Underemployment

Why More Workforce Training Will Not Solve the Jobs Problem

Published on by Brynne VanHettinga

Today’s Austin-American Statesman touts the benefits of new rounds of U.S. Department of Labor (DOL) workforce development grants.  Six states have been awarded nearly $15 million to increase employment opportunities for people with disabilities by connecting them with job training programs.  In Texas, $48.5 million has been made available over the next two years for the Skills Development Fund and job training programs.  According to the Texas Workforce Commission Chairman, this grant funding will “allow Texas workers to obtain customized job training that meets the needs of employers.”

Money to help workers on the lowest end of the job market is certainly good news.   The DOL and state workforce development agencies consistently frame the unemployment problem as one of a skills deficit, and so solutions are focused on skills remediation.  Moreover, the workers who are most likely to benefit from these programs are also most likely to receive services from the state in the form of income maintenance.  Because these workers are costing the state money, they are given priority by state unemployment programs.  However, workforce development agencies would do well to broaden their perspective on the population that constitutes un- and under-employed workers, as well as a way to monitor job quality.

The objective of workforce development agencies is to get people into jobs, and their performance metrics are focused on job placement success rates.  Thus, at least on the surface, the objectives of workforce development agencies and job seekers are aligned.  However, merely getting someone into a job does not necessarily guarantee either short-term subsistence or long-term economic security.  What is lost in the equation is any examination of job quality, either in terms of suitability for the worker or even the needs of society as a whole.

The problem is that the agenda driving workforce development policy is driven almost entirely by the demands of employers.  While this may be the fastest way to get people into a narrowly defined “job”, it may be neglecting other, more long-term and complex policy and social implications.  For example, this practice permits businesses to externalize the cost of training onto the taxpayer, while at the same time reap the benefits of increased profits from a trained workforce.  Additionally, the jobs themselves may pay so little that the worker needs continuing subsidization from the state for subsistence, e.g., food stamps, housing, day care and health care subsidies.  In essence, taxpayers (all of us) are subsidizing the gains of a few on both the front and back ends.

In addition to issues of economic fairness (that is, who pays the cost versus who reaps the benefits), there is the issue of the jobs themselves.  Are they designed for the worker to learn and grow, or are they discrete fungible positions constructed to support a rationalized process designed solely to maximize profits?  This is indeed the foundation of labor process theory, or what Harry Braverman termed the degradation of work. In essence, a job is deliberately designed to consist of a narrow range of discrete technical functions so that the jobholder is easily controlled and easily replaced.  While there are counter-arguments to Braverman’s theory that point out increases in the average technical content of jobs, the foundation of Braverman’s theory proposes that modern job processes have destroyed most avenues to upward mobility and personal fulfillment.  Moreover, in a rapidly changing economy, the workers’ narrow, technical skills may become obsolete quickly, at which point they will be laid off until they can be retrained again (at taxpayer expense), or replaced by more recently trained workers.

While the foregoing discussion has revolved around jobs on the lower end of the occupational hierarchy, what the so-called “skills shortage” and job training proponents miss is the army of un- and under-employed older workers, most who have been subject to some form of layoff or downsizing.  Unlike the lower skilled and less educated workers at the bottom of the hierarchy, these workers have skills, work experience (sometimes decades of it), and often have college or post-graduate degrees.  However, because they have some resources (either from a working spouse or savings from prior employment), they often do not receive public assistance, and so are not “priority” placements for workforce development agencies.

So, although providing state-supported training for workers lower in the hierarchy has the potential to benefit these workers by giving them a toehold in the labor market, it will not ipso facto solve the problem of un- and under-employment.  Academic researchers who study the labor market (whose findings are almost never quoted in the mainstream media unless they support corporate objectives) suggest that “the skills…for which [workers] are rewarded are partly a function of the jobs employers offer, rather than the intrinsic capacities of individuals acting as a kind of hard constraint,” and that policymakers should spend less time concerning themselves over purported skills deficiencies in the workforce because “the lack of decent jobs is the obvious basic problem.”

Is The Job Market Working For Us?

