The Future of Success (33 page)

12
. Described in Aaron Bernstein, “Welch’s March to the South,”
Business Week,
December 6, 1999, p. 74.

13
. Commission on the Future of Worker-Management Relations, “Fact Finding Report” (Washington, D.C.: U.S. Department of Labor, May 1994).

14
. For evidence on the growth of non-unionized sectors of the economy, see Henry Farber and Bruce Westera, “Round Up the Usual Suspects: The Decline of Unions in the Private Sector, 1973–1998,” Industrial Relations Section, Princeton University, Working Paper No. 437, April, 2000.

15
. See analyses by the Securities Industry Association, Washington, D.C., which are drawn from the Federal Reserve System’s “Ownership of Long-Term Securities Benchmark Survey.” The most recent data are from 1999.

16
. Pohle and Chirac are quoted in Greg Steinmetz and Michael Sesit, “Tighter Ship: U.S. Investors Bring More than Cash on European Tour,”
Wall Street Journal Europe,
August 4, 1999, p. A1.

17
. Ibid.

18
. From Alan Friedman, “Executives in Europe Demand Reforms,”
International Herald Tribune,
August 2, 1999, p. 1.

19
. The extent of layoffs at Nissan, NEC, and Sony is from company reports and briefings.

20
. Quoted in Annalee Saxenian, “Beyond Boundaries: Open Labor Markets and Learning in Silicon Valley,” in Michael Arthur and Denise Rousseau, eds.,
The Boundaryless Career
(New York: Oxford University Press, 1996), p. 28.

21
. Heath Row, “This Virtual Company Is Real,”
Fast Company,
December–January 1998, p. 48.

1
. Laurence Zuckerman, “Agent to the Software Stars,”
New York Times,
September 8, 1997, p. D1.

2
. Orestes Brownson, “The Laboring Classes” (1840), reprinted in Joseph L. Blau, ed.,
Social Theories of Jacksonian Democracy
(Indianapolis: Bobbs-Merrill, 1954), pp. 306–7, 309–10.

3
. Abraham Lincoln, “Speech at Kalamazoo, Michigan” (August 27, 1856), in Roy P. Basler, ed.,
The Collected Works of Abraham Lincoln,
vol. II (New Brunswick, N.J.: Rutgers University Press, 1953), p. 364.

4
. The Knights’ grand master, Terence Powderly, explicitly called for an abolition of the wage system in his “Address to the General Assembly of the Knights of Labor” (1880), reprinted in Powderly,
The Path I Trod
(New York: Columbia University Press, 1940), p. 268.

5
.
Historical Statistics of the United States, Colonial Times to 1970,
vol. 1 (Washington, D.C.: U.S. Government Printing Office, U.S. Bureau of the Census, 1975).

6
. “Testimony Before the Industrial Commission,” Washington, D.C., April 18, 1899, reprinted in Gompers,
Labor and the Employer
(New York: E. P. Dutton, 1920), p. 291.

7
. “Labor and Its Attitude Toward Trusts,”
American Federationist,
vol. 14 (1907), p. 881.

8
. Woodrow Wilson,
The New Freedom,
ed. William E. Leuchtenburg (Englewood Cliffs, N.J.: Prentice-Hall, 1961), pp. 26–7.

9
. 198 US 45, 61 (1905).

10
. 108 US 412, 418 (1908).

11
. National Conference on Social Welfare, The Report of the Committee on Economic Security of 1935, 50th Anniversary Edition, Washington, D.C., 1985, p. 56.

12
. U.S. Office of Management and Budget, Special Analysis of the Budget of the U.S. Government (Washington, D.C.), various issues.

13
. William H. Whyte, Jr., was an editor of
Fortune
magazine when his book about the conformist culture of America’s emerging white-collar class,
The Organization Man
(New York: Simon & Schuster, 1956), was published.

14
. The 1952 survey was included in a book published by
Fortune
called
The Executive Life
(Garden City, N.Y.: Doubleday, 1956), p. 30.

15
. Whyte, op. cit., pp. 143, 145.

16
. Ibid., p. 146.

17
. Sloan Wilson,
The Man in the Gray Flannel Suit
(Mattituck, N.Y.: Amereon House, 1955).

18
. E. P. Thompson, “Time, Work Discipline, and Industrial Capitalism,”
Past & Present, A Journal of Historical Studies,
no. 38 (December 1967), pp. 56–97.

19
. Quoted in “Norman Vincent Peale Answers Your Questions,”
Look,
March 6, 1955. Cited in Whyte, op. cit., p. 282.

