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Working Under Different Rules

Richard B. Freeman

Publication Year: 1994

For much of the 20th century, American workers were the world's leaders in productivity, wages, and positive workplace conditions. American unions championed free enterprise and high labor standards, and American businesses dominated the world market. But, as editor Richard B. Freeman cautions in Working Under Different Rules, despite our relatively high standard of living we have fallen behind our major trading partners and competitors in providing good jobs at good pay—what was once considered "the American dream." Working Under Different Rules assesses the decline in the well-being of American workers—evidenced by spiraling income inequality and stagnant real earnings—and compares our employment and labor conditions with those of Western Europe, Canada, Japan, and Australia. As these original essays demonstrate, the modern U.S. labor market is characterized by a high degree of flexibility, with rapid employee turnover, ongoing creation of new jobs, and decentralized wage setting practices. But closer inspection reveals a troubling flip side to this adaptability in the form of inadequate job training, more frequent layoffs, and increased numbers of workers pushed to the very bottom of the income scale, into the low wage occupations where much of the recent job growth has occurred. While the variety of works councils prevalent throughout the developed world have done much to foster democratic rights and economic protection for employees, the virtually union-free environment emerging in many areas of the private U.S. economy has stripped workers of a strong collective voice. German apprenticeship programs and the Japanese system of "job rotation" represent more effective approaches to preparing workers for the changing demands of lifetime employment. In addition, workers in European advanced economies and in Canada have greater social protection than Americans. But while this has some cost in unemployment and higher taxes, carefully designed social safety nets do not seriously jeopardize economic efficiency. Working Under Different Rules is an illuminating analysis of the often complex interaction of market institutions, social policy, and economic results. The authors' up-to-date international assessment of unions, wage setting, apprenticeship programs, welfare support, and works councils suggests alternate ways of training, paying, and empowering workers that, if effectively adapted, could facilitate the growth of a healthier American economy and better prospects for American workers.

Published by: Russell Sage Foundation

Title Page, Copyright Page

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pp. vii

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pp. ix-x

Rebecca Blank is an associate professor of economics at Northwestern University and a member of the research faculty at NU's Center for Urban Affairs and Policy Research. She is also a research associate of the National Bureau of Economic Research. Her research focuses on the interaction between macroeconomic effects, labor market and social welfare programs, and the ...

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pp. xi-xii

For American workers the 1980s, and to a lesser extent the 1970s, were a difficult time. Real earnings fell for many. Labor productivity grew slowly. The proportion of workers in sectors with high and increasing productivity, such as manufacturing, declined. Once the world leaders in reducing work time, Americans came to work ...

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1. How Labor Fares in Advanced Economies

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pp. 1-28

In 1909 Samuel Gompers, a founder of the American labor movement and president of the American Federation of Labor, visited Europe to examine "from an American viewpoint ... life and conditions of working men in Great Britain, France, Holland, Germany, Italy, etc." Gompers was struck by the poor living standard ...

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2. Rising Wage Inequality: The United States Vs. Other Advanced Countries

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pp. 29-62

One of the "big stories" in American economic life in the 1980s was the large increase in income inequality. Inequality grew as the economic expansion of the latter half of the 1980s failed to benefit the majority of American families enough to offset the losses they had incurred during the recession of the early 1980s. In ...

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3. Payoffs to Alternative Training Strategies at Work

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pp. 63-96

In the 1970s labor market analysts and policymakers were concerned about absorbing into the labor market an "overeducated American"-the cohort of young, baby-boom college graduates who flooded the labor market and experienced reduced earnings and employment opportunities (Freeman, 1976). In the 1980s and ...

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4. Workplace Representation Overseas: The Works Councils Story

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pp. 97-156

In the labor relations systems of most advanced countries, unions or other mechanisms of wage regulation and collective bargaining are supplemented by a "second channel" of industrial relations. This second channel consists of workplace-based institutions for worker representation and labor-management communication that ...

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5. Does a Larger Social Safety Net Mean Less Economic Flexibility?

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pp. 157-188

Higher employment growth and lower unemployment in the United States than in Western Europe in the 1980s generated widespread discussion of the employment problems potentially caused by government social protection programs. The U.S. economy has long been characterized by limited state welfare ...

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6. Small Differences That Matter: Canada Vs. the United States

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pp. 189-222

To outsiders Canada and the United States often look like two sides of the same coin. The two countries have a closely intertwined history; they share similar cultures, similar economic institutions, and similar standards of living. The U.S. and Canadian economies are linked by massive trade flows, by the interlocking ...

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7. Lessons for the United States

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pp. 223-240

Unlike many investigations of foreign economic systems, the Working under Different Rules project was motivated not by intrinsic interest in Europe or Japan (fascinating though they may be) but by concern about the specific problems that plague the United States as we prepare to enter the twenty-first century: ...

APPENDIX: Books in the NBER Series on Comparative Labor Markets

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pp. 241-244


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pp. 245-261

E-ISBN-13: 9781610442190
Print-ISBN-13: 9780871542779
Print-ISBN-10: 0871542773

Page Count: 280
Publication Year: 1994