Functions of LMIs

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Functions of LMIs

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1.

2. Functions of LMIs

3. Create a picture of the labor market landscape, including relative volatility Research Tasks

4. Understand the nuances of LMIs, categorizing and gauging roles Research Tasks

5. Calculate the prevalence of LMI use and analyze the work and search experience Research Tasks

6. Recommend policy approaches targeted at less advantaged workers Research Tasks

7. Data Analysis: Volatility, LMI Incidence and Services Mention methodology of surveyMention methodology of survey

8. Labor Market Volatility UI system data 1992-99: quarterly earnings and job holding patterns Wisconsin vs. California: higher job stability (percent of jobs that persist from one quarter to next) longer job durations greater individual upward earnings mobility (change in position in earnings distribution from 1992 to 1999) Data analysis is conducted for all establishments in all of California and Wisconsin and for single-site establishments only in Santa Clara County and for the Milwaukee Metro area. Our analysis of single vs. multi-site establishment data suggests that on these measures the single-site establishment data is close to being representative of all establishments. Data confirm magnitudes measured in our survey for mean number of jobs held in a three-year period (1.9 and 1.7 from our survey for SV and Mil respectively) and for the mean duration of a job (7.9 quarters and 10.2 quarters for SV and Mil respectively). UI data suggest possibly more multiple job holding in Wisconsin than in California (measured as the number of jobs held in a three-year period). Exceptions: job stability data is temp help services industry jobs which are more stable in California than Wisconsin. This might be do to a different industry or occupation mix. Clearly higher labor market volatility in California, but this extra churning does not translate into higher individual upward earnings mobility; quite the contrary. Data analysis is conducted for all establishments in all of California and Wisconsin and for single-site establishments only in Santa Clara County and for the Milwaukee Metro area. Our analysis of single vs. multi-site establishment data suggests that on these measures the single-site establishment data is close to being representative of all establishments. Data confirm magnitudes measured in our survey for mean number of jobs held in a three-year period (1.9 and 1.7 from our survey for SV and Mil respectively) and for the mean duration of a job (7.9 quarters and 10.2 quarters for SV and Mil respectively). UI data suggest possibly more multiple job holding in Wisconsin than in California (measured as the number of jobs held in a three-year period). Exceptions: job stability data is temp help services industry jobs which are more stable in California than Wisconsin. This might be do to a different industry or occupation mix. Clearly higher labor market volatility in California, but this extra churning does not translate into higher individual upward earnings mobility; quite the contrary.

9. Survey Methodology Random-digit-dialing telephone survey. Over-sampling of low-income prefixes. Respondents active LM participants, ages 25 and over. N=1,348 (659 in Milwaukee and 689 in Silicon Valley) Questions: job search experience, experience with LMIs, job characteristics, demographics, human capital and social networks.

10. Survey Methodology (cont?d) Survey questions distinguish between the following types of intermediaries: Temp Agencies, Non-profit, Government and Community-Based Organizations, Unions, Professional and Membership Associations, Community and Technical Colleges and Private Vocational Schools Note: difficulty for respondents in distinguishing between LMI types led to our basic definition of incidence: how did you find any job that you held in the last 3 years.Note: difficulty for respondents in distinguishing between LMI types led to our basic definition of incidence: how did you find any job that you held in the last 3 years.

11. This is our broadest measure of incidence, and is much higher than expected, with 26% in SV and, surprisingly, 29% in Milwaukee. Measure is higher in Milwaukee than in SV due to greater use of NP/Gov/CBOs (W2 influence) and community/technical colleges. In SV more jobs are found via personal contacts and the Internet (not shown here). We also have 2 other more limited measures of incidence, but both are also considerably higher than expected. -- the percent of CURRENTLY HELD jobs that are obtained through an LMI -- the 2nd is the percent of jobs begun in the last 3 years that were obtained through an LMI. -- These figures range from 13 to 22% in the two regions. [Compare with other measures from other studies.] Note: in cases of multiple LMI use, measure reflects most recently used LMI.This is our broadest measure of incidence, and is much higher than expected, with 26% in SV and, surprisingly, 29% in Milwaukee. Measure is higher in Milwaukee than in SV due to greater use of NP/Gov/CBOs (W2 influence) and community/technical colleges. In SV more jobs are found via personal contacts and the Internet (not shown here). We also have 2 other more limited measures of incidence, but both are also considerably higher than expected. -- the percent of CURRENTLY HELD jobs that are obtained through an LMI -- the 2nd is the percent of jobs begun in the last 3 years that were obtained through an LMI. -- These figures range from 13 to 22% in the two regions. [Compare with other measures from other studies.] Note: in cases of multiple LMI use, measure reflects most recently used LMI.

