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I started my career by analyzing the processes of decentralization of collective agreements and the decrease in unionization in Israel, demonstrating that these factors explain a significant part of the sharp rise in wage inequality (IR 2007). To provide a comprehensive account of the development of Israel’s political economy and its stratification system, in my PhD dissertation I focused on the rise and fall of Israel’s national income distribution between workers’ compensation and capitalists’ profits (typically called "labor’s share of national income"). By studying the zero-sum distribution of national income, my work opened a new research front and has filled a lacuna in inequality research, which has largely overlooked this important issue in Israel and elsewhere. Theoretically, I developed a new political economy approach that stresses the importance of class organization and state policy in determining how national income is distributed (SP 2013).

 

As a post-doc at Stanford University, I developed my theory about the social and economic forces that govern the dynamics of labor’s share, reasoning that if the theory is valid, it should be generalizable and explain the dynamics of labor’s share in countries other than Israel. In a paper published in the ASR (2010), I reformulated and validated my theory and showed that in all rich countries capitalists’ profits as a share of GDP are currently at or near all-time highs.  My research presented a puzzle: how was it that I found that labor unions were so important in explaining income inequality, while the dominant theories maintained that technological change was the leading explanation? Part of the answer lay in the insufficient measure of computerization used by most previous research. I therefore looked for direct measures of computerization in various US industries over time, and when I found them, I conducted the first ever empirical test for the effects of computers and indicators of workers’ institutional power on labor’s share. I showed that corporate profits were at record highs because workers had less power when bargaining with employers, mostly because of labor-union erosion (ASR 2013).

 

Throughout my career, I was engaged in the debate on the factors that may have induced rising earnings inequality. In my study with Yinon Cohen (SER 2017), we used for the first time direct measures of computers and institutions in US private industries, and found that declining unions, the fall in the real value of the minimum wage, and the diffusion of computer technology each explain about 20% of the growth in earnings inequality. In my ERC-funded research, I questioned the clear-cut distinction between technology and political forces in social-science explanations of rising inequality, and developed the two parts of my Class-Biased Technological Change thesis. First, I created a new agenda, stating that the national institutional context moderates the effect of technology on wages by stimulating norms of fair pay and equity (SER 2019). Second, I further developed a theory on the political mechanisms behind the well-known correlation between computerization and rising earnings inequality. I showed that computerization of US workplaces accounts for about a quarter of the decline in union density – partly by changing the skill composition and partly by enhancing employers’ resistance to unions (W&O 2019). Acknowledging the sharp rise in upper-tail inequality has prompted me to develop a conceptual framing of how computerization opened up new opportunities for enhancing earnings among the already privileged. Here I proposed a new perspective that conceptualizes and examines the earnings advantage deriving from computerization around access to information and control over it (W&O 2020). I further theorized and empirically demonstrated the consequences of computerization to flexibility in employment practices and reproducing old forms of gender-based inequality (in progress).

 

Realizing the need to broaden the scope of analysis from wages to additional income sources, and from the labor market to organizational dynamics and practices, I developed a structural theory as a strategy for explaining within- and between-workplace inequality in fringe benefits, and examined it utilizing Israeli matched employer-employee data (SF 2017). I also explored benefit inequality in the US, based on the BLS-ECEC micro-data, which contain unique information at the job level on wages and benefits costs, including health insurance, pensions, and paid leave. In a paper published in SS (2018) with Yinon Cohen and Edo Navot, we used benefit costs data to study levels and trends in gender, racial, and ethnic gaps in voluntary employer-provided benefits, showing that for the years 1982 to 2015 benefit gaps were wider than wage gaps for minorities but were narrower for gender. In a second paper, we used for the first time the unique feature of the BLS-ECEC as linked employer-job longitudinal data, demonstrating that between- and within-establishment inequality is higher in benefits than in wages, indicating that workplaces affect benefits more than wages (ASR 2020).

Although in recent years much of my research is about the U.S. and other rich countries, I am deeply interested in the political economy of Israel. I have been involved in several recent projects that enlarge my earlier work on Israeli labor unions and their effect on wages and benefits inequality. In a most recent research project with Meir Yaish we study the consequences of the coronavirus for inequality by collecting and analyzing panel data on Israeli workers (RSSM 2020; G&S 2021). As part of my research on Israel and my research interest on rising inequality in the context of workplace practices, I recently joined the Comparative Organizational Inequality Network (COIN) group. The COIN group compares the dynamic of workplace earnings distributions across countries based on analyses of linked employer-employee data (PNAS 2020), and I am the first academic to have access to linked employer-employee panel data for Israel.

Tali Kristal 

Professor Of Sociology 

University Of Haifa

Tali Kristal 

Professor Of Sociology | University Of Haifa