Published on by Brynne VanHettinga

Many of us may remember something we learned in either introductory psychology or management classes called “the hierarchy of needs,” or Maslow’s Pyramid.  Abraham Maslow (1908 – 1970) was an American psychologist who proposed that human motivation operated along a continuum of need fulfillment. Maslow’s model is frequently depicted as a pyramid, where the lower order needs must be fulfilled (at least to a minimal degree) before one advances to the higher-level needs.  At the lowest end are the physical needs of basic survival–air, water, food, and shelter. Once these needs are secured, the next level is the degree to which one feels safe in maintaining them, that is, security where one does not have to live in a state of hyper-vigilance to outside threats and constant worry about tomorrow. Once these lower needs are met, one moves up to the psycho-social needs of belongingness and friendship, followed by the need for achievement and expression in which one earns respect for oneself as well as the respect of others. The highest level Maslow terms self-actualization, in which one realizes his or her highest moral, intellectual, psychological  and spiritual development.

Maslow's Hierarchy.png

However, progress through the hierarchy is more complex and not necessary linear and sequential, and individuals may be working on several levels simultaneously. One example is someone working for a non-profit who is fully engaged with work in an organization whose mission corresponds directly with the individual’s personal values, but the pay barely covers subsistence.  In this example, the job is fulfilling higher level needs but is shortchanging lower level ones.  An example at the opposite end of the spectrum is the typical law associate at a large prestigious law firm, who is paid a six-figure salary but barely has time for a life outside of work, and the work itself may be little more than high-level drudgery.

The media is replete with stories about how we are now living in a so-called “knowledge economy.”  The assumption is that we have moved beyond a subsistence economy and even beyond a “production” economy, where the new sources of wealth are information and the ability to manage it. It is indeed true that information plays a much greater role in our economy than it ever has in the past, however this brave new world has not necessarily resulted in a corresponding increase in human actualization.

In the rest of this article, I will examine the extent to which the modern American job market fulfills the needs of workers in a Maslow-type analysis.  The four specific areas that will be examined are physical needs, security, social ties, and meaningfulness.  At the end of the article, you will have the option to participate in a short (10-question) survey about whether the job market is working for you or not.

Physical Needs

Unlike some third world countries, Americans do not experience the inconvenience of stepping over homeless people and squatters begging for food as we walk down most urban streets. Many view the homeless as outliers of society—persons who have mental health issues or criminal records that prevent them from finding a job.  However, a 2009 study by the National Coalition for the Homeless found that 44% of homeless are people with jobs.  Another study by the Bureau of Labor Statistics finds that 3 million workers, or 3.9% of the hourly workforce, earn the federal minimum wage of $7.25 per hour—a salary that pays (for a 50-week, 40-hr per week job) only $14,500–before any deductions for FICA, federal and state income taxes.  Is this enough to cover the basic necessities for survival?  You do the math.

Low wages do not only impact the persons receiving them, but they cost all of us. The University of California Berkeley Labor Center calculates that some 56% of combined state and federal public assistance goes to working families. In essence, low wage work costs taxpayers nearly $153 billion per year, as workers and families turn to federal and state income supplement programs just to make ends meet.  Although the majority of these workers are employed in fast food jobs or as home and child care workers, this group also includes some highly educated workers.  The educated impoverished are comprised mainly of an increasing number of part-time adjunct college professors with post-graduate degrees, who earn $20-$25,000 per year with no benefits or security.

It is one thing to have enough for today, but do people have enough to meet their needs if something goes wrong, such as job loss, illness or accident, or even an unplanned car repair?  A survey conducted by the Federal Reserve earlier this year (2016) revealed that 46% of those surveyed could not cover a $400 emergency expense, but would instead have to put in on credit, borrow from family or friends, or pay it off over time.  Although the study did not specify how many of these people had jobs, based on the incomes reported, it can be inferred that most of them were employed somewhere.

Security

Job security is harder to quantify than income and cost of living. A 1997 Bureau of Labor Statistics report suggests that measures of job contingency and median job tenure can serve as proxies for job security.  This does not bode well in an era of downsizing and layoffs, increasing part-time and contingent employment, increasing turnover and decreasing tenure in any one job, and longer periods of involuntary unemployment between jobs.  Measurement problems are compounded by the fact that job insecurity has both an objective (a layoff or merger has been announced, or the company has declared bankruptcy) and subjective (worker’s anxiety-based anticipation of job loss and difficulties in securing comparable employment) components.  A group of researchers in Europe reviewed the academic literature on job insecurity in 2006—before the Great Recession—and found that “the issue of insecure working conditions” greatly increased during the 1980s and 1990s.  The authors reference stress theory and suggest that uncertainty and ambiguity about how to counteract even a perceived threat of job loss leads to increased stress.