12. LMIs & Disadvantaged Workers Compared with their higher-income, more educated, white counterparts? In Milwaukee: Disadvantaged workers are MORE likely to use temp agencies, and LESS likely to obtain work through unions. In Silicon Valley: Disadvantaged workers are LESS likely to use temp agencies and MORE likely to use unions. In Both Places: Disadvantaged workers are MORE likely to use nonprofit and government agencies, and LESS likely to use vocational/community colleges or professional and membership associations. LMI use in the two regions has somewhat different characteristics. In particular, Temp Agencies in Milwaukee are employing primarily the most disadvantaged population. In Silicon Valley, Temp Agencies are serving a higher-skilled clientele and the most disadvantaged population is being served by the nonprofit/govt sector. In Silicon Valley 31.8% of those going to Temp Agencies were doing so in order to get a better job, while this is true for only 18.8% of those using Temp Agencies in Milwaukee. The same comparison holds for ?Other LMIs? (colleges, unions, professional and membership associations), which appear to be more an agent of positive change in Silicon Valley than a last resort. Similarly, the higher level of ?Other Reasons? in Milwaukee for Temp Agencies and Other LMIs is primarily due to ?Needed 2nd Job? and ?Financial Reasons?. The higher level of ?Other Reasons in Silicon Valley Nonprofits is ?Recruited?. Why incidence is higher in Milwaukee: -- concentrated poverty -- ease in targeting needy population; -- failed public responses and pressure to make the welfare-to-work connection, providing transportation and information; -- preponderance of temp use in manufacturing in Mil. LMI use in the two regions has somewhat different characteristics. In particular, Temp Agencies in Milwaukee are employing primarily the most disadvantaged population. In Silicon Valley, Temp Agencies are serving a higher-skilled clientele and the most disadvantaged population is being served by the nonprofit/govt sector. In Silicon Valley 31.8% of those going to Temp Agencies were doing so in order to get a better job, while this is true for only 18.8% of those using Temp Agencies in Milwaukee. The same comparison holds for ?Other LMIs? (colleges, unions, professional and membership associations), which appear to be more an agent of positive change in Silicon Valley than a last resort. Similarly, the higher level of ?Other Reasons? in Milwaukee for Temp Agencies and Other LMIs is primarily due to ?Needed 2nd Job? and ?Financial Reasons?. The higher level of ?Other Reasons in Silicon Valley Nonprofits is ?Recruited?. Why incidence is higher in Milwaukee: -- concentrated poverty -- ease in targeting needy population; -- failed public responses and pressure to make the welfare-to-work connection, providing transportation and information; -- preponderance of temp use in manufacturing in Mil.

13. Temp Agencies clearly provide far fewer services than other LMIs. Agency profiles are roughly comparable across regions, although Silicon Valley nonprofit/govt agencies seem to provide a somewhat richer portfolio of services than their Milwaukee counterparts. ?Other LMI? results (not shown here) are comparable to NP/Gov results. We also measure intensity of LMI contact, easured as: length of ongoing contact with LMI, whether training led to a certificate or diploma,whether training was helpful in finding a job, or amount of time spent in classes or training. Intensity is minimal for those using temp agencies, but quite rich for those using all other types of intermediaries. We also have self-reported measures of satisfaction with LMI services (such as ?LMI helped me obtain a more stable job?, ?better working conditions?, ?better career opportunities?, ?higher wage?, ?better medical coverage?). By these measures Temp Agencies score higher than expected (around 30%), but much lower than all other types of LMIs (for whom these measures are 50-60% and sometimes higher). Temp Agencies clearly provide far fewer services than other LMIs. Agency profiles are roughly comparable across regions, although Silicon Valley nonprofit/govt agencies seem to provide a somewhat richer portfolio of services than their Milwaukee counterparts. ?Other LMI? results (not shown here) are comparable to NP/Gov results. We also measure intensity of LMI contact, easured as: length of ongoing contact with LMI, whether training led to a certificate or diploma,whether training was helpful in finding a job, or amount of time spent in classes or training. Intensity is minimal for those using temp agencies, but quite rich for those using all other types of intermediaries. We also have self-reported measures of satisfaction with LMI services (such as ?LMI helped me obtain a more stable job?, ?better working conditions?, ?better career opportunities?, ?higher wage?, ?better medical coverage?). By these measures Temp Agencies score higher than expected (around 30%), but much lower than all other types of LMIs (for whom these measures are 50-60% and sometimes higher).

