Book reviews
Ladder of achievementEconomic liberalizationHigh performance systems
Construction Workers, U.S.A. By Herbert Applebaum. Greenwood Press, Westport, CT, 1999, 212 pp. $59.95.
Construction Workers, U.S.A. reveals a facet of the American labor force that most people are but fleetingly acquainted with. Herbert Applebaum’s meticulous research ensures that the work will find an audience in both the specialist, as well as the lay reader, and his narrative approach makes for a laudable history of the industry. The author has worked for over 40 years in the industry and also has read widely in the field, and his use of secondary sources from labor history, cultural anthropology, and sociology is evident. Yet, here, too, the writings of such men as the philosophers John Locke and Martin Heidigger and the industrial hygienist Frederick Taylor come under scrutiny as well. In addition, Applebaum’s use of data from the Federal Government, particularly, the Department of Commerce, the Bureau of the Census, and the Bureau of Labor Statistics effectively underscores key statistical points. Finally, numerous first-hand observations and interviews, many of which he has produced from his own trove of memories, round out the list of sources he employed for the research.
Applebaum’s presentation is scholarly, but remains accessible by a broad readership. He describes what he terms "the social organization of the construction industry that fosters a particular pattern of worker behavior," and he firmly believes that the construction industry is 1) unique, 2) important to economic study, and 3) crucial to American society, because "the yearly value of construction projects is one of the leading economic indicators that economists and government agencies use to evaluate and predict the state of the U.S. economy. Construction is responsible for a major percentage of our capital growth." He further highlights its importance to society, citing that the U.S. Commerce Department tracks it as one of the 10 leading economic indicators used in predicting the present and future state of the U. S. economy. "Construction accounts for a large percentage of the output of lumber, stone, structural steel, clay, windows, roofing, concrete, blacktop, piping, electrical, plumbing, and heating and air-conditioning supplies and equipment in the country." Having laid this groundwork, it can be seen that in Applebaum’s view, American society may be likened to a bolt of cloth, with construction’s various trades tightly interwoven into the warp and woof of hundreds other industries.
The book is organized into nine sections, and the industry is covered in toto. An opening review introduces the nature of the industry itself, working conditions, employment, occupations, training and advancement, earnings, and the future outlook for construction. Subsequent chapters include detailed descriptions of the trades, the types of personalities who work in them, and how a novice can break into the field (largely via an elaborate system of personal contacts, apprenticeship training, and the social network that links together this broader family of workers). These descriptions do shine considerable light on how one achieves success in construction, both on the job site itself and via the many different craft roles (for example, carpenter, mason, electrician, and plumber). Also described is how the ultimate burden of responsibility rests with the worker to personally maintain that success. Applebaum also provides several detailed arrays; for example, one thoroughly describes each craft, the knowledge and the skills each craftsworker needs to perform the given tasks, and that worker’s function and responsibility within the industry.
Applebaum extends an interesting theory about those who choose to labor in the industry. He writes: "Construction workers develop a distinctive culture based on their work environment and the ideas and values they derive from performing the construction work." This statement could be taken to mean that there exists between the work and the worker an essential symbiosis; more broadly interpreted, that the work itself provides and sustains a particular culture or worldview by and for its labor force. If true, this may indeed make the construction industry somewhat unique in the American labor force, hearkening, as it does, to the guildhalls of Europe. Further, from what he writes, construction appears to be the type of industry where one can truly work one’s way up a ladder of increasing levels of responsibility and knowledge, where autonomy in function and pride of craft serve as twin watchwords, at each successive rung. Rote manufacturing techniques are not the stuff of craft, and because of this, the duties of each worker are far removed from the automobile assembly lines of Henry Ford, or the industrial time-and-motion studies of Frederick Taylor.
