High-wage Jobs Research Articles

Uneven Development and Grounded Comparative Institutional Advantage: Lessons from Sweden and Mondragon

In this paper we use the theory of grounded comparative institutional advantage to analyze the possibilities for progressive development in the face of the uneven development patterns endemic to neoliberal capitalist development. We demonstrate that efforts to promote institutional structures to spur regional development, such as Swedish efforts to create high wage jobs via education, training, and technology diffusion, and the Mondragon Cooperative’s efforts to create and preserve manufacturing jobs via education, technology development and cooperative organization, can be a countervailing power to the forces of capitalist uneven development, if the state becomes a major allocator of investment funds. To succeed in creating stable, progressively-oriented industries in a region within a capitalist economy, there must be cushions for firms against downturns and sectoral shifts, mechanisms for the creation of cutting edge technologies, and a commitment to reallocate investment to key industries. Otherwise the forces of uneven development, spatially and sectorally, will tend to prevail. While the models developed by Sweden and Mondragon hold promise, this approach requires a major political commitment to the region, and a willingness to embrace some of the vagaries of international capitalism.

JOB CHAINS AND WAGE CURVES: WORKER MOBILITY AND MARSHALLIAN SURPLUSES IN EVALUATING REGIONAL EMPLOYMENT GROWTH*

ABSTRACT In theory, new regional jobs yield two distinct sources of welfare gains to workers: (1) mobility gains achieved by workers as they move up job chains and (2) traditional Marshallian surpluses enjoyed by all workers as labor markets tighten. In the past, we have argued that the second channel is likely to be small relative to the first. This paper integrates a chain model (using PSID job change data) with a modified‐Marshallian model based on “wage curves” (estimated from CPS data) to formalize and test that argument. High wage jobs with modest wage–unemployment elasticities show Marshallian effects only 10 percent to 20 percent the size of mobility effects. Low wage jobs with somewhat higher elasticities show Marshallian effects from 40 percent to 70 percent the size of mobility effects.

Glass Ceilings or Glass Doors? Wage Disparity within and between Firms

We investigate whether immigrant and minority workers' poor access to high-wage jobs - that is, glass ceilings - is attributable to poor access to jobs in high-wage firms, a phenomenon we call glass doors. Our analysis uses linked employer-employee data to measure mean- and quantile-wage differentials of immigrants and ethnic minorities, both within and across firms. We find that glass ceilings exist for some immigrant groups, and that they are driven in large measure by glass doors. For some immigrant groups, the sorting of these workers across firms accounts for as much as half of the economy-wide wage disparity they face.

The impact of offshoring on the evolution of the IT workforce within the UK

There is a growing concern over the offshoring of jobs to organisations in developing countries, particularly as we are now starting to lose high-wage knowledge jobs that may potentially impact the future of the UK IT sector. In this paper, we examine some of the issues surrounding offshoring, present case studies of some organisations with different experiences and views of offshoring and investigate what it may mean to the IT sector of the future within the UK. There are three main findings: (1) Future skills required by UK IT professionals will present a major lifestyle change for many parts of the IT workforce. (2) While it may be irrational to create artificial political or organisational barriers to restrict offshoring, the UK Government needs a holistic strategy for the UK IT sector to position itself for future competitive advantage or risk losing a prized high technology industry to developing countries. (3) There is universal agreement that Higher Education Institutions (HEIs) will play a major role in developing the supply of skills needed for the UK to compete globally in the future and that there is a clear need for government policy and business to inform educational directions.

Product Market Integration and Heterogeneity—Rent Sharing and Pricing to Market

AbstractInternational product market integration makes market penetration easier and therefore creates both export opportunities and import threats. This changes the competitive position of firms and is associated with changes in trade, production, and specialization structures. The gains and losses in this process are unlikely to be equally shared due to heterogeneity across firms/sectors. In a Ricardian trade model with heterogeneity across firms, we find “pricing to market”—effects not only for exports, but also for pricing in the domestic market even for nontradables. Rents to be shared in wage bargaining differ across tradables and nontradables. It is shown that lower trade frictions affect the scope for “pricing to market” and cause wages to become more closely driven by (relative) productivity. Labor market prospects tend not to improve for low wage jobs, and not to deteriorate for high wage jobs.

