Research Findings

Should CEO pay rise with performance?


October 17, 2018

The median CEO pay in Standard and Poor’s 500 companies is about $10 million.  Many Americans think Chief Executive Officers (CEOs) are overpaid. Still, they underestimate how much CEOs are paid.

One recent study shows that many people in the U.S. support capping CEO pay at a maximum amount relative to the average worker. Not everyone thinks so, of course, but sizeable numbers of Democrats (66%), Republicans (52%) and Independents (64%) do.

While evidence of discontent with CEO pay continues to grow, we still know very little about why.

A challenge in the study of attitudes toward executive pay, as with the study of attitudes toward anything, is that people consider many factors in forming their attitudes and expressing their opinions. In the case of executive pay, these might include people’s perceptions of current pay levels, their perceptions about company performance, and their core values, among others.

My research examines one of the major determinants of attitudes toward pay: beliefs about whether and how rewards should rise with contributions.

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Research Findings

Are overeducated workers unhappy at work?

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October 15, 2018

Many people enter occupations that require about the same level of education as they have, but some people enter occupations where their level of education exceeds the required level.  Are these overeducated workers less happy with their work than other workers?  We sought to answer this question in our recent paper.

Since the 1950’s, social scientists have voiced concerns about overeducation, and the recent trend of bifurcation in the labor market (i.e., jobs coming to require either very high skills or very low skills) has intensified these concerns.  For the country as a whole, the presence of overeducated workers in the labor market indicates underutilization of worker skills, which in turn limits the country’s ability to achieve its economic potential.

For individual workers, overeducation may lower earnings and increase health problems.  Overeducation may also lower work satisfaction.

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Research Findings

The emotional labor of stand-up comedy


October 13, 2018

In the popular imagination, comedians live extreme and volatile lives.

A cursory knowledge of the careers of Lenny Bruce, Richard Pryor, John Belushi, and Sam Kinison is enough to tell us that stand-up is a world where occupational success often goes hand-in-hand with scandal, excess, and self-destructive behavior.

For most professional comedians, however, stand-up is extreme and volatile in another, more mundane sense: it involves insecure employment, short-term contracts, irregular patterns of work, and months or even years of unpaid labor.

Like other types of creative workers, such as musicians or actors, comedians are prepared to tolerate low wages and uncertain career prospects because they view their occupation as a labor of love. Making audiences double-up with laughter every night, so the theory goes, is meant to be its own reward.

But of course, stand-up is still a job, albeit one that is outside conventional 9-to-5 hours. So how do comedians earn a living on the stand-up circuit, especially when there are a hundred other gag merchants happy to work for free?

Recent research I conducted with my colleague Dimitrinka Stoyanova Russell, based on interviews with 65 full-time comedians in the UK, shows that finding work in stand-up is a complex emotional process.

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Research Findings

Union innovations in organizing young workers


October 10, 2018

Unions matter because they provide a voice for workers at their workplace and often in their communities, sectors and in the economy more widely. But in most countries, union membership is ageing rapidly which raises questions about who unions speak for and who they speak to.

By and large, unions recognize the challenges facing them and have been trying to address them for some time. This has led to many unions and activists experimenting with new ways of doing things in an effort to engage young workers.

What’s different about young workers?

Our research looked at some of those innovations in the USA, UK, Germany and France  and found that where initiatives were supported by the union, and were in sectors that had some history of bargaining, unions could be very effective at reaching out to young workers.

But it can be difficult to sustain these initiatives with the churn of activists and the precarious work that inevitably comes with working in some of the sectors targeted. Laws and restrictions on what unions do can also be a major hurdle. Nonetheless, our research suggests there is good reason to be optimistic that unions can target and represent young workers very effectively when they are open to new approaches.

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Research Findings

After the flood, the flood map: uncovering values at risk


October 8, 2018

Climate change is making the planet we inhabit a more dangerous place to live. After the devastating 2017 hurricane season in the U.S. and Caribbean, it has become easier, and more frightening, to comprehend what a world of more frequent and severe storms and extreme weather might portend for our families and communities.

When policymakers, officials, and experts talk about such threats, they often do so in a language of “value at risk”: a measurement of the financial worth of assets exposed to potential losses in the face of natural hazards. This language is not only descriptive, expressing the extent of the threat, it is also in some ways prescriptive.

Information about value and risk provides a way for us to exert some control, to “tame uncertainty” and, if not precisely predict, at least to plan and prepare prudently for the future. If we know the value at risk, we can take smart steps to protect it.