An August 2014 Gallup survey on job security suggests that workers perceived job security mirrors job market conditions generally. Workers’ sense of security plunged following the dot com recession (2001-2002) and then again in 2007-2009.  In 2014, the survey found that 58% of workers were satisfied with their job security—up from 50% during the Great Recession.  The survey also found that major sources of dissatisfaction continue to be job stress, pay, and benefits like health insurance and retirement. Although the news appears to be good (at least things are improving), it still suggests that a high level of insecurity remains in the working population

Social Ties

The strength of social ties, or so-called social capital, has been found to be an important factor in physical and mental health, as well as economic well-being.  Many are familiar with Robert Putnam’s 2000 bestseller Bowling Alone on the state of social capital in the United States.  For many working Americans, jobs can impact social capital in both positive and negative ways.  A job provides a sort of ready-made community, even if it is a somewhat artificial one. Anyone who is looking for work is almost always exhorted on the necessity of “networking.” Conversely, too much time spent at work may prevent the development of relationships outside of work, and possibly have negative impacts on relationships at home. Social capital, like financial capital and human capital, requires investment of personal resources, most specifically investments of time.  However, modern post-industrial societies are characterized by a paradox of involuntary part-time and overwork:  The majority of Americans work over 40 hours per week, with 21% working 50-59 hours and 18% working more than 60 hours.  Putnam’s research suggests that up to 10% of decline in American social capital is due to financial anxiety and a “changing workplace,” and another 10% is due to urban sprawl and length of work commutes.

Another feature of American life that impacts the development of social capital is that we are frequent movers. According to the U.S. Census Bureau, about 12% of the U.S. population (or 1 in 9) moves for work every year—a rate that has remained relatively stable between 2008 and 2014.  The Pew Research Center looked at American mobility patterns between 2007 and 2008—more or less in the middle of the Great Recession. The most frequent reason for a move was “job or business” at 44%, with “good place to raise children” and “family ties” coming in second and third respectively at 36% and 35%.

In a post-Great recession report, the U.S. Census examined reasons for moving based on the 2013 Current Population Survey data. In this survey, the most frequently cited reasons for moving were housing-related (48%), family-related (30.3%), and job-related (19.4%).  It can be inferred from the data that there was a noticeable drop in job-related moves in a post-Great recession economy.  Both studies also corroborated that job movers tend to be mostly male, college graduates or post-graduates, and higher income.

An interesting development has been in the number of people emigrating out of the United States entirely. Although Americans are least likely among citizens of other nations to leave their own country to find work, a 2014 study by the Boston Consulting Group and The Network found that 35% of Americans say they would move out of the country for a job, and this number was even higher (59%) for millennials.  Sometime in 2008, the one millionth American moved to Mexico.  In the past, this population consisted mainly of retirees and persons evading a troubled history, but now increasingly is comprised of workers in search of jobs that allow them to achieve a better work-life balance and raise families.

Although there seems to be no study directly on this point (at least that I have been able to locate), one can certainly speculate about how constant relocation in search of work—especially if it is now global– may leave one socially rootless. While this may be an acceptable price to pay for career advancement, what happens to the rootless individual who loses the job?  The obvious antidote to finding oneself in this situation is to maintain a strong and geographically dispersed social network. But how many of the people working those 50+ hours per week have the time or the energy to do so?

Meaningfulness

The concept of meaningfulness is probably the most nebulous when applied to the world of work. It is more usually a term of religious reference and the search to find one’s “calling” in life. This concept is based on making some connection between one’s work and a higher purpose, especially activity that is beneficial to society at large. In the world of work, meaningfulness is usually discussed in terms of employee engagement. Many of us may think engagement requires either higher-level skilled work (such as medicine or law) or religious and “helping” professions, but theoretically most any job can be engaging if the job-holder has a high level of discretion (autonomy), the ability to achieve some type of mastery (agency), and a philosophical compatibility with the organizational mission.

