Where Are All the Workers?

While Indiana’s unemployment dipped to 3.6% last month, Utah is a full half point lower. The New York Times recently cites some of the challenges that brings. A few excerpts:

After eight years of steady growth, the main economic concern in Utah and a growing number of other states is no longer a lack of jobs, but a lack of workers. The unemployment rate here fell to 3.1%, among the lowest figures in the nation.

Nearly a third of the 388 metropolitan areas tracked by the Bureau of Labor Statistics have an unemployment rate below 4%, well below the level that economists consider “full employment,” the normal churn of people quitting to find new jobs. The rate in some cities, like Ames, Iowa, and Boulder, Colo., is even lower, at 2%.

That’s good news for workers, who are reaping wage increases and moving to better jobs after years of stagnating pay that, for many, was stuck at a low level. Daniel Edlund, a 21-year-old call center worker in Provo, Utah, learned on a Monday that his hours were changing. On Wednesday, he had his first interview for a new job.

But labor shortages are weighing on overall economic growth, slowing the pace of expansion in northern Utah and other fast-growing regions even as unemployment remains stubbornly high in Rust Belt cities like Cleveland and in regions still recovering from the 2008 recession, like inland California.

To Todd Bingham, the president of the Utah Manufacturers Association, “3.1 percent unemployment is fabulous unless you’re looking to hire people.”

“Our companies are saying, ‘We could grow faster, we could produce more product, if we had the workers,’” he said. “Is it holding the economy back? I think it definitely is.”

But the share of Utah adults who have withdrawn from the labor force remains higher than before the recession. Last year, 31.7% of adults in Utah were neither working nor looking for work, up from 28.2% in 2006. That is part of a broad national trend.

Workers Crave More than Currency

domination concepts with apples

Losing weight isn’t always fun. Dropping the pounds is rewarding, but the journey can be tough. Very tough.

Wouldn’t it be nice to get paid for your efforts? It turns out that doesn’t always entice employees, according to a new study.

Here’s a taste:

The study, published in January’s issue of the journal Health Affairs, reported the results of a yearlong randomized controlled trial to test the effectiveness of financial incentives to encourage weight loss among 197 obese employees of the University of Pennsylvania health system.

Participants were asked to lose 5% of their weight. Each was assigned to one of four study groups. The control group wasn’t offered any financial rewards. The three other groups were offered an incentive valued at $550.

People in one group were told they would begin receiving health insurance premium discounts biweekly immediately after reaching their weight loss goal. In another group, the people were told they would receive biweekly premium adjustments the following year if they reached their goal. Volunteers in the final group were eligible for a daily lottery payment if they met their daily weight loss goal and weighed in the previous day.

At year’s end, no group had met the 5% weight loss target. Participants’ average weight was virtually unchanged, whether or not they had a financial incentive to lose pounds. Nineteen percent of participants did meet the 5% target, but they weren’t concentrated in any particular group.

Harmonizing Music History with Worker Productivity

19188345Technology improvements are generally associated with getting the same amount of productivity with fewer workers. But something called the “quartet effect” – with links back to the lyrics of the Grateful Dead – instead emphasizes enhancing what people do with their time. Governing reports:

In the foreword to David Dodd’s The Complete Annotated Grateful Dead Lyrics, Robert Hunter, the band’s “lyricist in residence,” wrote that the song “Uncle John’s Band” represented “the first lyric I wrote with the aid of that newfangled gadget, the cassette tape recorder. I taped the band playing the arrangement and was able to score lyrics at leisure rather than scratch away hurriedly at rehearsals, waiting for particular sections to come around again.”

What Hunter was describing, of course, was an improvement in productivity resulting from the application of new technology. Productivity is usually measured in terms of the labor cost per unit of production, and in most cases improvement is achieved by using new technology to reduce head count. For instance, a steel mill that once employed 10,000 workers produces the same tonnage with only a thousand employees, bank tellers are replaced by ATMs and elevator operators become a thing of the past. But in Hunter’s application of new technology, no one’s position was eliminated. It’s an example of what has been called “the quartet effect” at work.

