Security and Risk

I was listening to Ed Schultz’s radio show today, which included an interview with the great union leader Leo Gerard, President of the United Steelworkers, who asked this question: Why do CEOs and executives get the security of contracts?  A small faction of unionized employees have such security, but that piece of the labor pie gets smaller every day.  The best paid employees – the executives – are also the most secure.

Corporations now specialize in transferring risk from the company and executives to workers.  I met with a client today who drives a small truck.  His company is being put out of business by competitors that require drivers to purchase their trucks and routes, which is a method FedEx uses for some of its vehicles.  When the company is no longer responsible for the vehicle, it can cut its price while increasing its profit.  The company wins, so does it customer.  Who loses?  The employee who now has to own the truck, maintain the vehicle, and eventually replace it.

This example is just one way that workers are carrying the burden of “productivity.”  The more a company can ask of its workers: own the vehicle, own your tools, pay for your entire pension, pay for most of your health care; the more it can take as profit.  Those who believe in the “free market” will argue that these business models would be impossible if workers did not accept the terms.  I think a more accurate way of describing this situation would be that desperate people will make bad choices.  Those bad choices will cause all of us to suffer.  First we will pay more to support social programs accessed by low wage workers.  The next step will be much worse.  What happens when wages fall so low that the shrinking middle class can’t subsidize the system that pushes money up?  Our lives will be very ugly.

We need a system that offers real security as well as the opportunity for reasonable profit.  Our current system is out of balance, asking the least of those who have the most, setting up a system where those who are most secure are getting even more security.

Don’t Blame Workers for Unemployment

The best way to kill a lie is to catch it early and call it out.  This is exactly what Laura Clawson does in today’s Daily Kos.  Experts and pundits are claiming the unemployment rate is high because workers lack skills needed to fill open jobs.  Clawson look at the numbers and finds something very different.  Employers are recruiting workers less intensely than they did before the recession.  She also tests the claim that there are not skilled workers needed to fill open positions.  Again, the lie is blaming the workers.

Why might employers want to leave positions unfilled?  It’s more profitable to squeeze every ounce of productivity out of existing staff.  A client recently told me that a leading retailer is going to cut all of its store managers and shift that duty to people who are currently assistant managers without giving them the title or salary of store manager.  Sooner or later, this kind of corporate “strategy” will boomerang.  Don’t listen to the lie.  Don’t blame the workers.

PS:  No Sabbath this week.  I’ve been busy and dealing with a minor health issue.

Krugman on Productivity and Earnings.

Paul Krugman has posted two very disturbing blogs on wages.  In one, he demonstrates that median earnings for full-time male employees have been flat since the 1970s.  How do people compensate for inflation?  Krugman answers this question with a second graph that shows rising levels of debt from the 1980s-2010.  In his second post, Krugman contrasts a steady growth in productivity over 40 years with a flat line for hourly compensation since the 1970s.  If this graph is accurate, who benefited from the increase in productivity?  It wasn’t hourly workers.

Beware of the Boss Who Asks for More.

Alexander Eichler of Huffington Post Business reports on a study from the University of Heidelberg that offers this thesis:  Bosses exploit workers who don’t understand what they produce.  The university set up a study in which boss set workers’ pay based on what employees knew about their contribution and value to the company.  When an employee demonstrated that she knew her value, her pay was less likely to be cut (Note: “less likely”).  Clueless employees were easily exploited and worked for less.

Eichler connects this study to conditions in the U.S. over the past few decades.  Productivity has steadily increased while workers have realized few of the benefits.  He says that the situation won’t change because so many people in the U.S. are out of work.  That’s true.  But, as the Heidelberg study shows, people who know their value are more likely to get paid – or they’re more likely to find an employer who will pay them. Take control of your career.  If your boss and company are exploiting you, find a new job and lay off your employer!

Productivity and What It Costs You

When reporters and commentators talk about the economy, they focus on unemployment.  More sophisticated experts discuss falling wages and the loss of consumer buying power.  Those are both very important topics.  But there is another economic measure that impacts how we work and live: Productivity.

Whenever productivity is discussed, it is taken as a measure of the economy.  It’s easy to assume that more productivity is a good thing.  However, we also need to ask who benefits from productivity and who loses.  As I said, salaries are flat, many benefits have been cut.  Fewer people are doing more work.  Who wins that game?  Investors and company owners who get bonuses for productivity.  Who loses?  The people who are doing more work for the same or less compensation.

Every week clients tell me new stories about how they have been being asked to do more, to work late into the evening, to take work home.  Across industries, workers feel stress and overburdened.  At the same time, they are afraid to confront their managers because they need their job and the income it provides.  We can measure an unemployment rate and productivity.  It’s much harder to measure what people are feeling and how their jobs affect their lives.  The next time you hear an economist gushing about increased productivity, remember that workers are paying the price, working more, leading less productive personal lives.  They are not the winners in the productivity game.

Make Yourself Happy

Are you happy at your job?  If not, the problem might not be your job, but the way you are approaching it mentally.  In a TED presentation, Shawn Achor, CEO of Good Thinking, Inc., explores how the “lens” we use to look at life affects our attitude and our performance.

Achor is a very funny, engaging presenter.  However, his science is serious, especially for those people who are cheating themselves by focusing on negativity.  Achor’s discipline is called “positive psychology,” which shouldn’t be confused with any kind of simple self-help program.  It is a new and growing specialty in psychology that focuses on how our attitude can be readjusted through exercises that emphasize gratitude and helping others.  Achor’s studies have found that a person with a positive outlook is 31% more productive at work.  More importantly, positive people are focusing on what they have, not what they lack. 

I strongly recommend this 12 minute video.  It’s fun and insightful.

Working Less on Holiday Weeks

The Chicago Sun-Times reports that 1/3 of managers claim workers are less productive on the week before a major holiday.  This claim is based on a national survey of 1,000 senior manager conducted by Accountemps.  Five years ago, a similar poll found that 44% of managers held this view.  It would seem that people are working harder.

How productive are senior (or middle) managers in the week before a major holiday?  Generally speaking, managers get more time off and have better benefits than the people who work for them.  My guess is that front line employees are less productive because their bosses are equally distracted by holidays. 

We are becoming more and more a society that blames problems on working people.  Former House Speaker New Gingrich recently called the unemployed “lazy.”  Other conservative thinkers blame unemployment rates on high union wages (even though fewer than 10% of private sector workers are union members).  We need to start questioning these claims.  We need to call them what they are – lies.