The Power of Unofficial Expectations: Shareholder Value Management Strategies and Long Work Hours in California

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Introduction

The structure of work has dramatically changed over the past 25 years. The growing literature on the “new economy” workplace describes the increase in wage inequality, the growing reliance on temporary and contract employees, and the diminishment of job security (Osterman 1999, Smith 2001, Reich 2000). Less attention has been paid to the demise of the forty hour work week and the growing dispersion in work hours leading some workers to put in extremely long hours while others are not working enough. The existing literature on work hours has been absorbed in a debate about whether or not these changes amount to an overall increase in work hours. The debate about aggregate trends has overlooked the critical question of who is working longer hours and why? This paper begins to fill the gap in the literature by examining the causes behind long work hours. We claim that the changes in work hours are best understood as part of the same underlying transformation of the workplace that has occurred pursuant to the rise of the shareholder value conception of the corporation. This conception has replaced the dominant postwar “implicit labor contract” between the corporation and its various stakeholders with management strategies that focus on maximizing the financial value of the company’s stocks. As pertaining to work hours, we will show how the logic of shareholder value management can account for the elongation of work hours for certain types of workers who cannot be easily replaced with machines or temporary workers. We will also analyze how and why companies utilize indirect or “unofficial” management strategies to pressure certain of their employees to work long hours.

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