Article

Journal of Industrial Relations

2016, Vol. 58(3) 419–440
Employment relations ! Australian Labour and
Employment Relations Association

and growing income (ALERA) 2016

SAGE Publications Ltd,

inequality: Causes and Los Angeles, London, New Delhi,

Singapore and Washington DC
DOI: 10.1177/0022185616634337
potential options jir.sagepub.com

for its reversal

Thomas A Kochan
Massachusetts Institute of Technology, USA

Christine A Riordan
Massachusetts Institute of Technology, USA

Abstract
The growth of income inequality is now recognized to be one of the most important
developments in employment relations of our time. While inequality has increased in
many parts of the world, it has been most pronounced in the United States. We review
the factors that have been suggested to cause the growth in inequality and, given these
multiple causes, suggest a set of actions that might begin to reverse this trend. We give
special attention to the changes in the employment relationship related to labor market
institutions – including unions and other forms of worker representation, wage regu-
lations and enforcement, and safety net policy – while also accounting for explanations
and proposals that focus on technology, skills and education, and globalization.
Additionally, we argue that emerging forms of organizational restructuring are becoming
increasingly important to the study of inequality and its remedies.

Keywords
Globalization, income inequality, labor market institutions, organizations, skills and
education, wage policies

Corresponding author:
Thomas A Kochan, Sloan School of Management, Massachusetts Institute of Technology, 100 Main Street,
E62-334, Cambridge, MA 02142, USA.
Email: [email protected]
420 Journal of Industrial Relations 58(3)

Introduction
The growth of income inequality is now recognized to be one of the most important
developments in employment relations of our time. While inequality has increased
in many parts of the world, it has been most pronounced in the United States. In
this article, we will review the factors that are suggested to cause the growth in
inequality and, given these multiple causes, suggest a set of actions that might begin
its reversal, with particular emphasis on the employment relationship and labor
market institutions. While we focus mostly on the US, we place the discussion in a
broader global context.

Trends in inequality in the US

The most widely used indicators of the growth in income inequality in the US come
from Piketty and Saez (2013). Using detailed tax data from the US Internal
Revenue Service, the authors show a remarkable pattern of income transfer – of
over 15% of national aggregate income – from the bottom 90% of the income
distribution to the top 10% over the past three decades (Figure 1). Even within the
top decile of the income distribution, it is the top 1% that realized disproportionate
gains, accounting for almost 60% of income growth between 1976 and 2007. In
contrast, income growth of the bottom 90th percentile was relatively flat (Figure 2).
A second widely used indicator focuses specifically on long-term trends in com-
pensation and labor productivity (Figure 3). For three decades following World
War II real compensation (wages and fringe benefit costs) moved roughly in
tandem with productivity. From 1979 to 2014, however, productivity grew by
approximately 63%, while real compensation for hourly workers in the US
increased by only about 8% – meaning productivity increased about eight times
faster than wages and benefits despite the rise in workers’ education levels during
this period.
A third indicator of growing inequality is the shift in labor’s share of national
income. Since 1970, labor income share has declined overall, even when accounting
for income sources such as health and pension benefits. Labor share measured by
salary and wages only has deteriorated more sharply, falling nearly nine percentage
points over this period (Figure 4).
The shift from labor- to capital-intensive industries is part of the reason for this
shift, but also important is the growing decline of labor share within industries –
especially those where profits have grown tremendously, such as in finance
(International Labour Organization (ILO), 2015) and the simultaneous accumula-
tion of capital income by the very top of wage earners.

Global trends in inequality

The US is not alone in experiencing growing inequality over recent decades. Many
industrialized countries – such as Japan, Canada, and those in Europe – have
Kochan and Riordan 421

Figure 1. Top decile income share in the United States, 1917–2014.

Source: Piketty and Saez (2007 [2015]).

Figure 2. Decomposing the top decile US income shares into three groups, 1917–2014.
Source: Piketty and Saez (2007 [2015]).

followed a similar trajectory. In particular, dramatic growth patterns at the very

top are observed in other English-speaking countries such as the United Kingdom
and Canada, although to a lesser degree, while in other countries such as Japan and
those in Europe such accumulation is not as pronounced (Alvaredo et al., 2013).
422 Journal of Industrial Relations 58(3)

Figure 3. The growing gap between productivity and workers’ hourly compensation,
1948–2014.
Source: Economic Policy Institute analysis of data from Bureau of Economic Analysis’ National
Income and Product Accounts and the Bureau of Labor Statistics’ Consumer Price Indexes and
Labor and Productivity Costs (Bivens and Mishel, 2015).

Figure 4. Declining shares of labor compensation and wages, 1955–2014.

Note: Compensation includes all forms of remuneration, including wages and salaries and
employer contributions (to employee pension and insurance funds, as well as government social
programs). Wages and salaries do not include any such contributions.
Source: US Bureau of Economic Analysis, Table 1.12: National Income by Type of Income. Last
revised: October 29, 2015.
Kochan and Riordan 423

Scholars attribute these observations to a convergence in labor market institutions

in countries such as the US and the UK – the decline of collecting bargaining, for
example, or the declining real value of minimum wages (Gosling and Lemieux,
2004) – but also point to significant change in bargaining among CEOs and other
top executives in large companies (Bivens and Mishel, 2015). Still, there is concern
that as countries seek to mimic US-style compensation structures and labor market
policies, their patterns of inequality will become more closely aligned with that of
the US, as has been the experience in the UK (Gosling and Lemieux, 2004).
Although these concerns are widespread across countries, we focus here on the
causes and consequences of wage inequality in relation to the employment rela-
tionship in the US, as it is the country with the most extreme growth in inequality
and the one for which we have the most expertise. (It is important to note that here
we focus primarily on income inequality due to wage inequality, not other sources
such as differences in property ownership and capital income. Wages account for
approximately 80% of total income in the US and 70% in Europe (ILO, 2015).)

Explanations for income inequality

Not surprisingly, the growth in inequality has gained significant attention and been
the source of considerable debate among researchers from multiple disciplines. We
review the evidence generated by this research in the following, starting with trad-
itional explanations in economics focused on the external market and technological
change before turning to institutional and organizational factors that arise from
various disciplines. In so doing, we aim to arrive at an explanation of inequality
that reflects the fundamental ways in which the organization of the employment
relationship has changed.

