Margaret Blair is a senior fellow at the Brookings Institution, a public policy think tank in Washington, D.C., and author of Ownership and Control: Rethinking Corporate Governance for the 21st Century.
I pick up two strands of thought in the corporate sector, and I have difficulty reconciling them. On the one hand, for certain kinds of specific knowledge, executives are extremely concerned that they are not going to be able to hire and keep good people. On the other hand, there’s a concern that they don’t want to lock themselves in anymore. They don’t want to give the impression that this is a job for life.
AT&T is actually taking part in a new online network, through which they and other companies can market their employees to other employers. AT&T doesn’t seem to want to consider their employees as permanent fixtures, but as free agents, obligated to keep up their own skills and forever market themselves.
We may be moving back to a system that in some ways resembles that of earlier times, where you have skilled craftspeople whose primary association is not with a company but with a guild. They move around from project to project. Construction has always operated that way, as has film production and, often, software programming.
A problem is that we don’t have the alternative institutions that can support that kind of labor market. AT&T was obviously addressing their own internal needs and recovering from the bad PR of their own layoffs. But maybe they also have a visionary idea. That is, they are trying to improve the mobility of labor by increasing the amount of information that is out there about these employees. It’s a matter of putting systems in place that can help workers and keep them comfortable with how they might find work after the current assignment ends.
Maybe more creative work will end up happening through this sort of craft model. Companies may be more at risk in terms of the fluctuation of day-to-day incomes, but they’ve learned to manage that. Along with that is some uncertainty for employees, but there is also some new freedom. Under that system, workers can control a lot of their own work. It’s not inherently bad.
David I. Levine is an associate professor at the University of California at Berkeley’s Haas School of Business and author of Reinventing the Workplace.
For years we’ve heard a lot about things like empowerment, quality of work life, job enrichment, quality circles. Slowly this is actually becoming a reality for a subset of employees. Lots of the successful companies of the last decade, as in previous decades, have been great places to work: interesting work, good wages, good benefits. Microsoft may be the evil empire of software, but it is a successful company and a good place to work. There’s nothing inevitable that says the companies with good jobs will win in all of this. But it remains a viable strategy. We need to rig the game a little more in favor of the ones that provide not only good jobs but help to create the kinds of citizens we want — people who are good at working together, solving problems together, who do interesting work.
We don’t have a balance sheet that rewards investment in employees. Our balance sheets tell investors that profits are low because we invested in some new plant and equipment, but they do not tell investors that profits are high because we stopped training and broke promises to workers. Most managers get penalized if they make those sorts of investments because what the board of directors sees is low profits this year if money goes into training.
There’s a tension there. Companies want to hire skilled workers. They might want to train them, but as little as possible. It’s perfectly reasonable for them to say we want others to train people and then we’ll hire them. But the flip side is to say we don’t want to train people and have them go somewhere else with the skills we paid for.
Norman Matloff is a professor of computer science at the University of California at Davis. His study of the role of immigration in the computer industry may be found on the World Wide Web at ftp://heather.cs.ucdavis.edu/svreport.html.
A Los Angeles Times article from 1993 reported that Sun Microsystems actually bragged about hiring a bunch of programmers in Russia — at bargain prices. Later Sun said, well, yeah, it is true we hired them at a lower salary, but it wasn’t because we wanted to exploit them. The reason we hired them is because they do Fortran, and that’s an old computer language, and we couldn’t find anyone to do it. Now, if this skill is rare, they should be paying a premium.
I don’t think that every employer hiring a foreign national is doing it to exploit them, but a lot of sincere employers are looking for the young people out of college who will accept low salaries. When they run out of those, they turn to foreign nationals. Both are cheaper than the midcareer employees. People are viewed as interchangeable and expendable. The people who are getting the jobs are the “20/25 club”: 20-year-olds with a $25,000 salary.
Alan Downs is a management consultant and author of Beyond the Looking Glass. He wrote “The Wages of Downsizing” (July/August 1996).
