David WeilHeller School for Social Policy & Management

Brandeis University

EROSION: THE FISSURED WORKPLACE ANDTHE FUTURE OF WORK

WHAT IS THE FISSURED WORKPLACE?LEAN RETAILING

Conveyer system

Incoming Shipments

Information

Products (shipments)

Incoming dock Outgoing dockStore

A

StoreB

StoreC

RETAILER DISTRIBUTION CENTER

WHAT IS THE FISSURED WORKPLACE?FISSURED LEAN RETAILING

Incoming dock Outgoing dock

Conveyer system

Incoming Shipments

Temp Firm 1Third Party Logistics Co.

Temp Firm 2

StoreA

StoreB

StoreC

RETAILER STANDARDS AND REQUIREMENTS

StoreA

StoreB

StoreC

Incoming OutgoingConveyer system

Incoming Shipments

Temp Firm 1Third Party Logistics Co.

Temp Firm 2

RETAILER STANDARDS AND REQUIREMENTS

WHAT IS THE FISSURED WORKPLACE?THE NEXT STEP: DIRECT HOME DELIVERY

Direct Home Delivery

Cont. 3a

Contractor 1

Contractor 2

Cont. 3b

RETAILER STANDARDS & RQMTS

CONSEQUENCES: Risk shifting

• Eroding compliance with basic labor standards

• Providing pensions and health care benefits• Safety net: unemployment and workers

compensation • Worker representation and voice

Source: Neil Irwin, NY Times, 9.3.17Gail Evans, Former Kodak janitor,

Now Mercer ExecutiveMarta Ramos, Contract janitor at Apple

Headquarters

CONSEQUENCES: Growing Earnings Inequality

The most autocratic and unfettered employer spontaneously adopts Standard Rates for classes of workmen, just as the large shopkeeper fixes his prices, not according to the haggling capacity of particular customers, but by a definite percentage on cost.

Sidney and Beatrice Webb, Industrial Democracy, 1897.

Setting Wages According to the Webbs

Wage premiumNonunion Employee Groupa 1979 1983All private nonfarm wage-and-salary workers 9 13Workers in 3-digit census occupations with union membership <= 5%

8 10

Workers in 3-digit census industries with union membership <= 5%

9 9

Source: Brown, Hamilton, and Medoff 1990

a Holding constant union status, demographics, age, education, tenure, metro area, region, detailed industry and occupation.

Size-wage premiums in big (500+) nonunion firms, 1979 and 1983

Source: Bloom et al., 2018

Declining large firm wage premium: Labor market power + fissured work

High

Low

CONSEQUENCES:Earnings Inequality

Between Firms

1990’s 2016

Fissured workplace leads to an increase in earnings inequality arising from growing differences between rather than within companies.

Earn

ings

Within Firms

1990’s 2016

Product market power + Labor market power + Fissured workplace + Declining voice =

WHERE DOES THAT LEAVE US?

So what do we do?

• REBALANCE THE FISSURED RECIPE• REINVIGORATE WORKER EXIT AND

VOICE • REESTABLISH WORKPLACE NORMS

REBALANCE THE FISSURED RECIPE:PUTTING PUBLIC INTERESTS ON THE SCALES

Strategic Enforcement

Historic Enforcement

REBALANCE THE FISSURED RECIPE:STRATEGIC ENFORCEMENT

REINVIGORATE WORKER EXIT AND VOICE

Exit:• Limiting non-compete agreements• Enhancing transparency and mobility

Voice:• New organizations for representation • New forums for workplace and labor

market engagement

REESTABLISH WORKPLACE NORMS:PRIVATE & PUBLIC ROLES

Private norms• Lessons from the “Fight for $15”• Worker and social advocates• Progressive employers

Public norms • Prevailing wage and benefits• Basic rights and responsibilities• Wage determination mechanisms

The Future is Now:• Tax bill and

incentives for independent contractor

• Uber model spreading

• Need for clarification that protects, not erodes

The Future is Now:• Contested

terrain: NLRA v. FLSA

• Need for clarification that protects, not erodes

• Industry concentration leads to greater monopsony power– Investigate the impact of market power on labor market collusion.– Commissions, antitrust, and other tools.

• Need to think about consequences of pricing mechanisms on the structuring of earnings in three fastest growing, low wage industries:– Home care and Medicaid reimbursements– Restaurants and tipped wage policies– Retail / distribution / logistics and worker classification

PUBLIC POLICY, PRODUCT MARKETS AND WAGE DETERMINATION

• Collective action and the enforcement of workplace laws Individual rights, collective action problems– Limiting mandatory arbitration of fundamental rights

• Diminishing role of labor unions—below a critical mass?• Broader exploration of voice mechanisms

– New forms of worker voice (NDWA; ROC; CIW)– New forums for voice (OHS councils)

ERODING WORKER BARGAINING POWER:ENHANCING VOICE

• Restricting non-compete agreements• Enhancing labor market transparency

– Wage and benefit transparency

• Building new social networks: Policies to thicken social networks for low wage and other workers

ERODING WORKER BARGAINING POWER:ENHANCING EXIT