"Downsizing. Rightsizing. Restructuring. Job Churning. Has this generation of American workers really been turned into Dilberts? If so, what does it mean? And, should we be concerned? William Baumol, Alan Blinder, and Edward Wolff deliver exactly what we have come to expect of such seasoned economic scholars: rigorous thinking, comprehensive attention to evidence and theory, clear writing, and sympathetic acknowledgment of all the interests at stake. A lovely example of applied economics-topical without being sensationalistic, analytical but not heartless, pointed but not opinionated."
-NEAL SOSS, Chief Economist, Credit Suisse First Boston

"This clearly written book explodes several myths about downsizing with hard facts drawn from multiple sources and thoughtful analysis. Anyone interested in the reality of downsizing needs to digest this book."
-ALAN B. KRUEGER, Princeton University

"In one place and without an ideological chip on their shoulders, these authors tell us all that we want to know about the real consequences of downsizing in America. It is an invaluable work."
-JEFFREY MADRICK, Editor, Challenge Magazine

"This is a first-rate empirical analysis of downsizing in the United States. If you think U.S. companies have reduced the average number of workers as they have become leaner and meaner, Downsizing in America will convince you otherwise: retailing has increased in size (for example, Wal-Mart) while manufacturing has experienced some downsizing, but mostly churning. Variation in employment changes by firm fluctuates with technology, industry growth, and trade in economically sensible ways. The book is an exemplar for taking a popular notion and putting it to a careful objective empirical test."
-RICHARD B. FREEMAN, Harvard University

In the 1980s and early 1990s, a substantial number of U.S. companies announced major restructuring and downsizing. But we don't know exactly what changes in the U.S. and global economy triggered this phenomenon. Little research has been done on the underlying causes of downsizing. Did companies actually reduce the size of their workforces, or did they simply change the composition of their workforces by firing some kinds of workers and hiring others? Downsizing in America, one of the most comprehensive analyses of the subject to date, confronts all these questions, exploring three main issues: the extent to which firms actually downsized, the factors that triggered changes in firm size, and the consequences of downsizing.

The authors show that much of the conventional wisdom regarding the spate of downsizing in the 1980s and 1990s is inaccurate. Nearly half of the large firms that announced major layoffs subsequently increased their workforce by more than 10 percent within two or three years. The only arena in which downsizing predominated appears to be the manufacturing sector-less than 20 percent of the U.S. workforce.

Downsizing in America offers a range of compelling hypotheses to account for adoption of downsizing as an accepted business practice. In the short run, many companies experiencing difficulties due to decreased sales, cash flow problems, or declining securities prices reduced their workforces temporarily, expanding them again when business conditions improved. The most significant trigger leading to long-term downsizing was the rapid change in technology. Companies rid themselves of their least skilled workers and subsequently hired employees who were better prepared to work with new technology, which in some sectors reduced the size of firm at which production is most efficient.

Baumol, Blinder, and Wolff also reveal what they call the dirty little secret of downsizing: it is profitable in part because it holds down wages. Downsizing in America shows that reducing employee rolls increased profits, since downsizing firms spent less money on wages relative to output, but it did not increase productivity. Nor did unions impede downsizing. The authors show that unionized industries were actually more likely to downsize in order to eliminate expensive union labor. In sum, downsizing transferred income from labor to capital-from workers to owners.

Downsizing in America combines an investigation of the underlying realities and causes of workforce reduction with an insightful analysis of the consequent shift in the balance of power between management and labor, to provide us with a deeper understanding of one of the major economic shifts of recent times—one with far-reaching implications for all American workers.

WILLIAM J. BAUMOL is professor of economics, New York University.

ALAN S. BLINDER is Gordon S. Rentschler Memorial Professor of Economics, Princeton University.

EDWARD N. WOLFF is professor of economics, New York University.

