforce, most resurface at companies that offer more progressive policies (Deutsch 2005).

The global sourcing of talent—commonly called “offshoring”—has become an issue of substantial public and political interest in the last few years. Although the 1973 landmark publication Work in America made no mention of outsourcing to third-party providers or the movement of jobs abroad, these trends have been shaping employment dynamics in the manufacturing sector for more than three decades. Historically, American employees in the service sector have gained from global trade, because companies around the world sought expertise from U.S. providers, particularly in high-end technology and research and development.1 However, it is the more recent phenomenon of global talent sourcing—in which white-collar service jobs move from high-wage to low-wage countries—that has captured new attention. With services making up 67 percent of the U.S. economy and the substantial increase in global trade in services over the last 20 years (Karoly and Panis 2004, 133–134), it is no surprise that Americans express alarm when service jobs start moving offshore.

For the last several decades, various companies have shared the benefit of corporate results with employees of the firm, using profit-sharing, gain sharing, bonuses, employee stock ownership, or stock options. All of these approaches have one thing in common: offering the worker a share in profits or stock appreciation when the company makes a profit on the capital that investors have provided. For the first time, a comprehensive picture of shared capitalism in the United States has become available as a result of a national random sample of all employed adults in the U.S. government-supported 2002 General Social Survey (GSS).1 This survey provides new information about the impact of shared capitalism on the experiences of workers and their companies. Since these results are statistically representative of the country at large, they are especially salient for policy discussions of these issues. Furthermore, they do not have the disadvantages of the biases introduced by nonrepresentative or small samples, surveys of companies or managers, case studies, or conceptual discussions of these issues.