When you reduce the head count of a musical quartet, you have not improved its productivity. If what you wanted was the music of a quartet, you have destroyed the product. The technology Hunter employed is the kind that, rather than eliminating jobs, allows existing staff to make better use of their time and gives them the opportunity to create higher-quality products.

How is this relevant to government? For most local governments, public safety constitutes the largest single category of expenditures, typically accounting for about 60 percent of total costs. For states and for some local governments, education is the dominant cost category. But it’s important to remember that within these areas, personnel costs — the salaries and benefits of police officers, firefighters and school teachers — are the real cost drivers. Personnel costs typically represent 80 percent or more of the total cost of a police department, for example. Few would argue that taking cops off the streets or teachers out of classrooms improves productivity.

Unions Growing Skeptical of Affordable Care Act

Even though labor has been a major contributor to President Obama during his two election bids, there is a growing skepticism about whether or not the Affordable Care Act — often labeled "Obamacare" — will be a benefit to their members. CBS News reports:

Some labor unions that enthusiastically backed President Barack Obama's health care overhaul are now frustrated and angry, fearful that it will jeopardize benefits for millions of their members.

Union leaders warn that unless the problem is fixed, there could be consequences for Democrats facing re-election next year.

"It makes an untruth out of what the president said — that if you like your insurance, you could keep it," said Joe Hansen, president of the United Food and Commercial Workers International Union. "That is not going to be true for millions of workers now."

The problem lies in the unique multiemployer health plans that cover unionized workers in retail, construction, transportation and other industries with seasonal or temporary employment. Known as Taft-Hartley plans, they are jointly administered by unions and smaller employers that pool resources to offer more than 20 million workers and family members continuous coverage, even during times of unemployment.

The union plans were already more costly to run than traditional single-employer health plans.

But Obama's Affordable Care Act has added to that cost — for the unions' and other plans — by requiring health plans to cover dependents up to age 26, eliminate annual or lifetime coverage limits and extend coverage to people with pre-existing conditions…

Unions backed the health care legislation because they expected it to curb inflation in health coverage, reduce the number of uninsured Americans and level the playing field for companies that were already providing quality benefits. While unions knew there were lingering issues after the law passed, they believed those could be fixed through rulemaking.

But last month, the union representing roofers issued a statement calling for "repeal or complete reform" of the health care law. Kinsey Robinson, president of the United Union of Roofers, Waterproofers and Allied Workers, complained that labor's concerns over the health care law "have not been addressed, or in some instances, totally ignored."

Extra Hours Mean Work/Life Balance Suffers

This report from Workplace Options was written last fall, but remains true today as the economy slowly recovers. If your company has reduced staff, then your existing employees are likely being pushed beyond what they’re used to. Just something to keep in mind — and perhaps more socializing together or even added benefits and appreciation events/rewards might be in order to boost morale.

According to a recent survey by Workplace Options, a leading global provider of work-life programs and employee benefits, more than half of American workers (62 percent) say their employer is trying to do more with less as a result of the national economic situation – stretching resources, postponing hiring and trying to get more work out of each employee.

According to a recent survey by Workplace Options, 42 percent of workers are extending their workdays by coming in early or staying late in order to avoid distractions. But what happens to those who contribute to the constant interruptions? According to the survey, nearly one in four employees (22 percent) are aware of someone in their workplace who has been fired for wasting time in the office, disrupting other employees or partaking in other distractions.

“Worker intensification” is a phrase commonly used to refer to the increasing demands placed on workers – asking them to more with the same amount of time and resources. In most instances, worker intensification occurs with little to no reward. According to the Workplace Options survey, more than half of the respondents (55 percent) have taken on additional job responsibilities as a result of the recession, but 70 percent have done so with zero pay increase.

“In times of economic uncertainty a lot of the burden falls on workers. Employers are forced to make ends meet with fewer resources and turn to their staff for help,” said Dean Debnam, chief executive officer of Workplace Options. “It’s important for managers to recognize the size of their requests and the weight of added responsibilities for their employees.”

