The American Dilemma and How We Can Fix It

Posts tagged ‘Employment’

GOOD NEWS FOR SENIORS

If you don’t like pizza – well, you’re just un-American.  I’m a good and loyal American so it goes without saying that I not only like, I LOVE pizza.  Hot, cold, thin or thick crust – other than throwing pineapple and ham on it (or peanut butter), it’s almost impossible to ruin this all-American favorite.  (We did invent it didn’t we?)

Well if you’re thinking that under our ever-beneficent radical socialist leaders in Washington, seniors are going to be able to get all the pizza they can eat, I’m sorry to report that you’re wrong.  (At least for the moment – but who knows?)  No, I’m referring to new job opportunities which those who rely on walkers to perambulate may soon have available to them.

You see, there’s this law that passed called the Patient Protection and Affordable Care Act (a/k/a/ Obamacare).  And a mighty law it is indeed – as we’re only beginning to discover.  Fortunately, it doesn’t fully kick in for another year so that allows us time to think and pine and fret over its implications as they begin to further unfold.  But there are a few things about it which we do know.

(This includes those Democrats including my own former Congresswoman Shelley Berkley who recently failed to advance her career to the United States Senate and is now out of politics.  The good Congresswoman followed leader Pelosi’s advice and voted to pass the bill without bothering to read it.  Details, details.)  And, by the way there are a lot of details.

One of the details that we do know is that employers will be required to provide health insurance for all employees who earn less than $15 per hour.  If they fail to do so they will be subject to a fine of $2000 per employee.  But the cost of the insurance is likely to be at least five times as expensive as the fine.  So, in essence, the reasonable employer will make the choice between spending $2000 per year or $10,000 per year – and which number do you think she will select?

But, wait – there’s a way around this.  You see this only applies to those employees who are considered “full time” employees – that is to say that they work (or at least show up) for 30 hours or more a week.  (Whatever happened to the 40 hour work week?  I guess I owe myself a lot of back pay at an overtime rate!)

So, as an alternative, an employer can cut back on her full-time staff, reducing them to part-time status and thus skirt this provision of Obamacare.  Apparently when our esteemed Congress passed this bill and the President signed it into law, they overlooked this eventuality and the consequent reduction in income and standard of living that those whom the law is intended to benefit will undergo.  I guess it’s just another example of unintended consequences.

But in my musings, I have arrived at a solution which I would like to share with all those small business owners (and little pizzerias that I love to frequent).

HIRE THE ELEDERLY

You see, if we merely raid the retirement homes to find the able-bodied among our senior citizens, we can recruit them to work in our stores and businesses and avoid this provision of Obamacare since they already have insurance, Medicare.

And this works out well for our seniors.  Not only will it provide them with additional income that they need to compensate for the rising prices of food and gas (the kind you put in your vehicle) which are far outstripping the increase in their Social Security benefits but, since their doctors are now becoming veterinarians, there’s no need for them to worry about missing their appointments – since there won’t be any.

And this works out for the pizza-eating public as well.  I mean really, would you rather see some acne-pimpled teenager tossing the dough for your pizza, or some lovely silver-haired lady who reminds you of your grandmother?

“I’m here to pick up my extra large pepperoni, mushroom, green pepper and onion pizza, Grams.  Oh, wait.  Don’t strain yourself.  Let me help you lift that.”

FINDING A JOB

During the twenty-five years I was in the executive search business, I read a lot of resumés.  I’m guessing the number could have been close to one hundred thousand or so.  As a result, I know a little bit about resumés and resumé writing.

Of course, this was back in the days when people committed their thoughts to paper, typed or “word processed” them with only a limited benefit from “spell check” and then folded this vital document, placed it in an envelope, used the USPS to deliver it and then hoped that the recipient would actually care about the contents of their communication.

People generally share the opinion that writing a good resumé will get you a good job.  Nothing could be further from the truth.  But I can assure you that writing a poor resumé will result in your never being called for an interview for that good position.  Allow me to explain.

My normal efforts to recruit for a specific position were to use contacts with whom I had a good relationship and work through a referral network to identify appropriate candidates for a position vacancy.  Sometimes those efforts would come up short and I would run a “Blind Box Ad” in the “Chicago Tribune” to bring in a new field of potential candidates.

During times of economic prosperity, an ad would generally yield about two hundred responses.  During bad economic times, the number of responses might be three to four times that great.  In either case that was a lot of reading.

If I did nothing but read all these responses thoroughly, I would have had no time to address myself to the ongoing management of my business.  So I developed a system for sorting through this correspondence  to minimize my time devoted to reading them.

