How Corporate America can create better jobs — Thomas Kochan

MIT Sloan Professor Thomas Kochan

MIT Sloan Professor Thomas Kochan

From Fortune

In the 1987 movie Wall Street, Gordon Gekko’s memorable pronouncement that “greed is good” epitomized the worst features of American corporations that focus only on maximizing immediate shareholder returns without regard to the impact on their employees, customers, or communities.

That corporate caricature has continued to prevail. But recently, people ranging from Harvard University Business School Professor Michael Porter to leaders of the Sloan, Ford, Aspen, Hitachi (more here) and other foundations are putting forward the case that companies can provide great returns to shareholders and great jobs for employees.

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The Volkswagen way to better labor-management relations — Matthew Finkin and Thomas Kochan

MIT Sloan Professor Thomas Kochan

MIT Sloan Professor Thomas Kochan

From the Los Angeles Times

Works councils — elected bodies representing all workers in a plant, both blue and white collar — are acclaimed as one of the best, most innovative features of Germany’s labor relations system. They have been shown to enhance efficiency, adaptability and cooperation. By supporting the use of work sharing (agreeing to reduce everyone’s hours rather than laying some people off), for example, these councils helped Germany experience less unemployment during the Great Recession and a faster, more robust recovery since then.

For years, labor law, labor economics and labor-management researchers like us have urged experimentation with works councils in the United States. Volkswagen and the United Auto Workers are proposing to do just that at Volkswagen’s Tennessee plant. This could be a watershed in American labor relations, one that rejects the outmoded adversarial doctrines that have built up in U.S. labor law and practice. And it signals management and labor support for a new model of cooperation and partnership.

Unfortunately, the National Right to Work Legal Defense Foundation and others are opposing this effort by arguing that such cooperation would violate U.S. labor law’s 1935 ban on sham or “company” dominated unions.

A comparison of German and American labor law makes it clear they are dead wrong.

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Tom Kochan: The Workforce

MIT Sloan Prof. Thomas Kochan
Photograph by Stu Rosner

From Harvard Magazine

An interview with Thomas A. Kochan, Bunker professor of management, MIT’s Sloan School of Management, and co-director of the MIT Institute for Work and Employment Research.

Harvard Magazine: You speak of a fundamental human-capital paradox in the way American employers and workers interact with each other.

Thomas Kochan: American corporations often say human resources are their most important asset. In our national discourse, everyone talks about jobs. Yet as a society we somehow tolerate persistent high unemployment, 30 years of stagnating wages and growing wage inequality, two decades of declining job satisfaction and loss of pension and retirement benefits, and continuous challenges from the consequences of unemployment on family life. If we really valued work and human resources, we would address these problems with the vigor required to solve them. Read More »

Labor, business can unite as economic heroes

Thomas Kochan, MIT Sloan professor, co-founder of the Employment Policy Research Network

Source: The Boston Globe

BUSINESS GROUPS and labor have at least one thing in common right now: a frustration that our politics are producing more hot rhetoric than good jobs, even as crucial national needs go unaddressed. But if private industry and labor unions pool their money and their political influence, they can lead the way toward modernizing an aging national infrastructure that dulls America’s competitive edge. In doing so, they would also start building the kind of longer-term economic compact necessary to sustain the high-quality jobs that the nation desperately needs.

The United States needs some kind of national infrastructure bank – an entity that would provide the financing for long-overdue repairs and improvements to our roads, bridges, and other public works. There is a $2.2 trillion backlog of such projects. Amid rising concerns about federal spending, infrastructure investments are more efficient economic drivers than tax cuts or other stimulus spending in achieving these goals.

Moody’s Economy.com estimates every $1 spent on infrastructure generates a $1.59 increase in GDP. University of Massachusetts Professor Robert Pollin has shown these projects generate between 20 to 30 percent more jobs than equivalent tax cuts. Read More »