Low-wage employment and the role of the firm

Increasingly linked employer-employee data have become and are becoming available, opening up important new avenues for research. Important contributions to the analysis of wage determination can be expected from including employer behaviour “in the wage equation”, both as a stimulus to and a consequence of these data developments. This is particularly the case at the lower end of the wage distribution - be it at the very end where the minimum wage reigns, if any, or somewhat higher up to a low-wage threshold such as the often used two-thirds of the median wage. In this segment many extremely interesting and important issues of labour-market analysis such as inter-industry differentials, union and employer behaviour, the effects of institutions and rent sharing (or the absence of it), come together theoretically as well as empirically. More detailed information on individuals’ employer characteristics speak can help to improve answers to questions such as What determines the individuals’ chances of being in low-paid jobs? What determines the duration of being in low pay or, phrased differently, the chances of escaping it, by moving to either a higher-wage job or non-employment? What determines the amount of low-wage employment available in the economy? and, last not least, is the outcome competitive ? The improved analysis may throw a new and different light on the role not only of personal characteristics bus also of labour-market and other institutions. Though more and better data are becoming available there is still a long way to go before an economically comprehensive and internationally comparable stage will be reached. Until then the analysis of employer behaviour will remain a challenge.JEL Codes: J22, J21, J31, J42, C81.

2007 State New Economy Index

The 2007 State New Economy Index, released by the Ewing Marion Kauffman Foundation and the Information Technology and Innovation Foundation (ITIF), is a state-by-state analysis of how state economies are transforming from an old industrial economic model based on smokestack chasing in which economic development success is measured by the number of big company relocations rather than in the creation and retention of high value-added, high-wage jobs. The Index, which expands on two earlier reports issued in 1999 and 2002, uses 26 indicators from a variety of sources to rank each state on the extent to which their economies are structured and operate to effectively compete regionally as well as globally. It examines the degree to which state economies are knowledge-based, globalized, entrepreneurial, information technology-driven and innovation-based. Perhaps the most important driver of the new economy, according to the Index, is the information technology revolution that is transforming virtually all industries and driving increased productivity. The good news is that various industrial sectors such as health care, education, transportation, government, real estate and others are at the early stages of digital transformation, and as they transform, productivity promises to continue to grow. On the other hand, technology has ushered in a new global competitive challenge to state economies. It has made it possible for more work to be done at a distance prompting many developing nations to establish the infrastructure, skilled workforce and business climate to be attractive locations for this work, and at a much lower cost. For example, in the past two decades, the number of industrial manufacturing relocations and significant expansions in the United States has fallen from an average of 5,139 per year for 1995-2000, to 3,162 in 2005. According to the Index, states at the top of the ranking tend to have a high concentration of managers, professionals and college-educated residents working in knowledge jobs. Their companies tend to be more geared toward global markets, both in terms of export orientation and the amount of foreign direct investments. All the states at the top of the ranking also show above-average levels of entrepreneurship, even those that are not growing rapidly in employment. Most are at the forefront of the information technology and Internet revolutions, with a large share of their institutions and residents embracing the digital economy. Most have a solid infrastructure that fosters and supports technological innovation and many have high levels of domestic and foreign immigration of highly mobile, highly skilled knowledge workers seeking good employment opportunities coupled with a good quality of life. Conversely, states ranking at the bottom of the Index tend to depend on natural resources or on mass production manufacturing and rely on low costs rather than innovative capacity to gain advantage. Massachusetts has held the top spot on the State Index issued in 1999, 2002 and 2007, while New Jersey and Maryland have each made a steady climbs with each Index to close the gap and take the second and third place rankings this year. Wisconsin, Vermont, North Dakota and Rhode Island made the greatest strides on the Index from 2002 to 2007, while Missouri, Maine, Oregon, Arizona, New Mexico, Oklahoma, and Hawaii recording the biggest decline in the rankings over the last five years. Given some states' reputations as technology-based, New Economy states, their scores seem surprising at first. For example, North Carolina and New Mexico rank 26th and 33rd, respectively, in spite of the fact that the region around Research Triangle Park (in the Raleigh-Durham metro area) boasts top universities, a highly educated workforce, cutting-edge technology companies, and global connections, while Albuquerque is home to leading national laboratories and an appealing quality of life. In both cases, however, many parts of the state outside these metropolitan regions are more rooted in the old economy. With the economic indicators as a reference, the Index also outlines an eight-point public policy framework of best practices that state officials can use as a guide to transform their economies and ensure raising standards of living for their residents.