"In the United States and elsewhere, efforts to maintain the incomes of the low- skilled have turned away from welfare to work. Timothy Bartik takes apart both the demand and supply sides of the labor market in which people with low human capital operate, and reveals the relative potentials of policy measures that operate on each side of this market. By combining solid analytics, a judicious review of the evidence, and his own estimates, he concludes that past U. S. policy has overemphasized measures to increase work effort by the poor, while neglecting measures designed to increase employer demands for the services of the low-skilled. He leaves us with a convincing two-pronged policy proposal emphasizing demand side incentives, which avoid the drawbacks of past efforts. His analysis and program deserve airing among policymakers and scholars, and will be used as the analytic core of courses concerned with the economics of labor market and social policy."
-Robert Haveman, University of Wisconsin, Madison

"Why have so many less-skilled workers had such a hard time finding and keeping jobs during the economic booms of the 1980s and 1990s? Timothy Bartik documents that a key reason is our failure to adopt labor demand policies focused on the least-skilled workers who have been left behind in our rapidly- changing economy. Jobs for the Poor provides a comprehensive review about what we have learned from thirty years of employment and training programs. Academics, policymakers, and students can all learn much about what has worked and what has not in our struggle to achieve full employment. Bartik advocates subsidizing employers to hire the disadvantaged and convinces us that labor supply policies alone will not do the job."
-Sheldon Danziger, University of Michigan, Ann Arbor

Even as the United States enjoys a booming economy and historically low levels of unemployment, millions of Americans remain out of work or underemployed, and joblessness continues to plague many urban communities, racial minorities, and people with little education. In Jobs for the Poor, Timothy Bartik calls for a dramatic shift in the way the United States confronts this problem. Today, most efforts to address this problem focus on ways to make workers more employable, such as job training and welfare reform. But Bartik argues that the United States should put more emphasis on ways to increase the interest of employers in creating jobs for the poor—or the labor demand side of the labor market.

Bartik's bases his case for labor demand policies on a comprehensive review of the low-wage labor market. He examines the effectiveness of government interventions in the labor market, such as Welfare Reform, the Earned Income Tax Credit, and Welfare-to-Work programs, and asks if having a job makes a person more employable. Bartik finds that public service employment and targeted employer wage subsidies can increase employment among the poor. In turn, job experience significantly increases the poor's long-run earnings by enhancing their skills and reputation with employers. And labor demand policies can avoid causing inflation or displacing other workers by targeting high-unemployment labor markets and persons who would otherwise be unemployed.

Bartik concludes by proposing a large-scale labor demand program. One component of the program would give a tax credit to employers in areas of high unemployment. To provide disadvantaged workers with more targeted help, Bartik also recommends offering short-term subsidies to employers—particularly small businesses and nonprofit organizations—that hire people who otherwise would be unlikely to find jobs. With experience from subsidized jobs, the new workers should find it easier to obtain future year-round employment.

Although these efforts would not catapult poor families into the middle class overnight, Bartik offers a powerful argument that having a full-time worker in every household would help improve the lives of millions. Jobs for the Poor makes a compelling case that full employment can be achieved if the country has the political will and adopts policies that address both sides of the labor market.

Copublished with the W. E. Upjohn Institute for Economic Research.

TIMOTHY J. BARTIK is senior economist at the W. E. Upjohn Institute for Employment Research.

A Volume in the American Sociological Association’s Rose Series in Sociology

Winner of the 2009 Grawemeyer Award for the Best Book in Education

Winner of the 2009 Outstanding Book Award of the American Educational Research Association

"Passing the Torch moves beyond the immediate goals of open admission to explore outcomes in the second generation .... In short, the middle-class boost that a CUNY education represented for these women did not fade away; their children did not regress to the earlier patterns of their grandparents' generation. Some questions remain. Did standards erode over time as charged? Were subsequent cohorts as fortunate as the first? For now, evidence trumps rhetoric and the evidence shows open admissions delivered on its promises."
-CONTEMPORARY SOCIOLOGY

