Labor Market and Industrial Change: The Competitive Advantage and Challenge of Harnessing Diversity

Abstract

Comparative cross-national analysis reveals that, irrespective of socio-cultural context, competitive production in the global economy has been predicated on homogeneity. As has been the case in the United States, labor market expansion and diversification is now occurring where alternatives to Anglo-American Taylorism have been considered competitive as well as socially progressive despite exclusionary employment systems. Specifically, in Japan, Germany, and Sweden, new entrants (notably women and immigrants) are increasing substantially in the work force; we may expect to find new entrants in workplaces in Japan and east Germany, and possibly in Sweden, in light of socially constructed labor shortages related to declines in traditional (native, middle-aged male) labor. Diverse workplaces challenge production systems based on homogeneity because the friction of difference counters foundational principles and negatively impacts productivity. Competitiveness in these contexts may require new rounds of corporate strategies that tap diversity while accommodating the needs of different workers. As in the United States, the public and private sectors of these countries to date have responded to increasing diversity by reinforcing existing systems via a deepening of labor market segmentation. Changing production to effectively manage diversity remains unsystematized and requires mechanisms to institutionalize change and sustain diversity; these formidable tasks must be understood as having economic, social, and political dimensions.