Negotiating a New Social Contract for Work: An Online, Distributed Approach

The United States needs a new social contract at work. That is, we need an updated and broadly shared commitment to meeting “the mutual expectations and obligations that workers, employers and their communities and societies have for work and employment relationships” (Kochan 2000). This has been apparent for a long time to many of us who study work and employment relations (Osterman et al. 2001). Proponents of this new social contract argue that the public policies, institutions, and organizational practices governing employment relations have not kept up with the dramatic changes taking place in the workforce, nature of work, and overall economy. Failure to keep up with these changes is one of the main causes for the rise in income inequality and the societal divisions that have built in recent decades, divisions that were laid bare by the anger and divisiveness we witnessed during and since the 2016 presidential campaigns and election. Continued failure to address these issues will allow these divisions and tensions to grow.

To date, however, few avenues for generating a new social contract have been explored beyond three major failed attempts at new governing legislation that have occurred since the 1970s. (These were a labor law reform bill that died in a U.S. Senate filibuster in 1978, the failure of the recommendations made by President Bill Clinton’s Commission on the Future of Worker Management Relations to gain support in Congress in 1995, and the inability of the Employee Free Choice Act to get through Congress during the administration of President Barack Obama.) In this article, we describe a bottom‐up – or grassroots – negotiated approach to this task that begins with classroom simulations designed to encourage public debate. We have used this approach in our teaching over the past several years and early results are promising.

Ours is not the first classroom exercise designed to mimic real‐world conflicts. Ariel Macaspac Penetrante (2012) modeled climate change negotiations and Arvid Bell and Brian Mandell’s (2018) Transition exercise simulated negotiations to resolve conflicts in Afghanistan and Central Asia. Penetrante simulated United Nations–sponsored climate change negotiations in order to help researchers and negotiators develop practical strategies to cope with the complex dynamics of international climate change negotiations, such as the North–South divide. During the Bell and Mandell (2018) simulations, which were conducted primarily as a training tool, unexpected alliances arose among the seventy‐two parties involved, a result that could have important implications for these seemingly intractable conflicts. Bell and Mandell (2018) positioned their approach relative to Michael Watkins’ (1999) call nearly two decades ago for simulations that feature real world volatility, uncertainty, complexity, and ambiguity.¹

Like these other studies, the workplace social contract negotiation seeks to provide a blueprint for change management. It has the following features:

1. The participants are actual stakeholders: many are members of the next‐generation workforce while some are currently employed at various stages in their careers.

2. The results of the simulation are intended to serve as an anchor for actual policy debates, not just useful insights into negotiation practice.

3. The very idea that a social contract can be renegotiated in an intentional way, working around legislative gridlock, represents a unique intersection of pedagogy and practice.

We put the challenge of how to build a new social contract to students in our online Massachusetts Institute of Technology (MIT) course on “Shaping the Future of Work” and in several other in‐person classes taught at Cornell University, Brandeis University, the University of Illinois, and the University of Sydney in Australia. In the simulation, we provide students, as the next generation workforce, with a template for specifying what they expect business, labor, government, and educational institutions each to contribute to a new social contract. Ultimately, our goal is to illustrate that, through informed and respectful dialogue, combined with negotiated exchange, it is indeed possible for people and groups with different interests to build a new workplace social contract that addresses the economic and social challenges of our time.

Our shared concerns about the current state and the future of work led us to develop and offer a massive open online course (MOOC) through MITx, which is MIT’s online education platform, entitled “Shaping the Future of Work” and through a parallel course at Cornell on “Forging the Future of Work.” The social contract exercise serves as the capstone activity in both courses.² Throughout the eight weeks of the course, students are presented with a series of videos, a textbook (Kochan and Dyer 2017), and other readings to introduce three key actions we believe must be taken to achieve a new social contract at work. They are free to draw on these materials, their own work experiences, or other sources as they engage in the exercise.

