Labor Relations Commons^™

Top Athlete Pay, Kevin F. Hallock

Economics Faculty Publications

The US has a history of discussing the pay of the relatively well-paid. This is partly because pay levels of some are revealed publicly (e.g., CEOs of publicly traded companies). Americans are also characterized as being celebrity-obsessed. So discussing the pay of superstars seems inevitable. However, they do not have quality data on the compensation of the relatively highly paid in many organizations and professions. When the author speaks about compensation in front of large groups, someone (and in many cases, many people) gets incensed over what they term "outrageous" or "egregious" levels of executive compensation. Athletes are rarely mentioned. …

Paying Our Presidents: What Do Trustees Value?, Ronald G. Ehrenberg, John J. Cheslock, Julia Epifantseva

Ronald G. Ehrenberg

Our study makes use of data from a panel of over 400 private colleges and universities on their presidents’ salaries and benefits. These data, reported annually to the Internal Revenue Service on Form 990, have been collected by and reported in the Chronicle of Higher Education for academic years 1992–1993 through 1997–1998. We merge these data with those from other sources including the American Association of University Professors, the American Council on Education, Who’s Who in America, the National Association of College and University Business Officers, the Council on Aid to Education, and the National Science Foundation’s CASPAR system. This …

Economic Effects Of The Minimum Wage, Kevin F. Hallock

Economics Faculty Publications

The US minimum wage, at almost 75 years old, remains the topic of many academic studies and much policy debate despite the fact that only about 5% of hourly employees are currently paid at or below the federal minimum. There are many possible and interesting economic effects of the minimum wage. The issue that has received by far the most attention is whether increasing the minimum wage has a negative effect on employment, and if so, for whom and by how much. Economists first approach this question through the basic theory of a perfectly competitive labor market where all workers …

Three Plants, Three Futures, Lowell Turner

Lowell Turner

To spread teamwork and cooperation, managers need to reform themselves—especially their attitudes about workers. At NUMMI, management has provided a system of work and rewards that has earned the loyalty of most employees and local union leaders.

Nummi – Japanische Produktionskonzepte In Den Usa, Lowell Turner

Lowell Turner

[Excerpt] NUMMI, die Produktionsstätte des Joint-Venture von General Motors und Toyota, hat Modellcharakter für die gesamte US-Automobilindustrie erlangt und gilt mittlerweile als Paradebeispiel fur eine erfolgreiche Reorganisation der Arbeit. Das »Geheimnis« von NUMMI (New United Motor Manufacturing Inc.) liegt - kurz gefaβt - in der Übertragung von japanischen Produktionskonzepten mit entsprechend sozialpartnerschaftlichen Beziehungen zwischen Arbeitnehmern und Management, Teamarbeit, hoher Arbeitsintensität und groβerer Verantwortung der Beschäftigten für ihren Arbeitsbereich in eine gewerkschaftlich organisierte amerikanische Automontagestätte - mit dramatischen Ergebnissen hinsichtlich Produktivität und Produktqualität. Kein Wunder, daβ amerikanische Automobil-Manager - nicht nur bei GM, sondern auch bei Ford und Chrysler - darauf …

Perils Of The High And Low Roads: Employment Relations In The United States And Germany, Lowell Turner, Kirsten S. Wever, Michael Fichter

Lowell Turner

[Excerpt] The U.S. crisis is characterized by growing income inequality, a shrinking safety net, and the decline of worker representation. Like the German crisis, it is caused in part by intensified global competition. Unlike in Germany, problems in the United States have also been exacerbated by deregulation, short-term horizons (e.g., quarterly reports to shareholders), and the decline of the labor movement.

Both Germany and the United States, however, have substantial political, economic, and social resources to use in solving their problems. The contemporary crises do not appear for either of these countries to foreshadow a major collapse like that of …

Faculty Retirement Policies After The End Of Mandatory Retirement, Ronald G. Ehrenberg, Michael J. Rizzo

Ronald G. Ehrenberg

[Excerpt] The findings we report above have implications for both institutions and their faculty members. In some states, rapidly growing college age cohorts will require academic institutions to hire large numbers of new faculty in the years ahead to fill positions created to meet the expanding demand for enrollments. Nationally, institutions will have to replace a large number of retiring faculty members in the years ahead. This suggests that most institutions’ concern in upcoming years will not be how to encourage their faculty members to retire. Rather, their concern will be how to continue to draw on the skills of …

The Family And Medical Leave Act’S Impact On The Hospitality Industry: Implementing Policies To Ensure Continued Productivity, Katie O'Brien Coon

UNLV Theses, Dissertations, Professional Papers, and Capstones

The Family and Medical Leave Act, (FMLA), allows women and men to take up to 12 weeks leave to care for a newborn child (maternity leave) and/or care for sick family members. The Department of Labor states that:

FMLA entitles eligible employees of covered employers to take unpaid, job-protected leave for specified family and medical reasons with continuation of group health insurance coverage under the same terms and conditions as if the employee had not taken leave (Family and Medical Leave Act - Wage and Hour Division (WHD) - U.S. Department of Labor, 2012).