I thought of it as the “Goldilocks System”.

My essential view of resumés is that they bear a lot of similarity to a striptease.  They should whet the appetite – but not necessarily be all-revealing.  That is the purpose of a personal interview.  So those resumés which were sent to us that were as heavy as the first volume of The Encyclopedia Britannica normally went directly into the circular file without being opened.

On the other hand, there needs to be enough material for the person reading the resumé to make some sort of judgment about the individual’s background  to decide whether to call him in for an interview.  So those resumés which were so light on information that it was impossible to make a reasoned evaluation were also sent into the wastebasket.

This process reduced the number of resumés by at least thirty percent – which still left a daunting number to be reviewed.

Then I applied the “Precision Factor”.  Those resumés in which I found typographical mistakes (sometimes including the misspelling of the name of their current or previous employers) met the same fate as those which failed my first two sorts.

We were dealing with financial personnel and my logic for giving these resumés a failing grade was that if a person were not correctly able to spell the name of the company that wrote his paycheck, what kind of work product would he deliver in dealing with a corporation’s finances?

I was raised in an era in which we were taught grammar and spelling.  Perhaps it is a personal bugaboo but I still believe that accuracy and attention to detail matter.  (This is one reason that my two year stint working for government resulted in my starting my own business.  It drove me crazy watching slip shod, sloppy work pass for a quality product).

At last I was down to the serious business of actually reading and “vetting” the remaining candidates.  I only wanted to interview and submit to our client those candidates who had the capability to discharge the duties of their new position in an effective manner.  I did not want to waste my client’s time by referring people to them who were not appropriate and I had a sense of professional pride in being able to sort the wheat from the chaff.  After all, that’s why my clients had hired me in the first place.

It is within the context of reviewing candidates’ credentials that I began reflecting on the results of the Presidential election of a few days past.  I wondered what sort of an ad I would write were I retained to fill that position and I came up with the following:

OPENING FOR PRESIDENT OF A MAJOR COUNTRY

Our country is in need of a new leader to replace our CEO.  The individual we select will have shown a proven ability to be a problem solver, work with a diverse group of individuals, arrive at simple, effective solutions to complex issues, and will have demonstrated a successful track record throughout his or her professional career. 

Our culture requires a person who has a firm grasp of economic, social and foreign issues and will be able to reach out to our diverse citizen base in an inclusive manner.  A strict adherence to our fundamental governing document, our Constitution, is required.

For consideration, please submit your resumé to the citizens of the United States of America.

Perhaps before the general election in 2016, we can offer a crash course to our voters on how to read and evaluate a resumé.  It might produce a better result for all of us.

Certainly, we could do no worse.

UNFIT TO SERVE

Every employer makes determinations about people.  Should I hire this person or that one – or hold off hiring anyone and try to redistribute the job’s responsibilities to those already on staff – or should I just do it myself?  These are real questions that real business people face regularly.

The process is, by its nature, essentially discriminatory.  We might require a Master’s degree which discriminates against those who are high school dropouts.  We might believe the job requires at least five years of related work experience – which discriminates against those who are freshly graduated.  This sort of discrimination is allowed by Federal law because it focuses on what are called BFOQ’s (Bona Fide Occupational Qualifications).

On the other hand, discriminating against applicants on the basis of gender, race, religion, national origin, sexual orientation or Vietnam War status is a prohibited practice and a violation of that same law.  That is because we believe these attributes have no bearing on whether a person will be able to perform his or her job duties.

These are the rules which regulate privately-owned businesses, from IBM to the little mom and pop diner.  They are also the rules that clog our system with law suits brought on behalf of those who think they have been victims of illegal discrimination – much to the benefit of trial lawyers who specialize in these sort of suits.  Having said that, there is a need to oversee the activities of short-sighted employers who harbor prejudices, whatever the form that it takes.

But when it comes to those who serve in Congress, there are only two requirements, which are that they conform to the eligibility requirements set forth in the Constitution and that they receive a plurality of votes from those who live in their district or state.  Sadly, that may not be enough.

A person of conscience should, as in the case of former Arizona Rep. Gabrielle Giffords, realize that her physical health, as a result of being shot,  was insufficient to allow her to discharge her duties to her constituents.  She resigned her office.  I applaud her for her courage in putting those she represents first and herself second.  That is an attribute of a stateswoman and I hope she experiences a complete recovery.

