Labor Market Policy: One Institutionalist's Agenda

By Figart, Deborah M. | Journal of Economic Issues, June 2003 | Go to article overview
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Labor Market Policy: One Institutionalist's Agenda


Figart, Deborah M., Journal of Economic Issues


Institutionalists have taken the position that policy advocacy is consistent with the writings of foundational thinkers such as Thorstein Veblen, John R. Commons, and Karl Polanyi (Hayden 1939). What is distinctive about an institutionalist approach is the contention that the normative criteria for policy must be explicitly grounded in core cultural values and dominant social beliefs. F. Gregory Hayden, for example, has contended that "criteria stand between beliefs and interpretations of policy" (1995, 362). In his book The Discretionary Economy, Marc Tool proposed instrumental efficiency as the criterion for normative policy and theory. Instrumental efficiency is achieved by policies and practices that provide "for the continuity of human life and the noninvidious re-creation of community through the instrumental use of knowledge" (2001, 293). Daniel Gimble argued that Tool's criteria imply labor markets in which work fosters individual creativity, self-motivation, human development, human dignity, self-ful fillment, noninvidiousness, and nonalienation in the work process (1991, 638).

Restructuring labor markets according to these criteria would be a long-term process. In the short run, however, there are a number of policy proposals currently under discussion that would further the end of instrumental efficiency. In particular, I emphasize policies that would foster the elimination of invidious distinctions between workers based on position and status. (1) In this article, I discuss those social and institutional contexts of contemporary labor markets that perpetuate invidious distinctions by class, gender, and race-ethnicity. I offer a "Top Ten" list of labor market policies that could be adopted in order to eliminate invidious distinctions, If these policies are out of the margin at the federal level, perhaps it is up to individual U.S. states to take the lead, as some already have.

Invidious Distinctions by Class and Occupational Status: Labor Market Deficiencies at the Bottom

Contemporary labor markets are rife with status distinctions based on class and occupation. Some of these invidious distinctions have been explored by institutional economists analyzing dual and segmented labor markets. However, the shift toward the service sector, globalization, and managerial initiatives to enhance "flexibility" have altered the institutional context. Today, the bottom of the labor market is replete with those trapped in part-time and contingent jobs, often earning the minimum wage. Hours are irregular. Jobs lack benefits such as insurance and pensions. A living wage, obtained through collective bargaining or legislation, is out of reach, and there is little or no opportunity for "time and a half," or overtime, pay. These conditions generate and perpetuate inequality as a cumulative causation (see Dugger 1998). The first half of the Top Ten list (see table 1) targets the features of contemporary labor markets that reinforce invidious distinctions on the basis of class and occupational stat us.

Create Good Jobs for Part-Time, Contingent, and Temporary Workers

One institution that has unraveled in recent decades is the forty-hour workweek. Initiatives to increase flexibility in employment practices and working conditions have included more diversity in work hours. The quest by employers for flexibility has also led to the growth of nonstandard employment, particularly part-time, temporary, and contingent work. According to the latest biennial survey by the Bureau of Labor Statistics (BLS) in February 2001, the proportion of workers in contingent and alternative employment arrangements amounts to about 17.3 percent of total employment. At the very least, part-time and contingent workers should be eligible for benefits in proportion to their hours of work, a policy adopted by the European Union in 1997. Further, workers in nonstandard employment arrangements need to be covered by labor and employment regulations, including the right to organize.

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