Working in America: A Blueprint for the New Labor Market.

• Author: Wolff, Edward N.
• Position: Book Reviews

By Paul Ostennan, Thomas A. Kochan, Richard Locke and Michael J. Piore.

Cambridge, MA: MIT Press. 2001. Pp. ix, 229. $29.95.

This is a very readable and interesting book. The main thesis is that there have been major structural changes in the labor market over the past three decades or so. The labor market policies and institutions that currently exist date from the Great Depression. These structural changes have made many of these policies and institutions obsolete. As a result, it is necessary to modify these old policies and institutions and create new ones to deal with the changing nature of work in the United States. As the authors argue, "The result is a basic mismatch between the institutional structure and the reality of today's world of work. We are concerned in this volume primarily with updating the institutional structures to match the new reality" (p. 5).

In Chapter 1, the authors detail the nature of the "old" labor market. They identify five major characteristics. The first is that the American economy is relatively self-contained and immune from foreign competition and capable of sustaining standardized wages and working conditions throughout the economy. The second is that the main "breadwinner" in the family is the father (or husband). Other family members might participate in the labor market, but their primary commitments lie elsewhere. Third, the employment of the head of household is seen as full time and relatively permanent. The household head generally works for the same company over time, and job security is basically guaranteed. Fourth, the corporation acts as a stable organization with well-defined work rules and clearly defined internal roles. This view underlies the notion of the "internal labor market" developed by Doeringer and Piore (1971). Fifth, there is an implicit "social contract" between workers and employers that earnings rise in tan dem with increases in productivity and prosperity.

In Chapters 2 and 3, the authors document what happened to the early postwar norm and portray the emergence of the "new" labor market over the past 30 years. The first is the development of the new global economy and new competitive pressures on American capitalism from abroad. The second is the increasing labor force participation of women--especially wives (and mothers)--and the emergence of "two-breadwinner" families. For many wives, the primary responsibility has shifted from the home to the workplace. The third is...