20
.
Sales Management,
January 15, 1952. Cited in ibid., pp. 288 n.3, 394.

21
. J. Kahl,
The American Class Structure
(New York: Holt, Rinehart, 1956), pp. 109–10.

22
. Evidence shows that earnings have become less stable, although not necessarily jobs. Researchers usually focus on several variables—“job stability,” meaning the duration of jobs or the probability of retaining or leaving one; “job security,” meaning the likelihood of experiencing involuntary job loss; and “earnings stability,” meaning the variation in earnings from one time period to another. In the industrial economy of wage work the three typically went together, but that has become less the case. For a sampling of recent research, see Daniel Aaronson and Daniel G. Sullivan, “The Decline of Job Security in the 1990s: Displacement, Anxiety, and Their Effect on Wage Growth,”
Economic Perspectives
, First Quarter 1998, pp. 17–43; Henry Farber, “Trends in Long Term Employment in the United States, 1979–1996,”
Industrial Relations Section Working Paper
no. 384 (Princeton, N.J.: Princeton University, July 17, 1997). See also U.S. Bureau of Labor Statistics, “Employee Tenure in the Mid-1990s,” January 30, 1997; and Peter Gottschalk and Robert Moffitt, “The Growth of Earnings Instability in the US Labor Market,”
Brookings Papers on Economic Activity
, no. 2 (1994). For an attempt to reconcile what seem to be several conflicting strands of evidence, see David Neumark, “Changes in Job Stability and Job Security: A Collective Effort to Untangle, Reconcile, and Interpret the Evidence,”
National Bureau of Economic Research Working Paper
no. 7472 (January 2000).

23
. Measures vary considerably, depending on how such work is defined. The Labor Department’s Bureau of Labor Statistics has estimated that a relatively small portion of the workforce falls within these categories—no more than 8 to 10 percent—while other estimates range as high as 30 percent. See Barry Bluestone and Stephen Rose, “Overworked and Underemployed,”
The American Prospect
, March–April 1997, p. 60.

24
. Variable pay plans are rapidly becoming the norm. In a survey of almost 3,000 U.S. and Canadian employers conducted by the American Compensation Association of Scottsdale, Arizona, in August 1998, 86 percent said they already had variable pay plans, and 35 percent planned to place more emphasis on variable pay over merit pay. In a summer 1998 survey of 1,069 employers by Hewitt Associates of Lincolnshire, Illinois, 72 percent said they offered at least one variable pay plan (up from 61 percent in 1996), 63 percent offered stock and stock-option plans, and 55 percent planned to extend stock options down the organizational ladder in 1999. See generally “Pay Is Rising, Thanks to Sweeteners in a Tight Labor Market,”
New York Times,
August 30, 1998, p. B11.

25
. Dale Belman and Erica Goshen, “Small Consolation: The Dubious Benefits of Small Business for Job Growth and Wages,” Washington, D.C.: Economic Policy Institute, June 30, 1998.

26
. Barry Bearak, “Behind the Wheel: Long Hours and Hard Feelings,”
New York Times,
May 15, 1998, p. A1.

27
. Substantial political and journalistic attention has been paid to the increasing number of Americans lacking health insurance, less to the increasing number who must pay higher premiums, co-payments, and deductibles for the health care they do receive. The consequence of these higher payments is often to deter people from using medical services. For data on the decline in employer-provided health coverage, see Lawrence Mishel, Jared Bernstein, and John Schmitt,
The State of Working America, 1998–99
(Ithaca, N.Y.: Cornell University Press, 1999), pp. 146–7.

28
. For evidence on universities’ increasing dependence on contract workers, see Michael S. McPherson and Morton Owen Shapiro, “Tenure Issues in Higher Education,”
Journal of Economic Perspectives,
Winter 1999.

29
. David Marcotte, “Evidence of a Fall in the Wage Premium of Job Security,” Center for Governmental Studies, Northern Illinois University, 1994; see also Barry Bluestone and Stephen Rose, “Overworked and Underemployed,”
The American Prospect,
March–April 1997.

30
. A survey conducted by the National Science Foundation and the U.S. Census Bureau shows very high levels of attrition among software engineers. It was cited by Normal Matloft, “Now Hiring! If You’re Young,”
New York Times,
January 26, 1998, p. A23.