"Passing the Torch provides compelling new evidence on the benefits of college enrollment for disadvantaged Americans often seen as not 'college material.' The authors track the career histories of almost two thousand women from low-income families who enrolled in one of the seventeen campuses of the City University of New York in the 1970s under its open admissions program .... The book makes a compelling case that public higher education is still a critically important mechanism for social mobility in the United States and that making college attainable for low-income youth deserves a top spot on the domestic policy agenda."
-RICHARD J. MURNANE, Thompson Professor of Education and Society, Harvard University Graduate School of Education

"Like the 1944 GI Bill, open admissions at CUNY and elsewhere opened college for those who had never dreamed it was possible. Passing the Torch shows how open access programs affected the first generation's occupations, earnings, family structure, asset accumulation, childrearing practices, community involvement, and paid dividends for the second generation's cognitive development and educational success .... The prose is lucid, the data are compelling, and the issues are urgent. Passing the Torch is must reading for anyone concerned about higher education, social policy, educational equity, families, race, children, and national productivity."
-CAROLINE HODGES PERSELL, professor of sociology, New York University

"This remarkable book will give a much-needed jolt to the conventional wisdom about open-access higher education. ... A landmark study, Passing the Torch vividly documents the critical role that open access continues to play in keeping the American dream alive for our least advantaged citizens. It is destined to take its place alongside Bowen and Bok's The Shape of the River as one of the best books on the impact of higher education on opportunity in America."
-JEROME KARABEL, professor of sociology, University of California, Berkeley

The steady expansion of college enrollment rates over the last generation has been heralded as a major step toward reducing chronic economic disparities. But many of the policies that broadened access to higher education—including affirmative action, open admissions, and need-based financial aid—have come under attack in recent years by critics alleging that schools are admitting unqualified students who are unlikely to benefit from a college education. In Passing the Torch, Paul Attewell, David Lavin, Thurston Domina, and Tania Levey follow students admitted under the City University of New York’s “open admissions” policy, tracking its effects on them and their children, to find out whether widening college access can accelerate social mobility across generations.

Unlike previous research into the benefits of higher education, Passing the Torch follows the educational achievements of three generations over thirty years. The book focuses on a cohort of women who entered CUNY between 1970 and 1972, when the university began accepting all graduates of New York City high schools and increasing its representation of poor and minority students. The authors survey these women in order to identify how the opportunity to pursue higher education affected not only their long-term educational attainments and family well-being, but also how it affected their children’s educational achievements. Comparing the record of the CUNY alumnae to peers nationwide, the authors find that when women from underprivileged backgrounds go to college, their children are more likely to succeed in school and earn college degrees themselves. Mothers with a college degree are more likely to expect their children to go to college, to have extensive discussions with their children, and to be involved in their children’s schools. All of these parenting behaviors appear to foster higher test scores and college enrollment rates among their children. In addition, college-educated women are more likely to raise their children in stable two-parent households and to earn higher incomes; both factors have been demonstrated to increase children’s educational success.

The evidence marshaled in this important book reaffirms the American ideal of upward mobility through education. As the first study to indicate that increasing access to college among today’s disadvantaged students can reduce educational gaps in the next generation, Passing the Torch makes a powerful argument in favor of college for all.

PAUL ATTEWELL and DAVID LAVIN are professors of sociology in the Graduate Center at the City University of New York.

"Low-Wage America brings a rich scholarly perspective [to] studies of a wide range of low-wage industries. The result of this effort is by far the best portrait available of the lower reaches of the job market."
-INDUSTRIAL AND LABOR RELATIONS REVIEW

"Anyone wanting to know what's happened to low-wage workers in America should read this thoughtful and insightful collection. It brilliantly illuminates a corner of the labor market that's too often in the darkness."
-ROBERT B. REICH, former U.S. Secretary of Labor; Brandeis University

"The rules of the workplace have radically changed in recent decades with important consequences for employees up and down the income scale. Low-Wage America provides a wealth of information on how these developments have played out for people in the middle and lower reaches of the job market. The great strength of this book is the careful and detailed case studies. Drawing on extensive fieldwork, the authors provide a remarkably rich and textured portrait of the American job market, which is made even more useful and vivid because it is anchored in the specifics of firms and industries. I highly rec ommend Low-Wage America to everyone concerned about the future of work in this country."
-PAUL OSTERMAN, Massachusetts Institute of Technology Sloan School of Management