Early on in the downsizing trend in the 1980s we heard a lot about how computers would take our jobs. We have not seen that. But downsizing is not over. Now it’s about lowering the cost of labor, and the quickest route to doing that is to fire people or cut wages. The social contract between workers and owners has been renegotiated and it’s been a one-sided negotiation. The number of employers, for example, who are giving raises in lump sum bonuses rather than as a percentage annual raise is increasing dramatically. Workers are losing as a result of this. What’s going to happen if your boss comes to you and says, “We’re not going to give you a 5 percent raise this year. We’re going to give you a 2 percent lump sum bonus”? Are you going to quit? As one manager told me, you’d be a fool not to take it. You don’t know if you’re going to be there a year from now. But careerwise that’s going to hurt you because your salary is not going to go up.
What we are seeing is a dramatic decrease in loyalty to the company. There’s not much willingness anymore to go the extra mile. We’ve seen an increase in blue-collar and white-collar crime — even just in terms of workers taking pencils from work.
What most of us “knowledge workers” worry about is not seniority but performance. If you do your job well, you expect to be promoted no matter how long you’ve been there. Unfortunately, organized labor opposes performance-based management. Most of the workers who are seeing their paychecks stagnate and who are being laid off, however, are college-educated, white- collar knowledge workers. They don’t want labor unions speaking for them because they don’t buy into that model.
William Wolman, chief economist for Business Week magazine and CNBC television, and Anne Colamosca, a former Business Week staff writer, are co-authors of the new book The Judas Economy: The Triumph of Capital and the Betrayal of Work.
There are a lot of things that are going on in the corporate world that indicate further downsizing is coming. America’s “cognitive elite,” our creative workers, are going to have some competition. It’s not just low-skill workers. We now live in the first era in the history of capitalism when capital is an equal opportunity employer of developed- and developing-world labor. There’s been so much government money in India, for example, that’s been poured into educating the poorer classes. It’s comparable to what happened in New York in the city college system after World War II. That’s what you see in Bangalore — technology institutes all over. You’re constantly running into the cab driver’s son who is becoming an electronics engineer. It’s what was happening in the United States 35 years ago, but at wages that are less than a third of what you have here.
Brian J. Turner is president of the Washington, D.C.-based Work and Technology Institute, which does research and development on high-skill, high-participation work systems.
What ever happened to a shorter workweek? Back in 1870, the average workweek was in excess of 70 hours. In the 1930s, the 40-hour week became standard. In most other countries in the world those numbers have continued to decline, but not here. The dividend of our increasing productivity ought to be divided between higher real earnings and increased leisure. We’ve lost the second half of that equation.
There are possibilities to the virtual office and working from home, but I think it remains to be demonstrated that you won’t end up with just a high-tech home sweatshop where you can’t get rid of work. Instead of 10 hours of work at the office, you might wind up doing 15 hours at home. We have to think about defining models for harnessing technology to the benefit of people, rather than using it to extend their subjugation.
Peter Cappelli is chair of the management department at the University of Pennsylvania’s Wharton School of Business and author of Change at Work.
You don’t hear much about downsizing anymore because companies have a bigger issue, and that’s attrition. Companies are downsizing and hiring at the same time. They’re shifting skills, getting rid of people with skills they don’t need anymore and hiring new ones. They have been telling skilled people for years to look out for themselves: Develop your skills and look out for the next job.
The relationship between employer and employee has changed in a fundamental way. We have moved it to the marketplace, a kind of arm’s-length relationship that is much more volatile. The companies make out like bandits when the labor market gets weak, and workers make out like bandits when the labor market gets strong.
We have two choices. We can accept that we have moved to the market and that we have to adapt to it by making the market more efficient, developing credential systems and better mechanisms for distributing information. The other approach is essentially the European approach, which is to say that this is a bad idea and to try to block it. Practically, I don’t think you can block it in the United States. There isn’t a political will to impose a lot of controls on the labor market. For individual employers it makes no sense to swim against the stream. And so we’ve seen adaptations: more contingent compensation, more contractual work, a move to outsource more activities.