Occupational Training, Unions, and Internal Labor Markets

A large majority of U.S. establishments provide formal job training programs, according to the 1991 National Organizations Survey. Most training is directed at core employees (who produce the company’s main product or service) and their managers. But contrary to previous research, blue-collar core occupations receive as much company training as white-collar core workers. The more extensive an organization’s internal labor market, the more likely it is to use formal training programs as mechanisms for enabling workers to advance to positions of higher prestige, pay, and responsibility. The presence of a labor union representing core workers in wage negotiations not only is associated with greater firm-provided training effort, but unions also seem to offset the adverse effects of an absent or poorly developed internal labor market for all types of workers. Unionized establishments are more likely than nonunionized workplaces to provide training to core workers recruited from outside the organization.