HBR IdeaCast There Still Aren’t Enough “Good Jobs”
Dec 21, 2021
Zeynep Ton, a professor at MIT Sloan and expert on good job strategies, delves into the pressing issues of the labor market. She highlights the urgent need for companies to create 'good jobs' to attract talent amidst a labor shortage. Ton argues for better pay, predictability, and flexibility, especially for essential workers facing poor conditions. She emphasizes treating labor costs as investments, using Costco as a model for success, and calls for systemic changes to enhance job quality and employee satisfaction for overall business success.
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Market-Based Pay Inequality
- The widening gap between CEO and frontline worker pay is partly due to an obsession with "paying the market."
- Benchmarking against poorly paid companies perpetuates low wages, especially at the bottom of the economy.
Labor's Unique Nature
- Labor is not like any other input; wages are 'sticky,' meaning they don't fluctuate freely with supply and demand.
- Low wages, below subsistence level, negatively impact worker productivity and well-being, creating a vicious cycle.
Addressing Low Wages
- Businesses should view low wages and poor working conditions as a business problem, not just a worker problem, due to high turnover and its associated costs.
- Policymakers need to address the inadequate federal minimum wage, which is not a living wage anywhere in the US.