The House of Representatives has procedures for censuring those who are charged and convicted of ethical violations.  I am not sure if the procedure allows for a convicted congressman’s expulsion – or if that is left to the voters in his district at the next election.

But what happens in the case of a congressman who is physically impaired – as was Congresswoman Giffords, or mentally so.  To the best of my knowledge, there is no procedure other than the way in which that congressman wishes to handle the issue.

The reason I bring up this matter is the physical and mental condition of Illinois’ 2nd Congressional District, Rep. Jesse Jackson, Jr. who has been on a “leave of absence” since May and is currently being treated for depression and bi-polar disorder at the Mayo Clinic.  I am particularly interested in this situation because I lived in the Congressional District from which Rep. Jackson was first elected in 1994.

By way of context, remember Presidential-candidate Sen. George McGovern’s 1972 effort to attain the White House.  Sen. Thomas Eagleton was his original choice for Vice-President but was dropped from the ticket when it was revealed that he suffered from depression.

Let me say that I wish  Rep. Jackson every good wish for a complete and full recovery.  I don’t know enough about these conditions to know if that is a possibility.  I certainly hope it is.

But until that occurs, I would call on him to be a statesman and resign his office in the interest of allowing someone who is, at this time, better physically and mentally able to represent his constituents.

America faces serious challenges – the most serious I remember during my lifetime.  We need everyone in every elected office to be a person who is healthy both physically and especially mentally in order to address these challenges.

No one but those who are running for election truly knows if he meets that standard – or if they are unfit to serve.

THE CONSUMER

Have you ever played chess?  If you have then you realize the most important value of your eight “pawns” is that they serve as sacrificial lambs in your effort to checkmate your opponent.  American consumers are little more than pawns in the game of chess that our banking system including the Federal Reserve and  our politicians are perpetrating on the nation.

In 1988, John Carpenter made one of my favorite films, “They Live.”  It is a combination of science fiction and film-noire.  As it is probably a movie that most of my readers have not seen, here is a synopsis of the plot.

The film is set in Los Angeles.  Aliens have come to earth and they have allied themselves with the rich and powerful – titans of industry and those who are in political power – promising these people untold wealth and riches as they engage in their ultimate strategy which is to rape the planet of its resources before they move on to another planet to do the same.

The aliens have installed broadcast towers around the world which serve two purposes.  The first is to cloak the aliens from identification (Carpenter portrays their real form as Halloween ghouls) and the second is to allow them to put subliminal messages on advertising billboards which humans absorb but don’t actually see.  Those messages direct us to “Buy,” “Spend,” “Use,” “Replace”, “Throw Out.”  These are the ultimate consumerist messages.

The reason that the aliens want us to do this is that, even as they use us to help in their mission of despoiling Earth’s resources, they want us to work faster and harder and if we are perpetually nearly broke, we will have to continue on our unwitting assistance of their agenda.

A drifter, Roddy Piper gets work in construction and discovers a box of sunglasses which, when worn, reveal the aliens’ true form.  The sunglasses are later replaced with an updated version in the form of contact lenses.  Piper, who’s character is named “Nada” joins a movement of other humans who realize the truth of the plight of earth’s people.  Their goal is to tear down the broadcast tower which cloaks the aliens’ true appearance and emits the signal for their subliminal messages so that all people will see them for who and what they really are.

At the conclusion of the movie, the tower and signal are destroyed – but Nada gives his life in the process.  Presumably, humans learn the truth and the aliens will be routed, but that is a conclusion left to the viewer to reach.

The American consumer is responsible for  two-thirds of our Gross Domestic Product.  It is our buying, replacing, using and throwing out things that keeps our economy fueled.  We make purchases based on the latest fad and fashion and for many of those, the products are nearly obsolete as soon as they have been released.  These spending habits are why we have amassed the incredible amount of consumer debt that is on the books.

While we are cautioned about being in all this debt, it is really the only way that we can finance our need to buy and spend and use and throw out.  And the banks love it.  Lending money to the consumer at 18% – 24% while they borrow from the Federal Reserve at  0.25% is very profitable business.

And our politicians hope that we will continue on our present path – and accelerate our journey on the way since they depend on us to fuel the economy and their own re-election efforts.  A happy consumer is more likely to be a voter who will once again return the establishment to their places of privilege at the top of the food chain.

The motto of The Science Fiction Book Club is, “Today’s fiction is tomorrow’s fact.”    Some of Carpenter’s views in 1988 might have been fiction.  But if you look around you will see that a lot of that has indeed evolved into fact.