Employee engagement has become a hot topic recently because it has been correlated with improved bottom lines. The Gallup organization has done a number of studies on employee engagement and has divided employees into “engaged,” “not engaged,” and “actively disengaged.”  In the U.S., less than one third of employees are engaged, a rate that has been stubbornly persistent.  Gallup suggests that employers may not be making the necessary investments to boost engagement, choosing instead to conduct a survey and then doing nothing to follow up—which only exacerbates distrust (and hence disengagement). A darker theory is that bolstering engagement often requires empowering employees, and giving up power is something that many employers simply don’t want to do.

So…is the job market working for you?  If you would like to add your voice to this discussion, you may link to the survey below.  There are 10 questions, which should take anywhere from 3-10 minutes (depending on length of commentary) to complete.

Click Here to Take Survey

Fighting Over Scraps

Published on by Brynne VanHettinga

Recent articles in The Washington Post describe co-worker hostility faced by veterans working in federal agencies, purportedly because of federally mandated hiring preferences.  Some ascribe this hostility to cultural differences between military and civilian workers.  Combat vets, who are used to making and responding to rapid decisions, have little patience for the bureaucratic process, where decisions travel up and down the chain of command for submission and approval.  Alternatively, civilians accuse the vets of “blind deference to authority” and their only real skill is knowing how to kill people.  However, like many workers elsewhere, the vets complain that they are accepting jobs where they do not make full use of their talents and abilities.

A big problem is the perception that the veteran workers may actually be unqualified and were hired only because of the federally-mandated preferences.  In essence, the dynamic is similar to the conflict raised by arguments about racial and gender discrimination and the backlash of so-called “reverse” discrimination.  Women and racial minorities tend to be more sensitive to traditional patterns of discrimination, while white males are more sensitive to patterns of reverse discrimination (aka affirmative action).  While these groups have historically been mutually suspicious of hiring and promotion decisions based on “illegal” motives, it is also not historically unusual for these groups to be suspicious of each other.  But veterans?  When did “thank you for your service” become “what are you doing in my job”?

Suspicious Workers

What many people do not realize is that persons who are hired pursuant to preferences must nonetheless be minimally qualified.  That is, they must possess the skills, education, and experience necessary to perform the essential functions of the job.  Where the ambiguity arises is whether or not they are the “best” qualified.  This judgment often depends on more subjective criteria which cannot be either proven or disproven objectively.  These types of decisions involve less measurable concepts such as person-job fit and cultural compatibility.  That is, even the person making the hiring decision really has no way of knowing with absolute certainly who the “best” candidate actually is without giving each and every qualified candidate a chance to prove themselves.  When there are literally dozens, if not hundreds, of minimally qualified applicants for a single position, the hiring authority may welcome preferences as a way to simplify the decision process.

Michael Sattinger, a professor of economics at the University at Albany, has developed a model of the job market represented by a group of n dogs presented with a batch of n bones delivered by a dump truck.  Assuming that each dog can only receive one bone and that the bones can be assigned a value, equilibrium is established when every dog has a bone that is not desired by any other dog that could take it away, and each dog prefers its own bone to any bone it could take away from another dog.  In this model then, the “value” of any dog’s bone is a function of both the assortment of bones available and the individual dog’s ability to compete for them.

Analogized to the job market, an individual’s wages (and by extension, job quality) are thus a function of both the jobs that are available and the individual’s ability to compete in the market. However, in the “real world” job market, there are many more dogs than bones, and many of the bones are of lower quality than even a junkyard dog would be willing to accept under more normal circumstances. The predictable outcome is that the dogs will fight each other over the bones rather than question the adequacy of the source—a source which is out of their sight and beyond their ability to effect. At least, not without coordinated, strategic, collective action.

Instead of suspiciously eyeing our co-workers or consulting an attorney about suing someone who has made a hiring or promotion decision against us, perhaps we should direct some of that energy to finding out why there aren’t enough decent jobs to go around. All of us are fighting each other over the scraps that seem to get more meager and distasteful as time goes on. This is not only unsustainable in the long run, it can destroy our sense of common humanity.