May 2005 (No. 7)

Editor: Terence K. Huwe
Contributors: Elizabeth del Rocío Camacho, Janice Kimball


Reminder: Deadlines for Statewide Labor and Employment Fund and IIR Research Grants
Chancellor Robert J. Birgenau Addresses Large Audience at IIR
Michael Reich and Marcy Whitebook Testify in Sacramento
Faculty Seminar: Sandra Smith
New IIR Faculty Working Papers
Important Computing News: New Campus Minimum Security Standards
CPER Activities
Labor Center News
Center for the Study of Child Care Employment
Institute of Industrial Relations Library


Bancroft Library Lecture
Economics Department Seminar
Goldman School of Public Policy

Special Note: The next edition of eNews will appear on September 1, 2005.


Reminder: Deadlines for Statewide Labor and Employment Fund and IIR Research Grants

The deadline for applications for funding under the UC Systemwide Labor and Employment Fund program is May 6, 2005. All interested researchers should be sure to check the Web page for guidelines and to meet this deadline. Information may be found at

Also, the IIR deadline for 2005-2006 IIR Research Grants is May 16. The grant program includes several new categories this year and is an important new opportunity for IIR’s affiliated faculty. Information may be found at


Berkeley’s newly appointed Chancellor, Robert J. Birgeneau, spoke at IIR on March 30, 2005, at a welcoming reception in his honor. Art Pulaski, Secretary-Treasurer of the California Labor Federation, AFL-CIO spoke as well. The event was attended by many of IIR’s affiliated faculty members, staff and students, together with many community friends and leaders from the labor movement.

In introducing the Chancellor and Mr. Pulaski, IIR Director Michael Reich commented on the resurgent interest in labor and employment among newly recruited faculty members. “We have seen a growing interest in labor issues among our new colleagues, and the trend spans many disciplines. New recruitments in public policy, sociology and environmental resources have brought new vitality to Berkeley’s already-strong focus on industrial relations issues.”

Chancellor Birgeneau spoke about his overall career, during which he worked closely with labor groups in many settings. While at MIT, he was instrumental in advancing faculty equity and recruiting women to MIT. At the University of Toronto, he inherited a fragmented labor relations environment that was marked by tense relations. “If you looked at the bigger picture, everybody, including the faculty, was upset about compensation issues. The big difference was that the faculty was treated with more respect than the labor unions that were represented on campus. When I started according the labor unions the same respect as everyone else expected, the result was four years of labor ‘peace’ at the University of Toronto.”

Art Pulaski, Secretary-Treasurer of the California Labor Federation, AFL-CIO, expressed his strong interest in working closely with Chancellor Birgeneau. “Throughout California’s history, the Labor Movement has always supported the University­indeed, the movement was instrumental in its formation and development. The California Labor Federation is looking forward to working with Chancellor Birgeneau and his administration to advance Berkeley, which is a great public institution and resource for the people of California.” Pulaski also highlighted the influential role of IIR and CLRE on public policy, citing recent studies on such topics as paid family leave, minimum wage impacts and the hidden public costs of low-wage employment.

Chancellor Birgeneau also addressed the points in his March 27, 2005 opinion piece for the Los Angeles Times. In that opinion piece, the Chancellor reaffirmed the University’s historic role as one of the most important gateways to education and career success for California’s multicultural population. He cited the fact that many business leaders agree that it is crucial for the University to train a student body that reflects every ethnic and cultural group within the state, because Berkeley graduate will be leaders in the future. “The system is broken,” the Chancellor said, “and it is up to us to fix it.”

The Chancellor’s enthusiasm was infectious, and the event was reminiscent of the reception that was held in honor of Dolores Huerta, when she was appointed as a Regent. “It was opportune for the Chancellor to visit IIR just now,” Michael Reich said. “The University of California at Berkeley is strongly positioned at the ‘crossroads’ where labor and employment issues intersect, with clear benefits not only for policy makers and academics, but also for the working people of California. IIR is very pleased to welcome the Chancellor to Berkeley, and we’re expecting great things in the coming years.”

Michael Reich and Marcy Whitebook Testify on Minimum Wage and Universal
Pre-School Bills

Michael Reich testifies before the Assembly Labor and Employment Committee

Michael testified in Sacramento in support of minimum wage adjustments. Assembly Bill 48, authored by Assemblywoman Sally Lieber (D-San Jose), seeks to increase the minimum wage for the state's poorest workers from $6.75 an hour to $7.25 in July 2006, to $7.75 in July 2007, and then to be indexed annually according to the Consumer Price Index beginning in 2008.

Marcy Whitebook Testifies before the Assembly Higher Education Committee

Marcy Whitebook, Director of the Center for the Study of Child Care Employment, also testified recently in Sacramento, before the Assembly Higher Education Committee regarding AB 172 (Chan). Marcy focused on the potential impact of pending legislation on the higher education system’s ability to train child care workers in response to those new programs.