He returns to this notion of autonomy many times, describing how, even at the journeyman level, a mechanic "must not only perform under loose supervision but must supervise himself. Construction contractors often have projects at widely separated sites. Under these conditions, maintenance of close supervision with each member of the work force is prohibitively expensive. Thus, the self-administration of the construction craftsworker is the most efficient response to the peculiar circumstances of construction work." Contrast this credo with that which underlies the process of manufacturing work, where the worker has, historically, worked on one small piece of a much larger project, such as assembly-line work in an automotive plant. The craftsperson specializes but "can see the total product and knows what it will be, and how it will look." This feeling of autonomy, coupled with permission to continually provide input, thus adds up to the construction worker’s sense of job satisfaction.
Although the author’s use of the male gender to depict the primary viewpoint (for example, "he," "him," "men," and so forth) may offend some readers, it appears to be simply a stylistic choice. In fact, Applebaum takes pains to include women’s entry into the industry, as well as that of minorities, for the two groups have found it difficult to secure a foothold in any of the construction trades. He cites government statistics showing that some inroads have been made, but both minorities and women still have far to go in the industry. Overall, neither group has yet achieved employment parity in construction: in the late 1990s, women constituted "3.8 percent of the construction workers engaged in productive work on the job site, and they [were] only 2 percent of the well-paid construction trades, such as plumbers, electricians, carpenters, and so on." For minorities in the same time frame, the statistics are somewhat better, but not by much. His citation from the U.S. Bureau of Census reveals that "in 1996, blacks made up 7.5 percent of the construction trades, while Hispanics were 11.7 percent; and blacks consisted of 6.2 percent of carpenters, while Hispanics were 9.9 percent." In the late 1990s, he notes that blacks, at 12 percent of the general population, were thus "far from achieving [employment] parity in the industry." Hispanics fared better, as they were 10 percent of the population and were, therefore, nearly at an equal level.
A brief review of the literature in the field uncovers a number of specialized or localized studies, in addition to the various government publications that address the topic of U.S. occupations. Other studies have painted the same type of portrait captured by Applebaum, minus the compelling details. One example would be sociologist Marc Silver’s 1986 publication, Under Construction: Work and Alienation in the Building Trades, which discusses, in some detail, the process of securing jobs in the industry, the work itself and its various divisions, and provides an indepth analysis of the alienation of the worker, with the philosophical tenets of Karl Marx at its core. For example, Silver’s use of Marxist logic effectively describes the helplessness and ultimate sense of alienation many construction workers come to feel when they are subject to the vagaries of such things as the impact a rainy week can have on the week’s wages. In 1979, another sociologist, Jeffrey Reimer, published Hard Hats: The Work World of Construction Workers. Reimer’s work is similar in tone and voice to Applebaum’s, but it is neither as detailed nor as extensive in scope. While Silver’s type of analysis has its champions, I believe Applebaum’s approach and methodology is more likely to attract a wider readership, because its narrative style works well to propel the reader along.
Applebaum assembled his work from the resources inherent to a cultural anthropologist, and this book reflects the type of analysis that many researchers term "history from the bottom up." This different type of social science methodology is one that allows the actual subject’s voice to be heard (albeit with some editorial assistance from the author). It can work well by engaging the reader to a fuller extent, inviting his (or her) personal assessment from the evidence presented. Other writers have used this technique to great effect; in particular, Applebaum’s use of first-person accounts may be compared favorably with Studs Terkel’s use of them in his classic study, Working: People Talk About What They Do All Day and How They Feel About What They Do. To sum up, this microcosm of America’s labor force has much to teach us about the larger American macrocosm of work, most particularly, about how the beliefs and habits of its workers can radiate throughout the collective construct we call "society." Construction Workers, U.S.A. effectively updates the existing literature and provides fresh insight into the construction industry at the end of the 20th century. It should find its place in the coming years as a critical addition to the broader body of literature pertaining to labor, in general, and construction work, in particular.
—Bonita Louise Boles
Office of Publications and Special Studies
Bureau of Labor Statistics
. Edited by Parvis Dabir-Alai and Mehmet Odekon. Westport, CT, Greenwood Press, 1999, 274 pp. $65.Economic Liberalization and Labor Markets
The argument conveyed by the authors of the 12 essays presented in this book may be summarized as follows: The labor markets of the countries and regions discussed have been subjected to the often severe deregulatory pressures that have been characteristic of economic liberalization; and in fact, labor market deregulation is inseparable from it. Functionally, economic liberalization seeks to ensure that the market, under the compulsion of (necessarily global) competition, allocate resources on the basis of price. Labor markets are to be governed by the same criterion, that is, of price (wages being prices of labor) as the fundamental allocative mechanism. Whatever "distorts" this mechanism—such as industrywide collective bargaining, difficulty of worker dismissals, severance expense—is, in principle, subject to being dismantled.