Sacrificing health, wellness and benefits

Additional responsibilities usually mean extra hours at the office and a struggle to maintain work-life balance. More than half of survey respondents (51 percent) say the increase in responsibilities has negatively affected their well-being and 37 percent said they wouldn’t be able to sustain their current workload in the long run.

According to the 2010 American Time Use Survey released by the Bureau of Labor Statistics, 35 percent of workers are no longer working for the weekends, they’re working on the weekends. Is this a continuing trend? Or is there light at the end of the tunnel?

Debnam says, “Regardless of the state of the economy, employers must recognize the impact of their resourcing decisions. If you aren’t able to hire more resources and you instead ask your current employees to take on that extra work, some productivity is bound to suffer.” 

Mixed Message on Manufacturing

Make: an American Manufacturing Movement is a new report from the Council on Competitiveness that indicates policymakers are receiving vastly conflicting reports on the state of U.S. manufacturing. In addition, it prescribes five "solutions" to help keep the U.S. on top.

The State Science & Technology Institute offers the following:

Policymakers, the report’s authors contend, are bombarded with widely available reports and analysis that support one of three conflicting views (it is on steep decline, doing reasonably well or it is poised for growth) on the health and importance of U.S. manufacturing.

"In reality, elements of all three perspectives are likely true," according to the authors. U.S. manufacturing remains the world’s top producer and an important part of the U.S. economy — employing more than 11 million and contributing more than $1.7 trillion to the economy. However, emerging economies are increasingly becoming a threat to U.S. competitiveness. Going forward, the U.S has the potential to capitalize on emerging marketplaces, but to achieve this the U.S. must find solutions to the challenges it faces.

The report provides five "solutions" to maintain the nation’s status as the world’s top producer, resolve its manufacturing challenges and capitalize on growing international demand:

  • Enact fiscal reform, transform tax laws, regulations and other structural costs to spur investment, ramp up production, capitalize growth companies and create skilled jobs

  • Create fair and open global markets for U.S. goods and services to reduce the trade deficit and increase exports as a percentage of gross domestic product

  • Prepare the next generation of innovators, researchers and highly-skilled workers

  • Create national advanced manufacturing networks and partnerships, prioritize R&D investments and deploy new tools, technologies and facilities

  • Develop and deploy smart, sustainable and resilient energy, transportation, production and cyber infrastructures 
     

Workers Wasting Time Web Surfing? Study Suggests It May Not be the Worst Thing

Studies show American workers waste over an hour per day surfing online. Not ideal, right? But Harvard Business School researcher Marco Piovesan conducted a study concluding that those who are forbidden from Internet use may be even less productive. Read why (and check out the entire article):

To test the hypothesis, the researchers used a variation of the "Marshmallow Task," a classic psychological experiment in which children were shown one marshmallow, and told they would be rewarded with two marshmallows if they could resist the temptation to eat the first treat until the instructor returned to the room. Only 30 percent of the kids could hold out.

But instead of measuring wait time, the team measured the ability of children to complete actual work tasks—folding paper per instructions—at an Italian summer camp in 2008. Children facing temptation got less work done, even given the promise of eventual reward of candy and soda: They not only completed fewer tasks, but also made more mistakes, which downgraded their performance.

"We’d expect to find that being more flexible in monitoring Internet use could increase productivity."(The effect was particularly pronounced for children below age 9, who were found to be on average 21 percent less productive than the children in the control group—while for children over age 9, there was shown to be no significant difference, a finding consistent with previous research showing that children begin developing willpower between the ages of 8 and 10. For more, see their article "Temptation and Productivity: A Field Experiment with Children," forthcoming in the Journal of Economic Behavior & Organization.)

Despite the fact that the study was done with children, Piovesan saw clear implications for adults—hypothesizing that the effects would change not only with age, but also with the degree of temptation. "If we used the same temptation of candies in an office, probably we wouldn’t find anything, but using a different temptation that is stronger for older subjects, the effect would be stronger."

In a recent set of experiments detailed in "Temptation at Work," Piovesan and his colleagues tested exactly that using 20- to 25-year-old college students in an office environment. Instead of paper-folding, the test subjects were given a simple task of counting the number of times people passed a ball back and forth in a video. Between tasks, however, half of the subjects were allowed to watch a video of the British comedy TV show Mr. Bean. The other half were confronted with a flashing red button at the bottom of their screens warning them not to play the video. Upping the temptation, the latter group was able to overhear the video playing nearby and laughter of the students.