Skill-biased technological change

One of the first factors economists turned to in explaining inequality is skilled-
biased technological change (SBTC), in which inequality is posited to rise when
new technologies generate demand for highly-skilled workers (Card and
DiNardo, 2002). This rise in inequality is argued to occur in two ways: first,
through demand for skilled workers who are needed to fill more technologically
advanced jobs yet who are in short supply, and later, by the displacement of
lower- and middle-skilled workers, which intensifies competition for lower-wage
jobs (Autor, 2010; Autor et al., 2008).
The increase in the college-to-high-school wage premium in the 1980s was the
first indicator that led researchers to examine this issue in detail. In 1980,
this premium was 39%; by 1990, it had risen to 54%. However, during the
1990s, the growth in the college-to-high-school differential slowed and stood at
61% by 2000, where it approximately remains today (Goldin and Katz, 2008;
James, 2012). This stagnation, along with the failure to explain differences in edu-
cational returns by demographic factors such as age, gender, or race, led a number
424 Journal of Industrial Relations 58(3)

of scholars to critique the theory of SBTC as incomplete at best (Card and

DiNardo, 2002; Lemieux, 2008).
Still, however, the debate around SBTC persists. Current arguments regarding
SBTC have shifted focus from skills measured by education to the changing com-
position of tasks in technologically changed work (Acemoglu and Autor, 2011).
This emphasis led to the emergence of the ‘job polarization’ thesis: namely, that a
‘hollowing out’ of middle-skill jobs is occurring at the same time that jobs char-
acterized by low- and high-skill levels (and corresponding low- and high-wage
levels) are growing (Autor, 2010). Empirical evidence challenges this idea: Holzer
(2010), for example, finds that middle-skilled jobs in the US are actually projected
to grow in the near future. Others argue that the job change patterns in the most
recent decade fail to reflect the job polarization thesis, notably as job growth in
low-wage sectors has outstripped that of high-wage sectors throughout the 2000s.
Using a comparative perspective across various countries, still others show that
institutions affect the degree to which the job polarization hypothesis bears out
(Fernandez-Macias, 2012).

Globalization
The next favorite explanation was globalization and the related decline of the
American manufacturing sector: since 1980, the US has lost just over one-third
of its manufacturing jobs. A number of studies have shown that workers displaced
from manufacturing jobs who regain employment experience wage reductions of
20% or more (Holzer et al., 2011: 125). A different study documents numerous
negative effects – declining wages, significant increases in income transfer pay-
ments, higher unemployment, and larger reductions in labor force participation –
experienced in communities exposed to increased import competition from China
(Autor et al., 2013). These community effects are more persistent than economic
theory would predict: the same study found relatively little geographic mobility
among those displaced. More recently, offshoring undertaken by US firms during
the 2002–2008 period has been shown to advantage higher-skilled (and higher-
paid) workers who undertake relatively more abstract and communication-depen-
dent tasks in their jobs (Oldenski, 2014).

Composition of the labor supply

Finally, we briefly note that growing inequality is also attributed to the changing
demographic composition of the labor supply. These arguments primarily revolve
around gender, immigration, or education levels – the influx of women, for exam-
ple, or immigrants into certain sectors is argued to drive down wage levels.
Research has challenged such findings (Lemieux, 2008), while also situating the
disparity in outcomes among different demographic groups in the context of labor
market institutions, as described more fully in the next section.
Kochan and Riordan 425

Labor market institutions

Scholars in various disciplines have established linkages between labor market
institutions – such as wage laws, labor unions, and regulatory regimes – and pat-
terns of growing wage inequality. Below, we review the main labor market insti-
tutions that we deem important to understanding inequality.

Minimum wages. The first institutional feature thoroughly examined was the decline
in purchasing power of the national minimum wage. The current US$7.25 per hour
federal minimum stands at about 25% below the purchasing power of the min-
imum wage at its peak in 1968, which, had it kept up with inflation, would cur-
rently stand at approximately US$10.94 per hour.
The decline of the federal minimum wage’s real value is particularly deleterious
to those at the bottom of the wage distribution – historically, this has been espe-
cially so for women, who were less likely to be employed in unionized industries
upon their entrance to the labor market in the 1980s (DiNardo et al., 1996; Lee,
1999; Lemieux, 1993). Fortin and Lemieux (1997) estimate that had the real value
of the minimum wage in 1979 been maintained in 1988, the variance in female log
wages would have increased by 32.1% less than it actually did, compared to the
24.2% lesser increase in men’s wage dispersion under the same conditions. These
trends changed markedly during the 1990s and 2000s, when explosive growth of
top incomes became the primary driver of disparity in income (Lemieux, 2008).
Even so, the minimum wage is still an important institutional feature affecting
inequality, particularly among those at the bottom of the US wage distribution.

Decline in unions and bargaining power. More recently, scholars have recognized that
decline in unions and worker bargaining power account for a sizable portion of the
problem. By 1980, union membership had been declining slowly for two decades,
and international competition was eating away at unionized manufacturing firms.
Membership’s abrupt and steep decline in the early 1980s – initiated by the Federal
Reserve’s efforts to break the back of rampant inflation; a harder management line
against unions, signaled by President Reagan’s firing of striking air traffic control-
lers; a deep recession; and the growth of non-union domestic competition – per-
sisted for the following three decades.
Tables 1 and 2 report previously unpublished data from research regarding the
changes in industrial relations in the 1980s (Kochan et al., 1986). Specifically, we
show that collective bargaining outcomes changed after 1980 due to a decline in the
power derived from strikes, centralized bargaining, and informal pattern bargain-
ing arrangements that spread negotiated wage settlements within local labor mar-
kets and industries. The analysis is based on regressions on wage changes
negotiated in collective bargaining units in manufacturing firms with 1000 or
more employees from 1957 to 1984. As Table 1 shows, prior to 1980, the coeffi-
cients on strikes, centralized (firm-wide rather than single plant-level) negotiations
 426

Table 1. Wage change regressions: 1957–1984.

Full sample Pre-1980 Post-1980

Multi-plant, single firm structures .0039** (.0012) .0037** (.0012) .0058** (.0012) .0055** (.0012) .0067 (.0038) .0067 (.0039)
Multi-firm structures .0042** (.0013) .0043** (.0014) .0046** (.0014) .0046** (.0014) .0031 (.0043) .0028 (.0043)
Region-wide pattern bargaining .0046** (.0013) .0050** (.0014) .0036** (.0014) .0039** (.0014) .0085* (.0043) .0090* (.0043)
Industry-wide pattern bargaining .0045** (.0014) .0046** (.0014) .0043** (.0015) .0042** (.0014) .0057 (.0046) .0063 (.0046)
Strike 1–14 days .0075* (.0031) .0080** (.0030) .0039 (.0157)
Strike 15–24 days .0054 (.0046) .0020 (.0046) .0164 (.0158)
Strike 25 or more days .0052** (.0019) .0060** (.0019) .0029 (.0072)
R2 .50 .50 .55 .55 .31 .30
All equations in Tables 1 and 2 contain controls for changes in rates of inflation, employment growth/decline, unemployment and presence/absence of wage and price
guidelines or controls. Standard errors in parentheses.
Note: *p < 0.05; **p < 0.01; ***p < 0.001.
Journal of Industrial Relations 58(3)
Kochan and Riordan 427

Table 2. Over-predictions of post-1980 wage changes using pre-1980 model.