The course materials made available to the students before they engage in the simulation emphasize three key points. First, we emphasize that firms have choices in how they compete and these strategic choices will determine whether or not the workforce shares in the benefits of firm performance or whether those rewards largely accrue to investors, owners, and high‐level executives. One module of the course, for example, is devoted to reviewing what has been learned from research on the power of “high road” strategies capable of achieving both good financial and employment outcomes.

Second, we state a clear position, drawn from our research, with respect to the need for employees to have a strong and supportive voice in shaping the future of work and the employment conditions offered by their employers. That is, we see a clear need to invent new ways to achieve the bargaining power lost by long‐term union decline. We believe this is a necessary condition for building and sustaining a “high road,” inclusive economy. At the same time, we do not call for a simple rebuilding of unions in the mirror image of the past. Instead, we explore the variety of innovative efforts under way within the labor movement, those involving unions and community coalitions and partners, and those emerging from the growing number of worker advocates using advances in technology, social media, and other mobilizing tools to test new ways of fostering worker voice and bargaining power.

Finally, we stress the need for all the stakeholders who share a responsibility for work and employment relations to break out of the silos and constraints that have allowed public policies, organizational practices, and labor market institutions to fall behind changes in the workforce and the nature of work. We report on and stress the importance of local and state government innovations in employment policies, citing these as potential “local laboratories” for shaping new policies that can then be addressed at the national level when political conditions make it possible to do so. And given the importance of knowledge, skills, and innovation in today’s economy, we specifically include educators as key stakeholders, both in preparing young people for their future careers and in providing lifelong learning. So, the simulation is embedded in an educational context in which the need for a new social contract at work is clearly stated, but the desired elements of that social contract are not prescribed.

When we first developed the social contract exercise, we initially planned to randomly assign students to teams, but weekly variation in participation by students in the MOOC context left many teams with unfilled roles. Our realization that all our students were representative of the workforce in some fashion (i.e., as current or future workers) led us to redesign the simulation to ask students in Phase 1 of the exercise what they expect from each stakeholder (employers, government, etc.). Then in Phase 2 of the exercise, we ask them to rank the priority they assign to the collective proposals of the class. Table One compares the sequencing in both phases and also indicates how the simulation changed from its first version to the second.

The results of the social contract negotiations exercise from the 2017 MIT MOOC and Cornell classes are reported here as an illustrative example. These results are suggestive of what key stakeholders (employers, worker representatives, government, and educators) could do, and, we would argue, need to do. The elements of the social contract the students developed provide a vision of the policies and practices that a selection of members of the next generation workforce and others at various career stages believe should govern the future of work and strategies for achieving it. Some of their views are based on their work experiences and aspirations for work that they brought into the course and some are likely influenced by the evidence provided in the course materials. If a group of people who have studied and discussed these issues together over the span of an eight‐week course can do this, perhaps people in positions of influence could do so as well.

We organize the social contract negotiations exercise as follows. Students who sign up for the online course are told there will be a social contract exercise that they can participate in on a voluntary basis in the final weeks of the course. We present the course modules and key teaching points via videos and written materials over the first seven weeks of the course.

The simulation has two phases. We present an instructional video along with written instructions in week four of the course and invite students to complete Phase 1 via an online questionnaire on their own time over weeks four to seven at which point Phase 1 ends. In that phase, we provide participants with a list of potential issues each stakeholder (business, labor, education, and government) could address to help build a new social contract. The issues cluster under five broad topics: workforce capabilities, fair treatment/worker representation, organizational/enterprise performance, rewards/benefits for workers, and family/community/society. (See the  appendix for a full listing of the topics and issues.) We instruct students to choose the top two issues they want each stakeholder to address and then write specific proposals for what they want that stakeholder to do about those issues.