"Low-Wage America is a wake up call to all who believe the term 'working poor' should be an oxymoron.
The authors provide the most thorough analysis available on the state of the working poor in America
and show what can be done about this disgraceful national problem. All who share the simple view that
people who work hard should earn a decent living need to read this book and take it as a call to action."
-THOMAS A. KOCHAN, George Maverick Bunker Professor of Work and Employment Relations,
Massachusetts Institute of Technology Sloan School of ManagementAbout 27.5 million Americans—nearly 24 percent of the labor force—earn less than $8.70 an hour, not enough to keep a family of four out of poverty, even working full-time year-round. Job ladders for these workers have been dismantled, limiting their ability to get ahead in today’s labor market. Low-Wage America is the most extensive study to date of how the choices employers make in response to economic globalization, industry deregulation, and advances in information technology affect the lives of tens of millions of workers at the bottom of the wage distribution.

Based on data from hundreds of establishments in twenty-five industries—including manufacturing, telecommunications, hospitality, and health care—the case studies document how firms’ responses to economic restructuring often results in harsh working conditions, reduced benefits, and fewer opportunities for advancement. For instance, increased pressure for profits in newly consolidated hotel chains has led to cost-cutting strategies such as requiring maids to increase the number of rooms they clean by 50 percent. Technological changes in the organization of call centers—the ultimate “disposable workplace”—have led to monitoring of operators’ work performance, and eroded job ladders. Other chapters show how the temporary staffing industry has provided paths to better work for some, but to dead end jobs for many others; how new technology has reorganized work in the back offices of banks, raising skill requirements for workers; and how increased competition from abroad has forced U.S. manufacturers to cut costs by reducing wages and speeding production.

Although employers’ responses to economic pressures have had a generally negative effect on frontline workers, some employers manage to resist this trend and still compete successfully. The benefits to workers of multi-employer training consortia and the continuing relevance of unions offer important clues about what public policy can do to support the job prospects of this vast, but largely overlooked segment of the American workforce. Low-Wage America challenges us to a national self-examination about the nature of low-wage work in this country and asks whether we are willing to tolerate the profound social and economic consequences entailed by these jobs.

EILEEN APPELBAUM is professor and director of the Center for Women and Work at Rutgers University.

ANNETTE BERNHARDT is senior policy analyst at the Brennan Center for Justice, New York University School of Law.

RICHARD J. MURNANE is the Thompson Professor of Education and Society, Harvard Graduate School of Education and research associate at the National Bureau of Economic Research.

CONTRIBUTORS: David H. Autor, John W. Ballentine Jr., Ann P. Baretl, Rosemary Batt, Peter Berg, Rachel Connelly, Deborah S. DeGraff, Laura Dresser, George A. Erickcek, Ronald F. Ferguson, David Finegold, Ann Frost, Erin Hatton, Susan Helper, Susan N. Haouseman, Larry W. Hunter, Casey Ichniowski, Derek C. Jones, Arne L. Kalleberg, Takao Kato, Morris M. Kleiner, Julia Lane, Alec Levenson, Frank Levy, Philip Moss, Gil Pruess, Harold Salzman, Kathryn Shaw, Chris Tilly, Mark Van Buren, Adam Weinberg, Steffanie Wilk, Rachel A. Willis.