Structure/pattern cell N Without strikes (%) With strikes (%)

Overall sample 414 1.35 1.36

Single plant 169 0.79 0.83
Multi plant/single firm 163 2.10 2.09
Multi-firm 82 0.94 0.96
No pattern 83 1.20 1.24
Regional pattern 162 0.89 0.90
Industry pattern 169 1.85 1.83

and regional and intra-industry pattern bargaining were positive and significant. In
contrast, from 1980 to 1984 (the last year these data were collected), the coefficients
are mostly either insignificant or negative.
The data in Table 2 show that overall, the model of wage determination under
collective bargaining that dominated in the 1957–1979 time period over-predicted
wage settlements in the early 1980s by 1.35% and, consistent with the results shown
in Table 1, over-predicted wage changes more in units with centralized bargaining
structures and intra-industry pattern bargaining traditions. Thus, the key sources
of power that unions used to increase wages and spread these gains within indus-
tries had declined. This decline is substantial: extrapolating from these findings, if
the magnitude of these wage outcomes persisted in bargaining, the 1.35% estimate
would account for nearly 20% of the difference in growth of productivity and
wages from 1980 through 2015. Although imprecise, this is in the same range as
more recent studies of the effects of union decline.
Similarly, Erickson (1992, 1996) documents the demise in the 1980s of specific
union contract clauses that had helped maintain pattern bargaining within and
across the aerospace, automobile, and agricultural implement industries.
Freeman (1980, 1982) also shows that leading up to the 1980s, unions played an
important role in reducing wage inequality within organizations, finding that the
dispersion of wages within unionized organizations of different industries ranged
from 5% to 50% lower than that found within non-unionized organizations.
Using more recent data, Western and Rosenfeld (2011) estimate the decline in
unionization accounts for as much as 20% to 30% of the rise in wage inequality
since the 1980s. The impact is strongest among less educated and blue collar men –
a group for whom unions reduced inequality prior to the 1980s by mitigating the
deleterious effects of a falling minimum wage (Freeman, 1993; Western and
Rosenfeld, 2011).

Deteriorating labor enforcement regimes and safety net. The absence of unions has yet a
different effect in low-wage sectors, where they have traditionally acted as a deter-
rent against wage theft and other labor standards violations that contribute to
inequality (Wright and Brown, 2013). A 2008 survey of over 4000 low-wage
428 Journal of Industrial Relations 58(3)

workers in the cities of Chicago, Los Angeles, and New York found that approxi-
mately 67.5% of respondents – who worked in non-union car washes, retail and
food service, and domestic work, among other sectors – faced wage reductions
through violations in the prior week. These included underpayment of wages,
lack of overtime pay, or working off the clock, and cost them nearly US$3000 in
wages over a year of full-time work (Bernhardt et al., 2013).
Compounding the problem is weakened enforcement capacity of the state, an
issue that has been observed in many countries (ILO, 2006). In the US, the number
of workers and establishments covered by the Fair Labor Standards Act has risen
steadily over the last two decades, yet the number of inspectors in the Department
of Labor has simultaneously declined (Weil, 2014). Enforcement of wage standards
is also hindered by the fact that 70% of wage and hour investigations result from
worker complaints (Weil, 2008), even though evidence suggests there is a mismatch
between industries where complaints are made and where violations are most com-
monplace (Weil and Pyles, 2005).
US social policy relevant to the safety net – as measured by social insurance and
the payroll and income tax systems, both of which grant access to safety net pro-
grams through employment – is the weakest among Organization for Economic
Co-operation and Development (OECD) countries. By 2000, the US was spending
the least among this group in income transfers and cash social transfers for the
non-elderly (Smeeding, 2005). These weak safety net programs indirectly affect
growing inequality, as observed through the lack of paid family leave (Ray
et al., 2009) or work-sharing (Appelbaum, 2012), or the low rates of take-up of
unemployment insurance (DeNavas-Walt and Proctor, 2014; Schaefer, 2010).

Organizational and employment relationship changes

Increasingly, scholars are beginning to turn their attention to the role of organiza-
tions and their employment relationships as explanatory factors driving specific
dimensions of inequality. Increases in income inequality have been documented in
organizations within and across industries (Groshen, 1991), between large and
small firms (Davis and Haltiwanger, 1991), and among individuals within estab-
lishments (Barth et al., 2014). Next, we point to two factors that explain at least
part of this organizational story: the changing environment and interests of firms as
they relate to financialization, and organizations’ growing use of ‘fissured’ employ-
ment relationships.

Financialization of corporate behavior. A number of researchers have documented the

rise of financialization, that is, the growing importance of maximizing shareholder
value, in corporate behavior that began in the 1980s (Appelbaum and Batt, 2014;
Jacoby, 2004; Kochan, 2016; Lazonick, 2009). The argument is that this shift has
persisted since then as (1) new debt instruments (often referred to as junk bonds
because they were offered at high-interest rates with little collateral) became avail-
able to support highly leveraged and sometimes hostile buyouts and takeovers of
Kochan and Riordan 429

firms (Appelbaum and Batt, 2014; Lazonick, 2009), (2) new models for pricing
stock options became available, leading firms to increase the portion of CEO
pay tied to share price improvements (Black and Scholes, 1973; Merton, 1971),
and (3) finance considerations dominated in corporate decision-making as the
pressures from Wall Street agents increased and the countervailing power of
unions declined (Jacoby, 2004; Useem, 1993). These developments in turn led to
growing inequality as gains were diverted from the full labor force to shareholders
and corporate officers. Although estimates vary, economists calculate that the cur-
rent ratio of CEO to average hourly worker pay is now approximately 300:1,
compared to only 20:1 in the 1960s (Mishel and Davis, 2015).