14. Services to Disadvantaged Workers The level of services provided by temp agencies to advantaged and disadvantaged workers are largely equivalent. The level services provided by other kinds of intermediaries is distinctly higher for disadvantaged workers than for their more advantaged counterparts, probably indicating that disadvantaged workers are tapping into a different set of organizations. Non-temp agencies are far more responsive as a group to the needs of disadvantaged workers than are temp agencies.Non-temp agencies are far more responsive as a group to the needs of disadvantaged workers than are temp agencies.

15. Wage Outcomes In both regions, disadvantaged workers who use other intermediaries have a wage advantage over those using temp agencies or no intermediary at all. These results hold in a multivariate setting as well.These results hold in a multivariate setting as well.

16. Benefit Outcomes Jobs from other LMIs are more likely than jobs from temp agencies to include: health insurance coverage, pension coverage, or job training. This is true for advantaged and disadvantaged workers. These results also hold in a multivariate setting.These results also hold in a multivariate setting.

18. Summary LMI incidence rates are higher than expected, and more than half of LMI use is temp agencies. Higher LMI usage in Milwaukee than SV. LMIs (and the role of temp agencies) are not just a response to the volatility of the ?new economy?, but are endemic. Temp agencies are playing a different (bottom-feeding) role in Milwaukee. In Silicon Valley they are somewhat more of a ?white-collar? phenomenon.

19. Summary (continued) Disadvantaged workers rely disproportionately on temp agencies, especially in Milwaukee. Compared with other LMIs, temp agencies: provide far fewer support services , provide less intensive services, generate less worker satisfaction, place workers in jobs with fewer benefits, and place disadvantaged workers in lower wage jobs. Other LMIs (nonprofit and government, unions, community colleges and membership associations) are more responsive to the needs of disadvantaged workers.

20. Survey Analysis: Social Capital

21. Increasing interest in social capital, with focus on how social networks affect employment search and success Notion that social networks might be especially important for poor with less efficacious networks Social Capital

22. Define social connectedness as a composite of meetings attended, tendency to communicate with friends or relatives, individuals identified for hypothetical job search, and internet use for communication Defining Social Capital

23. Socially Connected by Region

24. Social Connection Gender and Region

25. Social Connection Race and Region

26. Social connectedness is negatively correlated with use of an LMI Of those using LMIs, social connectedness is correlated with use of a non-temp or ?better? LMI Basic Findings

27. Percent LMI Users By Socially Connected

28. General: Minorities more likely to use LMIs in both regions More educated more likely to use LMIs in Silicon Valley Job hoppers more likely users in both regions Multivariate Results

29. Gender: Run separately, social capital is significant for both men and women, with nearly the same coefficient size, in reducing probability of LMI use Race: Less significant effect for whites in the Silicon Valley, almost three times size effect for Latinos Gender and Race Regressions

30. Temp Vs. No-Temp

31. General: Less work experience, more likely to use temps Latinos less likely to use temps in Silicon Valley English-limited are more likely to use temps in Milwaukee Job hoppers are more likely to use temps in both regions Multivariate Results

32. Low Income: For respondents living in low income prefixes, social connectedness does not reduce the probability of LMI use Low-Income Neighborhoods

33. Social capital does yield information about jobs and LMI quality ?Quality? of social capital is low (in terms of economic outcomes) in poorer neighborhoods Basic Implications

34. Intermediary Landscape Analysis: Meeting the Market Again, two types of things that intermediaries can do: 1. Job placement and training: -> supply side 2. Changing the quality of jobs -> demand side Historically, it?s been government regulations and in some industries unions that have fulfilled this function (e.g. FLSA, OSHA, prevailing wage, industry regulation) But as we see weakening of the traditional employment relationship, and decline in government regulation and union power, can intermediaries take up some of the slack? Again, two types of things that intermediaries can do: 1. Job placement and training: -> supply side 2. Changing the quality of jobs -> demand side Historically, it?s been government regulations and in some industries unions that have fulfilled this function (e.g. FLSA, OSHA, prevailing wage, industry regulation) But as we see weakening of the traditional employment relationship, and decline in government regulation and union power, can intermediaries take up some of the slack?