A Volume in the RSF Case Stud ies of Job Quality in Advanced Economies

"When is low-wage work a permanent trap and when is it the bottom rung on a ladder leading to better jobs? Most research on this fundamental question has focused on the characteristics of the workers themselves. This important and pioneering book shows that the strategies and practices of employers and labor-market intermediaries are key factors in determining the outcome for workers. There are novel lessons for public policy here, and we need to know about them. This is the place to find out."
-ROBERT SOLOW, professor emeritus of economics at MIT

"This superb study employs a massive new data set created by the Census Bureau to provide the best answers to date on one of the most important issues of domestic policy-how to help low- wage workers increase their wages and earnings. Reading Moving Up or Moving On is a must for anyone who wants to understand the low-wage labor market or help the workers stuck in it."
-RON HASKINS, senior fellow in economic studies, Brookings Institution

"Armed with information on the characteristics of millions of workers and the firms that employ them, Fredrik Andersson, Harry Holzer, and Julia Lane find that the likelihood of escaping from low earnings is better in some sectors, such as government, and worse in others, such as retail trade. While there is considerable mobility out of low earnings status, most of these workers consistently earn less than $15,000 per year. Moving Up or Moving On will be of great interest to labor economists and to those working to encourage employers to provide better job ladders for low-paid workers."
-SHELDON DANZIGER, Henry J. Meyer Collegiate Professor of Public Policy, University of Michigan

"In a remarkably short period of time, the welfare and employment status of low-income women has been transformed. Welfare rolls are down by half, and employment rates among low-income women have reached all time highs. With so many low-income women having traded a welfare check for a paycheck, the central challenge facing American policymakers is how to help the swelling numbers of the working poor to secure their precarious foothold in the labor market and move up to better jobs. Creatively employing a wonderfully rich new data set, Moving Up or Moving On sums up what we know about this critical issue to date, and then advances our understanding by leaps and bounds, telling us who gets ahead and who doesn't, and how and why they do so-from landing a job with the right employer to obtaining skills, and from using temporary employment agencies as a stepping stone to better jobs to strategic job changing. It is must reading for policymakers, employment counselors, human resources professionals, and employers large and small."
-GORDON L. BERLIN, president, MDRC

For over a decade, policy makers have emphasized work as the best means to escape poverty. However, millions of working Americans still fall below the poverty line. Though many of these “working poor” remain mired in poverty for long periods, some eventually climb their way up the earnings ladder. These success stories show that the low wage labor market is not necessarily a dead end, but little research to date has focused on how these upwardly mobile workers get ahead. In Moving Up or Moving On, Fredrik Andersson, Harry Holzer, and Julia Lane examine the characteristics of both employees and employers that lead to positive outcomes for workers.

Using new Census data, Moving Up or Moving On follows a group of low earners over a nine-year period to analyze the behaviors and characteristics of individuals and employers that lead workers to successful career outcomes. The authors find that, in general, workers who “moved on” to different employers fared better than those who tried to “move up” within the same firm. While changing employers meant losing valuable job tenure and spending more time out of work than those who stayed put, workers who left their jobs in search of better opportunity elsewhere ended up with significantly higher earnings in the long term—in large part because they were able to find employers that paid better wages and offered more possibilities for promotion. Yet moving on to better jobs is difficult for many of the working poor because they lack access to good-paying firms. Andersson, Holzer, and Lane demonstrate that low-wage workers tend to live far from good paying employers, making an improved transportation infrastructure a vital component of any public policy to improve job prospects for the poor. Labor market intermediaries can also help improve access to good employers. The authors find that one such intermediary, temporary help agencies, improved long-term outcomes for low-wage earners by giving them exposure to better-paying firms and therefore the opportunity to obtain better jobs. Taken together, these findings suggest that public policy can best serve the working poor by expanding their access to good employers, assisting them with job training and placement, and helping them to prepare for careers that combine both mobility and job retention strategies.

Moving Up or Moving On offers a compelling argument about how low-wage workers can achieve upward mobility, and how public policy can facilitate the process. Clearly written and based on an abundance of new data, this book provides concrete, practical answers to the large questions surrounding the low-wage labor market.

FREDRIK ANDERSSON is senior research fellow at Cornell University.

HARRY J. HOLZER is professor of public policy at Georgetown University and a visiting fellow at the Urban Institute.

JULIA I. LANE is director of the Employment Dynamics Program at the Urban Institute.