Once an array of proposals is generated, our teaching staff reviews all the proposals for each stakeholder on each topic. We then summarize the ideas mentioned most frequently in the proposals for each stakeholder and topic into consolidated proposals for Phase 2 of the exercise. We next present the consolidated proposals to the class and ask the students to rank the priorities they would attach to them. We also ask them to rate their overall satisfaction with the elements of the new draft social contract if each of the proposals were to be implemented. Finally, we conduct a debrief of the exercise via a live video event open to all class participants several days after Phase 2 is completed, and we post the results on the course website.³

Although the exercise focuses on the United States, the 220 participants in the 2017 MITx exercise represented fifty‐five countries. Forty‐six percent of the participants lived in the United States. Fifty‐nine percent were female; 7 percent had a high school education or less; 12 percent had education beyond high school but not a college degree; 34 percent had a bachelor’s degree; and 47 percent had advanced degrees. Ages ranged from 18 to 75, with a median age of 25. Twenty‐five percent had two or fewer years of work experience; 30 percent had between three and ten years of experience; 16 percent had eleven to twenty years of experience; and 27 percent had more than twenty years work experience. Thus, the majority of participants were already active participants in the workforce. Overall, this group generated 1,346 proposals for the different stakeholder groups.

Figure One summarizes the results from the Phase 1 survey showing the priorities that class participants assigned to each of the areas of concern for the different stakeholder groups. It shows the share of proposals students developed for each area, which suggests what their priorities were for the social contract.

These data, as well as some of the specific proposals students offered to elaborate on what they expect the different stakeholders to do about these topics, revealed common patterns across the stakeholder groups. Participants expressed a high expectation that all the stakeholders would help build “workforce capabilities” through entry‐level and ongoing training and development, but expressed particularly high expectations for educational institutions.

Participants also placed significant emphasis on such concerns as health‐care benefits, parental leave, and equitable distribution of wages between workers and managers/executives, which contributed to their relatively high ratings on “fair treatment” and “rewards/benefits” across the business, labor, and government stakeholder groups, but they assigned less responsibility for addressing issues of fair treatment in the workplace to employers and even less for educational institutions. Participants specifically assigned responsibility to the government to support “fair treatment” by increasing minimum wages, updating labor and employment policies, and ensuring equitable access to education and training opportunities. They also expected labor (current unions and other worker advocacy organizations) to prioritize fair treatment through negotiations over wages, profit sharing (or other forms of gain based on firm or economy‐wide performance), and by fighting for universal and portable health care.

Tables Two to Five describe selected consolidated proposals for each stakeholder group ranked in order of the priority that participants assigned to each proposal in this second phase of the exercise. Note that in this second phase, “rewards and benefits” is ranked as the highest priority for the business, labor, and government stakeholder entities while “workforce capabilities” remain the top priority for education. (Workforce capabilities come out second or third from the top for the other stakeholders.)

Included with each category are examples of the associated proposal language consolidated from the various submissions. In producing the consolidated language, the instruction team strove to maintain the intent of the submissions. We did so by clustering the most frequently mentioned ideas on each topic for each stakeholder and then summarized these ideas in short statements in the language of proposals for actions expected by each stakeholder. This language will be of substantive interest to those interested in a potential new workplace social contract and of pedagogical interest as an illustration of the types of results that people might propose to these stakeholders if given the opportunity to do so.

The proposals for business share a common emphasis with those geared to other stakeholders around increasing equity and fairness in the distribution of wages and benefits. These participants clearly want to hold business leaders accountable for reducing inequality and for supporting universal access to health care. They also stress, however, the need to better align compensation incentives between investors/owners and employees via options such as profit sharing, employee stock ownership, or other means.

Moreover, they recognize that employees can contribute to improving organizational performance by engaging in continuous improvement efforts that lie at the heart of “high road” strategies, referred to in Table Two as “high performance work systems,” that is, work systems that draw on employee knowledge, motivation, teamwork, and voice to improve work processes, productivity, and customer service. They place an equally strong emphasis on ensuring that employees have the skills needed to make these contributions, both when initially hired and throughout their tenure with the organization and throughout their careers. As the proposals summarized here also indicate, contributing to lifelong learning and development is viewed as a responsibility of all the stakeholders. Two additional themes evident in Table Two are visible in proposals made to other stakeholders as well, namely the need to provide some form of paid family leave and the expectation that all the parties will work to eliminate discrimination in employment relations.

