Research Findings

The COIN project and rising between workplace inequalities

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September 10, 2020

Over the last few years an expanding group of social scientists, mostly sociologists, have been working under the banner of the Comparative Organizational Inequality Network (COIN). We have an intellectual center of gravity in inequality, organizations and economic sociologies, but we also include economists, management, and industrial relations scholars working at last count from sixteen countries.

Our network has been developing methods and theory to exploit the far reaching and exciting potential of linked employer-employee administrative data that is increasingly available from national governments. Sociology, since Jim Baron and Bill Bielby told us we should bring the firm back into studies of inequality, has been waiting for such rich data. In most countries we can track people within and between firms and know a lot about both people, their workplaces, and the network structure of labor market movement of people between workplaces.

In this post we describe one of our first and most ambitious papers, looking at the role of workplaces in national inequality trends using twenty years of administrative data from countries in North America, Scandinavia, Continental and Eastern Europe, the Middle East, and East Asia.

The paper is open access and the citation alone might catch your eye as unusual on two dimensions:

Donald Tomaskovic-Devey, Anthony Rainey, Dustin Avent-Holt, Nina Bandelj, István Boza, David Cort, Olivier Godechot, Gergely Hajdu, Martin Hällsten, Lasse Folke Henriksen, Are Skeie Hermansen, Feng Hou, Jiwook Jung, Aleksandra Kanujou-Mrčela, Joe King, Naomi Kodama, Tali Kristal, Alena Křížková, Zoltán Lippényi, Silvia Maja Melzer, Eunmi Mun, Andrew Penner, Trond Petersen, Andreja Poje, Mirna Safi, Max Thaning, Zaibu Tufail. “Rising between-workplace inequalities in high-income countries.” Proceedings of the National Academy of Sciences 2020. DOI: 10.1073/pnas.1918249117

That’s right there are 27 authors, with academic appointments in sixteen countries and four disciplines (Sociology, Economics, Business, and Industrial Relations). Also notable is that this paper was published in the Proceedings of the National Academy of Sciences, an unusual general science destination for a bunch of social scientists.

The paper has another distinction, in addition to focusing on the workplace generation of earnings inequalities, it does so with some very big data. Analyzing trends in fourteen countries over twenty year we explore more than a billion jobs-years in over 50 million workplace-years. You might say that “we brought the firm back in” – big time.

When we started out project it was already well documented that most of the steeply growing earnings inequalities in both the U.S. and Germany were between, rather than within, firms. We extended our investigation to include twelve more countries– Canada, Czechia, Denmark, France, Hungary, Israel, Japan, the Netherlands, Norway, Slovenia, South Korea, and Sweden, from the mid-1990s to the mid 2010s. We begin when these countries began to release linked employer-employee data and end with the most recent available years.

We have four big findings.

The first is that earnings inequalities are an order of magnitude higher in the US, Canada and Israel than in Norway, Sweden and Denmark.

Second, earnings inequalities among workers are not rising everywhere. Total inequality (measured as the variance in logged earnings) is rising in nine countries (Czechia, Denmark, Germany, Israel, the Netherlands, Norway, South Korea, Sweden, and the United States), declining in three (France, Hungary, and Slovenia), and relatively stable in two (Canada and Japan).

Third and for us the most striking finding is that in 12 of the 14 countries the organizational structure of production is shifting toward increasing between-workplace earnings inequalities. In all of those 12 countries this process is more pronounced in the private sector, but we also find rising between-workplace inequality in the public sector in eight countries.

Finally, we show that trends in both rising between- and within-workplace inequalities are closely aligned with weakening national labor market institutions, such as collective bargaining coverage and legal employment protections; institutions which, when strong, protect the bargaining power of employees relative to employers, especially low and medium-skilled workers.

Why should we care?

Most of our conceptual tools in sociology about organizational inequality focus on relationships within workplaces. But most of the action in many countries is now between workplaces.

The rise of super-star firms, like Amazon and Google, with the power to extract resources from both our households and other firms is one part of this story. The second part is the general tendency of big branded firms to outsource, subcontract, and franchise a great deal of the work to low wage employers and independent contractors while retaining their control of revenue streams.

The declining strength of unions and other labor market institutions has made it increasingly easier for employers to engage in these kinds of “fissuring” strategies.

The basis of economic exploitation is changing, and we sorely need the data, methods, and conceptualization to catch up.

The COIN network has an ambitious agenda including published and on-going studies on rising precarity in employment, increased segregation of the top 1% from the rest of their workforce, and the relative role of occupations, organizations and job in the production of earnings, gender and migration inequality, all in a comparative context. More to come!

Read more

Donald Tomaskovic-Devey, Anthony Rainey, Dustin Avent-Holt, Nina Bandelj, István Boza, David Cort, Olivier Godechot, Gergely Hajdu, Martin Hällsten, Lasse Folke Henriksen, Are Skeie Hermansen, Feng Hou, Jiwook Jung, Aleksandra Kanujou-Mrčela, Joe King, Naomi Kodama, Tali Kristal, Alena Křížková, Zoltán Lippényi, Silvia Maja Melzer, Eunmi Mun, Andrew Penner, Trond Petersen, Andreja Poje, Mirna Safi, Max Thaning, Zaibu Tufail. “Rising between-workplace inequalities in high-income countries.” Proceedings of the National Academy of Sciences 2020. DOI: 10.1073/pnas.1918249117

Image: Michael Sander via Wikepedia (CC BY-SA 4.0)

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