Is that because of alien intervention or is it because of our own foolishness and consumerism?  Does it really matter?  The results are the same.

BIG BROTHER

There was a time in America, not too long ago, that people believed that if they worked hard and they worked smart, they had a chance of doing well for themselves and for their families.

Some of these people worked for others and realized that self-sacrifice was necessary.  They saved some out of each paycheck and spent less than they earned.  They built a nest egg and many bought small houses in which to raise their families.

Others, resounding with the pioneer spirit that built America were more adventurous than those who accepted a wage for a living.  They were entrepreneurs who took the risk, trusting in their own ideas and in their own abilities to create something where previously there had been nothing.  Some failed, yet many succeeded and in so doing collectively gave employment to millions of their fellow Americans.

I have been a member of both classes of these American workers and am appreciative that I had the opportunity both to find a job when I needed one and to found a company and offer jobs to many others.  Whether it was as an employee or as an employer, I always tried to do my best – putting forth more than the amount of effort my employer expected – and challenging myself as the employer to offer a better product and better service to ensure both my and my employees’ security.

Things didn’t always go exactly as planned – there were recessions which threw us off track – but somehow through sheer determination and a lot of faith I was able to struggle through and at the end of the day things worked out okay.  I must admit that I felt proud of both my accomplishments and my record.  It made up for the many sleepless nights wondering how I was going to meet the payroll during our worst economic times.

I cannot imagine the reaction that people who are entrepreneurs today must have had to the recent declamation by President Obama concerning their businesses that, “You didn’t build that …”  Beyond the insensitivity of the remark is something far worse – pure and blatant stupidity – which seems to run rampant in an Obama speech when he is deprived of a teleprompter.  And this coming from a man who’s career is distinguished by a lackluster stint in the Illinois and U. S. Senates, preceded by a couple of years as a “community organizer.”  When the history books are written, he will probably be remembered as the person who was most responsible for attempting to destroy the “American dream.”

Let’s look, for a moment at how this prescient President began his post-school career.

As a community organizer on Chicago’s Southeast Side, Barrack Obama accomplished several things.  First, he was involved in helping to develop “neighborhood watches” to improve the security of the residents in the high crime rate areas which were within his purview.

Security and personal safety are obviously worthwhile goals and are important to all of us.  But the reason that there was a need to develop neighborhood watches was because the residents of these communities had very limited education resulting in a high rate of unemployment and a consequent large dependence on welfare to sustain their existence.  The thugs who threatened them met the same demographic and found, since they had no useful skills, that it was easier to band together in gangs and either sell drugs or steal from others.

As an adjunct to the neighborhood watch, there were the neighborhood “clean-ups” which Mr. Obama set in motion.  By clean-up I refer to getting volunteer residents to pick up the debris which littered their streets – the refuse that came from irresponsible people tossing the containers that originated in fast food restaurants and which had been discarded wherever the purchaser decided it was most convenient for her.

It is this “business background” and resume which apparently enables the President to have a keen insight into what it takes to run a business.  Frankly, if he applied to my temporary service for a position, I doubt that I would have felt comfortable recommending him to any of my clients – except, perhaps for a low-level job in the mail room.

Given President Obama’s view of things, none of us should be surprised that small businesses, the backbone of economic growth and employment, are not hiring and the economy is stagnant.  But at least one good thing came out of his comments.

Unlike so many other issues on which he has flip-flopped repeatedly to appear in the favorable light of momentary public opinion, I think we do have a good idea of what this man is all about through his statement about small businesses.

Hang in there all you entrepreneurs.  You are a credit to yourselves and to a country that allowed you the opportunity to be all you could and chose to be.  You’ve had to endure tough times before but your faith and diligence carried you through.

And as with all things, even with Big Brother, this too shall pass.

UnderdogBmprStck5678

“X” MARKS THE SPOT

There is a stock listed on the NYSE which has one of those most coveted of all ticker symbols – a single letter. In this case the symbol is “X” and it represents the United States Steel Corporation.  It has maintained that distinctive symbol for a century.

There was a time in America when economists and investors waited anxiously for U. S. Steel to report its earnings.  A good report could mean a surge in the general stock market.  A bad report could mean a nasty selloff.  Of course, this was at a time when America owned a large share of the global steel industry.  Those times have passed.

In the decade beginning in 1910, the amount of steel that was manufactured in the United States gradually increased as a percentage of worldwide steel production to the point where we consistently produced between 30% – 50% of all the steel made in the world.  Cities like Gary, IN became boom towns – welcoming workers to the state of the art mills that had been built.  Good jobs were plentiful and the steel industry was the backbone of American prosperity.

