Chapter 16: Building a New Social Contract at Work - A Call to Action


Thomas A. Kochan

Overview

A fundamental mismatch exists between today's workforce and workplace and the institutions and policies that support and govern them. As a consequence, both the workforce and economy are held back from reaching their full potentials and a gap is growing between the winners and losers in society. We therefore need to update these policies and institutions in ways that give workers and employers greater control over their destinies.

We have been talking and writing about these issues in many different forums during 1999. The main points emerging from these discussions are summarized below:

  1. The old social contract grew out of the images of work and employment relations that were prevalent during the New Deal era: a long-term relationship between a large firm, competing mostly in an expanding domestic market, involving two types of employees—hourly wage earners and salaried managers—with a spouse at home attending to family and community matters.

  2. The policies and institutions that evolved out of the New Deal were generally successful in producing a broadly shared prosperity and improved work quality for the majority of Americans. Wages and benefits improved in tandem with rising productivity and profits, and loyalty and good performance on the job were rewarded with increased security, dignity, opportunity, and savings for retirement. Collective bargaining, professional personnel/human resource management, and government regulations created a dynamic that resulted in incremental expansion and diffusion of comprehensive benefits, employment standards and protections, and systems for fair administration and enforcement of workplace policies.

  3. Over time, the New Deal images of work became outmoded by globalization of markets, emerging technologies that created both new businesses and shifts in demand for labor and the organization of work, organizational restructuring that displaced senior and white-collar workers, variation in employment types and uncertainty in employment duration, increased diversity in the workforce, and increased interdependence between family and work responsibilities.

  4. As a result, the old social contract has given way to a long period of stagnant real wages, increased inequality of income and wealth, falling health and pension coverage, increased job insecurity, decline in union coverage, increased litigation and conflict over government regulations and their enforcement, increased polarization between business and labor on core values and issues, and a sustained impasse over labor policy.

  5. There is also considerable good news to report. Innovations in how work is organized are spreading gradually to more workers; knowledge workers—those with high skills—are doing well in today's labor markets; the sustained macroeconomic growth and tight labor markets are now producing modest improvements in real income and job opportunities for low-income workers; labor-management partnerships are helping some unions and companies adapt to their changing circumstances; and flexible employment arrangements and practices are helping some families and employers integrate family and work responsibilities.

In what follows, I propose an institutional and policy framework for reconstructing a social contract that allows working families and employers to regain control over their destinies at work. Many elements of a new policy and institutional framework can already be seen in the large number of innovative efforts under way in different settings around the country. If previous American traditions are true to form, the next generation of institutions and policies will emerge from these local experiments and innovations. But to date, these are still islands of innovation. To move them to a scale that benefits our overall society and economy requires leadership and support from national policy makers and professionals in all parts of our field.

I also challenge our profession and our national leaders to move from passive analysis to active advocacy for putting the future of work and the policies and institutions governing employment at the top of the nation's agenda. To do so, we have to reframe our approach to these issues, bring new voices into the discussion, and offer new ideas capable of breaking the twenty-year stalemate America has endured over labor and employment policy issues.[2]

[1]Full text of the address on which this chapter is based is available in the Proceedings of the Industrial Relations Research Association.

[2]For a more complete discussion of these points, see IRRA (1999).




Inventing the Organizations of the 21st Century
Inventing the Organizations of the 21st Century
ISBN: 026263273X
EAN: 2147483647
Year: 2005
Pages: 214

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