Economic liberalization is based on the view that the free market, in combination with anti-inflationary policies, will spur economic development and raise living standards. It involves privatization of state-run enterprises (which invariably entails substantial job loss); removal (or lowering) of trade barriers; decontrol of financial flows; equal treatment of foreign investors; and the pegging of exchange rates to make exports globally competitive. The import-substituting industrial strategies of many developing countries of the earlier post-war period had become unsustainable.
While stabilization of major macro-economic variables has been a focal concern of governments and international financial institutions, economic liberalization, as the authors’ argument implies, has spelled the destabilization of large numbers of working people in terms of recurrent, and at times large-scale, unemployment and underemployment, job tenure insecurity, the weakening of collective bargaining processes, and the political strength of worker organizations. Income distribution has been progressively skewed in favor of the well-to-do and professional and technical employees. Real wages have slowly (if at all) recovered their 1960s levels. A tendency toward capital-intensive investment has contributed to the displacement of less skilled (and unskilled) workers, while the gradual shrinkage of labor-intensive production methods has likewise disfavored their employment at wages that allow customary living standards.
It is evident that the social protection against such untoward market forces as business cycle swings, technological job displacement, and foreign competition, and for which worker organizations had successfully struggled over many decades, has been eroded, if not eliminated, by economic liberalization.
None of the authors discusses the period that preceded economic liberalization in detail. As indicated, that period, which for some Latin American countries began in the 1930s or 1940s and for some African ones after they became independent, was marked by an import-substituting industrialization strategy—the creation of domestic industries, especially capital and consumer goods. The strategy indeed achieved economic growth but became "exhausted" in recent decades. Economies of scale could not be adequately attained within national markets. Vested interests clustered to ensure protective measures. Currencies tended to be overvalued, foreign indebtedness soared as exports lagged, and raw materials and fuel prices climbed. Labor did benefit from the strategy. In Argentina, for example, unemployment remained low into the 1960s, worker benefits generous, and trade unions strong. But the "redistributionist" and developmental policies of the Peron regime and its military and democratic successors could not be pursued without some hyperinflationary results and deep budgetary deficits. Interest rates reached levels that contributed to steep declines in industrial production and real wages. The Menem administration, beginning in late 1989, instituted a radical program of structural adjustment, which not only contained inflation but diminished public subsidies, lifted restrictions on foreign investment, and privatized an array of state enterprises. It also froze wages and salaries. Human resource services were cut back. Real wages plunged, so that on average they bought but 72-79 percent of the minimal basket of essential goods and services (in 1990). "The transfer of income from the low- and middle-income groups" created a new stratum of pauperized, formerly middle- and working-class families. Labor was further weakened by the introduction of flexible work rules, and the shifting of collective bargaining to individual firms, thus wage changes were more closely aligned with productivity.
In some respects, Argentina’s economic liberalization parallels that of Chile, the underlying rationale being as noted, that the allocative function of price be ensured, and that the labor market be "flexibilized." In Chile, as later in Argentina, this exacted a high cost in workers’ income, security, and trade unions protection—union impotence, to some extent, assured by legislation. Income distribution worsened and poverty spread, although by the early 1990s, poverty had declined to 26 percent from 40 percent in the earlier years as real wages recovered. Privatization of state enterprises signaled, as it did in Argentina and elsewhere, favorable opportunities for foreign investors.
