Institutional force

Institution affects labor outcomes in two different ways. First they fragment or ‘balkanize’ the labor market into a number of segmented, loosely connected organization - does that ring a bell? We may have different functions or jobs however we are one, we are TWU Local 100. MTA has introduced structure, artificial boundaries and rigidities into its own labor force. However we say we are TWU Local 100, we are one. We are in a contract fight with MTA, we have earned the right, and deserve wage raise. It should be automatic however when dealing with MTA that is not the case. Wage raise should be done automatically based in response to the changes of prices of goods and the rise in taxes.

Wage change should be automatic in response to changes of demand and supply to those experiencing shortages. The boundaries of this ‘natural’ market are defined only by the limits placed on the sphere of competition by the flow of information, the transferability of skills and the willingness to travel. MTA however introduced rules and regulations that further define dimensions of the labor market. These rules and regulations maybe either formal (written) or informal (customary). In either case they effectively delineate who can compete for particular jobs and who is most preferred and which business firms can compete in the bidding. These rules are established with one goal in mind which is to keep the blue collar under control by the management.