When an employee decides to take …

Cornell Confronts The End Of Mandatory Retirement, Ronald G. Ehrenberg, Michael W. Matier, David Fontanella

Ronald G. Ehrenberg

[Excerpt] In July 1995, the first author of this paper was appointed vice president of academic programs, planning and budgeting at Cornell and, at his initiative, a joint faculty-administrative committee was subsequently established, with him as chair, to look into how the university should respond to the elimination of mandatory retirement. In this chapter, we discuss the environment in which the university found itself when the committee was established, the recommendations of the committee, faculty reactions to the recommendations, and the actions that the university ultimately decided to pursue.

No Longer Forced Out: How One Institution Is Dealing With The End Of Mandatory Retirement, Ronald G. Ehrenberg

Ronald G. Ehrenberg

: [Excerpt] Why should academic institutions or their faculty care about the end of mandatory retirement for tenured faculty, which became effective in January 1994? From the perspective of an individual tenured faculty member who wants to continue her career beyond age seventy, the elimination is a welcome event. In the past, faculty members who wanted to remain active after reaching seventy had to negotiate their status with institutions that were under no legal obligation to allow them to continue. Now, however, tenured faculty members have the legal right to continue indefinitely in their tenured appointments. From the point of …

Ceos Off The Clock, Kevin F. Hallock

Economics Faculty Publications

There is new and interesting academic work on how executives spend their time and the personal choices they make to maximize utility. From a compensation point of view, one issue that has been at the forefront with respect to executives is perks. One CEO compensation perk that has also received increased scrutiny but is surviving better than club memberships is the use of private aircraft. In a related April 2012 paper, "Executives' 'Off-The-Job' Behavior, Corporate Culture and Financial Reporting Risk" (National Bureau of Economic Research working paper), Robert Davidson, Abbie Smith and Aiyesha Dey consider other off-the-clock behaviors of CEOs …

Estimating Wage-Fringe Trade-Offs: Some Data Problems, Robert Smith, Ronald G. Ehrenberg

Ronald G. Ehrenberg

[Excerpt] This paper represents an inquiry into some of the data related difficulties inherent in estimating wage-fringe trade-offs, and it explores the usefulness of a particular source of data in meeting these difficulties.

Compensating Wage Differentials For Mandatory Overtime, Ronald G. Ehrenberg, Paul L. Schumann

Ronald G. Ehrenberg

Our paper estimates the extent to which employees are compensated for an unfavorable job characteristic, being required to accept mandatory assignment of overtime, by receiving higher straight—time wages. Our estimating equations are derived from a model in which wage rates and the existence of mandatory assignment of overtime are jointly determined in the market by the interaction of employee and employer preferences. While on average, we do not observe the existence of a compensating wage differential for mandatory overtime, we do observe the existence of such differentials for unionized workers and workers with only a few years experience at a …

Why Warn? The Impact Of Recent Plant-Closing And Layoff Prenotification Legislation In The United States, Ronald G. Ehrenberg, George H. Jakubson

Ronald G. Ehrenberg

[Excerpt] WARN was passed only after a decade of strenuous debate. We can now look back and address a number of issues it raised. What benefits did its proponents think would arise from the notice legislation, and what costs did its opponents think there would be? What public policies toward advance notice do other nations have? Did displaced workers in the United States receive advance notice before the passage of WARN? What do we know empirically about the effects on workers and firms of the provision of advance notice? What has experience under WARN taught us? Finally, what research issues …

The Costs Of Defined Benefit Pension Plans And Firm Adjustments, Burt S. Barnow, Ronald G. Ehrenberg

Ronald G. Ehrenberg

[Excerpt] While it is obvious that the costs of term life insurance vary directly with age, it is less obvious how employers' contributions to pension funds, which comprise a major share of nonwage compensation, vary. As such, we focus in this paper on the most common variant of pension plans and demonstrate how an employer's cost of fully funding a plan varies with the age and service characteristics of his work force. This cost, as a percent of annual salary, is seen to increase with employees' ages and, in some cases, years of service. This variation has important implications for …