But things changed.  Other countries learned how to manufacture steel of equal quality to our American product – and they learned to make it less expensively than we could.  One of those countries was Japan.

If you know anything about that island nation you know that Japan, unlike America, is blessed with few natural resources.  The raw materials to manufacture steel have to be shipped in from other countries where they abound.  Despite that additional cost, Japan has still been able to manufacture a quality product at a fraction of the cost of its American counterpart.

How is that possible?  Perhaps the answer lies, at least in part, in the demands and entitlements which American unions have been able to extract from U. S. steel companies.  The cost of labor is an essential component of the way that any product is priced.  And if your costs are significantly higher than your competitors’ you simply will not be able to offer your product at a price that is going to be attractive to buyers.

Recently I’ve been covering the flap about “outsourcing” as it pertains to the presidential race.  Although I think this should have about the same level of importance as getting a peek at President Obama’s college transcripts, allow me to play devil’s advocate and assume that there is something that is actually material in this conversation.

Let me further assume that Gov. Romney’s Bain Capital outsourced some jobs to countries overseas.  How many jobs?  Well, considering the nature of the companies that Bain owned I am going to take a stab at estimating that number.  I’m going to suggest that number is between a few hundred and a few thousand.

By contrast, the number of American workers employed in the steel industry shrank from 500,000 to 224,000 in the period between 1980 – 2000 – a loss of 276,000 jobs that were essentially outsourced to countries overseas.  Thank you union leaders for your excellent work.  You certainly deserve to be recognized for your achievements.

By 1980 the United States’ share of global steel production had declined to 12%.  By 2000 our market share had declined further to 8%.  Today it stands at 2%.  And that once great boom town of Gary, IN has an unemployment rate of 13.1% which is more than half again as much as the national average.

Given these statistics, even if Gov. Romney is an “outsourcer”, he is a veritable neophyte at it.   He needs to sit in on a few AFL-CIO leadership meetings to see how it really is done.

If we want to make outsourcing an issue in the November election, let’s look at the real causes and perpetrators of it.  Our unions which demand that their members earn wages and benefits which make our products globally uncompetitive; our politicians who enact onerous rules and regulations which detract from productivity and add significantly to cost; and ourselves, for being willing purchasers of products manufactured overseas because they are less expensive and we can save money.

Harry Truman said, “The buck stops here.”  I guess that was back in the days when “X” marked the spot.

THE RIGHT PERSON FOR THE JOB

John got home a little later from work than usual and when he walked in the door he could smell the wonderful dinner that Mary was getting ready to serve the family that evening.  He thought to himself, “How lucky the kids and I are that I found such a wonderful woman to be my wife and their mother.”

As the family sat at the table, John asked Mary, as he usually did, how her day had gone.

She said that it had gone fine – other than the fact that she had experienced the worst tooth cleaning of her life.  John asked her what had happened.

Mary said, “Well, it’s probably my own fault.  I should never have gone to Al’s Auto Repair to get it done.”

Mary would occasionally cross over into the slightly-warped dark side of humor and John thought that statement was one such foray.  He put down his fork and he and the kids began laughing at the joke Mary had made.

Mary looked annoyed – which was unusual for her.  So she said, “You think that’s funny?”  Then she retracted her lips and to the shock of her family they could see that her once pearly-white teeth were streaked with grease.

Of course you realize I fabricated this story, my point being that it is important to try to select the right person for any particular job.  Perhaps even more frightening than Mary’s selecting someone totally incapable of doing what she needed done was that they actually attempted to do it knowing full well that they didn’t have the expertise.

I have hired a great many people over many years of owning my own business.  I always put a great deal of thought into the individuals who were interested in joining us because I felt that we had to be mutually-comfortable in the commitment we would make to each other.

I viewed our relationship not so much as one between employer/employee but as a marriage.  We had to be compatible and we had to share a basic philosophy and work ethic.  Lacking those elements, our relationship was ultimately doomed to failure.

As I’ve said in previous posts, I always viewed the failure of any employee as my failure – not his.  Either I had made a poor hiring decision based on what I perceived to be the nature and character and potential of the person whom I had hired; or I had failed to inculcate our corporate philosophy in that individual or they were unwilling to accept it.  Whatever the case, it necessarily meant that we would part ways – sometimes through my choice and at other times through theirs.

