A Research Area

Here is one issue that has been brewing in my mind as subject of future study. As some of you know, I'm switching over to sociology - specifically organizational, economic, and political sociology - and these questions come from there. Though, as you will see, the philosopher in me is not gone.

There is a practice among (some?) large corporations to cut wages and benefits through what I'm going to initially call wage-adjustment lag. Primarily, this lag process confounds the typical pay raise system which increases a worker's wage the longer they work and the more responsibilities they take over. Empirically, there are a number of forms of development lag that I've come across so far.

1. Innovative Distribution: The first is exemplified by the writers' strike which exposed a key residuals issue in the new media economy. The question is whether/how much writers should receive in residuals for profit made on their programs via the internet, cell phones, and other new media. In general, this is an issue of extending traditional/legitimate/expected forms of compensation (residuals) to new commercial practices. The Alliance of Motion Picture and Television Producers (AMPTP) directly represent the producers who don't want bigger budgets, since they are responsible for maintaining the bottom line. Some form of compensation was offered in recent negotiations. Wikipedia cites the writers' demand at 2.5% of producer's gross revenue while the studio's proposed a structure similar to DVD residuals (at $.02/DVD now). As it seems now, the writers will get some residuals from the new media economy. HOWEVER, the fact that they were not receiving anything before demonstrates that this lag occurs and that it may take unionization to fix it. Innovative distribution capitalizes on new channels to profit from old commodities. In this case, wage-adjustment lag is created when those who are normally paid per item sold are being paid less or nothing for new kinds of sales.

2. Atomized contracting: The second wage-adjustment lag has to do with temporary or project-based contracts. These contracts define the worker's benefits, responsibilities, deadlines, and such over the course of a single project or period. The lag comes in when these contracts end. This example comes from a retired employee of a major cell phone company who worked on a traditional life-time schema which incorporates pay raises, long-term benefits, and retirement planning. In the last years of his employment, many of the new hires were signed on using these project-based contracts. According to him, once the contracts expired (2-5 years), workers could sign another with the same conditions (pay, benefits, responsibilities) adjusted to the project. Typically, these new contacts did not generate the same pay-raise scheme as the life-time schema. What we have here is a lag which challenges one justification for pay raises - that one is more valuable to the company the longer one is employed there.

3. General Issue: The self-interest-based logic of profit-sharing which defines more formalized American business generates the Marxist analysis of class conflict: those with control over the means of production will marginalize the payout they give to the workers using those means to generate profitable commodities. Marx's Capital offers case studies and in-depth analysis of numerous techniques through which producers short-change workers. Wage-adjustment lag can be added to the list. In the first case, unionization is operating to thwart the leverage of controlling the means of production. It can do this because it represents a necessary component of the industry and utilizes an industry-wide contract. In the second case, there is no union and seemingly no way for these workers (computer programmers) to ensure better wages beyond being a labor market. In both cases, it does not seem that those who control the means of production have any interest in ensuring better compensation for their workers. In neither case do the controllers seek to maintain the interests of those they control.

4. Three important questions for contemporary sociology come out of this. First, how new, prevalent, and costly are wage-adjustment lags to worker income? Second, what justifications/accounts underly this play of demands that fly in the face of traditional wage adjustment (psychological/cultural Marxist angle)? Third, what does this say in general about contemporary capitalism and the possibilities for businesses in internalizing beneficence?