If, as we hope, the exercise moves beyond the classrooms and into society, these draft provisions should be viewed as potential opening proposals rather than as finished elements of a social contract. Further validation would be needed to ensure that the provisions are genuinely reflective of the interests of the workforce, although we have conducted the simulation enough times to see the language as a good first approximation.

A module in the course addresses the question of whether or not unions are still needed and, if so, what strategies should unions or worker advocates pursue in the future. Participants were generally supportive of the need to restore worker voice and representation; however, they offered a number of proposals aimed at broadening the range of workers that unions or other worker advocates reach, “rebranding” the image of unions to be more inclusive, and leveraging new technologies to communicate with members and to be used as new sources of bargaining power.

Note again the top priority for labor focuses around raising wages and improving benefits, again combined with an emphasis on training (especially expanding apprenticeships) and on working with employers to engage workers in driving innovation and change. Another strong message for labor can be seen in the proposal for family, community, and society: champion the needs of all families in their communities.

Moving from the classroom and into society with these draft provisions could pose a number of challenges for the U.S. labor movement. When work was dominated by crafts, there were craft unions; when the industrial revolution came along, a new model of industrial unions emerged. The suggestions from students point to elements of what could be a postindustrial model for worker representation. It would be exciting to see if a classroom simulation could reinforce and deepen current efforts by worker representatives to develop these new models.

We included educational institutions as key stakeholders in shaping the future of work and devoted a module of the course to the growing importance of education in a “knowledge‐driven” economy. Indeed, a central theme in the course is that continuous education, that is, access to lifelong learning, will be necessary to empower the workforce of the future to adapt and adjust to changes in technologies that they are likely to encounter over their careers. The underlying theme developed in the course is that, while there are widely varying predictions about the pace and scope of job displacement likely to come from technological innovations, workers and these stakeholders should not be passive receptors of how their jobs and occupations may change. Instead, they should be well prepared to both participate in decisions that shape the ways new technologies might be used to augment how they do their work and to adapt to these changes if and when they occur. That is, we emphasize the need for proactive strategies to embrace and shape the future of technology and the future of work.

The proposals shown in Table Four indicate how these students expect education leaders to support efforts to pursue this proactive approach. Simulation participants expect educational institutions to form effective partnerships with business in order to ensure schools teach the skills expected in twenty‐first century labor markets. Part of this requires educators to learn and then teach what it takes to build and sustain high road firms that rely on worker knowledge and engagement to achieve the high levels of productivity and organizational performance necessary to support good jobs and careers.

Participants also expect educational institutions to expand their roles in offering lifelong learning opportunities, again presumably in partnership with employers and labor organizations. To complete the circle, they also encourage better compensation for teachers both for equity reasons and to ensure the teaching profession attracts and retains the talent needed to prepare and support the workforce of the future. Finally, as with the proposals for the other stakeholders, the education proposals express a strong concern for fairness: educational opportunities need to be accessible to all; educators should help students embrace diversity; and educators should teach students about their rights and their obligations as citizens and as workers.

Table Five reports the priorities students assign to government (local, state, and federal) leaders for helping to build and sustain a new social contract. In the course, we explain that, for many years, federal policy makers have been mired in a gridlock over most aspects of labor and employment policy. But the need for updating and improving the effectiveness of public policies governing work and employment is as critical as ever.

We also discuss the role of local and state governments as laboratories for testing policy innovations. For example, we note that, in the face of the long‐standing gridlock at the federal level, many states and communities have taken actions to raise minimum wages and other labor standards. We also note that states and communities have also experimented with ways to diminish employee collective interests, such as passing so‐called “right‐to‐work” legislation and weakening the role of public sector labor unions – so the experimentation is both enhancing and eroding the current social contract from the perspective of employees.

