The Impact of Internal Labor Markets on Newspaper Industry Diversification
The daily newspaper industry in the United States changed dramatically in the second half of the last century. The number of daily newspapers declined, the number of cities served by only one daily newspaper increased, and the number of newspapers not part of a newspaper group decreased. One potential outcome of creation of a newspaper group is expansion of what economists call the Internal Labor Market. If the newspaper group integrates or even coordinates the hiring of personnel, the Internal Labor Market could be expanded to cover all or major parts of the group. This creation of an expanded Internal Labor Market of the daily newspaper company should have significant consequences for the individual newspaper. It should, in the circumstances of an expanded Internal Labor Market cutting across different newspapers of differing sizes, be advantageous for individual papers to hire able talent, to invest in them through compensation, and to encourage their development through training. This paper tested this expectation in one specific area: the hiring of and investment in journalists. It found that daily newspapers that are part of an optimally configured extended Internal Labor Market are more likely to have minority journalists on their staff than are other newspapers.
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