Fissurization of employment relationships. One result of financialization and increased

focus on shareholder value can be observed through the restructuring of organiza-
tions from the vertically integrated, bureaucratic enterprises of the past to more
networked, horizontally organized firms of today. Increasingly, these arrangements
are reflected in the notion of ‘fissured’ work which includes not only contingent
arrangements (e.g., temporary labor or contract workers), but also organizational
structures resulting from subcontracting, outsourcing, and franchising (Weil, 2014).
The common thread throughout all these forms of fissured work is that they
introduce external considerations into the firm–employee relationship, often pla-
cing the employment relationship outside its formal borders. When a Silicon Valley
technology firm, for example, contracts out its janitorial positions, those jobs – and
decisions regarding their wage levels – are no longer included in an enclosed system
characterized by norms of internal equity among workers who labor for the same
employer. Rather, the external, competitive market of janitorial contractors
becomes a reference point through which wages are set as janitorial contractors
vie for business.
The clearest illustration of how this contributes to inequality comes from a 2010
study of subcontracting of janitorial and building service workers in the US (Dube
and Kaplan, 2010). Between 1983 and 2000, the occupational percentage of building
security guards working for subcontractors increased from 40.1% to 49.7% and of
janitors from 16.4% to 21.6%. This growth in contracting was accompanied by
simultaneous wage loss: janitors experienced a US$1.33 wage penalty per hour
(and earned 14% less than directly employed workers in the same occupation) and
guards a penalty of US$2.34 per hour (earning 21% less). Similar trends in subcon-
tracting have been reported in the petrochemical industry (Kochan et al., 1994), call
centers (Batt et al., 2004), hotels (Hertz, 2010), and school cafeterias (McCain, 2009).
It is worth noting that the fissurization of work presents additional challenges to
various other institutional factors we have identified as important to inequality. For
instance, jobs in subcontracted arrangements are subject to greater risks of injuries
and accidents (Kochan et al., 1994) as well as violations of labor law (Bernhardt
et al., 2013), as the triangular employment relationship escapes regulatory checks on
compliance through ambiguous legal standards defining workers’ employer of record
(Zatz, 2008). Union organizing also becomes more difficult in settings where there is
430 Journal of Industrial Relations 58(3)

ambiguity over which employer is responsible for managing and controlling employ-
ees, and where there are workers misclassified as independent contractors (Kalleberg
et al., 2000). Studies in other countries have likewise demonstrated that a range of
human resource practices typically found in firms are either less likely to exist or to
be constrained by the same uncertainty of which employer is responsible for mana-
ging the workforce in networked organizations (Marchington et al., 2011).

Limited adoption and diffusion of high-road business models. A large body of empirical
research has documented the positive effects of sets of workplace practices labeled
‘high-performance work systems’ on productivity and other indicators of organ-
izational performance (Appelbaum et al., 2011). These work systems in turn are
supported by so-called high-road business strategies that compete on the basis of
achieving high productivity and service quality rather than by minimizing and
tightly controlling labor costs. The evidence on the relationship among these stra-
tegies and practices and wages is, however, somewhat mixed (Osterman, 1994):
positive wage effects are more likely to be experienced in unionized than non-
unionized firms (Bailey et al., 2001). Moreover, while there are case examples in
almost all industries of high-road firms that pay above-average wages (e.g.
Appelbaum et al., 2000; Cascio, 2006; Hoffer Gittell, 2003; Kochan et al., 2009;
Ton, 2014), the reality is these strategies have not widely diffused across American
industry. The mental model that labor is a cost to be minimized continues to
dominate the behavior of many business decision-makers and analysts. If the
hypothesis is correct that these high-road strategies and workplace practices are
necessary conditions for achieving the high productivity needed to support high
and increasing wages, the limited diffusion of these strategies and practices may
serve as another cause of wage stagnation.

Options for reversing trends in inequality

While there is now widespread public recognition and concern about income
inequality and persistent wage stagnation, action at the national policy level is
slow in coming, largely because of deep political gridlock that blocks efforts to
reform prevailing labor and employment policies (Kochan, 2016). There has, how-
ever, been increased activity at local levels, both by city and state-level governments
and by private sector firms and unions. In this section, we review actions that have
either been proposed or are underway that seek to address one or more of the
aforementioned causes of inequality.

Education and skills

While SBTC has lost some of its power as the primary explanation for growing
inequality, there is little doubt that one long-term effect of technological change is
to increase demand for skills and education. Thus, education is a critical starting
point – a necessary but far from sufficient solution for reversing these trends.
Kochan and Riordan 431

A highly educated, skilled, and innovative workforce is essential to generating

the technological breakthroughs and improvements needed to drive productivity
and to support a high-wage economy. Yet there is considerable evidence that the
US educational system needs significant reforms to produce a workforce with both
the technical (science, technological, engineering, and math or so-called STEM)
and behavioral (communications, problem-solving, and coordination/negotiations)
skills employers indicate they need both today and in the future. There is, however,
considerable momentum in the US focused on addressing these challenges, starting
with efforts to expand access to early childhood education. The Obama
Administration’s and equivalent state-level pressures and incentives for reform
and increased funding have generated a wave of innovation aimed at, among
other things, promoting collaborative teacher–union–school district improvements
(Bluestone and Kochan, 2011; Rubinstein and McCarthy, 2014), diffusion of a new
common core of curriculum standards, and expansion of the school day or year.
There also is a growing recognition of the need to strengthen community col-
leges, vocational schools, and labor-management apprenticeships and other train-
ing programs that focus on building technical or so-called middle skills. The key
actions needed are to better coordinate middle-skill educational and training pro-
grams with other labor market intermediaries, employers, and labor organizations
that constitute what are now popularly described as the ‘eco-system’ for workforce
development and training (Weaver and Osterman, 2014).

Globalization and trade

Globalization of economic activity will undoubtedly continue and generate benefits
for the aggregate global economy, both for workers in developing economies and
for those with the skills needed to compete in high productivity, innovation-based
workplaces. This implies that efforts to promote high-productivity high-wage
economies and business strategies must feature prominently in the approach
taken to deal with globalization in the US and other advanced economies.
The major globalization-related policy issue currently under debate in many
countries is the Trans Pacific Partnership trade agreement. It is highly controversial
because some estimates of its likely impact on domestic employment and income
suggest it will most likely favor corporations and those in the higher parts of the
income distribution, while possibly reducing job opportunities of lower income
workers (Rosnick, 2015). The Trans Pacific Partnership does, however, have stron-
ger explicit provisions for minimum labor standards than those in prior multilateral
trade agreements, including minimum wages, the right to form unions and collect-
ively bargain, prohibition of forced labor, and limitations on use of export zones
exempt from labor regulations.
Despite these standards, enforcement of labor protection provisions of trade
agreements requires complementary strategies of national governments, multi-
national companies that monitor and work with their global suppliers, local and
transnational non-governmental organizations and unions on the ground,
432 Journal of Industrial Relations 58(3)

and international labor organizations (Locke, 2013). Building these multi-

stakeholder systems is critical: global trade will continue to create risks to both
lower-wage and low-skilled workers in advanced economies. The Obama
Administration has taken steps in this direction by creating and funding a set of
advanced manufacturing institutes which support development of next generation
technologies and products with investments in education, training, and promotion
of high-road business strategies. Yet the need to promote high-road strategies goes
beyond the next generation manufacturing firms, and there is no consensus strategy
for doing so. Certainly, continued efforts to educate business leaders and investors
about the strategic choices open to them and the consequences of their strategies
for job and career quality need to continue.

