David Fairris

Unions and Wage Inequality in Mexico

This paper offers empirical evidence on the impact of trade unions on wage inequality in Mexico. The results indicate that unions were a strongly equalizing force affecting the dispersion of wages in 1984, but were only half as effective at reducing wage inequality in 1996. Not only did the unionized percentage of the labor force fall considerably over the period, unions also lost some of their ability to reduce wage dispersion among the workers they continued to represent. Had unions maintained in 1996 the same structural power they possessed in 1984, the rise in wage inequality in the formal sector of the labor market between those years would have been reduced by roughly 11%.

The Impact of Minimum Wages on Job Training: An Empirical Exploration with Establishment Data

Human capital theory suggests that workers may finance on-the-job training by accepting lower wages during the training period. Minimum wage laws could reduce job training, then, to the extent they prevent low-wage workers from offering sufficient wage cuts to finance training. Empirical findings on the relationship between minimum wages and job training have failed to reach a consensus. Previous research has relied primarily on survey data from individual workers that typically lack both detailed measures of job training and important information about the characteristics of firms. This study addresses the issue of minimum wages and on-the-job training with a unique employer survey. We find no evidence indicating that minimum wages reduce the average hours of training of trained employees and little to suggest that minimum wages reduce the percentage of workers receiving training.

Minimum Wages and the Wage Structure in Mexico

Abstract Instead of merely setting a lower bound on the wages of formal sector workers, minimum wages serve as a norm for wage setting more generally throughout the Mexican economy. Our results suggest that wages are commonly set at multiples of the minimum wage, and that changes in minimum wages influence wage changes across the occupational distribution. Moreover, our findings suggest that these normative features of minimum wages have their greatest impact on the mid-to-lower tail of the wage distribution, including the informal sector of the economy. Thus, the results lend support to the view that declining real minimum wages and stabilization programs that strengthened the link between wage levels, wage changes, and minimum wages, might account for a portion of the growing wage inequality in Mexico over the period of the late 1980s and early 1990s.

COMPENSATING PAYMENTS AND HAZARDOUS WORK IN UNION AND NONUNION SETTINGS

This paper extends the results of past research on estimated compensating payments and estimated injury rate equations for the union and nonunion sectors. It allows for both simultaneity in the determination of income and safety and structural differences in their determinants across the two sectors. Although union settings are found to maintain larger compensating payments for hazardous work than nonunion settings, they also appear to contain higher injury rates, all else constant. A fuller understanding of these results will require further analysis of the differing institutional mechanisms for compensation and safety determination in union and nonunion labor markets.

Are Transformed Workplaces More Productively Efficient

For almost two decades now, the organization of production has been undergoing rapid transformation in both developed and developing economies. The changes represent an attempt by employers to improve productivity and product quality through increased flexibility in the use of labor and greater participation by workers in various production decisions. Flexibility refers to the ease with which workers can be hired and dismissed, as well as to the ease with which they can be moved between job tasks in production. Worker participation involves the elicitation of ideas from, as well as a shifting of the burden of responsibility to, the labor force regarding productivity and product quality. The various institutional changes in production that these developments have brought forth include the following:

Union Voice Effects in Mexico

This paper utilizes establishment survey data from Mexico to explore the impact of union voice on fringe benefits, turnover, job training and productivity. Mexican unions have a significant effect on these outcome measures for workers and firms. Unions increase both the value of fringe benefits per worker and the ratio of fringe benefits to total compensation, increase job training and raise productivity per worker. However, contrary to the broader literature on union voice effects, unionized establishments in Mexico appear to possess greater worker turnover.

What Accounts for Intra-Industry Wage Differentials? Results from a Survey of Establishments

Abstract This paper utilizes an original establishment survey in a select few low-wage industries in Los Angeles to draw conclusions about the existence of and explanations for intra-industry wage differentials. We explore differences in average establishment wages but also in the starting wage of the largest low-wage occupations in establishments. Well over 50 percent of the variation in average establishment wages occurs across establishments within industries and 60 percent or more of the starting occupational wages of establishments occurs both within industries and occupations. Differences in the skills of workers account for a portion of the variation in intra-industry average and intra-occupational starting wages, but so too do institutional factors such as unions, rent sharing, monitoring difficulty, and recruitment difficulty.

Institutional Change in Shopfloor Governance and the Trajectory of Postwar Injury Rates in U.S. Manufacturing, 1946–1970

Manufacturing injury rates followed a U-shaped pattern over the 1946–70 period, falling for roughly the first fifteen years after World War II and then rising by an almost equal amount in the following decade. Rapid economic growth, changing demographics of the manufacturing labor force, and technological changes in production cannot account for the rising injury rates during the 1960s. Basing his analysis on a variety of sources, the author of this paper argues, instead, that the rise in injury rates reflects institutional changes in the system of shopfloor governance during the late 1950s that reduced the power of workers to influence shopfloor conditions.

Control and Inefficiency in Capitalist Production: The Role of Institutions

This paper offers a clarification of the terms and specific arguments associated with the radical claim that capitalist control of production leads to economic inefficiency. It argues that a greater understanding of the institutional features of the capitalist employment I relation is required in order to make the claim compelling. The paper finds suggestive evidence in support of the radical claim in an institutional analysis of postwar labor-management relations in the U.S.

Employment with a Human Face: Balancing Efficiency, Equity, and Voice

and the WB look foolish, but it hardly makes them a force of evil. To make loans which predictably end up being recycled in offshore accounts or fund ill-fated programs, however, wastes resources, subjects future generations to repayments without benefits, and borders on criminal negligence. Professor Tabb rightly emphasizes that whoever controls the agenda of organizations greatly influences their direction and effectiveness. His book is an original contribution to the discussion on the current state of globalization by asking critical questions regarding the impact of global economic governance institutions on the important issues of sovereignty, equity, and accountability. It is here where global state economic governance institutions really have their work cut out.