Economic liberalization in Mexico was, to an extent, compelled by the debt crisis of the 1980s. More fundamentally, it was adopted because the country’s import-substituting industrial strategy could no longer be sustained—even though this strategy had produced high growth rates between 1965 and 1980. The adoption of the North American Free Trade Agreement (NAFTA) in 1993 must of course be regarded as part of the liberalization policy. The author of the relevant chapter concedes the advantages this policy brought, but writes that "although liberalization has improved the performance of the Mexican economy in a variety of ways, the lot of the Mexican worker deteriorated…."
In the face of perennially high unemployment and underemployment (Mexico has a large informal sector where incomes often run at or below minimal subsistence needs), labor demand has shrunk (at least up to the time the chapter was written). The role of the state has diminished, meaning that government employment has declined, and that privatization (together with the competitive threat it posed to state-run enterprises) has led to job cuts. Productivity in manufacturing has indeed risen, but faster than output, leading to worker displacement. Moreover, American firms investing in Mexico often introduce capital—rather than labor-intensive production techniques—thus limiting labor demand. It is true that Maquiladoras have evidenced vigorous growth in output and employment, but real wages have continued to decline. Furthermore, even though a quarter of Mexico’s workforce is in agriculture, the requirement under NAFTA that Mexico’s agricultural tariffs must be eliminated over the next several years threatens hundreds of thousands of campesionos with destitution, compelling them to migrate to urban centers in search of new livelihoods.
An important chapter of the book deals with African countries, although its author does not focus on any particular one, and possibly over generalizes at times. Many of these countries, like their Latin American counterparts, adopted import-substituting industrial strategies as they became independent during the post-World War II period. However, the development of their internal markets was thwarted by low incomes, a factor which was evidently aggravated by government exploitation of peasantry to accumulate the capital needed for the strategy. The need to import raw materials also eventually caused indebtedness to rise, such that up to 50 percent of export earnings had (and has) to be used to pay off debt. Agriculture was neglected; taxes on agricultural products have constituted up to 70 percent of peasants’ revenue, collected by state commodity boards, which then presumably guided (all or part of) the proceeds to industrialization and infrastructure schemes. A result has been increased rural-urban migration, which contributes to employment problems and deterioration of urban centers.
However, the author notes that tax cuts instituted in more recent years in some African countries, and ending the practice of farm product sales to commodity boards, has helped expand rural self-employment, as have devaluations that made these products competitive with cheap imports.
Yet the economic development of African countries remains stymied by the large military expenditures and bureaucracies of their governments, often at the expense of adequate infrastructure. The needs for reform evidently cannot be met by economic liberalization alone; the reform of governance itself remains the problem.
The book is quite instructive about the relationship of economic liberalization and labor markets. But considering the book’s scope of vast human problems implicit in its discussions, it is surprising that the editors fail to present a concluding essay that comes to grips with these problems more broadly. The employment problem, once discussed only within the frame of the industrial countries, has widened to global scope. Can economic liberalization resolve it? The book’s message does not allow much optimism about the answer. One misses some further, deeper probing of this question.
—Horst Brand
Economist, formerly with the
Bureau of Labor Statistics
Manufacturing Advantage: Why High Performance Work Systems Pay Off. By Eileen Applebaum, Thomas Bailey, Peter Berg, and Arne Kalleberg, Ithaca, NY, Cornell University Press, 2000, 259 pp. $45, cloth; $19.95, paper.
Manufacturing Advantage is a timely book from the Economic Policy Institute that focuses on the competitiveness of manufacturing industries in the United States. It attempts to answer the question of how to transform "old economy" manufacturing industries to take advantage of "new economy" concepts, like digitization, and in the process become more efficient, which is paramount to the ability of many of these industries to gain competitive advantage.
Eileen Applebaum, Thomas Bailey, Peter Berg, and Arne L. Kalleberg examine the role of high performance work systems in helping to transform "old economy" manufacturing firms to become more technologically savvy and meet the ever-changing needs of the marketplace. High performance work systems are defined as workplace practices that incorporate worker involvement in frontline decisions and range from participation in production and quality management teams to employee incentive and reward schemes. The book is beneficial because changing workplace practices in the apparel, steel, and medical-instrument industries are meticulously examined. In addition, the authors provide empirical evidence of the effect of these workplace practices on reducing costs and improving plant performance.