The proposals for government reflect the determination of class participants to forge a new and positive direction for updating employment policies. Topping the list is again the need for government leaders to do their part to both improve wages and, especially, to ensure all employees, including contract workers, receive portable and affordable health‐care benefits. Once again, participants prioritized supporting lifelong learning from early childhood through the formal educational years and as workers experience disruptions to their jobs/careers. Government is also called on to enact policies that support diffusion of high road companies and strategies. Finally, participants underscored the need for the U.S. government to catch up with most other developed countries by providing universal access to paid family leave.

The ratings and rankings summarized in Figure One and Tables Two to Five provide only a snapshot of the expectations our class has for each of these stakeholders. The messages embedded in some of the proposals offered by individual students further illustrate their desire that stakeholders be more proactive rather than passive reactors to the changing world of work. Here is a brief sampling:

Overall, the participants gave a satisfaction rating of eight on a ten‐point scale for the complete social contract they generated. This suggests that it is possible, at least with this group, to generate a new social contract that gains broad support; but the less‐than‐perfect rating also suggests that there remains room for improvement.

The version of the exercise summarized above works well for students scattered across the globe. Each can complete the two phases of the exercise individually and on his or her own time. This depends, however, on the instructor or instruction team synthesizing the Phase 1 entries for evaluation in Phase 2. We have also developed different versions for in‐person groups. One version assigns students to play the role of a leader of one of the four stakeholders. Each individual then completes Phase 1 of the exercise from the perspective of his or her role. That is, those assigned to the business role choose priorities across the topics from the perspective of what business would like to see in a new social contract. Those assigned to labor, government, education, and workforce stakeholder roles do likewise. Then, groups of four (composed of one person from each stakeholder role) meet and attempt to negotiate a new social contract together. Individuals are allowed to negotiate agreements among all the stakeholder groups or with one, two, or three others.

This approach optimally requires people to be in the same physical space at the same time. We have used it quite successfully in three‐hour classes at MIT, Brandeis, the University of Sydney, and the University of Illinois. We also have created a short version of the exercise suitable for a ninety‐minute class. For that version students are assigned to one of the four stakeholder roles and complete Phase 1 individually online. The results are then tabulated electronically and fed back to the class. Students then meet with others assigned to their stakeholder role and attempt to reach consensus on proposals for what they want that stakeholder to contribute to a new social contract. We have used this version with MIT MBA students who participated in a short four‐day version of the online “Shaping the Future of Work” class.

In all of these cases, the simulation is effective in engaging students to think about and make choices about what they want to see as priorities for each of the stakeholders to contribute to a new social contract at work and in signaling the underlying principle that such social contracts are indeed negotiable in society. While the results obtained with the various versions of the exercise vary somewhat, what is remarkable is the high priority given to workforce development and capabilities in all these groups. Perhaps this reflects the fact that many of the participants are or have recently been students; perhaps it reflects that today’s and tomorrow’s workforce understands the important role lifelong learning needs to play in an economy facing rapid and likely increasing rates of technological change.

The results of using this simulation in its various forms illustrate the possibility that, through engagement with other stakeholders and informed by knowledge of today’s realities, on‐campus students and participants of all ages and backgrounds in the online course were able to forge constructive proposals and agreements for the key stakeholders. Indeed, taken together, their proposals offer an ambitious, forward‐looking, yet achievable blueprint of an inclusive social contract for governing work and employment relationships.