35. Qualitative Methodology Focus groups to identify issues and nominate typical agencies 2-3 Cases in each of five categories For-Profit Membership Based Public Agencies CBO/Non-Profit Community/Technical Colleges Interviews with staff & multiple clients Focus on disadvantaged workers Total of 22 LMIs and 146 Interviews

36. Jobs, Good Jobs or Careers? Job matching services: Outreach Assessment Training On-the-job Help Support services Career services: Intimate industry knowledge Building worker networks Advanced/Lifelong Training Use example of Out-reach: Strong to both low and middle levels of labor market. Surprisingly Private sector good on outreach, membership based narrow but deep, public-sector?limited. On-the-job help?best practice is regular and extensive?biggest gap in all three!!! Building worker networks: strengthening and expanding existing networks?private and public sector minimal, with membership strong. Use example of Out-reach: Strong to both low and middle levels of labor market. Surprisingly Private sector good on outreach, membership based narrow but deep, public-sector?limited. On-the-job help?best practice is regular and extensive?biggest gap in all three!!! Building worker networks: strengthening and expanding existing networks?private and public sector minimal, with membership strong.

37. Obstacles to Best Practices

38. Important Overall Findings Problems: Many clients unable to distinguish between different intermediaries. Job focused, not career. Short-term relationship drive poor job record and lack of highly valued services. Fragmentation, lack of coordination, duplication of services.

39. Important Overall Findings Promising Practices: Occupation/industry focused Long-term relationship building Formal & informal training, and OJT learning Rooted in membership-based LMIs and/or networks of LMIs including community colleges

40. Intermediary Landscape Analysis: Making the market? Again, two types of things that intermediaries can do: 1. Job placement and training: -> supply side 2. Changing the quality of jobs -> demand side Historically, it?s been government regulations and in some industries unions that have fulfilled this function (e.g. FLSA, OSHA, prevailing wage, industry regulation) But as we see weakening of the traditional employment relationship, and decline in government regulation and union power, can intermediaries take up some of the slack? Again, two types of things that intermediaries can do: 1. Job placement and training: -> supply side 2. Changing the quality of jobs -> demand side Historically, it?s been government regulations and in some industries unions that have fulfilled this function (e.g. FLSA, OSHA, prevailing wage, industry regulation) But as we see weakening of the traditional employment relationship, and decline in government regulation and union power, can intermediaries take up some of the slack?

41. Questions To what extent are intermediaries changing the labor market itself? What are the different models for doing so? What are the net effects on the quality of jobs? Reiterate: Focused on LMIs that deal with workers without college degrees -- this is where the problems of job quality are. And where the question of impact on jobs is most important. Reiterate: Focused on LMIs that deal with workers without college degrees -- this is where the problems of job quality are. And where the question of impact on jobs is most important.

42. Finding 1 Most intermediaries do not fundamentally affect the organization of work or the quality of jobs being created One-Stop Centers, community colleges, welfare-to-work agencies, CBOs, and professional associations are usually limited by: Restrictions that come with main funding (i.e. WIA) Lack of scale Lack of industry-based training and certification in US Narrow mission 1. Even just placement & training, and trying to improve individual outcomes, is incredibly hard. Many LMIs recognize the problem of bad jobs, and many are increasingly working with employers, but can?t even begin to think about trying to change job quality. Even when there?s direct employer connection (i.e. community college contract training). Limits: all placement, all the time, makes it hard to compete on basis of quality workers Tons of small org. reinventing the wheel, don?t have scale to get clout No structures (a la Europe) of collaboration with employers on training and especially certification, which would be potential source of leverage 1. Even just placement & training, and trying to improve individual outcomes, is incredibly hard. Many LMIs recognize the problem of bad jobs, and many are increasingly working with employers, but can?t even begin to think about trying to change job quality. Even when there?s direct employer connection (i.e. community college contract training). Limits: all placement, all the time, makes it hard to compete on basis of quality workers Tons of small org. reinventing the wheel, don?t have scale to get clout No structures (a la Europe) of collaboration with employers on training and especially certification, which would be potential source of leverage