Employment and labor policy initiatives

These educational and high-road strategies need to be complemented with govern-
ment policies that bring up minimum labor standards to reduce the incentive to
compete on the basis of minimizing labor costs and provide incentives to compete
with high-productivity high-wage strategies. Here, we review examples of such
initiatives and emphasize the role of local policy efforts in institution-building.

Minimum and living wages. Starting in the 1990s, advocates have relied on minimum
and living wage campaigns to raise the wage floor in localities, cities, and states. By
many measures, these have been effective both in raising wages for those paid at the
minimum and those directly above them in the wage structure (Wicks-Lim, 2006).
Twenty-nine states currently have minimum wage levels that are higher than the fed-
eral minimum; of these, 15 have indexed their minimum wages to inflation. A growing
number of cities – such as San Francisco, CA and Seattle, WA – have followed suit,
and have recently passed or are pursuing legislation to increase their local minimum
wage to US$15 per hour over a number of years. Advocates also increasingly rely on
living wage campaigns; currently, over 140 cities and counties have enacted such laws
(Bernhardt and Osterman, 2016). Despite their spread, however, many of these poli-
cies cover a limited range of jobs – often work purchased or in other ways regulated by
local governments or part of local economic development efforts – and thus have
limited capacity to generate large-scale patterns of change.
Yet, in a hopeful sign, demands for change to the federal minimum wage are
flourishing at the national level. In many respects, these demands have been led by
workers and labor unions. The now-international ‘Fight for 15’ is one such example,
rooted in early efforts among fast-food workers to increase wages and realize the right
to organize in fissured work settings. Such efforts have effectively brought worker
voice and demands addressing wage inequality front and center within the Obama
Administration and among candidates of the upcoming 2016 US presidential election.

Wage standards enforcement and administrative action. Paired with campaigns to

raise the wage floor are innovative approaches to enforcing wage regulations.
Kochan and Riordan 433

For instance, advocates in San Francisco, CA successfully created a new city entity,
the Office of Labor Standards Enforcement (OLSE), in 2001. The OLSE uses
innovative cross-agency information-sharing and enforcement strategies to address
wage violations and other labor standards infractions. To date, it has recovered over
US$17m in back wages and collected over US$2m in employer penalties (Dietz et al.,
2014). Notably, the OLSE also increases the effectiveness of enforcement activities
by directly engaging with community-based and worker organizations, a best prac-
tice documented in the literature (Fine and Gordon, 2010).
At a national level, the Obama Administration has proposed increased coverage
of salaried workers for overtime work, while also issuing a clarifying administrative
letter detailing the criteria for worker classification as an employee or an independ-
ent contractor (which determines coverage under wage and overtime rules). The
National Labor Relations Board has likewise issued a recent decision broadening
the definition of ‘employer’ for the purpose of determining whether subcontracted
work is covered under the nation’s labor relations statute, and similar cases con-
cerning companies such as Federal Express and Uber are being considered in fed-
eral and state-level courts. Scholars are also increasingly documenting enforcement
theories built on leveraging fissured, supply chain relationships among firms, often
referred to as strategic enforcement (Weil, 2008; Wright and Brown, 2013).

Government contracting rules. One area of considerable discussion is whether the fed-
eral government can or should use its power as a purchaser of goods and services as
a means of enforcing and improving employment standards. The model for doing
so comes from the US experience in enforcing and promoting the 1964 Civil Rights
Act, which prohibits discrimination in employment on the basis of race and sex,
among other protected groups. A subsequent Executive Order required govern-
ment contractors to demonstrate steps they take to achieve affirmative actions.
Later research demonstrated the efficacy of these requirements in promoting
non-discrimination and equal opportunities (Leonard, 1990). The question under
debate in government and academic circles is whether this model could be applied
to promote diffusion of high-productivity high-wage practices among government
contractors. This remains to be seen. President Obama signed an executive order,
effective in 2016, that requires contracting firms to disclose their records of com-
pliance and violation of labor and employment law. Some suggest expanding this
order by inserting high-productivity high-wage criteria in the specifications used to
select competing bidders for government contracts – a strategy that may substitute
for the role of pattern bargaining discussed earlier.

Next generation unions and sources of power. One of the biggest open questions facing
both the US and to some extent other countries is what will fill the void left by
union decline. While reproducing unions and collective bargaining in the mirror
image of their past is neither likely nor viable, alternative means are needed to
reinstate voice and bargaining at work. Indeed, unions are pursuing new strategies
to this end, such as non-traditional organizing of freelancers and supporting
434 Journal of Industrial Relations 58(3)

organizing efforts targeting large employers in low-wage, union-scarce sectors, such

as those in fast food as well as with the retailer Walmart (Bernhardt and Osterman,
2016).
The crisis in worker representation has also sparked considerable innovation in
labor and community group coalitions, and among an expanding number of net-
works at local, national, and global levels. These range from religious-based groups
(Bobo, 2009); to students mobilizing against sweatshop conditions; and to inter-
national coalitions of non-governmental organizations (NGOs), governments, inter-
national agencies, employers, and unions aimed at upgrading conditions in global
supply chains (Locke, 2013). One of the most promising organizing strategies comes
through worker centers, which are typically organized around specific, often low-
wage industries such as restaurants or construction. By some estimates, there are
currently 225 such organizations throughout the country, up from only five in 1992
(Fine, 2011). Perhaps most importantly, the federation of many local worker centers
within fragmented industries – such as restaurants, domestic work, and taxi trans-
portation – is establishing larger scale, more effective organizations (Fine, 2011).

