Divergent Paths

Divergent Paths: Economic Mobility in the New American Labor Market

Annette Bernhardt
Martina Morris
Mark S. Handcock
Marc A. Scott
Copyright Date: 2001
Published by: Russell Sage Foundation
Pages: 280
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  • Book Info
    Divergent Paths
    Book Description:

    The promise of upward mobility-the notion that everyone has the chance to get ahead-is one of this country's most cherished ideals, a hallmark of the American Dream. But in today's volatile labor market, the tradition of upward mobility for all may be a thing of the past. In a competitive world of deregulated markets and demanding shareholders, many firms that once offered the opportunity for advancement to workers have remade themselves as leaner enterprises with more flexible work forces.Divergent Pathsexamines the prospects for upward mobility of workers in this changed economic landscape. Based on an innovative comparison of the fortunes of two generations of young, white men over the course of their careers,Divergent Pathsdocuments the divide between the upwardly mobile and the growing numbers of workers caught in the low-wage trap.The first generation entered the labor market in the late 1960s, a time of prosperity and stability in the U.S. labor market, while the second generation started work in the early 1980s, just as the new labor market was being born amid recession, deregulation, and the weakening of organized labor. Tracking both sets of workers over time, the authors show that the new labor market is more volatile and less forgiving than the labor market of the 1960s and 1970s. Jobs are less stable, and the penalties for failing to find a steady employer are more severe for most workers. At the top of the job pyramid, the new nomads-highly credentialed, well-connected workers-regard each short-term project as a springboard to a better-paying position, while at the bottom, a growing number of retail workers, data entry clerks, and telemarketers, are consigned to a succession of low-paying, dead-end jobs.While many commentators dismiss public anxieties about job insecurity as overblown,Divergent Pathscarefully documents hidden trends in today's job market which confirm many of the public's fears. Despite the celebrated job market of recent years, the authors show that the old labor market of the 1960s and 1970s propelled more workers up the earnings ladder than does today's labor market.Divergent Pathsconcludes with a discussion of policy strategies, such as regional partnerships linking corporate, union, government, and community resources, which may help repair the career paths that once made upward mobility a realistic ambition for all American workers.

    eISBN: 978-1-61044-049-3
    Subjects: Business, Sociology

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-vi)
  3. About the Authors
    (pp. vii-viii)
  4. Acknowledgments
    (pp. ix-x)
  5. Chapter 1 The New Labor Market
    (pp. 1-20)

    Almost three decades ago, Daniel Bell’sThe Coming of Post-Industrial Societyforetold the shift from an economy based on the production of goods to one based on knowledge and technology. Bell and others saw great potential in this shift: It would change the nature of work, with professional, technical, and service occupations gaining dominance and education becoming the sole determinant of success. It would fundamentally alter the nature of capitalism, by moving power out of the market and transferring it to those engaged in the production of knowledge. It would result in social planning that was rational and analytical. New...

  6. Chapter 2 An Introduction to the National Longitudinal Survey Cohorts
    (pp. 21-41)

    The project of this book—to describe how career development and upward mobility have changed, a period of fundamental economic transition for the United States—has strong data requirements: we want to track individual workers as they build their careers and to observe this process in different economic periods. Few data sets exist that can fulfill both functions. We make use of two cohorts from the National Longitudinal Surveys (NLS). The first is the National Longitudinal Survey of Young Men (NLSYM): this nationally representative sample of young men was first interviewed in 1966, tracked until 1981, and reinterviewed yearly in...

  7. Chapter 3 The Transition into the Labor Market
    (pp. 42-63)

    A descriptive comparison of our two cohorts of young workers—in how they acquire education, make the transition into the labor market, and accumulate work experience in different industries and occupations—allows a broad overview of how the labor market has changed over the past three decades. Clearly, one could write a book on any of these topics alone. Our purpose here is to lay the groundwork for later analyses and to identify key compositional shifts that will need to be taken into account. Some of the trends we document will be familiar, such as deindustrialization and the rising rates...

  8. Chapter 4 Rising Job Instability
    (pp. 64-87)

    When theNew York Timesran its eight-part series on the downsizing of America several years ago, the response was overwhelming (Louis Uchitelle and N.R. Kleinfield. March 3, 1996. “On the Battlefield of Business, Millions of Casualties.”New York Times, 11). Flooded with letters, the newspaper set up an Internet site to accommodate the need for more information and for people to share similar experiences of being reengineered and restructured. Other media followed suit, reporting on downsizing in their local communities but also commenting on theTimesarticles themselves. The series clearly captured a strong anxiety in the national psyche...

  9. Chapter 5 The Short-Term Consequences of Instability
    (pp. 88-109)

    One of the empirical “facts” to emerge from labor economics is that changing jobs early in the career is highly beneficial, yielding more short-term wage growth than staying put with one employer. It is important to appreciate the influence of these early years. The majority of lifetime wage growth occurs during the first ten years in the labor market. For white men, the figure is roughly three-quarters (Murphy and Welch 1990). So to a large and sobering extent, what happens early in workers’ careers determines where they will end up over the long run; trajectories of upward mobility are set...

  10. Chapter 6 Declines in Long-Term Economic Mobility
    (pp. 110-149)

    We have now documented a series of marked differences between the two cohorts of young workers—in terms of smooth entry into the labor market, the likelihood of early unemployment, the amount of job instability experienced, and the short-term returns to job changing. These findings strongly suggest that we should expect to see a cumulative impact on wages over time.

    This chapter focuses on the long-term profiles of wage growth that these young workers achieve over the sixteen-year survey period. Wage growth is perhaps the most fundamental measure of a successful career, and it lies at the heart of the...

  11. Chapter 7 The Growth in Low-Wage Careers
    (pp. 150-172)

    The analyses in this book have cast a wide net, analyzing labor market trends across a broad spectrum of workers. Along the way, we have paid attention to differences by education, work experience, occupation, and other dimensions that determine who succeeds and who does not. Yet on the whole our interest has been in documenting how the morphology of the entire labor market has changed, from top to bottom.

    Events over the past few years, however, suggest that a more specific focus is needed as well. The advent of welfare reform and its “work first” policies are shifting the attention...

  12. Chapter 8 Policies to Restore the American Dream
    (pp. 173-199)

    This is a book about what has happened to economic mobility during the past thirty years of economic restructuring. Some parts of this picture have already been drawn by others. On one side are the well-documented changes in labor market structure. The “new economy” has been shaped by a long-term shift from manufacturing to service industries and by more recent changes in employment relations at the firm level. On the other side are the equally well documented changes in worker outcomes. There has been a long secular decline in median wages for men, and wage inequality has increased sharply for...

  13. Appendix A Variable Definition and Construction
    (pp. 200-209)
  14. Appendix B Validation and Attrition Analysis for Job Change Measure
    (pp. 210-216)
  15. Appendix C Relative Distribution Methods
    (pp. 217-221)
  16. Appendix D Permanent Wage Estimation
    (pp. 222-228)
  17. Notes
    (pp. 229-244)
  18. References
    (pp. 245-258)
  19. Index
    (pp. 259-267)