Letting an employee go was the part of my job that I hated the most.  It was difficult for me emotionally because I knew that my decision would have a major impact on the employee’s life – at least in the short term.  But I also had to consider that by getting rid of some dead wood the whole tree had a greater chance to survive and flourish.

Admitting that I had made a mistake was as difficult for me as it is for most of us.  But when you see the handwriting on the wall, an intelligent person should not fail to read and act on the message.

Have we hired the right person to lead this country?  To what can our employee, the President point as being justification for keeping his job?  Are things better or worse than they were when we voted for him based on what he said his nature and character and potential were?  If not, it’s time to prune the tree of the dead wood so that it has a greater chance of surviving and flourishing.

Admitting that we have made a mistake is always embarrassing.  Choosing to pretend that we haven’t is simply ignorant and is likely to lead to disaster.  Given those two options, I’ll select a moderate case of dealing with egg on my face.  Because I know, it’s always important to try to find the right person for the job.

IS IT REAL OR IS IT MEMOREX?

Today we had another poor Employment Report for the month of June.  While the 80,000 jobs which were created was a small improvement over May’s 69,000, these numbers are obviously far short of the 200,000 we need to create monthly just to keep even with the number of net new workers entering the job market.

The Administration, which is the architect of our stagnant employment situation and an unemployment rate of 8.2%, had it’s usual response that we should not be too concerned with any one month’s data.  I agree with that statement.  There are variations which can be due to any number of external factors in any given month (although I would exclude President Bush from the list).

At the bottom of this post I have listed the White House’s official response to 30 months of Employment Reports as can be found on its website.   I particularly enjoyed the post of July, 2010 which was as devoid of substance as one might expect from this Administration.

Perhaps, my readers will ask themselves the same question I did:

“Is it real or is it Memorex?”

BmprStck25591

June 2012: “Therefore, it is important not to read too much into any one monthly report and it is informative to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/07/06/employment-situation-june)

May 2012: “Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/06/01/employment-situation-may)

April 2012: “Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/05/04/employment-situation-april)

March 2012: “Therefore, it is important not to read too much into any one monthly report, and it is helpful to consider each report in the context of other data that are becoming available.” (LINK: http://www.whitehouse.gov/blog/2012/04/06/employment-situation-march)

February 2012: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.” (LINK: http://www.whitehouse.gov/blog/2012/03/09/employment-situation-february)

January 2012: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report; nevertheless, the trend in job market indicators over recent months is an encouraging sign.” (LINK: http://www.whitehouse.gov/blog/2012/02/03/employment-situation-january)

December 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2012/01/06/employment-situation-december)

November 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/12/02/employment-situation-november)

October 2011: “The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. There is no better example than August’s jobs figure, which was initially reported at zero and in the latest revision increased to 104,000. This illustrates why the Administration always stresses it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/11/04/employment-situation-october)

September 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/10/07/employment-situation-september)

August 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/09/02/employment-situation-august)

July 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/08/05/employment-situation-july)

June 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/07/08/employment-situation-june)

May 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/06/03/employment-situation-may)

April 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/05/06/employment-situation-april)

March 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/04/01/employment-situation-march)

February 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/03/04/employment-situation-february)

January 2011: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/02/04/employment-situation-january)

December 2010: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2011/01/07/employment-situation-december)

November 2010: “Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2010/12/03/employment-situation-november)

October 2010: “Given the volatility in monthly employment and unemployment data, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2010/11/05/employment-situation-october)

September 2010: “Given the volatility in the monthly employment and unemployment data, it is important not to read too much into any one monthly report.” (LINK: http://www.whitehouse.gov/blog/2010/10/08/employment-situation-september)

July 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative. It is essential that we continue our efforts to move in the right direction and replace job losses with robust job gains.” (LINK: http://www.whitehouse.gov/blog/2010/08/06/employment-situation-july)

August 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/09/03/employment-situation-august)

June 2010: “As always, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/07/02/employment-situation-june)

May 2010: “As always, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/06/04/employment-situation-may)

April 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/05/07/employment-situation-april)

March 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/04/02/employment-situation-march)

January 2010: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2010/02/05/employment-situation-january)

November 2009: “Therefore, it is important not to read too much into any one monthly report, positive or negative.” (LINK: http://www.whitehouse.gov/blog/2009/12/04/employment-situation-november)

ON OUTSOURCING

When we hear the word outsourcing (and the rhetoric over that is sure to increase as the Presidential campaign heats up), most of us tend to think that it means taking American jobs and shipping them overseas.  That is one, but not the only aspect of this business practice.  This post will attempt to explain both the process and the reasons that companies outsource certain internal procedures.

