Professor of Public Policy Sanford Jacoby was featured in a Capital & Main article about how Amazon’s business model has hindered unionization efforts by the company’s workers. “The thing you have to remember about Amazon is that it’s really two companies these days,” said Jacoby, author of the recently published “Labor in the Age of Finance: Pensions, Politics, and Corporations from Deindustrialization to Dodd-Frank.” “There’s the Amazon we know as consumers and then there’s Amazon Web Services, which is a much more profitable part of the company.” He explained that AWS, which sells data storage and processing to companies and generated $13.5 billion in 2020, is more profitable than the division where consumers buy items online and have them delivered. Jacoby noted that Amazon uses revenue from AWS to subsidize low prices for consumers and fast delivery, which increases the pressure on warehouse workers to meet the high demand.
A new book by Sanford Jacoby of UCLA Luskin analyzes the reaction of the U.S. labor movement to financialization over the past half-century. In “Labor in the Age of Finance: Pensions, Politics, and Corporations from Deindustrialization to Dodd-Frank,” Jacoby describes financialization as a transformative economic and political force that has ebbed and flowed over time. “It was, and is, associated with inequality and with robust stock markets,” said Jacoby, distinguished research professor of management, public policy and history. “Financialization waxed during industrialization, waned during the New Deal and expanded again under neoliberalism.” Jacoby noted that labor unions in the United States have shrunk since the 1970s, as has their economic clout. Jacoby’s study focused closely on the relationship between workers and shareholders who, by the 1990s, were dominated by large institutional investors such as pension plans, mutual funds and exchange-traded funds, or ETFs. He explained that the vast holdings of public corporations, and the ability to coordinate their interests, changed the balance of power: less for workers and unions, but more for investors. “The irony is that unionized workers are more likely to be covered by traditional pension plans,” he said. “It was through these plans that labor sought to bolster its organizing and political power, and, sometimes, to check the influence of corporate executives.” The power of shareholders to extract value from firms was, and remains, a key source of income and wealth inequality, Jacoby observed. But the recent political atmosphere has changed the dynamic among investors, executives and workers, he said. For more than 40 years, the winners have been executives and owners — sometimes both, sometimes only one of them. “Workers usually have lost,” Jacoby said. “If they are to gain a fair share, they will need help from unions, and unions will need help as well.”
Public Policy Professor Sanford Jacoby spoke to WalletHub about the COVID-19 pandemic’s impact on American workers’ sense of job security as Labor Day approaches. A WalletHub survey found that 75% of people will not travel this Labor Day weekend, and Jacoby predicted that reduced revenue for those in the vacation industry will hit small businesses the hardest. Jacoby recommended helping small businesses and restaurants through government subsidies of restaurant meals, as well as the elimination of fees at state and national parks and campgrounds. He also argued that big shareholders have taken advantage of labor during the pandemic, contributing to the staggering inequality in the American economy. “The top 10% of the wealthiest American households own 93% of the stock, while the bottom half of U.S. households own no stock whatsoever,” he said. “It’s time to educate Americans that the stock market is not their friend and that it mostly benefits America’s wealthiest.”
Sanford Jacoby, distinguished professor emeritus of public policy at UCLA Luskin, commented in a front-page New York Times story on Carlos Ghosn, Nissan’s former chairman who was recently arrested in Japan on allegations of financial wrongdoing. The allegations include withholding millions of dollars in income in financial filings for several years, according to the Times report. “Even when a company is a global multinational company, it’s still stamped by its country of origin and the place where it has its headquarters,” said Jacoby, who has studied and written about employment relations in Japan. Jacoby, who also holds appointments in management and history at UCLA, said in Japan more weight is placed “on egalitarian policies of government and pay and other things.”
Sanford Jacoby, distinguished professor emeritus of public policy at UCLA Luskin, commented in a front-page New York Times article about the remarkably egalitarian employee profit-sharing program offered by Sears in its heyday. Before it was phased out in the 1970s, the stock-ownership plan allowed Sears workers at all ranks to build a comfortable nest egg. “People were retiring with nice chunks of change,” Jacoby said. “People loved this fund, and Sears was a wildly successful company.” But the approach favored men over women and also made workers even more exposed to their employer’s fate, said Jacoby, who also holds professorial appointments in history and management at UCLA. The article contrasted the program at Sears, which has declared bankruptcy, with policies at Amazon, which recently lifted its minimum hourly wage to $15 but also stopped giving stock to hundreds of thousands of employees. The decision underscores how lower-paid employees across corporate America have been locked out of profit-sharing and stock grants, the article said.