Securing Prosperity The American Labor Market: How It Has Changed and What to Do about It.

• Author: Diaz, Scot
• Position: Review

Osterman, Paul

Princeton, New Jersey: Princeton University Press, 1999. (222 pp)

With a robust domestic economy and increased productivity, it is logical to believe that there is no real crisis in the labor market. After all, unemployment is relatively low and most Americans view the current economic times as one of the most prosperous periods they can remember. Yet Paul Osterman describes a much different picture of the labor market in his book Securing Prosperity.

Osterman explores the labor market using a comparative post-World War II perspective, arguing that external and internal changes in the labor market--such as the expansion of the technology sector that has created a growth in the demand for skilled labor--have caused an increase in the number of layoffs and the creation of a new breed of "contingent workers." Compared to the post-World War II labor market structure, today's employees feel less job security, and although contingent work, or temporary help, is good for some, it is evident that others are dissatisfied and desire more stable employment. Osterman argues that these changes are not incidental effects that occur with the changing times. Rather, they are serious problems that have contributed to 1) a decrease in the real wage, 2) an increase in the wage gap, and 3) an overall change in the predictable and evident rules and norms of the American labor institution.

Osterman begins by providing a detailed assessment of the American labor market in the postwar era, best illustrated as a dichotomy between two competing models. The first model is that of the industrial union, characterized by the automotive industry. Here, seniority was the driving force in wage determination, employment duties were communicated via a specified contract, and layoffs would typify the response to a desired reduction in employment.

The second model is the "nonunion approach" depicted best by IBM, where relations between workers and management took place through surveys and various communication programs. Unlike the automotive industry, wages were much more individually determinant and they were coupled with an atmosphere of flexibility. Although the two models were very different in structure, both attempted to provide a familial atmosphere, where mutual obligations and long-term attachments were desired by both workers and management and each implicitly adopted these notions.

This structure, Osterman argues, has changed considerably due to: 1)...