"Friedman brings a broad social and historical perspective to bear on the conventional wisdom that America is an increasingly litigious society .... The author cogently examines several aspects of both private and public law without resorting to legal jargon. This volume deals with a vital issue in contemporary society and does so with style, humor, and insight."
-Choice

"Provides a much needed perspective on an issue of paramount concern .... Total Justice leaves the reader with important insights into the liability crisis."
-Contemporary Psychiatry

"Skeptics should spend two hours with this book; they will come away convinced that the law-drenched age in which we live can be interpreted only in the light of this sophisticated argument."
-ABA Journal. The Lawyer's Magazine

It is a widely held belief today that there are too many lawsuits, too many lawyers, too much law. As readers of this engaging and provocative essay will discover, the evidence for a "litigation explosion" is actually quite ambiguous. But the American legal profession has become extremely large, and it seems clear that the scope and reach of legal process have indeed increased greatly.

How can we best understand these changes? Lawrence Friedman focuses on transformations in American legal culture—that is, people's beliefs and expectations with regard to law. In the early nineteenth century, people were accustomed to facing sudden disasters (disease, accidents, joblessness) without the protection of social and private insurance. The uncertainty of life and the unavailability of compensation for loss were mirrored in a culture of low legal expectations.

Medical, technical, and social developments during our own century have created a very different set of expectations about life, again reflected in our legal culture. Friedman argues that we are moving toward a general expectation of total justice, of recompense for all injuries and losses that are not the victim's fault. And the expansion of legal rights and protections in turn creates fresh expectations, a cycle of demand and response.

This timely and important book articulates clearly, and in nontechnical language, the recent changes that many have sensed in the American legal system but that few have discussed in so powerful and sensible a way.

Total Justice is the third of five special volumes commissioned by the Russell Sage Foundation to mark its seventy-fifth anniversary.

LAWRENCE M. FRIEDMAN is Marion Rice Kirkwood Professor of Law at Stanford University.

Friedlander and Burtless teach us why welfare reform will not be easy. Their sobering assessment of job training programs willenlighten a debate too often dominated by wishful thinking and political rhetoric. Look for their findings to be cited for many years to come. —Douglas Besharov, American Enterprise Institute

A methodologically astute study that sheds considerable light on the potential for and limits to raising the employment and earnings of welfare recipients and provides benchmarks against which the impacts of later programs can be compared. —Journal of Economic Literature

With welfare reforms tested in almost every state and plans for a comprehensive federal overall on the horizon, it is increasingly important for Americans to understand how policy changes are likely to affect the lives of welfare recipients. Five Years After tells the story of what happened to the welfare recipients who participated in the influential welfare-to-work experiments conducted by several states in the mid-1980s.The authors review the distinctive goals and procedures of evaluations performed in Arkansas, Baltimore, San Diego, and Virginia, and then examine five years of follow-up data to determine whether the initial positive impact on employment, earnings, and welfare costs held up over time. The results were surprisingly consistent. Low-cost programs that saved money by getting individuals into jobs quickly did little to reduce poverty in the long run. Only higher-cost educational programs enabled welfare recipients to hold down jobs successfully and stay off welfare.

Five Years After ends speculation about the viability of the first generation of employment programs for welfare recipients, delineates the hard choices that must be made among competing approaches, and provides a well-documented foundation for building more comprehensive programs for the next generation. A sobering tale for welfare reformers of all political persuasions, this book poses a serious challenge to anyone who promises to end welfare dependency by cutting welfare budgets.

DANIEL FRIEDLANDER is senior research associate at the Manpower Demonstration Research Corporation.

GARY BURTLESS is senior fellow in the economic studies program at The Brookings Institution.

Examines an alternative to the old patterns of living and working in the prevailing social system—the communal work place where work, recreation, and living space are brought together in a unified setting. The authors deal with a number of questions the communal work group faces, including the selection of projects, the choice of technologies and legal structure, and the means for determining economic viability. Past American and European communitarian movements are traced, as well as the nature and limitations of the new community experiments of the 1960s and 1970s.

DAVID FRENCH is assistant professor of economics at Johnson State College, Vermont.

ELENA FRENCH is assistant professor of social sciences at Johnson State College, Vermont.

