Economic, technological, and political changes have created a new employment relationship characterized by an externalized labor market, more tenuous ties between workers and employers, and growing wage inequality. To date, policymakers have sought to address these problems through a supply-side approach focused on education and training. What is needed instead is a demand-side policy resulting in the following: multiemployer career ladders; strengthened internal labor markets; improvements in the quality of low-wage jobs; and a stronger system of labor market coordination. Four distinct models for pursuing these goals have been identified. The two most powerful, joint initiatives between unions and a group of employers and legislative and legal reform, seem unlikely to be implemented because of the political climate and the current system's profitability to employers. The third policy model, worker-based organizations such as worker-run hiring halls or temporary agencies, is potentially powerful but will have little impact if employers do not use the organizations. The fourth option, intermediary institutions that simply coordinate the workings of the labor market, is relatively easy to implement but addresses only one of the four policy goals. Achieving significant improvements in wages and employment will require broad institutional and legislative changes. (Contains 12 references.) (MN)