Chapter 2 begins with a useful discussion of the historical origins of workplace practices beginning with the Taylorist or ‘assembly line’ theory of mass production, which emphasized quantity over quality and hierarchy of workers. As the emphasis in the marketplace shifted from quantity to quality, high performance work systems evolved as a management style suited to address this need.
The next three chapters provide an informative and indepth analysis of three very different industries in the manufacturing sector, as well as the role of high performance work systems in changing the competitive advantage in each of these industries. These chapters provide the crux of the industry analysis and give a clear understanding of the efficacy of high performance work systems in different industry types. In chapter 3, the analysis focuses on the capital-intensive steel industry. This chapter details the transformation of an industry on the brink of collapse to one that is now the most efficient in the world. It also provides a perfect example of the effects of the Japanese high performance work systems and inter-industry technology. Consequently, the steel industry not only completely digitized their production process, but also adopted new work system practices.
Chapter 4 discusses the case of the apparel industry, which is very labor-intensive and operates under different dynamics than the more capital-intensive steel industry. Changes in retailer demands put pressure on apparel producers to change their production methods and introduce new work systems. Producers changed from a bundle system, emphasizing quantity, to a modular system that focuses more on quality and customer service. The modular system is more flexible and, unlike the bundle system, can adapt to frequently changing styles. Additionally, each member in the bundle system monitors the quality of the team, which eliminates the need for quality inspectors.
Chapter 5 discusses the highly technological medical instruments industry, which operates with a significantly higher proportion of skilled employees than either the steel or apparel industry. This industry is very material-intensive, and labor is only a small percentage of production costs. Competitive advantage in this industry is based on responsive design and engineering to adhere to changing U.S. regulatory standards. Thus the firm’s ability to understand client needs and quickly produce new technological devices is essential to competitive advantage. High performance work systems helped smooth this flow and increase productivity with the introduction of problem-solving teams, developing standards to increase the communication between engineers and managers, as well as the incorporation of the just-in-time inventory system.
The remaining chapters are meaty with details of the data and empirical analysis. Though these chapters provide much of the empirical evidence on high performance work systems, non-laymen readers will not lose much of the book’s substance by skimming these sections.
In chapter 6, the authors use worker surveys to develop "opportunities to participate in decisions that matter" as one work system measure. The authors estimate the effect of this variable on plant performance, worker satisfaction, worker stress, and wages in the three industries. They find positive effects of the opportunity to participate on performance in all three industries, no effects on worker stress or improvement in wages, and varied effects on worker satisfaction. However, when broken down by industry, some effects vary based on employee skill level.
In chapter 7, there is a technical discussion of the data used in the analysis, while chapter 8 presents further detail of the effects of high performance work systems on plant performance. The effect of these new work systems from the workers’ perspective is analyzed in chapter 9. This is an interesting chapter, as the authors find that high performance work systems are successful in increasing worker levels of organizational commitment and job satisfaction.
Along those same lines, chapter 10 investigates the extent to which high performance work systems financially benefit workers. High performance work system employees are expected to be able to understand and carry out more functions than workers in traditional production systems, resulting in higher wage expectations. The authors find this scenario to be the case in all three industries. For example, in the apparel industry, team managers often provide group incentives and raise the base wage to promote a positive team attitude.
Chapter 11 provides the book’s noteworthy conclusion, which serves an argument for employing higher -wage U.S. workers. High performance work systems are shown to increase total factor productivity and create surplus economic rents, part of which can be used to justify higher wages. The authors note that the real payoff to high performance work systems is on the revenue side—performance improvements that increase sales and profits. In addition, economic gains to plants adopting high performance work systems result in decreases in the number of nonproduction workers, inventory and inventory costs, scrap and waste, and the amount of space required for production.
In summation, in light of low-wage labor in other countries that have forced many U.S. manufacturing production facilities abroad, Manufacturing Advantage provides strong evidence for managers and unions that ultimately hope that high performance work systems will allow them to remain competitive while employing U.S. workers.
—Marva E. Corley
Office of Productivity and Technology,
Bureau of Labor Statistics
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