Attempts to study corporation philanthropy inevitably prove frustrating, for it is a subject surrounded by rhetoric and almost entirely devoid of hard facts.

Marion R. Fremont-Smith's concise appraisal of corporation philanthropy takes a close look at the donative policies of corporations and their methods of giving. Concentrating on the legal and historical setting, as well as corporation philanthropy in practice, the author analyzes recent expansion in the field of traditional philanthropy and the accompanying shift in public attitude toward the responsibility of business corporations. The book shows how this new attitude has brought with it a reappraisal of the philosophical and legal bases for corporate action in the social sphere. In conclusion, Mrs. Fremont-Smith calls for a more imaginative and independent definition of the objectives of corporate philanthropic policies and not merely a continuing series of ill-considered defensive reactions.

MARION R. FREMONT-SMITH is a practicing attorney in Boston.

"An important contribution to the research literature on anti-poverty policy that should be read by anyone interested in that subject."
-Industrial and Labor Relations Review

"A first-rate collection of papers on important topics. The great value of this collection is that it asks questions whose answers are really worth knowing. It is valuable to have an entire book focused on policy- especially on demand-side policies."
-LAWRENCE MISHEL, research director, Economic Policy Institute

"A helpful primer for those who wish to begin looking at policy responses to the problems facing low-wage laborers in this country. The writing style is general enough that the book is likely to be accessible to non-economists and people with only a modest understanding of empirical methods .... It should also be read by key staffers in Congress and the administration."
-DAVID ELLWOOD, John F. Kennedy School of Government

The American economy is in danger of leaving its low-skilled workers behind. In the last two decades, the wages and employment levels of the least educated and experienced workers have fallen disastrously. Where willing workers once found ready employment at reasonable wages, our computerized, service-oriented economy demands workers who can read and write, master technology, deal with customers, and much else. Improved education and training will alleviate this problem in the long run, but educating the new workforce will take a substantial national investment over many years. In the meantime, we face increasingly acute questions about how to include low-skill workers in today's economy.

Generating Jobs takes a hard look at these questions, and asks whether anything can be done to improve the lot of low-skilled workers by intervening in the labor market on their behalf. These micro demand-side policies seek to improve wages and employment levels—either by lowering the costs of hiring low-skilled workers through employer subsidies, or by raising wage levels, benefit levels, or hours of employment, or by providing employment via government jobs. Although these policies are not currently popular in the U.S., they have long been used in many countries. Generating Jobs provides a clear-eyed assessment of this history, and asks if any of these policies might be applicable to the current problems of low-skilled workers in the United States.

The results are surprising. Several recently touted panaceas turn out to be costly and ineffective in the American labor market. Enterprise zones, for instance, are an expensive way of moving jobs into areas of high unemployment, costing as much as $60,000 per job. Similarly, job-sharing, which has had uneven success in Europe, turns out to be ill-suited to conditions in the U.S., where wages are relatively low and workers need to work long hours to maintain income. On the other hand, a number of older, less flashy policies turn out to have real, if modest, benefits. Wage subsidies have increased employment among qualifying workers, and public employment policies can increase the number of workers from targeted groups working during the program.

While acknowledging that many solutions are counterproductive, this definitive review of active labor market policies shows that many programs can offer real help. More than any rhetoric, Generating Jobs is the best guide to future action and a serious response to those who claim that nothing can be done.

RICHARD B. FREEMAN is Herbert Ascherman Professor of Economics at Harvard University. He is also director of labor studies at the National
Bureau of Economic Research and director of the Program for Discontinuous Economics at the London School of Economics.

PETER GOTTSCHALK is professor of economics at Boston College and research affiliate at the Institute for Research on Poverty at the University of Wisconsin, Madison.

CONTRIBUTORS: Richard B. Freeman, Peter Gottschalk, Rebecca M. Blank, Edward M Gramlich, Colleen M. Heflin, Harry J. Holzer, Susan N. Houseman, Lawrence F. Katz, Douglas L. Kruse, and Stephen Nickell.