In the great boom of the 1990s, top management's compensation soared, but the wages of most Americans barely grew at all. This wages stagnation has baffled experts, but in The New Ruthless Economy, Simon Head points to information technology as the prime cause of this growing wage disparity.
Many economists, technologists and business consultants have predicted that IT would liberate the work force, bringing self-managed work teams and decentralized decision making. Head argues that the opposite has happened. Reengineering, a prime example of how business processes have been computerized, has instead simplified the work of middle and lower level employees, fenced them in with elaborate rules, and set up digital monitoring to make sure that the rules are obeyed. This is true even in such high-skill professions as medicine, where decision-making software in the hands of HMOs decides the length of a patient's stay in hospital and determines the treatments patients will or will not receive.
In lower-skill jobs, such as in the call center industry, workers are subject to the indignity of scripting software that lays out the exact conversation, line by line, which agents must follow when speaking with customers. Head argues that these computer systems devalue a worker's experience and skill, and subject employees to a degree of supervision which is excessive and demeaning. The harsh and often unstable work regime of reengineering also undermines the security of employees and so weakens their bargaining power in the workplace.
Drawing upon ten years of research visiting work places across America, ranging from medical offices to machine tool plants, Head offers dramatic insight into the impact of information technology on the quality of working life in the United States.
Head, a former correspondent for the Financial Times and the New Statesman, here argues that the age of information technology and the "new economy" has not liberated workers from their daily tasks but instead forces them to work under more rules to perform their increasingly simple jobs. The author begins by reviewing Fredrick Taylor's work with scientific management and the assembly line. He then describes how modern-day automobile plants such as Nissan micromanage their employees' work flow down to regulating the time it takes to pick up a screw and install it. Head goes on to profile other areas, such as customer service and call centers where the employee's every move and word is scripted and all decision-making capability has devolved to computers and CRM software. The medical industry and HMOs fare no better as Head considers the concept of managerial medicine and how it affects doctors and patients. The author concludes by saying that the rate of a worker's real compensation (wages plus benefits) has fallen far below the rate of productivity in the past decade. Drawing on a decade of research, this provocative and thoughtful book is recommended for all academic libraries.-Stacey Marien, American Univ., Washington, DC Copyright 2003 Reed Business Information.