6 - Enterprise- and Industry-Level Models of Employees' Earnings

Abstract

The central role of size and capital intensity in both the industry-level and company-level models supports sociological, Marxist, and institutional theories of the workplace that specify internal organizational and technical factors at the workplace as key determinants of labor force outcomes. The finding that profit and productivity do not have direct effects on labor force earnings indicates that economic interpretations that rely on these factors as crucial mechanisms in determining workplace outcomes should be seriously questioned. Such theories do not give adequate guidance in the efforts to understand the mechanisms through which organizational factors influence people's working lives. The negative earnings effect of concentration in the industry-level model also supports institutional theories but suggests that certain market-based factors might also have important influences on labor force outcomes. However, the influence of these factors is best interpreted as operating through institutional rather than purely market mechanisms. The inclusion of corporate autonomy and foreign involvement in the industry-level model indicates that relationships of exploitation between companies have important implications for labor force earnings, at least insofar as these factors influence industry-wide standards of wages and working conditions.