How to Create Good Blue-Collar Jobs in the Knowledge Economy

Dennis Campbell

John Case

Bill Fotsch

<article-ideainbrief class="article-ideainbrief">
 <h4 class="ideainbrief-title">In Brief</h4>
 <div class="ideainbrief-contents">
  <h5>The Problem</h5>
  <p>Companies in the knowledge economy are struggling to provide meaningful and secure jobs for workers who aren’t highly educated. This creates social tensions and promotes inequality.</p>
  <h5>Why It’s Happening</h5>
  <p>Manufacturing, traditionally the source of good blue-collar jobs, is shrinking relative to the service sector, and what work it has available is increasingly vulnerable to automation. Meanwhile, service sector jobs are often poorly paid and offer little security.</p>
  <h5>The Solution</h5>
  <p>We need to redefine what makes a blue-collar job good. The traditional job was well paid and secure. Going forward, employers should offer workers a stake in the company, reward their contributions to the company’s success, and provide opportunities to acquire portable skills.</p>
 </div>
</article-ideainbrief><p>Fifty years ago Americans knew exactly what constituted a good job for a blue-collar worker: a position with a large manufacturer such as General Motors or Goodyear or U.S. Steel. Often unionized, it paid well and offered good benefits. It was also secure. Even if you were laid off during a downturn, you would probably be called back when business picked up. This was true not only in the United States but also in most other developed economies at the time.</p>

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<p>Fifty years ago a good blue-collar job was with a large manufacturer such as General Motors or Goodyear. Often unionized, it paid well, offered benefits, and was secure. But manufacturing employment has steadily declined, from about 25% of the U.S. labor force in 1970 to less than 10% today. Now a decent living entails more than a generous wage; it involves sharing the company&#8217;s success with employees.</p>
<p>Some companies offer a direct stake in the company&#8217;s performance through stock, a share in profits, or both. Companies with employee stock ownership plans report significantly higher sales growth and higher revenue per employee than do conventionally owned companies in the same industry. However, virtually all the gains to be had go to those that create an ownership culture, by building in participative management and helping employees learn to think and act like owners.</p>

More Than a Paycheck

Fifty years ago a good blue-collar job was with a large manufacturer such as General Motors or Goodyear. Often unionized, it paid well, offered benefits, and was secure. But manufacturing employment has steadily declined, from about 25% of the U.S. labor force in 1970 to less than 10% today. Now a decent living entails more than a generous wage; it involves sharing the company’s success with employees. Some companies offer a direct stake in the company’s performance through stock, a share in profits, or both. Companies with employee stock ownership plans report significantly higher sales growth and higher revenue per employee than do conventionally owned companies in the same industry. However, virtually all the gains to be had go to those that create an ownership culture, by building in participative management and helping employees learn to think and act like owners.

More Than a Paycheck

Summary.

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