Retirement Policies, Employment, And Unemployment, Ronald G. Ehrenberg

Ronald G. Ehrenberg

[Excerpt] There is a growing consensus among economists that reliance on aggregate demand policies alone will not be sufficient to move the economy to full employment with a nonaccelerating inflation rate, and that policies which alter the structure of labor markets will be required. While obvious structural policies such as public sector employment programs and training programs are the focus of current debate, many other public policies affect labor markets in subtle ways which may well adversely affect the level and distribution of employment and unemployment. To help improve the inflation-unemployment tradeoff, policymakers should seek to marginally modify these policies, …

Do Economics Departments With Lower Tenure Probabilities Pay Higher Faculty Salaries?, Ronald Ehrenberg, Paul Pieper, Rachel Willis

Ronald G. Ehrenberg

The simplest competitive labor market model asserts that if tenure is a desirable job characteristic for professors, they should be willing to pay for it by accepting lower salaries. Conversely, if an institution unilaterally reduces the probability that its assistant professors receive tenure, it will have to pay higher salaries to attract new faculty. Our paper tests this theory using data on salary offers accepted by new assistant professors at economics departments in the United States during the 1974-75 to 1980-81 period, along with data on the proportion of new Ph.D.s hired by each department between 1970 and 1980 that …

The Impact Of Retirement Policies On Employment And Unemployment, Ronald Ehrenberg

Ronald G. Ehrenberg

[Excerpt] This paper has focused on the impact of retirement policies on the level and distribution of employment and unemployment. All of the policies discussed, except for early retirement provisions in privately negotiated collective bargaining contracts were seen to have adverse effects on the level and distribution of employment. Hence, the paper illustrates the more general point that policies designed to promote one social goal may well detract from achieving other goals and suggests that more explicit attention should be given to the employment effects of social programs and legislation prior to their adoption.

Executive Compensation In Municipalities, Gerald S. Goldstein, Ronald G. Ehrenberg

Ronald G. Ehrenberg

[Excerpt] In this paper we are concerned with the salaries of three important municipal officials; city-managers, police chiefs, and fire chiefs. We present a model that relates the salaries of these officials to a set of explanatory variables, the most important being measures associated with job performance. Two of these measures of performance are developed in the study. Further, the influence of the city-manager form of government on the incentive structure facing police chiefs and fire chiefs, and the interdependence betwen the salaries of police chiefs and fire chiefs is investigated. The model is tested using cross-section data for 1967.

Cost-Of-Living Adjustment Clauses In Union Contracts: A Summary Of Results, Ronald G. Ehrenberg, Leif Danziger, Gee San

Ronald G. Ehrenberg

Our paper provides an explanation why cost-of-living adjustment (COLA) provisions and their characteristics vary widely across U.S. industries. We develop models of optimal risk sharing between a firm and union to investigate the determinants of a number of contract characteristics. These include the presence and degree of wage indexing, the magnitude of deferred noncontingent wage increases, contract duration, and the trade-off between temporary layoffs and wage indexing. Preliminary empirical tests of some of the implications of the model are described. One key finding is that the level of unemployment insurance benefits appears to influence the level of layoffs and the …

Comparable Worth In The Public Sector, Ronald G. Ehrenberg, Robert Smith

Ronald G. Ehrenberg

[Excerpt] At the theoretical level, we conclude that the case for comparable worth rests on the argument that the current distribution of female employees is based on discriminatory barriers which existing legislation have not broken down. If this argument is valid, the desirability of comparable worth depends upon one's perceptions of how the benefits it provides contrasts with the efficiency losses it induces. Given the trade-offs involved, ultimately one's position on comparable worth must depend on value judgments.

Comparable-Worth Wage Adjustments And Female Employment In The State And Local Sector, Ronald G. Ehrenberg, Robert S. Smith

Ronald G. Ehrenberg

Our paper simulates the likely effects of a comparable-worth wage-adjustment policy in the state and local sector on female employment in the sector. The simulation is based on estimates of within-occupation male/female substitution and across-occupation occupational employment substitution that we obtain using data from the 1980 Census of Population.

Officer Performance And Compensation In Local Building Trades Unions, Ronald G. Ehrenberg

Ronald G. Ehrenberg

[Excerpt] This paper presents estimates of the relationship between the performance and compensation of local building trades union leaders. A growing literature has revived the common-sense notion that organizations should structure the compensation of both their employees and their executives so as to encourage them to take actions consistent with the goals of the organizations. One way to minimize the probability that executives will take actions contrary to the organization's goals is to tie their compensation to measures of their organization's performance.