Alternative wage-setting criteria and norms. As noted earlier, the tandem movement of
productivity and real wages and compensation in the pre-1980s era was driven by,
among other factors, union agreements that aligned productivity gains and cost of
living clauses into collective bargaining contracts. New approaches to wage setting
at the level of the enterprise will be needed to ensure that those who work together
to generate productivity and profits have a fair chance of sharing in the gains
produced. Profit sharing, productivity gains sharing, and broad-based employee
stock ownership plans (Blasi et al., 2014) are alternative ways of embedding this
principle in the wage-setting processes within specific enterprises.
New federal rules will soon require publication of salary ratios between CEOs
and average workers in corporate reports. Whether this effort to increase trans-
parency will be powerful enough to change corporate practices remains to be seen.
Corporate boards may need stronger pressures to change the ways CEOs are paid
(such as changes in marginal income tax rates; Piketty, 2014), given the embedded
roles that compensation consultants play in spreading CEO compensation patterns
across firms and industries.

Labor policy. While each of the options reviewed can contribute to stimulating
wage growth and reducing inequality, sustained progress will require a funda-
mental change in national labor and employment policy. There are a number of
dimensions to such change: updating minimum wage laws and clarifying the
definition of the employer in fissured work settings, as described earlier, are
two glaringly necessary changes. Expansion of safety net programs – such as
the Earned Income Tax Credit, the Affordable Care Act, and paid family and
medical leave – can provide low-income workers better access to employment
opportunities while promoting overall economic growth (Lower-Basch, 2014).
Additionally, updating current laws that govern collective bargaining is yet
Kochan and Riordan 435

another step towards fundamental change, particularly since current law cannot
provide union representation coverage to all workers who want it (Ferguson,
2008). It remains to be seen whether changing labor relations policy is possible,
given that, both historically and recently, it has been the most difficult aspect of
US employment policy to change (Kochan, 2016).

Conclusion
The widespread recognition and growing public debates over income inequality are
producing a growing body of research on the causes of wage stagnation and
options for addressing it within private and public realms. Until recently, most
of the academic debate has focused on the relative importance of technology and
globalization as underlying causal forces, and on education – and to a lesser extent,
trade policies – as remedies. More recently, however, attention has turned to insti-
tutional factors including minimum wages, unions and their bargaining power, and
employment policies and their enforcement. We extend this literature here to focus
on some of the key changes in employment relationships and organizational prac-
tices that affect wages and related employment conditions at the enterprise level.
It is clear that these causal forces are closely interrelated and that no single
change in policy or organizational practice will suffice to reverse long-term
trends in wages. Investments in education are a necessary but far from sufficient
component of a broader strategy. So too are more direct efforts to build next
generation manufacturing industries in ways that support and sustain high-wage
jobs. Equally important, however, are actions aimed at bringing up the floor of the
wage structure through raises in minimum wages and better enforcement of
employment standards, modernization of labor policies that allow workers to
build new sources of bargaining power consistent with the modern economy,
and organizational changes that challenge the financialization of corporations
and encourage broader diffusion of firms that embrace high-road business strate-
gies and workplace practices.
The historical trends in inequality, and particularly in productivity-wage
growth patterns, suggest two final points. The current situation is the product
of trends of over 30 years’ duration and therefore it will take a sustained period
of wage growth to make up for lost ground. But the fact that turning points as
clear as the ones that reversed the high level of inequality in the US observed just
prior to the passage of the New Deal labor legislation in the 1930s and the
beginning of the productivity-wage gap around 1980 suggest that a broad-
based, systematic strategy that is well informed by research can change these
long-run trends and put the economy on a different path. Doing so again is
the defining challenge facing our field today.

Declaration of conflicting interests

The author(s) declared no potential conflicts of interest with respect to the research, author-
ship, and/or publication of this article.
436 Journal of Industrial Relations 58(3)

Funding
The author(s) received no financial support for the research, authorship, and/or publication
of this article.

References
Acemoglu D and Autor D (2011) Skills, tasks, and technologies: Implications for employ-
ment and earnings. In: Ashenfelter O and Card DE (eds) Handbook of Labor Economics,
vol. 4b. Amsterdam: Elsevier.
Alvaredo F, Atkinson AB, Piketty T, et al. (2013) The top 1 percent in international and
historical perspective. Journal of Economic Perspectives 27(3): 3–20.
Appelbaum E (2012) Reducing inequality and insecurity: Rethinking labor and employment
policy for the 21st century. Work and Occupations 39(4): 311–320.
Appelbaum E and Batt R (2014) Private Equity at Work: When Wall Street Manages Main
Street. New York: Russell Sage Foundation.
Appelbaum E, Bailey T, Kalleberg A, et al. (2000) Manufacturing Advantage: Why High
Performance Work Systems Pay Off. Ithaca, NY: Cornell University Press.
Appelbaum E, Hoffer Gittell J and Leana C (2011) High performance work practices and
economic recovery. Report, Employment Policy Research Network. Available at: http://
www.employmentpolicy.org/page-1797725#sthash.yEFch5zl.dpbs (accessed 18 February
2016).
Autor D (2010) The future of American jobs: The polarization of job opportunities in the
U.S. labor market. Report, Center for American Progress. Available at: https://www.am
ericanprogress.org/issues/labor/report/2010/04/30/7687/the-future-of-american-jobs/
(accessed 18 February 2016).
Autor D, Dorn P and Hanson GH (2013) The China syndrome: Local labor market effects
of import competition in the United States. American Economic Review 1036: 2121–2168.
Autor D, Katz L and Kearney MS (2008) Trends in U.S. wage inequality: Revising the
revisionists. The Review of Economics and Statistics 90(2): 300–323.
Bailey T, Berg P and Sandy C (2001) The effect of high-performance work practices on
employee earnings in the steel, apparel, and medical electronics and imaging industries.
Industrial and Labor Relations Review 54(2A): 525–544.
Barth E, Bryson A, Davis JC, et al. (2014) It’s where you work: Increases in earnings
dispersion across establishments and individuals in the U.S. IZA Discussion Paper
No.8437.
Batt R, Doellgast V and Kwon H (2004) The US call center industry 2004: National bench-
marking report. Ithaca, NY: Cornell University.
Bernhardt A and Osterman P (2016) Organizing for good jobs: Recent developments and
new challenges. Work and Occupations. Epub ahead of print 26 Jan 2016. DOI:10.1177/
0730888415625096.
Bernhardt A, Spiller MW and Polson D (2013) All work and no pay: Violations of employ-
ment and labor laws in Chicago, Los Angeles, and New York City. Social Forces 91(3):
725–746.
Bivens J and Mishel L (2015) Understanding and explaining the historic divergence between
productivity and a typical worker’s pay: Why it matters and why it’s real. Report,
Economic Policy Institute. Available at: http://www.epi.org/publication/understanding-
the-historic-divergence-between-productivity-and-a-typical-workers-pay-why-it-matters-
and-why-its-real/ (accessed 18 February 2016).
Kochan and Riordan 437

