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 »
It’s no secret that the labor market is tough these days. But the issue isn’t just the number of people who are unemployed. It’s also income inequality and the low pay of retail employees that’s concerning. Retail employees represent close to 20% of the U.S. workforce.
In retail, conventional wisdom holds that if you want to offer the best prices then you can’t afford to invest in your employees. Typical retail workers receive minimal training, irregular hours, and no benefits for part-timers. Turnover is high with understaffing common.
Wages are so low that retail workers tend to rely more on public assistance than workers in other industries. If companies actually invested in their employees by offering better jobs, many of these people could move into the middle class, which is critical in our economy.
Andy McAfee and I have just released a short e-book, Race Against the Machine. In it, we try to reconcile two important facts. 1) Technology continues to progress rapidly. In fact, the past decade has seen the fastest productivity growth since the 1960s, but 2) median wages and employment have both stagnated, leaving millions of people worse off than before. This presents a paradox: if technology and productivity are improving so much why are millions being left behind?
In the book, we document remarkable advances in digital technologies in particular. Innovations like IBM’s Watson, Google’s self-driving car, Apple’s Siri are turning science fiction into reality. Machines are doing more and more tasks that once only humans could do.
In the book (and now film) Moneyball, general manager Billy Beane transforms the Oakland Athletics by recognizing that overlooked players contribute value to a team. He overturns conventional wisdom, indeed upends baseball’s domination by wealthier teams,by using data to measure performance. What he learns can also apply to the economic challenges we face today.
When people think and write about what leads to economic success, they too often focus only on the most visible, highly paid players. In the case of the economy, it is the CEOs. The business press is full of praise for celebrity leaders such as Jack Welch and Steve Jobs. But even when the CEO is not movie-star famous, stories about whether a firm will succeed or fail usually focus on the personality and actions of the person at the top.
President Obama’s job plan has triggered lots of talk if not action. With the economy struggling, any conversation about job creation is good news. But from the President on down, we sometimes pay too much attention to the number of jobs being produced and not nearly enough attention to the quality of those jobs.
In Good Jobs America: Making Work Better for Everyone (Russell Sage Foundation), a book co-authored by me and Beth Shulman being released this month, we document how a very large percentage of American adults today work in jobs that pay at levels below what is needed for a decent standard of living.
The main focus of our book is to show how bad jobs can be made into good ones. We show that education is a necessary but not sufficient element in the solution, that the persistence of low wage work cannot be laid at the door of immigration, and that it is possible to improve job quality without negatively impacting economic growth.