Absenteeism And The Overtime Decision, Ronald G. Ehrenberg

Ronald G. Ehrenberg

[Excerpt] Upon reading the congressional hearing on the Overtime Pay Penalty Act of 1964, one cannot fail to be impressed by the emphasis that management places on absenteeism as a primary cause of overtime. The argument given is basically quite simple: Large firms, it is claimed, attempt to account for absenteeism by hiring standby workers; however because of the stochastic nature of the absentee rate, it is impossible for them to have replacements always available. Hence overtime must be worked by existing employees in order to meet production schedules. One concludes from this argument that the randomness of absenteeism is …

Retirement System Characteristics And Compensating Wage Differentials In The Public Sector, Ronald G. Ehrenberg

Ronald G. Ehrenberg

This paper presents evidence that a trade-off exists between wages and certain characteristics of retirement systems in the public sector. Cross-section econometric estimates for uniformed municipal employees, based upon data from two national surveys of municipalities, suggest that, other things equal, an increase in the contribution made by uniformed employees to their retirement system leads to a compensating increase in their salaries, while retirement systems with more "generous" characteristics are associated to some extent with lower salaries. The estimates also indicate that the extent of retirement system underfunding is related to employers' and employees' perceptions of the probability that promised …

Introduction: Do Compensation Policies Matter?, Ronald Ehrenberg

Ronald G. Ehrenberg

[Excerpt] The papers in this volume should give the reader a sense of the exciting empirical research that has recently taken place on compensation-related issues. As a set, these papers considerably expand our empirical evidence on the effects of compensation policies. Several papers show that executive compensation is structured in a way that at least implicitly ties executive compensation changes to measures of corporate performance, and —crucially—that doing so leads to improved corporate performance (Leonard, Murphy/Gibbons, Abowd). Others show that compensation systems that pay workers for performance, in the sense of providing explicit or implicit incentives for high levels of …

Determinants Of The Compensation And Mobility Of School Superintendents, Ronald G. Ehrenberg, Richard P. Chaykowski, Randy Ehrenberg

Ronald G. Ehrenberg

Analyzing 197-83 panel data from more than 700 New York State school districts, the authors find evidence that school superintendents were rewarded, both by higher salary increases and by enhanced opportunities to move to belter-paying jobs, for having low school tax rates and high educational achievement within their districts, relative to the values of those variables in comparable school districts in the state. The rewards were, however, quite small. The analysis also suggests that the superintendents themselves did not significantly influence either school tax rates or educational test scores in their districts.

Paying Professors, Kevin F. Hallock

Economics Faculty Publications

One of the most interesting quirks of academia is professional tenure. Many argue that tenure is necessary so that faculty can be protected by "academic freedom" to study the issues they find important without outside interference or pressures to conform. It is also, obviously, a nonmonetary reward and this security for life could offset higher salaries. Few accounts of the tenure system, however, recognize that while tenure essentially grants a job for life, it does not come with guaranteed lifetime raises. Some academic organizations, however, give roughly across the board annual raises. They don't seriously reward performance until a faculty …

[Review Of The Book Frederick W. Taylor And The Rise Of Scientific Management], Nick Salvatore

Nick Salvatore

[Excerpt] Daniel Nelson has written an informative book that helps to explain important aspects of Taylor's life. But the analysis of the man, his influence, and the opposition both engendered is too narrowly cast to serve as a final rebuttal to Taylor's critics. By 1923, Nelson writes toward the end of his book, Taylor's reputation was secure and worker opposition to his approach was low: "The unionists had mellowed," Nelson comments. Yet the reader is never informed that this "mellowing" occurred in the midst of the most severe and pervasive anti-union campaign to that date in American history. This omission …

Aligning Employees Through Line Of Sight, Wendy R. Boswell, John B. Bingham, Alexander Colvin

Alexander Colvin

Aligning employees with the firm’s larger strategic goals is critical if organizations hope to manage their human capital effectively and ultimately attain strategic success. An important component of attaining and sustaining this alignment is whether employees have “line of sight” to the organization’s strategic objectives. We illustrate how the translation of strategic goals into tangible results requires that employees not only understand the organization’s strategy, they must accurately understand what actions are aligned with realizing that strategy. Using recent empirical evidence, theoretical insights, and tangible examples of exemplary firm practices, we provide thought-leaders with a comprehensive view of LOS, how …