43. Finding 2 But there are three types of intermediaries that (in some cases) have had a lasting impact on job quality Temp agencies Union-based initiatives Alternative temp agencies

44. Temp agencies Two effects: Simply by existing, temp agencies have an impact on the distribution of job quality The availability of cheap temp workers creates incentive to pursue low-road business models Once you start, it?s hard to stop ? organizational inertia takes over, cementing the practice First is indirect effects: Packing and delivery firm: short cycle jobs, intense labor. At competitor firm these are temp jobs (and in general is one of the big temp occupations), but firm is unionized and so they?re permanent part-time. Are also working hard to figure out how to make them full-time, by creating a ?combination? job, which is mix of packaging and admin. Work, in order to retain workers. Story of financial services firm that looked at computer and was surprised at how many temp workers they had Net effect? To the extent that the lowering of labor costs is still one of the main motivations for using temp workers (and occupational and wage distributions of temp workers suggest that it is), likely a net negative Also, spill-over onto other intermediaries: temp agencies cream, forcing unskilled workers toward public agencies First is indirect effects: Packing and delivery firm: short cycle jobs, intense labor. At competitor firm these are temp jobs (and in general is one of the big temp occupations), but firm is unionized and so they?re permanent part-time. Are also working hard to figure out how to make them full-time, by creating a ?combination? job, which is mix of packaging and admin. Work, in order to retain workers. Story of financial services firm that looked at computer and was surprised at how many temp workers they had Net effect? To the extent that the lowering of labor costs is still one of the main motivations for using temp workers (and occupational and wage distributions of temp workers suggest that it is), likely a net negative Also, spill-over onto other intermediaries: temp agencies cream, forcing unskilled workers toward public agencies

45. Temp agencies, continued? But in addition, temp agencies are increasingly affecting job quality directly: by running entire departments ?on premise? with temp workers by consulting on work reorganization, outsourcing, and financial and legal decisions Second is more direct effect: 1. ?on-premise?: agency takes over running of part of the operation. Staffs the entire department, has full responsibility for production, performance, advertising, and all HR functions. Workers are on agency?s payroll -- in one version, workers had been working under that arrangement for 12 years. Agency may even become ?master vendor? 2. Consulting: of particular concern is consulting on how to reorganize production and the workplace in order to cut costs. Sometimes the solutions create better jobs, sometimes not. In one case, temp agency advised increasing wages and work hours and doing more training in order to reduce turnover. In another case, agency was frustrated at having to find 25 workers a week for such low-wage jobs, but couldn?t convince the employer to increase wages. But said ?it?s not for us to say that the company shouldn?t be paying the minimum wage.? --> So not a simple picture. But from our conversations, would be difficult to predict net positive impact on jobs. It?s the inherent problem that company is the client, and that the profit of the temp agency is dependent on the client?s performance, narrowly defined. Second is more direct effect: 1. ?on-premise?: agency takes over running of part of the operation. Staffs the entire department, has full responsibility for production, performance, advertising, and all HR functions. Workers are on agency?s payroll -- in one version, workers had been working under that arrangement for 12 years. Agency may even become ?master vendor? 2. Consulting: of particular concern is consulting on how to reorganize production and the workplace in order to cut costs. Sometimes the solutions create better jobs, sometimes not. In one case, temp agency advised increasing wages and work hours and doing more training in order to reduce turnover. In another case, agency was frustrated at having to find 25 workers a week for such low-wage jobs, but couldn?t convince the employer to increase wages. But said ?it?s not for us to say that the company shouldn?t be paying the minimum wage.? --> So not a simple picture. But from our conversations, would be difficult to predict net positive impact on jobs. It?s the inherent problem that company is the client, and that the profit of the temp agency is dependent on the client?s performance, narrowly defined.