Black F and Scholes M (1973) The pricing of options and corporate liabilities. The Journal of
Political Economy 81(3): 637–654.
Blasi JR, Freeman RB and Kruse D (2014) The Citizen’s Share: Reducing Inequality in the
21st Century. New Haven, CT: Yale University Press.
Bluestone B and Kochan TA (2011) Toward a grand new bargain: Collective bargaining
approaches to labor-management reform in Massachusetts. Report. Boston, MA: The
Boston Foundation.
Bobo K (2009) Wage Theft in America. New York: The Free Press.
Card D and DiNardo JE (2002) Skill-biased technological change and rising wage inequal-
ity: Some problems and puzzles. Journal of Labor Economics 20(4): 733–783.
Cascio W (2006) Decency means more than ‘Always low prices’: A comparison of Costco to
Wal-Mart’s Sam’s Club. Academy of Management Perspectives 20: 25–28.
Davis SJ and Haltiwanger J (1991) Wage dispersion between and within U.S. manufacturing
plants, 1963–1986. Brookings Papers on Economic Activity: Microeconomics 1991: 115–200.
DeNavas-Walt C and Proctor BD (2014) Income and poverty in the United States: 2013.
Current Population Reports. U.S. Bureau of the Census. Available at: https://www.cen
sus.gov/content/dam/Census/library/publications/2014/demo/p60-249.pdf (accessed 18
February 2016).
Dietz M, Levitt D and Love E (2014) Enforcement of labor standards. In: Reich M, Jacobs
K and Dietz M (eds) When Mandates Work: Raising Labor Standards at the Local Level.
Berkeley, CA: University of California Press, pp. 229–255.
DiNardo J, Fortin NM and Lemieux T (1996) Labor market institutions and the distribu-
tion of wages, 1973–1992: A semiparametric approach. Econometrica 64(5): 1001–1046.
Dube A and Kaplan E (2010) Does outsourcing reduce wages in the low-wage service
occupations? Evidence from janitors and guards. Industrial and Labor Relations Review
63(2): 287–306.
Erickson CL (1992) Wage rule formation in the aerospace industry. Industrial and Labor
Relations Review 45(3): 507–522.
Erickson CL (1996) A reinterpretation of pattern bargaining. Industrial and Labor Relations
Review 49(4): 615–634.
Ferguson JP (2008) The eyes of the needles: A sequential model of union organizing drives,
1999–2004. Industrial and Labor Relations Review 62(1): 3–21.
Fernandez-Macias E (2012) Job polarization in Europe? Changes in the employment struc-
ture and job quality, 1995–2007. Work and Occupations 39(2): 157–182.
Fine JR (2011) New forms to settle old scores: Updating the worker centre story in the
United States. Relations Industrielles/Industrial Relations 66(4): 604–630.
Fine JR and Gordon J (2010) Strengthening labor standards enforcement through partner-
ships with workers’ organizations. Politics and Society 38(4): 552–585.
Fortin NM and Lemieux T (1997) Institutional change and rising wage inequality: Is there a
linkage? The Journal of Economic Perspectives 11(2): 75–96.
Freeman R (1980) Unionism and the dispersion of wages. Industrial and Labor Relations
Review 34(1): 3–23.
Freeman R (1982) Union wage practices and wage dispersion within establishments.
Industrial and Labor Relations Review 36: 3–21.
Freeman R (1993) How much has de-unionization contributed to the rise in male earnings
inequality? In: Danziger S and Gottschalk P (eds) Uneven Tides: Rising Inequality in
America. New York: Russell Sage Foundation, pp. 133–164.
438 Journal of Industrial Relations 58(3)

Goldin C and Katz L (2008) The Race Between Education and Technology. Cambridge, UK:
Harvard University Press.
Gosling A and Lemieux T (2004) Labor market reforms and changes in wage inequality in the
United Kingdom and the United States. In: Card D, Blundell R and Freeman RB (eds)
Seeking a Premier Economy: The Economic Effects of British Economic Reforms, 1980–2000.
National Bureau of Economic Research. Chicago, IL: University of Chicago Press,
pp. 275–312.
Groshen EL (1991) Sources of intra-industry wage dispersion: How much do employers
matter? The Quarterly Journal of Economics 106(3): 869–884.
Hertz R (2010) Economic crisis and new social realities: Bait and switch and the American
Dream – Presidential Address 2010. Sociological Forum 25(4): 643–654.
Hoffer Gittell J (2003) The Southwest Airlines Way. New York: McGraw Hill.
Holzer HJ (2010) Is the middle of the U.S. job market really disappearing? A comment on
the ‘‘polarization’’ hypothesis. Report, Center for American Progress, Washington, DC.
Available at: https://cdn.americanprogress.org/wp-content/uploads/issues/2010/05/pdf/
Holzer_memo.pdf (accessed 18 February 2016).
Holzer HJ, Lane JI, Rosenblum DB, et al. (2011) Where Are All the Good Jobs Going? What
National and Local Job Quality and Dynamics Mean for U.S. Workers. New York: Russell
Sage Foundation.
International Labour Organization (ILO) (2006) Strategies and Practice for Labour
Inspection. International Labour Office Governing Body, Committee on Employment
and Social Policy. Geneva, Switzerland: ILO.
International Labour Organization (ILO) (2015) Global Wage Report 2014/15: Wages and
Income Inequality. International Labour Office. Geneva, Switzerland: ILO.
Jacoby SM (2004) Employing Bureaucracy: Managers, Unions, and the Transformation of
Work in the 20th Century. New Jersey: Lawrence Erlbaum Associates, Inc.
James J (2012) The college wage premium. Economic Commentary, vol 10. Federal Reserve
Bank of Cleveland.
Kalleberg AL, Reskin B and Hudson K (2000) Bad jobs in America: Standard and non-
standard employment relations and job quality in the United States. American
Sociological Review 65: 256–278.
Kochan TA (2016) Shaping the Future of Work. New York: Business Experts Press.
Kochan TA, Eaton A, McKersie RB, et al. (2009) Healing Together: The Kaiser Permanente
Labor Management Partnership. Ithaca, NY: Cornell/ILR Press.
Kochan TA, Katz HC and McKersie RB (1986) The Transformation of American Industrial
Relations, 2nd edn. (1994). Ithaca, NY: ILR Press.
Kochan TA, Smith M, Wells J, et al. (1994) Human resource strategies and contingent
workers: The case of safety and health in the petrochemical industry. Human Resource
Management 33: 55–78.
Lazonick W (2009) Sustainable Prosperity in the New Economy: Business Organization and
High-Tech Employment in the United States. Kalamazoo, MI: W.E. Upjohn Institute for
Employment Research.
Lee D (1999) Wage inequality in the United States during the 1980s: Rising dispersion or
falling minimum wage? Quarterly Journal of Economics 114(3): 977–1023.
Lemieux T (1993) Unions and wage inequality in Canada and the United States. In: Card D
and Freeman RB (eds) Small Differences that Matter: Labor Markets and Income
Kochan and Riordan 439