May 2, 2005 Faculty Seminar: Sandra Smith


Sandra S. Smith, Professor of Sociology, UC Berkeley
Monday, May 2, 2005 ~ 12noon – 1pm

In the urban poverty, joblessness, and job search literatures, the assumption is that when connected to friends, relatives and acquaintances in possession of job information and influence, jobseekers will embrace assistance from these relations to find work. Thus, black joblessness results in part from the lack of these vital social resources. My research suggests that the problem is far more complicated. Drawing from 105 in-depth interviews of low-income blacks from Southeast Michigan, I find that roughly one-third refused to seek or accept assistance from their personal contacts with job information and influence and instead chose to go it alone. In this paper, I investigate why and examine the conditions that facilitate social resource mobilization for job-finding. I link reluctance to accept aid to fears of losing face­of falling short of expectations and/or being maligned by their personal contacts for being jobless­and I show that fears of losing face were greatest among those who deployed joblessness discourses that give primacy to individual and cultural deficiency explanations. In other words, reluctant jobseekers embraced self-reliance during the job search process in an effort to avoid failure and to show their worth, but in so doing, reduced their chances of finding work in low-wage labor markets where employers rely heavily on informal job referral networks for screening and recruitment of job applicants

New IIR Faculty Working Papers

The following new working papers have been received and will be posted in the eScholarship Repository. Additional
faculty working papers will be appear in the series in the next two months.

Neil Fligstein and Jennifer Choo (March 1, 2005)
Law and Corporate Governance

(There is no abstract for this paper)

Neil Fligstein and Taek-Jin Shin (February 1, 2005)
Shareholder Value and Changes in American Industries, 1984-2000

There is now a solid set of results from economic sociologists concerning the spread and implementation of "shareholder value" strategies across publicly held corporations in the United States during the 1980s. Corporations were financially reorganized and used the tactics of selling off unrelated product lines, engaging in mergers with firms in similar industries, various financial ploys such as stock buybacks, and downsizing their labor forces. This paper explores empirically the connections between mergers, layoffs, de-unionization, computer technology, and subsequent industry profitability. Mergers occurred in sectors where economic conditions were not good in line with shareholder value arguments. Mergers subsequently led to layoffs, consistent with the shareholder value perspective that emphasizes that firms needed to deploy their resources more efficiently as they reorganized. There is also evidence that managers who engaged in mergers invested in computer technology. This technology directly displaced workers through layoffs and was focused on reducing unionized work forces. There is no evidence that mergers or layoffs returned industries to profitability. Only industry growth and computer investment led to increased profits. This suggests that shareholder value ideology was not, by itself, successful in righting the problems of American business.

Mary C. Noonan, Sandra S. Smith, and Mary E. Corcoran (April 1, 2005)
Examining the Impact of Welfare Reform, Labor Market Conditions, and the Earned Income Tax Credit on the Employment of Black and White Single Mothers

(Note: This paper will be posted to the Web during May 2005)

Using the Annual Demographic Files of the March Current Population Survey, we determine the extent to which change in welfare policies, labor market conditions, and the earned income tax credit (EITC) account for the changes in employment of black and white single mothers from 1991-2003. Compared to white single mothers, black single mothers are more likely to be high school dropouts, never married, and central city residents, and our results show that policy and labor market changes had a more profound affect on the employment of these groups. However, these demographic differences and interaction effects are not substantial enough to produce dissimilar explanations for the changes in employment by race. During the period 1991-2000, the increase in the EITC was the most important factor, accounting for approximately 25 percent of the increase in employment. Declines in the unemployment rate and welfare reform were less important, together accounting for an additional 25 percent of the increase. Our results also show that the decline in employment between 2000 and 2003 for both black and white single mothers was primarily due to the weakening economy during those years.

Marko Tervio (April 27, 2005)
Overworked and Overpaid: The Costs of Learning-By-Doing

In medicine, law, consulting, and many other careers, a significant proportion of human capital is created through profession-specific learning-by-doing (LBD. In the absence of long-term wage contracts, if LDB effects are sufficiently large, then young workers should face a negative wage in return for high future wages. However, if workers are liquidity constrained, then young workers compete away those returns to experience by working inefficiently hard. This inefficiency results in higher lifetime earning, causes older workers to exert too little effort, and tends to lower the observable (monetary) returns to experience. Unlike traditional models, this can explain "career concerns" in professions where effort and ability are observable.

Ximing Wu and Jeffrey M. Perloff (March 1, 2005)
GMM Estimation of a Maximum Distribution With Interval Data

We develop a GMM estimator for the distribution of a variable where summary statistics are available only for intervals of the random variable. Without individual data, once cannot calculate the weighting matrix for the GMM estimator. Instead, we propose a simulated weighting matrix based on a first-step consistent estimate. When the functional form of the underlying distribution is unknown, we estimate it using a simple yet flexible maximum entropy density. our Monte Carlo simulations show that the proposed maximum entropy density is able to approximate various distributions extremely well. The two-step GMM estimator with a simulated weighting matrix improves the efficiency of the one-step GMM considerably. We use this method to estimate the U.S. income distribution and compare these results with those based on the underlyign raw income data.

