How helping disabled people find employment affects the job market – John Van Reenen, Barbara Petrongolo, Felix Koenig

John Van Reenen, Professor of Applied Economics at MIT Sloan School of Management

From OUP Blog

Policy makers have long been concerned with helping people on disability benefits find some employment as this group has grown dramatically in recent decades. In the UK, as in several other countries, there are now many more people on disability benefits than on unemployment benefits. The chances of leaving disability benefits once someone is enrolled is low and although many disabled people cannot work at all, many others would like to have some access to the labor market, such as part-time employment.

Introducing performance rewards for public employment service staff may be a cost-effective way to help the disabled find jobs. The UK Jobcentre Plus reform introduced modern management practices into the welfare system. Similar incentive schemes have been associated with substantial productivity gains in the private sector. The reform offered caseworkers greater career rewards if they successfully placed benefit recipients into work. Jobcentre Plus was introduced at different times in different districts between 2001 and 2008, so this staggered timing enabled researchers to implement a thorough examination of the impact of the policy.

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Staffing firms must use data assets to compete with new platforms – Geoffrey Parker

MIT Sloan Visiting Scholar and Fellow, Initiative on the Digital Economy, Geoffrey Parker

From MIT SMR Custom Studio

Like established companies in many industries, incumbent players in the staffing and recruitment sector are encountering a competitive landscape transformed by platform businesses.

New platforms that have sprung up to connect companies with workers include online freelance marketplaces such as Fiverr, TaskRabbit, and Wonolo. While Facebook and Google are seeking a cut of recruitment advertising revenue, Microsoft-owned LinkedIn is challenging staffing firms by offering job listings and recruiter services fueled by well-maintained data. With its emphasis on professional networking, LinkedIn gives users motivation to maintain current information about their credentials, providing a rich view of where they fit into the economy and the jobs they’re qualified for.

To develop their capabilities in a platform economy, traditional staffing enterprises need to make better use of their own valuable data assets. Based on what they know and capture about both their customers’ workforce needs and job candidates’ qualifications, what new revenue streams can they create? For example, they might use in-depth knowledge of an employer’s resource needs to create road maps for workforce skills development that will generate value for that organization. When training and education providers participate in the ecosystem, staffing companies would generate revenue via recommendations that are implemented.

Using data effectively is key to efficiently matching supply and demand, the core of any platform strategy. With more and higher quality data, a company does a better job of facilitating that match. However, many traditional enterprises are not leveraging data from across the whole business, and their analytics capabilities are designed to optimize current, not future, business models.

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A new social contract for work – Tom Kochan and Lee Dyer

MIT Sloan Professor Thomas Kochan

MIT Sloan Professor Thomas Kochan

From Boston Review

This Labor Day we could join those speaking out against Donald Trump’s many hypocrisies, chief among them the preposterous notion that he represents the American worker. We could point out that he is further dividing an already divided country, turning to Wall Street tycoons as his key economic advisors, advocating for the elimination of health insurance coverage for the poor in favor of tax cuts for the rich, rolling back overtime regulations, abandoning requirements that investment agents focus on the interests of the retirees that hire them, and appointing a Education Secretary who attacks public education, teachers, and their unions.

We could go on, but a better approach is to lay the foundation for what will need to be done in the post-Trump era, whenever that arrives, to repair the damage, regain the trust of workers, and unify employers, unions, government leaders, and all who share the responsibility for shaping the future of work. We can do so by laying out a positive vision and strategy built around a simple narrative: a new social contract for work capable of meeting the expectations and obligations that workers, employers, and society in general hold for work and employment.

A new and fresh approach is long overdue. It is now all too apparent that America is paying a severe penalty for failing to address several decades of growing income inequality and stagnant wages and deep social and political divisions between the winners and losers from globalization.

And things could get worse. If we don’t turn the digital revolution into an opportunity to increase the number of good new jobs it could offer, the gap between the haves and have-nots will grow. If we let this happen, the legacy we will leave for our children and grandchildren is a lower standing of living and the prospect of more violence.

The good news is thanks to innovations happening around the country we can see how a new and more inclusive social contract might be built.

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Good gig? New employment proposals for contract workers could make it better — Thomas A. Kochan

MIT Sloan Professor Thomas Kochan

MIT Sloan Professor Thomas Kochan

From WBUR Cognoscenti

Last week, Sen. Elizabeth Warren unveiled a comprehensive set of proposals to provide basic employment policy protections and income security benefits to those working in the so-called “gig” economy and others in subcontracted or franchised arrangements. Whether one agrees with her specific ideas or not, the nation owes her a debt of gratitude for putting these issues front and square on the table for a discussion that is long overdue.

The gig economy, best embodied by Uber, Lyft and Task Rabbit, may account for less than 1 percent of the workforce, but it has sparked a debate over what to do about all those who make their living outside of standard employment relationships.

Standard employment relationships are ones in which there is a clearly defined and identifiable employer that is responsible for complying with the range of employment laws put on the books since the New Deal: unemployment insurance, Social Security, minimum wage and overtime rules, and the right to unionize and gain access to collective bargaining. To be clear, the vast majority of American workers, about 85 percent to be exact, still work in this type of employment relationship.

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Obama should follow overtime plan with more unilateral moves to update labor laws — Thomas Kochan

MIT Sloan Professor Thomas Kochan

MIT Sloan Professor Thomas Kochan

From The Conversation

Late last month, President Barack Obama took a step around the longstanding congressional gridlock over labor and employment policies by announcing a plan to boost the salary threshold governing overtime from US$23,600 to $50,440 and to index it to inflation.

Essentially, that means white collar workers in that salary range, currently exempt from being paid overtime, would get 1.5 times their hourly wages for anything over 40 hours.

The administration estimates this action will extend coverage to an additional five million workers who will either receive overtime pay or work fewer hours at the same salary, with some of their extra work shifted to part- or full-time hourly workers. Either way, the workforce and the economy will record a small win in efforts to raise wages and reduce income inequality.

I’ve been immersed in this issue for decades, including as a member of the Clinton administration’s Commission on the Future of Worker Management Relations in the early ‘90s and as codirector of the MIT Sloan Institute for Work and Employment Research.

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