Maintenance in Canada and the United States. Chicago, IL: University of Chicago Press,
pp. 69–107.
Lemieux T (2008) The changing nature of wage inequality. Journal of Population Economics
21: 21–48.
Leonard JS (1990) The impact of affirmative action regulation and equal employment law
on black employment. Journal of Economic Perspectives 44(4): 47–63.
Locke RM (2013) The Promise and Limits of Private Power: Promoting Labor Standards in a
Global Economy. New York: Cambridge University Press.
Lower-Basch E (2014) How today’s safety net promotes work – And how to do more.
Report, Center for Law and Social Policy. Available at: http://www.clasp.org/
resources-and-publications/publication-1/How-Todays-Safety-Net-Promotes-Work-
And-How-To-Do-More-1.pdf (accessed 18 February 2016).
McCain M (2009) Serving students: A survey of contracted food service work in New
Jersey’s K-12 public schools. Report, Rutgers Center for Women and Work, New
Brunswick, NJ.
Marchington M, Rubery J and Grimshaw J (2011) Alignment integration and consistency
in HRM across multiple-employer networks. Human Resource Management 50(3):
313–339.
Merton RC (1971) Theory of rational option pricing. The Bell Journal of Economics and
Management Science 4(1): 141–183.
Mishel L and Davis A (2015) Top CEOs make 300 times more than typical workers. Report.
Economic Policy Institute Issue Brief #399. Available at: http://www.epi.org/publication/
top-ceos-make-300-times-more-than-workers-pay-growth-surpasses-market-gains-and-
the-rest-of-the-0-1-percent/ (accessed 18 February 2016).
Oldenski L (2014) Offshoring and the polarization of the U.S. labor market. ILR Review
67(Supp.): 734–761.
Osterman P (1994) How common is workplace transformation and who adopts it? ILR
Review 47(2): 173–188.
Piketty T (2014) Capital in the Twenty-first Century. Cambridge, MA: President and Fellows
of Harvard College, Harvard University Press.
Piketty T and Saez E (2007 (2015)) Income and wage inequality in the United States 1913–2002.
In: Atkinson AB and Piketty T (eds) Top Incomes over the Twentieth Century. A Contrast
Between Continental European and English-Speaking Countries. Oxford: Oxford University
press. Accessed at: http://topincomes.g-mond.parisschoolofeconomics.eu/ (accessed 18
February 2016, Data series updated by the same authors).
Piketty T and Saez E (2013) Top incomes and the Great Recession: Recent evolutions and
policy implications. International Monetary Fund Economic Review 61(3): 456–478.
Ray R, Gornick JC and Schmitt J (2009) Parental leave policies in 21 countries: Assessing
generosity and gender equality. Report, Center for Economic and Policy Research.
Available at: http://www.cepr.net/documents/publications/parental_2008_09.pdf
(accessed 18 February 2016).
Rosnick D (2015) Are 40 Cents a Day Big Gains? Washington, DC: Center for Economic
Policy Research, Available at: https://cepr.net/documents/TTIP-brief-08-2015.pdf
(accessed 18 February 2016).
Rubinstein SA and McCarthy JE (2014) Teachers Unions and Management Partnerships:
How working together improves student achievement. Report, Center for American
440 Journal of Industrial Relations 58(3)

Progress. Available at: https://cdn.americanprogress.org/wp-content/uploads/2014/03/

Rubinstein-EduReform-report.pdf (accessed 18 February 2016).
Schaefer HL (2010) Identifying key barriers to unemployment insurance for disadvantaged
workers in the United States. Journal of Social Policy 39(3): 439–460.
Smeeding TM (2005) Public policy, economic inequality, and poverty: The United States in
comparative perspective. Social Science Quarterly 86(supp.): 955–983.
Ton Z (2014) The Good Jobs Strategy. New York: Houghton Mifflin, Harcourt.
Useem M (1993) Executive Defense: Shareholder Power and Corporate Reorganization.
Cambridge, MA: Harvard University Press.
Weaver A and Osterman P (2014) The new skill production system: Policy challenges and
solutions in manufacturing labor markets. In: Locke R and Wellhausen R (eds)
Production in the Innovation Economy. Cambridge, MA: MIT Press, pp. 51–80.
Weil D (2008) A strategic approach to labour inspection. International Labour Review
147(4): 349–374.
Weil D (2014) The Fissured Workplace. Cambridge, MA: Harvard University Press.
Weil D and Pyles A (2005) Why complain? Complaints, compliance, and the problem of
enforcement in the U.S. workplace. Comparative Labor Law and Policy Journal 27: 59–92.
Western B and Rosenfeld J (2011) Unions, norms, and the rise in US wage inequality.
American Sociological Review 76(4): 513–537.
Wicks-Lim J (2006) Mandated Wage Floors and the Wage Structure: New Estimates of the
Ripple Effects of Minimum Wage Laws. Amherst, MA: Political Economy Research
Institute, University of Massachusetts Amherst Working Paper.
Wright CF and Brown W (2013) The effectiveness of socially sustainable sourcing mechan-
isms: Assessing the prospects of a new form of joint regulation. Industrial Relations
Journal 44(1): 20–37.
Zatz ND (2008) Working beyond the reach or grasp of employment law. In: Bernhardt A,
Boushey H, Dresser L, et al. (eds) The Gloves-Off Economy: Workplace Standards at the
Bottom of America’s Labor Market. Champaign, IL: Labor and Employment Relations
Association, pp. 31–64.

Biographical notes
Thomas A Kochan is the George Maverick Bunker Professor of Work and
Employment Research, and the Co-Director of the MIT Sloan Institute for
Work and Employment Research at the Massachusetts Institute of Technology
Sloan School of Management.

Christine A Riordan is a doctoral student in the Institute for Work and

Employment Research at the Massachusetts Institute of Technology Sloan
School of Management.