Since approximately 1974, the Gini Coefficient of US households has been increasing drastically and almost monotonically. While there are many ways to read this time series in terms of its effects on consumption, there is an even more disturbing narrative told in the sky rocketing of this curve as regards wage negotiation. In essence, this is the story of the dwindling leverage of the American worker in her/his negotiations with employers.
In the past, there was an implicit moral narrative to markets. There was an implicit agreement that most jobs came with an expectation of stability, a retirement plan, a ladder for progress, a citadel of knowledge and a container for contribution. This agreement has increasingly eroded, most obviously in the case of the gig economy.
Also part of the implicit moral narrative was that in essence, to economists one’s income was a crude indicator of the value of one’s contribution to society. The argument was never exactly true, but it is now obviously not true with many successful rent-seekers and many desperate hard workers.
In an economy where the median worker is, decade after decade, unable to regain any of the significant lost leverage over employers, the implicit narratives are falling apart.
This leaves us with a question: “If nearly all analysts are convinced that radical household income and asset inequality is a bad thing, what are the possible remediations under consideration?”
INET’s Center for Innovation, Growth and Society, in collaboration with the Center for Advanced Study in Behavioral Sciences at Stanford is putting together a one day conference to explore Gini Negative economic and legal approaches. While political debates are currently focused on whether to lay the blame at the doorstep of globalization or automation, this conference will focus specifically to the approaches that can increase the leverage of labor in the marketplace, including examining the role of
- monopsonies and antitrust
- human centered technological development,
- rebalancing of the shareholder/stakeholder equation
- legal and institutional frameworks governing labor and employment
The goal is to understand the role and relationships of the different approaches in increasing the leverage of labor and work towards a model of inclusive prosperity in the face of rapid technological progress.
February 27, 2020
MacArthur Park Restaurant
|6:30||Welcome Dinner and Discussion|
Inducing Labor Law Change for Greater Equality In a Market Economy
Sharon Block and Damon Silvers
February 28, 2020
Center for Advanced StuDY in Behavioral Sciences
|9:00||Session I: A Shifting Social Compact|
The story of GDP and the changing distribution of its spoils between labor and capital is the story of relative leverage between the two groups within market economies. A loss of bargaining power by full time workers would be expected to look like stagnant wages, loss of benefits, and the gradual demise of collective representation, ‘overtime’ and other perks of organized labor. These presumed losses of bargaining leverage are all consistent with the so-called ‘casualization of labor’, and the “fissured” and “gig” economies. This session will explore some of the sources and consequences of the changing balance of power.
Joel Rogers (University of Wisconsin-Madison)
David Weil (Brandeis University)
Tanya Goldman (Center for Law and Social Policy)
Commenter: Margaret Levi (CASBS)
|10:45||Session II: Building Leverage Through Economics|
A tight labor market arising in a highly productive nation is one in which workers have considerable leverage over employers. The twin forces of globalization and automation have had considerable impact in many sectors to the point where an assembly line worker in a midwestern factory may now find herself competing on cost against a robot in (or immigrant from) Malaysia. Further, as frequent monopsonies, big tech firms wield considerable additional leverage as “the only game in town” in certain sectors. While addressing these new forces, this session asks whether there are any new and plausible Gini-negative forces wholly within markets that might reverse the rise of Capital’s share of productivity.
Marshall Steinbaum (University of Utah)
Lance Taylor (The New School)
John Irons (CASBS)
Commenter: Tom Ferguson (INET)
|1:30||Session III: Building Leverage Through Law and Representation|
What role does regulation play in wage stagnation? How are legal structures governing worker leverage affecting the ability of workers to negotiate wages? Data indicates that declines in wage growth closely track declines in private union membership. What are the regulatory and legal changes that can bring to bear non-economic forms of leverage on widening income inequality?
Sharon Block (Harvard Law School)
Damon Silver (AFL-CIO)
Sanjukta Paul (Wayne State University)
Commenter: David Abraham (University of Miami Law School)
|3:00||Session IV: Steering Innovation and Gini Negative Solutions|
As the debate continues amongst economists about whether automation is labor substituting or labor complimentary, we attempt to look beyond the stalemate to ask whether there is a possibility of steering innovation through incentives and regulation to achieve better outcomes for labor, whether by increasing the role of workers as stakeholders or redesigning workplace technologies to forestall avoidable degradation of meaningful human work.
William Lazonick (UMass – Lowell)
Nathan Schneider (University of Colorado)
Anton Korinek (University of Virginia)
Commenter: Pia Malaney (Center for Innovation, Growth and Society)
|4:45||Session V: Discussion|
|5:45||Drinks and Farewell|
- David Abraham (University of Miami Law School)
- Sharon Block (Harvard Law School)
- Tanya Goldman (Center for Law and Social Policy)
- John Irons (Center for Advanced Study in the Behavioral Sciences)
- Anton Korinek (University of Virginia)
- William Lazonick (UMass – Lowell)
- Sanjukta Paul (Wayne State University)
- Joel Rogers (University of Wisconsin-Madison)
- Nathan Schneider (University of Colorado)
- Damon Silver (AFL-CIO)
- Marshall Steinbaum (University of Utah)
- Lance Taylor (The New School)
- David Weil (Brandeis University)
- Chris Benner (UC Santa Cruz)
- Federica Carugati (Stanford University)
- Aixa Cintron (Russell Sage Foundation)
- Misha David Chellam (Council on Technology and Society)
- Tom Ferguson (INET)
- Natalie Foster (Economic Security Project)
- Taylor Jo Isenberg (Economic Security Project)
- Rob Johnson (INET)
- Andrew Kortina (Fin)
- Margaret Levi (Stanford University)
- Pia Malaney (INET)
- Drummond Pike (Equilibrium Capital Group)
- Nick Pinkston (Volition)
- john a. powell (University of California, Berkeley)
- Barry Schwartz (University of California, Berkeley)