46. Union-based intermediaries Several different approaches: Sectoral partnerships Hiring halls The logic here is to convince employers to pursue a high-productivity, high-wage model, with a combination of carrots and sticks Cursory summary of examples: 1. WRTP: cursory summary 2. Hiring halls, largely in building trades. Noteworthy: short-term, project-based industry. Carrots: Pooled training and health insurance funds Resources for plant modernization and work reorganization Benchmarking and industry standards Political voice Sticks: Union power Governmental regulation (prevailing wage, responsible contractor laws) The logic here is that the intermediary provides collective solutions to problems that single firms can?t afford or devise on their own, with the price tag of good wages and benefits, job security, and career ladders. Net impact on jobs good: The hiring hall structures are of course singular: skilled workers, high union density, long-standing employer associations. Note that especially the hiring hall model is very much dependent on regulatory structures -- Taft-Hartley training and benefit funds, closed shop requirements Even partnership intermediaries like the WRTP (and hotel and health examples) are singular. Large, mature organizations that depend significantly on union power and that have also managed to pull off the incredibly difficult job of herding employers, unions, community colleges, PICs, CBOs, and complex funding streams. Replication seems daunting, something we should return to later. Still, lesson is that you can have intermediaries which have positive impact on job quality Cursory summary of examples: 1. WRTP: cursory summary 2. Hiring halls, largely in building trades. Noteworthy: short-term, project-based industry. Carrots: Pooled training and health insurance funds Resources for plant modernization and work reorganization Benchmarking and industry standards Political voice Sticks: Union power Governmental regulation (prevailing wage, responsible contractor laws) The logic here is that the intermediary provides collective solutions to problems that single firms can?t afford or devise on their own, with the price tag of good wages and benefits, job security, and career ladders. Net impact on jobs good: The hiring hall structures are of course singular: skilled workers, high union density, long-standing employer associations. Note that especially the hiring hall model is very much dependent on regulatory structures -- Taft-Hartley training and benefit funds, closed shop requirements Even partnership intermediaries like the WRTP (and hotel and health examples) are singular. Large, mature organizations that depend significantly on union power and that have also managed to pull off the incredibly difficult job of herding employers, unions, community colleges, PICs, CBOs, and complex funding streams. Replication seems daunting, something we should return to later. Still, lesson is that you can have intermediaries which have positive impact on job quality

47. Alternative temp agencies Logic: In the absence of union density, employ the market to improve the market Vehicle: High-road temp agency that provides quality workers to firms and good jobs to workers Compete away the low-road agencies Set an example for the employers themselves Seems an intuitive model, and especially in the 1990s, many CBOs tried it. But many floundered. We saw examples in Milwaukee of non-profits trying to be temp agency, and it?s tough. Very competitive industry, margins are thin, and especially small entrants have a tough time making it. They also ran into the problem that their mission is to help disadvantaged workers, but their survival depends on delivering skilled workers. Seems an intuitive model, and especially in the 1990s, many CBOs tried it. But many floundered. We saw examples in Milwaukee of non-profits trying to be temp agency, and it?s tough. Very competitive industry, margins are thin, and especially small entrants have a tough time making it. They also ran into the problem that their mission is to help disadvantaged workers, but their survival depends on delivering skilled workers.

48. Working Partnerships version Three-piece strategy: High-road temp agency to set standards for the industry Temp worker association to lobby for standard-setting legislation Quality training for association members Working Partnerships is pursuing the model somewhat differently: The legislation piece here is really key: code of conduct for the industry (solid wages, basic rights, rapid access to health insurance), and responsible contractor-type laws, whereby public agencies only use temp firms that sign the code of conduct. [UPDATES?] Lesson: you need the sticks -- industry regulation -- as well as the alternative agency (carrot). The training is key as well, since WP ran into the same problem as other alternative agencies, that not all of their target workers were ready for skilled or semi-skilled placements. Net effect: Still early in the game? Working Partnerships is pursuing the model somewhat differently: The legislation piece here is really key: code of conduct for the industry (solid wages, basic rights, rapid access to health insurance), and responsible contractor-type laws, whereby public agencies only use temp firms that sign the code of conduct. [UPDATES?] Lesson: you need the sticks -- industry regulation -- as well as the alternative agency (carrot). The training is key as well, since WP ran into the same problem as other alternative agencies, that not all of their target workers were ready for skilled or semi-skilled placements. Net effect: Still early in the game?