We recognize that simulations like this one can only be aspirational; that is, they do not reflect actual outcomes that might result from the give and take and problem‐solving dynamics of negotiations among leaders of the actual stakeholders groups. Nor do they deal with power differentials, trade‐offs that would likely be demanded by stakeholders in return for agreeing to these proposals, or the potential that the real stakeholders might end up in impasses rather than reaching agreements. Thus, our hope is others will experiment with using the exercise with leaders of the actual stakeholder groups who share responsibilities for governing and shaping the future of work and thereby provide a better gauge of where sticking points, disagreements, or resistance to these ideas might arise. Although we welcome and will support additional utilization of the simulation in the classroom, we have had sufficient applications for the ideas to move out of the classroom and into society. We could envision a number of ways to do this and are exploring ways to adjust the software platform to support such use.

At a community level, local chapters of professional associations such as the Labor and Employment Relations Association (LERA) (LERA members include a mix of academics, business, labor, government, and labor‐management neutrals), the Society for Human Resource Management (SHRM), community labor–management committees, and others could facilitate a cross‐section of community members and leaders in a version of this exercise. By doing so, their communities could provide a statement of what each of the key stakeholders (the local workforce, educators, local governments, and labor) would contribute to businesses in the community and those thinking of locating operations in the community, as well as what, in turn, would be expected of these firms. Importantly, this would be a negotiated process designed to surface reciprocal responsibilities, with the aim of identifying and advancing mutually beneficial outcomes.

Others might organize industry or occupation‐specific discussions about how to adapt the starting principles generated by our students in ways that fit their settings. Making this information widely known could even, possibly, set in motion a “race to the top” for talented employees.

Groups of young workers about to enter the labor force, women, minorities, immigrants, and others could use the exercise to give voice to issues of special concern they want to see featured prominently in the next generation social contract. These may be issues that have not been adequately addressed in the past or in current employment practices, but the issues would be advanced as interests to be taken into account, rather than as positional demands. The simulation environment helps to surface these issues and indicate what elements of a new social contract might look like, while still leaving room for the parties to shape actual agreements to meet local needs.

There are already many lists of “best places to work,” but these are mostly centered on individual employers. Moving the simulation out of the classroom and into communities could help to identify communities that feature mutually beneficial social contracts as best communities within which to work.

In contrast to the gridlock on labor and employment policy, we are suggesting a sequence of negotiated simulations in the classroom, informing sequences of negotiated simulations in society, which would then provide the contours for actual agreements in society. The ultimate goal of these or other possible efforts would be for the exercises to prompt a shared set of principles and strategies that leaders commit to pursuing individually and collectively. Just engaging in such an exercise would send a clear message that constructive dialogue is possible across interest group lines and that, perhaps, it is possible to construct a shared vision for the future of work. In this respect, this article can be seen as a mid‐process report. In the coming years, we hope the ideas will be heading out of the classroom and into societal debates. Additional classroom experimentation will continue and we anticipate that it will interact with practice in the years to come.

We invite readers to access the different versions of the exercise and the video materials from the online course at http://iwer.mit.edu/and to use the version that best fits particular in‐person or online settings. For readers interested in the process of moving the results of a simulation out of the classroom in order to prompt societal negotiations, we invite both observers and change agents. In the process, we can send the message to the leaders of the different stakeholder groups to take up the negotiation of a new social contract at work, or bear the consequences of inaction.

Formal Education (Pre‐School, Primary, Secondary, College/University)

Apprenticeships or Other Forms of Technical Training

Lifelong Training and Development

Career Planning and Development

Training for New Technology

Other

Voice/Bargaining Power/Representation

Dispute Resolution

Anti‐Discrimination/Inclusion

Privacy Protection

Labor and Employment Laws

Other

Organizational Purpose/Goals

High Road/High Performance Work Systems

Staffing Patterns (Employees or Contractors)

Performance/Productivity Improvement

Innovation and Agility

Other

Pay Level – Managers/Executives

Pay Level – Workers/Supervisors

Pay Mix – Fixed versus Linked to Individual, Group, or Organizational Performance

Health Care

Pensions

Other

Flexibility of Hours/Workplace

Work Scheduling

Dependent Care

Parental Leaves

Community Economic Development

Other