Michael J. Piore

Employment relations in a changing world economy

To address contemporary issues, industrial relations as a field of study will have to take an increasingly international and comparative dimension. Accordingly, Employment Relations in a Changing World Economy looks at the critical role employment relations play in firm performance and industry competitiveness worldwide. The essays employ a common framework to examine changes in the employment practices of eleven OECD (Organization for Economic Cooperation and Development) countries: the United States, the United Kingdom, Canada, France, Germany, Italy, Spain, Norway, Sweden, Austria, and Japan. They constitute the first phase in a large ongoing project at the Center for Industrial Performance at MIT to update our understanding of comparative industrial relations and human resource policies. The authors, scholars in economics, political science, sociology, industrial relations and law, first identify a representative set of employment practices and then look at the outcomes of those practices and the changes they are undergoing across different national settings. By collaborating, the contributors seek to clarify the dynamics of employment relations across the world today, and to set the terms of reference for a new generation of international-comparative employment research.

Economics and Sociology

This paper explores the potential of sociology to fill certain gaps in economic theory. It examines in particular its capacity to explain: 1) the institutional supports required to make a competitive market work; and, 2) the limits of the assumption of rational choice behavior. The dominant sociological approach to problems of this kind is to postulate the existence of different social realms, but it does not have a strong theory of how these realms come into existence and how their boundaries come to be defined. Its failure to provide such a theory is particularly limiting because the salient characteristic of the period in which we are living is fluidity of boundaries, the boundaries of the firm and the family no less than the boundaries between the economic and social realms themselves. The paper concludes with suggestions for how a theory of boundary formation could be built around a notion of “interpretation” as a mode of human behavior distinct from rational choice but co-existing with it.

Changing Regimes of Workplace Governance, Shifting Axes of Social Mobilization, and the Challenge to Industrial Relations Theory

This article challenges prevailing views about the collapse of the New Deal industrial relations system and the role of the market. It argues that the old system has been replaced not by the market but by an employment rights regime, in which the rules of the workplace are imposed by law, judicial opinions, and administrative rulings, supplemented by mechanisms at the enterprise level that are responsive to the law but also are susceptible to employee pressures, both individual and collective. The emergence of this regime is the product of a shift in the axes of social and political mobilization from mobilization around economic identities rooted in class, industry, occupation, and enterprise to identities rooted in the society outside the workplace: sex, race, ethnicity, age, disability, and sexual orientation. The shift in the axes of mobilization in turn reflects the collapse of the underlying model of social and economic organization upon which the collective bargaining regime was built and more fundamentally a shift in our understanding of the nature of industrial society and its direction of evolution in history. This interpretation poses a challenge to the conceptual tools used in industrial relations to understand the issues of work and to frame the public policy debate. We conclude with some suggestions as to the direction in which we might move to provide an alternative conceptual framework.

Qualitative Research Techniques in Economics.

I did not plan to do open-ended interviewing and participant observations: I happened into it, in the course of my graduate education, in two ways: in my thesis research and in my work with civil rights and anti-poverty groups. My thesis topic was the effect of automation upon the skill composition of manufacturing jobs. At the time, there was considerable controversy about whether technological change was increasing or decreasing the skill requirements of jobs. An important group of analysts in the debates about national economic policy were arguing that skill requirements were increasing, leaving a residue of workers who had, or might have, been employed by the old techniques but who were unqualified for the new jobs. This growing residue was supposed to be a barrier to reductions in the level of unemployment.

The Shifting Grounds for Immigration

This article is addressed to the theory of the international migration of workers to low-wage sectors of developed industrial economies from underdeveloped regions. Its starting point is the framework of analysis originally put forward in Birds of Passage, a framework built around the notion of circular migration through the secondary sector of a dual labor market. It then discusses how that theory might be amended in light of recent developments in migration patterns to encompass enclave economies, immigrant entrepreneurship, and the settlement process.

The Impact of the Labor Market upon the Design and Selection of Productive Techniques within the Manufacturing Plant

Introduction, 602. — I. The internal innovative process, 604; the search, 604; the design and construction of equipment, 608; job design given capital equipment, 612. — II. The role of outside institutions, 615. — III. Conclusions, 619.

Thirty Years Later: Internal Labor Markets, Flexibility and the New Economy

This article reviews the relevance of the concept of the Internal Labor Market from the contemporary perspective thirty years after it was originally formulated. The narrow concept of internal labor markets associated with large, bureaucratic enterprises appears to be less relevant in the new economy. But the underlying notion of the labor market as socially embedded remains central to an understanding of the way the economy operates. Several increasingly salient social forms are reviewed.

The Emergent Role of Social Intermediaries in the New Economy

This paper focuses on the role of social intermediaries in the evolution of the economy. By ‘social intermediaries’ I mean those institutions that mediate between the economy and other realms of social activity and maintain a balance between them. Among institutions of this kind are trade unions and governmental organizations but also cooperatives, household-based enterprises, religious institutions, and, increasingly, networks of professionals and business people based on race, sex, ethnicity and religion.

On-The-Job Training and Adjustment to Technological Change

In the absence of technological change, on-the-job training takes place in the process of production. When change occurs, training also takes place in the process of innovation, installation, and debugging of new equipment. Analytically, training, production, and innovations should be viewed as joint products of a single process. The joint product, single process relationship entrains mechanisms which act to prevent structural imbalances in the labor market. The relationship also suggests that imbalances are unlikely to appear as job vacancies matched by workers unemployed but unqualified to fill the vacant jobs. Finally, the nature of on-the-job training and its role in adjustments to technological change suggests new interpretations of labor productivity and job vacancy data.

Rethinking International Labor Standards

Labor standards are moving to center stage in international trade policy, but the debate has been conducted largely within the framework of competitive economic theory. In that framework, working conditions are viewed as the outgrowth of an informed choice by workers and by firms. To make the labor standards of the advanced, industrial countries a condition for trade is at best the naive imposition of the values of rich nations upon the poor in the developing world who can ill afford them. At worst, it is simply covert protectionism (Bhagwati, 2002). There is a certain abstract logic to this view, but it is not grounded in field experience. I have been looking at firms in Mexico over the last six years as they have tried to adjust, first to the opening of that economy to trade and then to NAFTA, and in Mexico at least these views seem completely out of touch with reality (Piore, Dussel-Peters and Ruiz-Duran, 1997; and Kuznetsov et al., 2001).