Continued barriers for breast-feeding in public and the workplace

n some parts of the United States, a woman waiting for a bus and breast-feeding her 6-week-old son could be arrested for violating “public indecency” laws; however, if she unzipped her bag, pulled out a bottle, and fed her son, she would be performing a perfectly decent act. Such a paradox should be matters of concern, especially because the scientific community, ederal agencies, and professional societies uniformly extol the virtues of breast milk and breast-feeding. Most countries are ignatories to the World Health Organization recommendation that infants should be exclusively breast-fed for 6 months. The S Healthy People 2010 target is to increase the proportion of mothers who breast-feed their babies for 6 months to 50%. Even uch a modest goal may be difficult to attain, however, because a large fraction of women in this country return to work after elivery. The US Department of Labor reported that in July 2005, 59.3% of women over age 16 were in the civilian workforce. eturning to work has been identified as an important cause of early termination of breast-feeding or of feeding expressed breast ilk. Some barriers to breast-feeding in the workplace include the perception that infants at work may impede mothers’ job erformance; lack of privacy for expressing breast milk or for breast-feeding; inability to find a day care facility at or near the orkplace; the high cost of day care and long waiting periods (up to 8 months in some localities); and insurance regulations, uilding codes, and other rules that limit infants and children in workplaces. Women in low-wage jobs may face substantially reater barriers for breast-feeding than those in higher-wage jobs. The 1996 Personal Responsibility and Work Opportunity econciliation Act (better known as the Welfare Reform Act) also may have had unintended negative consequences on reast-feeding rates, because mothers on welfare may have difficulty in finding jobs that support breast-feeding. There may be reluctance at the workplace to allow for adequate time for expressing breast milk, which may take up to 30 inutes a day. Employers may not appreciate the societal benefits accruing from high rates of breast-feeding, which may far utweigh the cumulative inconvenience of accommodating such efforts. Less well-appreciated issues that may affect breast-feeding rates are local and state laws related to breast-feeding. The able (available at www.jpeds.com) summarizes data from a study conducted by the La Leche League International, updated ay 2005. It is gratifying that 38 states (as of November 15, 2005) have enacted at least ome laws in support of breast-feeding. Some of these laws include exempting breasteeding from public indecency laws; considering breast-feeding a valid excuse for exempion from jury duty; requiring state Departments of Health to issue mercury alerts, xplaining the dangers of eating mercury-contaminated fish by women who are pregnant r breast-feeding; enacting antidiscrimination laws; and waiving sales and other taxes for roducts manufactured for initiating, supporting, and sustaining breast-feeding. The effect of these regulations on breast-feeding rates in the United States has yet o be studied. In a longitudinal survey currently underway, 2100 US women will be nrolled in the third trimester of pregnancy and followed through the first year of their nfants’ age. This study will evaluate the factors influencing women’s choices on feeding heir infant and also may shed light on the barriers to breast-feeding in the workplace. The LLLI data 16 also show that as of November 2005, no specific laws had been assed concerning breast-feeding in 12 states (Figure), but there are pending legislative roposals related to breast-feeding in several states. It is perhaps a sign of the times hat laws are required to “protect” women who plan on performing a perfectly normal iological act that is universally recognized as beneficial to the health and well-being of the ntire society. But regulatory actions do help. In Norway—arguably the breast-feeding capital of he West—high breast-feeding rates have been documented since the 1970s. More than 7% of women breast-feed their infants during the immediate postpartum period, 80% From the Pregnancy and Perinatology Branch, Center for Developmental Biology and Perinatal Medicine, National Institute of Child Health and Human Development, National Institutes of Health, Bethesda, Maryland.

The cyclical upgrading of labor and on-the-job search

This paper examines patterns of worker reallocation in the search and matching model of the labor market. We show that on-the-job search is crucial for explaining the observed cyclical upgrading of workers to better employment opportunities in booms. This is due to the rising availability of employed searchers which facilitates recruitment for newly created high-wage jobs. The standard model fails to exhibit such behavior. At the same time, the model is consistent with salient features of labor market dynamics, such as the volatility of vacancies and unemployment, and a highly procyclical rate of job-to-job transitions. This suggests an important channel for the reallocation of workers across jobs as well as the propagation of aggregate shocks.

