About one in five American workers today have jobs that offer low wages, poor benefits and few opportunities for advancement. But what can you do, right? After all, don’t we know that what’s good for business is often not good for people?
Not really, argues Zeynep Ton, an adjunct associate professor at the MIT Sloan School of Management, in this recent article. Although the conventional wisdom is that companies have no choice but to pay their employees poorly to remain competitive, Ton’s research suggests the opposite is true: When companies invest in their workforce, everybody wins.
Ton studied the practices of four highly regarded retailers – Mercadona*, QuikTrip, Trader Joe’s, and Costco – and found that “highly successful retail chains not only invest heavily in store employees but also have the lowest prices in their industries, solid financial performance, and better customer service than their competitors.” Indeed, low wages are “not a cost-driven necessity but a choice.” Her analysis suggest that one key to breaking the perceived trade-off is “a combination of investment in the workforce and operational practices that benefit employees, customers, and the company.” Read More »
It is conventional wisdom that the United States is suffering from a severe skills shortage, for which low-performing public schools and inadequate teachers must shoulder part of the blame (see here and here, for example). Employers complain that they cannot fill open slots because there are no Americans skilled enough to fill them, while pundits and policymakers – President Barack Obama and Bill Gates, among them – respond by pushing for unproven school reform proposals, in a desperate effort to rebuild American economic competitiveness.
But, what if these assumptions are all wrong?
What if the deficiencies of our educational system have little to do with our current competitiveness woes? A fascinating new book by Peter Cappelli, Why Good People Can’t Get Jobs: The Skills Gap and What Companies Can Do About It , builds a strong case that common business practices – failure to invest adequately in on-the-job training, offering noncompetitive wages and benefits, and relying on poorly designed computer algorithms to screen applicants –are to blame, not failed schools or poorly prepared applicants. Read More »
I’ve been reading Albert Shanker’s “The Power of Ideas: Al In His Own Words,” the American Educator’s compendium of Al’s speeches and columns, published posthumously in 1997. What an enjoyable, witty and informative collection of essays.
Two columns especially caught my attention: “That’s Very Unprofessional Mr. Shanker!” and “Does Pavarotti Need to File an Aria Plan” – where Al discusses expectations for (and treatment of) teachers. They made me reflect, yet again, on whether perceptions of teacher professionalism might be gendered. In other words, when society thinks of the attributes of a professional teacher, might we unconsciously be thinking of women teachers? And, if so, why might this be important?
In “That’s Very Unprofessional, Mr. Shanker!” Al writes: Read More »
A recent study by the Center for Policy Research (CEPR) asks the question that must be on the minds of college grads, now working as coffee shop baristas: “Where Have All the Good Jobs Gone?” The answer: swallowed by corporate profits and the personal portfolios of the ultrawealthy.
Despite the fact that the American economy has experienced “enormous” productivity gains since the late 1970’s, the study finds that the number of “good jobs” (defined as those paying at least $37,000 per year, with employer-provided health insurance and an employer-sponsored retirement plan) has declined from 27.4 percent in 1979 to 24.6 percent in 2010. This discouraging trend was strong even before the onset of the country’s economic crisis: in 2007, the year before the onset of the recession, only 25 percent of college grads had “good jobs.”
CEPR notes that the prevailing explanations for the failure to share productivity gains are “technology” and lack of necessary skills among American workers. But, if this were true, the CEPR study argues, one would expect college grads to have a higher share of good jobs than they did 30 years ago. They don’t. Instead, at every age level, today’s college grads are less likely to have a “good job” than their 1970s counterparts. This is especially surprising, the researchers note, since twice as many Americans now have advanced degrees as compared to the 1970’s. Read More »
Economist Jesse Rothstein recently released a working paper about which I am compelled to write, as it speaks directly to so many of the issues that we have raised here over the past year or two. The purpose of Rothstein’s analysis is to move beyond the talking points about teaching quality in order to see if strategies that have been proposed for improving it might yield benefits. In particular, he examines two labor market-oriented policies: performance pay and dismissing teachers.
Both strategies are, at their cores, focused on selection (and deselection) – in other words, attracting and retaining higher-performing candidates and exiting, directly or indirectly, lower-performing incumbents. Both also take time to work and have yet to be experimented with systematically in most places; thus, there is relatively little evidence on the long-term effects of either.
Rothstein’s approach is to model this complex dynamic, specifically the labor market behavior of teachers under these policies (i.e., choosing, leaving and staying in teaching), which is often ignored or assumed away, despite the fact that it is so fundamental to the policies themselves. He then calculates what would happen under this model as a result of performance pay and dismissal policies – that is, how they would affect the teacher labor market and, ultimately, student performance.*
Of course, this is just a simulation, and must be (carefully) interpreted as such, but I think the approach and findings help shed light on three fundamental points about education reform in the U.S. Read More »
We have been engaged in decades-long public policy debates on gaps and how best to close them: the income gap, the student achievement gap, gender-linked gaps in employment opportunities. But why do we care so much about gaps? In a land of diversity, why are subgroup differences such a concern?
At a basic level, we care about gaps because (or when) our fundamental assumption is that, on a “level playing field,” there should be no systematic differences among people based on ascribed traits, such as race and gender, that are unrelated to the “game.” It is “ok” if a specific Hispanic kid performs at a lower level than his/her white counterpart or vice-versa. But it’s not ok if, on average, Hispanic students’ test scores systematically lag behind that of similar white children. Why? Because we know intelligence and ability are normally distributed across racial/ethnic groups. So, when groups differ in important outcomes, we know that this “distance” is indicative of other problems.
What problems exactly? That is a more complex question. Read More »
It’s well-known that patterns of occupational sex segregation in the labor market – the degree to which men and women are concentrated in certain occupations – have changed quite a bit over the past few decades, along with the rise of female labor force participation.
Nevertheless, this phenomenon is still a persistent feature of the U.S. labor market (and those in other nations as well). There are many reasons for this, institutional, cultural and historical. But it’s interesting to take a quick look at a few specific groups, as there are implications in our current policy environment.
The simple graph below presents the proportion of all working men and women that fall into three different occupational groups. The data are from the Bureau of Labor Statistics, and they apply to 2011. Read More »