49. Lessons Intermediaries can have both good and bad effects on job quality -- the latter tend to come from the market and are currently winning out This is partly the result of government failure Intermediaries who try to have a positive effect on job quality are facing enormous challenges Success depends on the extent to which the intermediary can bring both incentives and pressures to bear on employers Obvious point, but important. On balance, the market seems to be producing low-road intermediaries. And is continuing to do so, in new forms (NYC store-front employment brokers) Failure to solve labor market problems helped to create space for temp agencies (Milwaukee: busing) Decline of minimum wage opened door for low-road intermediaries ?Work first? focus means public agencies can?t compete on quality Unwillingness to regulate temp agencies 2. LEVERAGE LEVERAGE LEVERAGE - Unions of course - Governmental regulation: it?s telling that WRTP lobbies for WAA money, that WPUSA lobbies for code of conduct and responsible temp agency rules, Taft-Hartley for hiring halls Obvious point, but important. On balance, the market seems to be producing low-road intermediaries. And is continuing to do so, in new forms (NYC store-front employment brokers) Failure to solve labor market problems helped to create space for temp agencies (Milwaukee: busing) Decline of minimum wage opened door for low-road intermediaries ?Work first? focus means public agencies can?t compete on quality Unwillingness to regulate temp agencies 2. LEVERAGE LEVERAGE LEVERAGE - Unions of course - Governmental regulation: it?s telling that WRTP lobbies for WAA money, that WPUSA lobbies for code of conduct and responsible temp agency rules, Taft-Hartley for hiring halls

50. Putting the Lessons in Practice: Reflections on Strategy and Policy for Disadvantaged Workers

51. LMIs: Strategic Intervention or Diversion? LMIs do provide useful services that employers and worker want They are likely to be a growing part of future labor markets BUT, there are real questions whether LMIs can be changed to play a significant role in meeting worker needs

52. LMI Policy Implications Improving LMI Practice: Can public policy help LMIs become a vehicle for increasing worker power, or improve LMIs ability to meet specific workers? needs? If not, how can public policy help improve conditions for workers despite LMI activity? Potential outcomes of best practice: Is there any realistic hope of them achieving significant scale? Blocking the low-road: How much emphasis on constraining temp agencies? Prevention of perma-temping Wage and benefit standards Taxation of temporary agencies

53. Strategy and Policy Manufacturing + Concentrated Poverty = An LMI lesson for the Midwest? On the difficulty and necessity of getting definitions right The dominance of the market metaphor, and the need to move beyond it Leverage leverage leverage: now and into the future

54. Concentrated Poverty and For Profit Intermediaries Concentrated poverty and high mfg. share of jobs may push up disadvantaged temp incidence throughout the Midwest May be especially important to think about standard setting for temp agencies that work in concentrated poverty areas (from day labor on through more ?legit? operations)

55. Definitions: ?I got my job from UMOS, the temp agency.? From the research perspective, lots of distinctions, not just between, but even within groups From worker perspective distinctions fade into thin air From employer perspective temp agencies are thing, the public sector a giant morass

56. So What? Desire to design good policy, or even decent description rests on our ability to meaningfully identify this stuff. ?Intermediaries? writ large are not a meaningful target. Even identifying the strength of the relationships with workers and firms isn?t sufficient for understanding the quality of the effect. Research and policy design hinges on our ability to get standards and accountability right, more than our ability to identify and bless some intermediary forms over others.

57. Market Metaphors: ?Take my client for a test drive? From CBO to One Stops, retail metaphors and strategies dominate the approach to intermediation Why? Rise of temp agencies and ?dual customer? focus of the public WD system A ?high functioning? intermediary hires people with a lot of friends in HR departments.

58. So What? The intermediary cares only about the first connection to the job The intermediary only understands or relates to entry-level positions (with no knowledge of futures, etc. in the company) Intermediaries jealously guard ?their? clients, and do not cooperate with others who might offer referrals etc. The result is a uncoordinated system, where each LMI develops similar capacities, and (usually randomly and idiosyncratically) connections to HR departments.

59. Intermediating Intermediaries If you want a focus on career advancement and family supporting wages, you need to build coordination between various LMIs Get closer to real capacities of CBOs and public agencies: everybody does what they do best Get a system that delivers higher quality jobs to more people

60. The WRTP: Intermediating Intermediaries

61. Leverage leverage leverage Labor market power does not result from only good job connections (alternatively, just connecting folks with jobs doesn?t really improve job quality) Labor market power comes from leverage Political power Controlling/building skills Access to affordable benefits

62. Questions Public policy that helps support this agenda: flexibility and accountability in funding streams. How to build that? Public policy that doesn?t continue to fuel the rage of the market metaphor. How to build that? Policy that increases the leverage of intermediaries. Future directions?


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