This logic can, however, break down in practice.

After Hurricane Sandy in 2012, I went to New York City to find out how residents there, particularly homeowners, were responding to a new landscape of “value at risk.” In the wake of the catastrophe, they had received a new “flood insurance rate map” that expanded the boundaries of the city’s high-risk flood zones.

129 billion dollars of property was now officially “at risk” of flood, an increase of more than 120 percent over the previous map.

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Research Findings

Do women board directors promote social responsibility?

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October 6, 2018

Last year the European Union began advocating for a quota system that requires companies to appoint women to at least 40% of their board seats. According to the EU commissioner for justice and gender equality, Vĕra Jourová, advancing women on boards is “good for business.”

Many countries in Europe—including Norway, Belgium, France, Italy, the Netherlands and Germany—have already imposed national quotas to mixed effect. In the U.S., where women fill only about 20% of corporate director roles, there is little talk of quotas even among advocacy groups. Yet firms face growing pressure to appoint more women to the boards from policy makers, women’s rights advocates and even large investors.

There are many reasons to advocate for greater diversity on corporate boards. Many investors believe that women improve performance, enhance a firm’s reputation and contribute to creativity and innovation.

Yet little is known about the impact of gender diversity on the board on corporate policy and practice—especially when it comes to corporate social responsibility.

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Research Findings

Do characteristics of secure work make workers feel secure?


October 3, 2018

Most people work because they need to provide shelter and sustenance for themselves and their families. These needs are not temporary or fleeting. For these workers, regular paychecks and health insurance are necessary features of their employment. Having stable and reliable employment is therefore of vital importance.

The formula seems simple. If workers have a job, they should feel more secure than those that don’t. Moreover, certain types of jobs are thought to be more secure than others (e.g., professionals versus retail workers). In reality, however, perceived insecurity is not a one-dimensional phenomenon.

Specifically, there are two major types of perceived insecurity: job insecurity and labor market insecurity.

Job insecurity refers to workers’ assessment of their likelihood of losing their job, whereas perceived labor market insecurity refers to workers’ assessment of their ability to find another job similar to their current position.

In a recent study I found that jobs which are widely viewed by society as secure are associated with lower levels of perceived job insecurity by job holders. However, that same type of work is mostly associated with higher levels of perceived labor market insecurity. How can this be? How can secure work precipitate insecurity?

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Research Findings

Do managers maximize efficiency?


September 29, 2018

The core of mainstream economics is rational choice theory. According to this theory, the guiding principle of human behavior and decision making is that individuals maximize their own self-interest.

Rational choice theory provides the foundation for the idea that for-profit businesses maximize profits and efficiency. Profit is the ultimate goal, but in a competitive market the surest way to maximize profits it to maximize the efficiency of the business.  Competitive discipline plus rational choice results in organizational efficiency.

As critics have long pointed out, rational choice theory is based on heroic assumptions: that individuals have perfect information and computerlike information processing capability, which are used to maximize utility. Economists justify maintaining these assumptions because rational choice models allegedly produce accurate predictions. (They don’t, but that’s another story.)

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Research Findings

Too many bachelor’s degrees for too few skilled jobs


September 26, 2018

People who earn post-secondary degrees have better lives than those who do not. They get better jobs, earn more money, are healthier, happier, and are more civically engaged.

In the popular imagination—and research literature—it is through education that people from poor backgrounds improve their socioeconomic status. Education is an essential part of the American meritocracy.

If you want to improve someone’s life, send them to college!

But everyone involved with higher education—and a large number of people outside of it—are aware of college graduates who are underemployed, or working in relatively low-skilled jobs. Jokes aside, about humanities majors working in restaurants, anyone who spends time around young adults knows some who struggle to find work commensurate with their education.

In a recent study, I found that more recent cohorts of college-educated adults are struggling to find high-skilled jobs. There are too many college graduates for too few skilled jobs.

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New book

Rock stars are made, not born


September 24, 2018

Have you ever wondered how some men and women muster the courage to pursue careers in rock music, despite the fact that so few of them will actually “make it”? Or have you questioned why some individuals would intentionally choose a path that will undoubtedly be filled with struggle, miniscule economic payoff, and a slim chance of success?  

Sure, once musicians get to the level of fame of R.E.M., Nirvana, or The White Stripes, it all seems worth it. But what about the countless other musicians who don’t attain such levels of success? Why would they commit to such seemingly irrational choices? In my new book, I attempt to answer these and a host of related sociological questions. Continue Reading…