The Polarization of the U.S. Labor Market

This paper analyzes a marked change in the evolution of the U.S. wage structure over the past fifteen years: divergent trends in upper-tail (90/50) and lower-tail (50/10) wage inequality. We document that wage inequality in the top half of distribution has displayed an unchecked and rather smooth secular rise for the last 25 years (since 1980). Wage inequality in the bottom half of the distribution also grew rapidly from 1979 to 1987, but it has ceased growing (and for some measures actually narrowed) since the late 1980s. Furthermore we find that occupational employment growth shifted from monotonically increasing in wages (education) in the 1980s to a pattern of more rapid growth in jobs at the top and bottom relative to the middles of the wage (education) distribution in the 1990s. We characterize these patterns as the %u201Cpolarization%u201D of the U.S. labor market, with employment polarizing into high-wage and low-wage jobs at the expense of middle-wage work. We show how a model of computerization in which computers most strongly complement the non-routine (abstract) cognitive tasks of high-wage jobs, directly substitute for the routine tasks found in many traditional middle-wage jobs, and may have little direct impact on non-routine manual tasks in relatively low-wage jobs can help explain the observed polarization of the U.S. labor market.

IT jobs: opportunities for all?

This paper examines the opportunities for the unemployed to access information technology jobs. Based on original research, it indicates that, despite initial expectations about an expanding sector of high skill, high wage jobs, recent developments indicate a tight labour market, which has created barriers to these jobs for the unemployed.

Analysis: Offshoring - home sweet home

Offshoring can be defined as relocation of business processes, including high-wage production and manufacturing jobs, to a lower cost location, usually overseas. To be able to adopt this principle, companies must be efficient enough to produce its goods close to the place where they are in demand, even when labour cost are high. They should also look carefully at their economics before they send production overseas. In this paper, this principle is illustrated taking the state of California as an example.

Distributional effects of science and technology-based economic development strategies at state level in the United States

Inequality is growing in the United States. This article examines the relationship between innovation strategies and wage inequality at state level in the US. State science and technology strategies usually aim to add high-skill, high-wage jobs to the local economy. When they succeed, therefore, they threaten to increase wage inequality. Alternative innovation strategies are possible, including ‘good job’ strategies that focus on creating jobs in the middle of the wage distribution, and ‘better life’ strategies that improve living conditions for those at the low end of the wage scale and for the unemployed. Copyright , Beech Tree Publishing.

BUILDING POWER IN THE NEW ECONOMY: THE SOUTH BAY LABOR COUNCIL

Confronted with the technological changes and corporate restructuring that is eroding job security for all workers, the once booming economy of Silicon Valley is now undergoing severe growing pains. Moreover, the much vaunted information technology industry is producing a dual economy of high‐wage and low‐wage jobs. Now, with the bursting of the dot.com industry, workers in all sectors are confronting layoffs and lower expectations. In both boom and bust periods, the South Bay American Federation of Labor‐Congress of Industrial Organizations Labor Council has made a tremendous turnaround, made has innovative responses to the “new economy,” and has expanded its capacity to take on issues important to workers and unions. The article offers a detailed account of the labor council's program and explores the environmental and historical context surrounding the revitalization of organized labor in the region. Our findings in San Jose suggest that central labor councils are successful in advancing the needs of workers and labor movement. Today, this experience offers a model for the three‐pronged approach to grassroots movement building: (1) policy research and advocacy, (2) community coalition building, (3) and an aggressive political program that keeps politicians responsive to the needs of workers.

The Promise of Opportunity

THE SIMPLE bargain at the heart of the American dream offers opportunity to every American who takes the responsibility to make the most of it. That bargain is the great source of American strength, because it unleashes the amazing talent and determination of our people. As our people seize the opportunity to build a better life, they build a stronger country. Now as never before, education is the key to opportunity, essential to a strong America. In an age when our people compete with workers on every continent and information flows across oceans, high-wage jobs are more dependent than ever on high-level skills. Together, we must build an America that offers the best education to all our children -- wherever they live, whatever their background. That means we need more resources and more reform for our schools. Resources-without-reform is a waste of money, and reform-without- resources is a waste of time. John Edwards and I are committed to an agenda that offers both. For the sake of our children, we must set the bar high. Every child should come to school ready to learn. Every student should be held to high standards, and every school should have the resources and responsibility to meet those standards. Every classroom should have a great teacher, and every student should get enough personal attention to foster talents and overcome difficulties. Every teenager should expect to graduate from high school with a meaningful diploma. Every qualified young person who wants to go to college should be able to afford it. And every adult who needs additional job training should be able to get it. Today, our country is not living up to those ideals. The shameful truth is that too often the quality of a child's education depends on the wealth of that child's neighborhood. Our best public schools are the best schools in the world, but too many children go to schools that just don't work. Too many children who beat the odds and succeed in school can't afford to go to college. Too many adults who need added training are not able to get it. When the No Child Left Behind (NCLB) Act was signed, the Bush Administration said the right things -- asking more from our schools and pledging to give them the resources to get the job done. But by now, funding for NCLB has fallen $27 billion short of the promised levels, literally leaving millions of children behind. The Bush Administration proposed eliminating the smaller schools initiative and the dropout prevention initiative, both proven methods of reducing dropout rates. Over the last three years, public college tuition has risen by 35%, pricing 220,000 students out of college. Yet President Bush has tried to charge more for student loans and eliminate Pell Grants for 84,000 students. If we're going to give all of our children the education they deserve, we have to be willing to make tough choices. While extending and expanding tax cuts for the middle class, John Edwards and I will roll back the Bush tax cuts for those making over $200,000. We just can't afford to keep those tax cuts and make our schools work as they should. With those savings, we will fully fund No Child Left Behind -- so our children have smaller classes, more textbooks, and more after-school opportunities. We will also fund our other education priorities -- like getting on the path to full funding for special education and making college affordable for all young people through a generous new tax credit. John Edwards and I will make reform work for our schools. That means high standards -- and common sense. Today, many states are measuring student achievement with fill-in-the-bubble tests that limit both teaching and learning. We will offer the support needed for states to use sophisticated tests that capture the full range of skills that we want students to develop. We will also ensure accurate assessments of schools' success. Having correctly revised key regulations measuring school achievement under No Child Left Behind, the current Administration is refusing to apply those new regulations retroactively. …