If you were the Managing Partner of a successful CPA firm and had guided your partnership’s growth over the years, one of the aspects of your business which you would have to manage was records destruction.  Destroying records containing sensitive client information, Name, Address, SSN, DOB, income might easily have been accomplished as a firm with a small practice with a simple paper shredder.  But because of the volume of client documents what was once a simple task that took one of your employees a few hours now has grown to a monumental job.

Solution:  Outsource this to a firm that is bonded, specializes in the destruction of sensitive records and has the most sophisticated equipment to make sure that they accomplish their job in a secure manner.  You have just outsourced this aspect of your business – although in this case you have done so with an American company.  No loss of American jobs here – merely a transfer of who is paying the individuals performing the task.

The reason companies do this is that it makes for a more efficient operation.  Someone using the most advanced equipment and whose sole job is to destroy records, as in the case above, is going to provide a better product and do so in less time.  I doubt the critics of outsourcing as a practice have a problem with the example I have given.

Nor are they likely to have a problem with another aspect of outsourcing – engaging temporary personnel to work on a specific project – rather than hire a full-time employee.

I think most of us would agree that it is more efficient to hire a person from a temporary agency for a project which is expected to last only a few weeks or a few months, rather than hire a person to work full time until the project is completed and then lay that person off.  Again, we have another example of how outsourcing can be an effective, if not the only, logical strategy in certain business situations.

The rhetoric surrounding outsourcing does not concern itself with either of the two examples I have cited.  It specifically refers to taking jobs which formerly were done by Americans and shipping those to other countries.  There is no doubt that much of that has occurred.  The question is, if this is a “bad” thing, who is at the root cause of it and who should shoulder the blame?

There is one party to whom I would point:  The American consumer.

The American consumer’s spending comprises two-thirds of our Gross Domestic Product.  You and I collectively are the single largest driving force behind our economy – or it’s greatest nemesis.  We want more, we buy more, we spend more – or we still want but we cannot afford to buy and as a result we spend less.  When we spend less, the economy suffers.  And our economy is suffering.

It would be untruthful not to admit that many products which were once made in the United States are now manufactured abroad.  The American dominance in the automobile and steel industry have long since waned from their days of glory.  And the reason – the American consumer.

Absorbed with our desire to buy we naturally want what we want at the lowest price.  And the lowest price is a direct function of the lowest material and labor cost.  A car which can be assembled in Germany or Japan for one half the cost in terms of labor will be sold in the showroom at a lower price than a comparable American product.  Look in your garage and check out the make of the vehicle that you are driving.  Does it have “Made in America” stamped on it?

The largest tech company, Apple, Inc. does not have a single product in its line which is manufactured in the United States.  The glass on your iPhone and the engine on the iPhone and iPad are made in the U. S.  – and are then shipped to China and other Asian countries where these units are assembled – together with all the rest of the parts that are manufactured in those countries.

Why does Apple pursue this manufacturing strategy?  CEO, Tim Cook responded to that question by saying, “Cost and facilities.”

If an iPad sells quickly at $499 the question is would one that was manufactured in the U.S.A. sell as well at $999?  Would the lines at the Apple store be as long and would the company move as much product if they decided to bring the manufacturing process home?  Probably not.  And so each of us who purchases their products provides positive reinforcement for Apple’s strategy of outsourcing.

I do not mean to sound as though I am picking on Apple.  Countless other examples could be cited ranging from appliances to food products.  I now find it nearly impossible to buy dog treats that don’t have “Made in China” stamped somewhere surreptitiously on the packaging.  And if I purchase those products, I am contributing to the wave of outsourcing in which we find ourselves.  And if you buy them, so are you.

There are many who will argue that outsourcing is anti-American, a disgrace and a shameful practice.  Perhaps their assessment is correct.  But at the heart of the practice is our insatiable desire to acquire more and more, the latest and greatest – and to pay the lowest price for it.

That’s something of which we should all be mindful the next time we pull out our credit card to make a purchase for a product that doesn’t say, “Made in America.”  That is, if you can find one.

OVERTIME

When I was in grammar school, high school and college I always held part-time jobs.  Of course, these were hourly positions – in other words, I traded my services to my employer in exchange for an agreed upon rate they paid me per hour.  I’m sure everyone is familiar with this arrangement.

What I never understood was the concept of being paid at an “overtime rate”.  Yes, I knew that it was Federal law.  The last time I looked, employers were required to pay overtime (generally one and one half time the normal hourly wage, but it could be as high as twice or three times as much) if an employee worked more than eight hours in one day or forty hours in one week.