As with the summer camp kids, the researchers found that the students facing temptation were more apt to make mistakes and were less productive overall than the control students, underscoring that no matter how much willpower we adults think we have, we are still susceptible to tempting distractions.

Encyclopedia Brown & the Case of the Shrinking Cubicle

Well, this is just sort of a bummer, man. Your office space is shrinking:

Feeling a little cramped at work? Do you no longer enjoy the elbow room you used to? Well, you’re not alone. According to the International Facility Management Association, the average American office worker had 90 square feet of work space in 1994, but by 2010, that same worker was down to just 75 square feet of personal space in which to stretch out on the job.

Nor are office drones the only casualty of this spacial downsizing trend. Senior company officials have seen their offices shrink as well, from an average of 115 square feet in 1994 to 96 square feet in 2010. Oh, the humanity!

The shrinking workplace is yet another cost-cutting measure that employers have pursued for years under the theory that smaller workstations are cheaper to maintain to especially as commercial rents spiral upward.

Survey: Majority of American Workers Happy with Jobs

A survey from Clarus Research Group, a non-partisan organization based in D.C., indicates that despite the notion our country is one big contentious soda can ready to explode with the fury of 1,000 suns (or do I just watch too much cable news?), an overwhelming majority of Americans are actually happy with their jobs. However, it seems older workers are far happier than their younger counterparts, and access to health care obviously plays a role, too. Read on:

The survey, conducted by Clarus Research Group, found only 6 percent of workers unhappy with their current employment. Another 6 percent said they were neither happy nor unhappy.

“In these tough times of high unemployment and uncertainty, many workers are happy that they have jobs,” said Ron Faucheux, president of Clarus Research Group. “However, despite the nationwide results, there were important differences among population groups, especially based on age, race, education and region.”

Age is a major factor, with the youngest and oldest workers a wide 27 points apart. Only 69 percent of workers under the age of 30 are satisfied with their jobs, compared to 96 percent of those 60 and older.

Workers with medical insurance were happier—90 percent, than those without it—75 percent.

Respondents who said they were happy with their jobs by group:

  • Race: 90 percent of whites and Hispanics; 77 percent of African Americans
  • Education: 92 percent of workers with college degrees; 83 percent without
  • Region: The highest was the West (95 percent), and the lowest was the South (83 percent); in the middle was the Northeast (88 percent), and the Midwest (92 percent)
  • Party: Republicans, at 92 percent, were happier than Democrats, at 80 percent. Self-described independent voters were almost as happy as Republicans at 91 percent.

“It is interesting to note that there was only a one-point difference between women and men,” said Faucheux, “and no difference between union and non-union workers.”

The survey was conducted by live telephone interviewers August 14-18, 2009, using a nationwide scientifically selected sample of 560 registered voters who said they were employed full-time or parttime. The margin or error was +/- 4.1%.

Conexus: Indiana Chamber is Right, Privatize Lottery

Carol D’Amico of Conexus Indiana has a guest post on the Central Indiana Corporate Partnership (CICP) blog today supporting our latest Letters to Our Leaders offering, which suggests privatizing the lottery to fund needed workforce development programs in the state.

D’Amico writes:

Such a new revenue source could provide the funds necessary to help move more young people into the higher education pipeline, building our future workforce, as well as addressing the critical need to retrain our incumbent workers.

Some worry that private management of the Lottery is tantamount to a further expansion of gambling. Under the legislation considered last session, at least, the private manager was specifically prohibited from expanding the menu of lottery games. It should also be noted that Hoosiers spend less on our lottery than the average American.  We rank 26th among the 41 states with lotteries in per capita spending ($118 per person).  All adjacent states rank higher in lottery spending, from $135 per person in Illinois to $195 in Michigan…new management would certainly be incentivized to market the lottery aggressively, but it’s unlikely to turn Hoosiers into a pack of gambling addicts.