31
. One reason older and middle-aged people who lose their jobs are having more trouble finding new ones that pay as well as the old is that firms seem to be reluctant to invest in new training associated with new technology for older workers for whom there will be a shorter payoff period. For evidence, see William J. Baumol and Edward N. Wolff, “Speed of Technical Progress and Length of the Average Interjob Period,” Jerome Levy Economics Institute, Working Paper no. 237, May 1998, Annandale-on-Hudson, N.Y. See also a survey by Exec-U-Net Outplacement Service, Norwalk, Connecticut, of 400 executives who had searched for a new job. The older the applicant, the fewer the interviews and the longer the search. Applicants aged forty-one to forty-five took 18 percent longer to find a job than applicants thirty-five to forty; those forty-six to fifty took 24 percent longer; those fifty-one to fifty-five, 44 percent longer; those fifty-six to sixty, 66 percent longer. Reported in Daniel M. Gold, “In Executive Job Hunts, Experience Doesn’t Matter,”
New York Times,
October 25, 1998, Business, p. 10.

32
. Every March, Census Bureau researchers conduct a large-scale survey of American incomes. The Current Population Survey, as it’s called, uses a very broad definition of income, including public assistance and other cash-transfer payments, as well as wages and salaries. But it does not measure capital gains or the benefits of home ownership, and incomes are measured in such a way as to understate very large ones. Thus the CPS can be assumed to be a very conservative measure of inequality. Data are collected on “families” (two or more related people living together) and on “households” (not just families, but also people living alone and unrelated people living together). Average income for families is higher across the spectrum than for households, since people living alone drag down the household figures, and inequality is likewise more pronounced among households.

33
. A close reading of the data suggests that the increase in wage and income inequality may have been somewhat greater during the 1980s than in the 1990s. That makes sense, to the extent that the strong economic expansion that began in 1991 and continued through the nineties entailed a substantial increase in the demand for labor, and a corresponding decline in the rate of unemployment. As a result, workers at the bottom rungs of the economic ladder were paid more than they would be if demand were softer, and they also had more opportunity to work longer hours. The 1990s comparisons are a bit distorted by the redesign of the Current Population Survey in 1994 (beginning with 1993 incomes), which led to a one-time large jump in income inequality in 1993.

34
. U.S. Department of Commerce, Bureau of the Census,
Historical Data from the Current Population Survey,
revised September 1999 and supplement.

35
. The analysis of who gained from the stock-market boom of the 1990s is from Professor Edward N. Wolff of New York University, who regularly analyzes data from the Federal Reserve Board’s surveys of consumer finances. Edward Wolff, “Recent Trends in the Size Distribution of Household Wealth,”
The Journal of Economic Perspectives,
vol. 12, no. 3 (1998), p. 131.

36
.
Report of the 1994–96 Advisory Council on Social Security,
vol. 2 (Washington, D.C., 1997), p. 30.

37
. People who deny that inequality is a problem also allege that inequality data from the Current Population Survey ignore the significant effects of taxes and transfer programs. But it turns out that inequality increased between 1980 and 1998 to an even greater degree when measured after taxes and transfers are figured in. See Census Web site, www.census.gov/hhes/ www/income.htm, Table RDI-5.

38
. Studies that track consistent sets of people over time show only limited mobility. Relatively few families in the lower rungs move upward. Roughly six out of ten children who started life in families in the bottom fifth of income in the early 1970s were still there ten years later. See Peter Gottschalk, “Inequality, Income Growth, and Mobility: The Basic Facts,”
Journal of Economic Perspectives,
vol. 11, no. 2 (Spring 1997).

39
. Scott Thurm, “Silicon Valley Reveals Signs of Growing Disparity,”
Wall Street Journal Europe,
January 11, 2000, p. 6, summarizing a report by Joint Venture: Silicon Valley Network, January 2000.

40
.
The Economist,
February 26, 2000, p. 43.

1
. The estimate of just under 2,000 hours a year for pay, for the average adult working American, comes from dividing total hours worked in the entire economy during the year by the average level of employment over the year. Because some people enter and leave the workforce during the year, however, the actual number of people with work experience is larger than the average level of employment—which means that
average annual hours for everyone with work experience
during the year is correspondingly lower. Either way you figure it, there’s been a substantial increase in hours worked. Calculated the first way, average annual hours go from 1,905 in 1979 to 1,976 in 1999—an increase of almost two weeks. Calculated the second way, they go from 1,637 in 1979 to 1,776 in 1999—an increase of almost three and a half weeks. See generally
Report on the American Workforce
(Washington, D.C.: U.S. Department of Labor, 1999).