"Offshoring" study misses important issues

An offshoring study stated the benefits to the United States of outsourcing high-wage jobs to lowest-wage countries but failed to address a number of important issues according to the IEEE-USA. According to IEEE-USA president, the report invariable fail to address the implications of offshoring on the long-term technological competitiveness and security of the United States.

"Offshoring" contributes to high unemployment, poses serious challenges

Offshoring or the outsourcing of high-wage jobs from the United States to lower-wage countries contributes to high unemployment levels among the US technologists, and poses a serious, long-term challenge to the nations technological and innovative leadership, its economic vitality, and its military and homeland security, according to a position recently adopted by IEEE-USA. According to an IEEE-USA president, in order to maintain US technological leadership and promote job growth in the USA a coordinated national strategy should be developed. IEEE-USA also believes that new US workforce assistance programs are needed to help displaced high-tech workers.

What happens when agent T gets a computer?: The labor market impact of cost efficient computer adoption

This paper offers a model of how computer technology has changed the labor market, demonstrating that wage differentials between computer users and non-users are consistent with computers first being introduced in high-wage jobs following cost efficiency. Furthermore, skill upgrading occurs following a reemphasis on non-routine tasks after adoption. The model also reveals that neither differences in computer skills nor complementary skills are needed to explain wage differentials between users and non-users, skill upgrading, and the changing organization and intensity of work. Finally, the predicted effects on the wage structure are consistent with empirical evidence.

Evaluating state cooperative technology programs: With a Virginia case study, and comparative data from Illinois

One of the strategies for economic development to emerge during the 1970s and 1980s to stem decline due to industrial restructuring in the United States was the formation of science and technology initiatives in many states. This strategy was of interest because it suggests the creation of high-wage jobs through the application and development of technology. States in the industrialized part of the United States were losing large numbers of high-wage industrial jobs, as restructuring occurred and the jobs moved offshore or were replaced with technology. These initiatives took several forms including, in some states, departments or secretariats of technology, the formation of authorities that were state agencies but one step removed from the legislature and executive branches and the initiatives that were set up as nonprofit corporations. Today, science and technology programs exist in every state of the United States. In the mid-1990s, the authors were asked to develop a methodology to measure the outputs and outcomes of one of the state centers in science and technology, a program that was increasingly being focused on technology and commercialization rather than primarily on basic or pure research. A methodology was created by the authors in collaboration with the Battelle Institute and was implemented first in 1996. The purpose of this paper is to explain the methodology developed and how it was implemented in an effort to illustrate a number of issues that arise around the issue of evaluating such programs and to explore the policy impact of such studies. The issues include sample selection, survey design, interview protocol, management of client and research team relations, validity and research protocol.

Opening the Box: Information Technology, Work Practices, and Wages

Using 1994–95 survey data on customer service representatives in 303 U.S. bank branches, the authors investigate the effects on wages of information technology (IT), of work practices, and of those two factors in combination. Offline high-involvement practices (measured by the presence of quality circles) were related positively to wages, as was more extensive use of IT that supports sales efforts. Where IT was used more extensively to automate routine processes, wages were lower in branches that did not have high-involvement work practices. The effects are partially explained by higher education requirements and more extensive introductory training in higher-wage jobs.