Ximing Wu and Jeffrey M. Perloff (February 1, 2005)
China's Income Distribution, 1985-2001

We employ a new method to estimate China's income distributions using publicly available interval summary statistics. We examine rural, urban and overall income distributions from 1985-2001. We show how the distributions change directly as well as examine trends in equality. Using an inter-temporal decomposition of aggregate inequality, we determine that increases in inequality within rural and urban sectors and the growing rural-urban income gap have been equally responsible for the growth in overall inequality over the last two decades. However, the rural urban gap has played an increasingly important role in recent years. We also show that urban consumption inequality rose considerably.

Important Computing News: New Minimum Standards for Security of Berkeley Campus Networked Devices

On May 1st, 2005, U.C. Berkeley will require that any computer that will connect to the UCB network comply with the following minimum standards. Devices that do not meet these minimum standards may be disconnected.

(1) Install anti-virus software with regular virus definition updates.
(2) Make sure you have the latest software patches for your computer.
(3) Have a personal firewall installed and running at all times.
(4) Create a strong administrative password.
(5) No unencrypted authentication
(6) No unauthenticated email relays
(7) No unauthenticated proxy services
(8) Physical security
(9) No Unnecessary services

The full document on the standards can be found here:

For more information about computer security, please visit:

If you still have questions, please feel free to contact your IT staff.Remember: Security is not a goal – it is an ongoing process.

--Robert Hiramoto

CPER Activities

CPER is working its June issue (No. 172), which will include articles on bargaining in Los Angeles County, learning lessons about negotiations from major league baseball, and privacy in the workplace (focusing specifically on employer medical inquiries under state and federal law.

For a full report on CPER activities, take a look at the CPER Web at

Center for labor Research and Education

CA Union Leadership School

June 5-10, 2005
Deadline extended to: May 1, 2005

The Labor Center is once again offering the California Union Leadership School, which will be held at Asilomar, June 5-10, 2005. This educational and interactive program brings together senior-level union leaders in a unique learning environment with experienced labor educators. This year, the school is launching a special recruitment for participants from the Central valley, and a principal outcome of the school with be the deveoplment of collaborative projects in the north and valley regions.

Strategic Research Training

June 20-23, 2005
Deadline for Registration: Friday, May 27, 2005
Information on this workshop will be posted on the Labor Center Web in the near future.

Center for the Study of Child Care Employment

State Superintendent of Public Instruction Jack O'Connell has appointed Marcy Whitebook as one of 44 members of the newly established Superintendent's California P-16 Council. The Council has been charged with developing strategies to better coordinate, integrate, and improve education for California students from preschool through college.

"Different segments of California's education system have been working in isolation for too long," O'Connell noted during his announcement of the council. "We can better help our students meet the challenge of high standards and high expectations if the entire system is better coordinated. I have asked this impressive group of education leaders and experts to find ways to break down traditional barriers and work toward building a seamless education system that better serves all California students."

Institute of Industrial Relations Library

IIR Library to Pursue NEH Grant for UC Berkeley Labor Collections

The IIR Library is joining with the Bancroft Library to pursue funding for campus labor collections, from the National Endowment for the Humanities. The project will involve surveying all locations where labor materials reside, and identifying good prospects for digitization. Chief among these is the IIR Library’s full run of the publications of IIR-Berkeley and UCLA­which constitute an important resource, especially for scholars interested in mid-century U.S. industrial relations.

IIR Library Labor Blog Relaunched

The IIR Library is blogging again, capturing global news on labor events, local events, and reports of interest to researchers. The Blog enables the Library to make a selective digest of news and events available using RSS (Rich Site Summary), which allows enables automated newsfeeds, and is increasingly popular with non-governmental organizations that track labor issues. Find the link to the blog at


Bancroft Library

Thursday, May 19, 2005
Faculty Club, Lewis-Latimer Room

Working Women and Racial Politics in San Francisco During the Late 19th Century
Hellen Lee (UC San Diego Literature Department, Bancroft Study Award winner)

The circulation of contradictory visual images and journalistic accounts of
prostitutes negatively shaped perceptions of racialized working women in
San Francisco in the late 19th century. Ms. Lee explores issues of
entrepreneurship, sexuality, media representation and the role of the legal

Economics 251 - Labor Economics Seminar

Thursday May 5, 2005 2:pm – 4:pm
Evans Hall, 608-7
Judy Hellerstein, University of Maryland

Goldman School of Public Policy

Wednesday May 4, 2005
Andersen Auditorium, Haas School of Business

The Nation’s Growing Fiscal Imbalance: Perspectives and Issues
David M. Walker, Comptroller General of the US

The United States and other major industrialized nations face a large and
growing fiscal imbalance that, if left unchecked, will impede economic
growth and imperil key government programs. Largely because of rising
health care costs, a growing elderly population, and reduced federal
revenues, the federal government now faces decades of deficits. Without
changes to current policy, these trends will put increasing pressure on the
nation’s spending and tax policies.