I guess the “logic” behind this is that if an employer asked one of his workers to spend that much time on the job, he was penalizing that person from spending time with his family and this was a way of compensating for it.  On one level it does make some sense.

I was never in a position where I worked enough to earn overtime in these part-time jobs so in essence the point was moot to me.  But I do remember a full-time co-worker clucking about the size of her check one week because she had nine hours of overtime pay on it.  Even as a youngster this caused me to think about the concept.

I knew from my experience that when I started work on a given day I was fresh, rested and ready to get the job done.  Generally, I only worked a few hours so nothing really changed for me in terms of my level of energy or focus.  But I also noticed that my full-time counterparts would start yawning as the afternoon progressed.  They had been at work all day and were simply getting tired.  Of course, if they had to work beyond their normal schedule – into “overtime territory” -they would continue to tire further.

I don’t think that it’s an earth shattering statement to say that if you’re tired and less alert the quality of what you do, whether it’s work, sports, driving or any other activity is probably poorer than when you’re awake and more alert.  This was why I never understood the concept of overtime.

What overtime does is reward a person with a premium wage for an inferior work product.

Please understand that I’m not trying to overturn the payment of overtime – merely point out one of its inherent flaws.  But I do know that if I purchased a garment and in the shirt pocket I found one of those little stickers that says “Inspected by No. 4 During Overtime Hours,” I’d probably take it back to the store and exchange it for one that was inspected during that employee’s regular work schedule.

This brings me to a news item that comes from my original home state, New York.  Apparently, PAPD, the Port Authority Police Department is not clear on the value of the services they receive when they pay their employees overtime.

One of the supervising policemen, Edwin Rivera earned in excess of $166,000 in overtime pay in 2011.  This is in addition to his base salary of $108,000 per year.  Not too shabby.  Apparently this gentleman’s services are so invaluable that he has earned over $200,000 per year for each of the last three years.  That’s not too bad for someone who is directing traffic – or more correctly, directing people who are directing traffic.

By contrast, although his base salary is less than theirs, Officer Rivera is reporting more income on his Form 1040 than either New York’s Governor or a member of the New York State Supreme Court.   If you’ve ever been tied up in a traffic jam in New York City you certainly appreciate how annoying that can be.   So I guess directing it is a pretty important job too.

Well, this led me to a thought.  If you accept my premise that overtime pay rewards poorer performance with more money; if you believe the government statistics that our unemployment rate is 8.2% (and who doesn’t believe the government), then there may be a way to get more productivity out of our workforce and at a lower cost, lowering the unemployment rate in the process.

Let’s take a mid-sized company that runs 1000 hours of overtime per week among its clerical staff.  I’m using a figure of $10 per hour as an average in this example.  I think if anything that’s probably low since I just met a young man the other day who was hired by a Strip property to switch out their one and one half million light bulbs for LED’s at a wage of $16.50 per hour.

Since we know that overtime is paid at a minimum rate of one and one half times the base wage, that employer is spending five dollars per hour times 1000 hours per week – a total for the year of nearly $300,000 when you include FICA and Medicare, etc.  Assuming a 40 hour work week, those overtime hours would allow that employer to add 12 full time people – or 25 part time people each working 20 hours per week – and get a better work product.

One of the frustrations that the OWS movement’s members have expressed is that they can’t find a job – despite having spent years getting an education.  I understand that sense of frustration.  And while doing clerical work may not be their life’s ambition, at least it would provide them with some income until things improve and a position opens up in their chosen field of endeavor.

The employer benefits by getting an improved work product at no additional cost.  Any training of the new staff should be minimal since I suspect anyone with a college degree knows how to type and file.

The new employees obviously benefit because they are now earning an income and paying their own way.

The country benefits because we would reduce the rate of unemployment thus alleviating the strain placed on the Unemployment Insurance system at both the Federal and State level.

Of course, this idea is intended solely for use in the private sector.  I suspect that if government tried to implement it, by the time all the supernumeraries were added to oversee the project, we would be further in the hole.

I wrote this post late last night after a long day taking care of things that needed to be done.  In addition, the temperature got up to 106 degrees – and I wilt rather quickly at those levels.  Heat seems to wreak havoc on the few remaining brain cells I have left.

I try in these posts to be creative and thoughtful.  Sometimes I succeed more than at other times.  So if this post is less than up to the standards I try to set for myself, I apologize to my readers.

Please understand, I wrote it on overtime.

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