Job Creation Model for America

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Things are getting tougher at home. I run into a former neighbor who stated he was looking for work. He was a corporate manager for a Fortune 500 company. Sadly, the company had made some bad business decisions that left it with the decision of laying off staff. My neighbor was one of these causalities of downsizing. 

He had been earning over $80K. He stated that he was getting many job offers because of his experience that were offering him about $40K. He could not understand his plight. I explained the employment research I had been doing over the years. It is a buyer’s market with companies being the buyers. 

Therefore, my neighbor was part of the blue plate special for businesses. These companies were searching for highly qualified workers at the fraction of the cost while staying away from recent college grads or inexperienced prospects. Unfortunately, this is the reality of employment in a financial crisis. 

Last week, the Labor Department reported job growth had slowed and thousands of Americans were giving up on their job search. Of course, these results received attentions on all political fronts in America because it is a presidential election year.  

On the campaign trail, President Barack Obama explains how the economy is improving but slowly. His opposition, Republican Presidential candidate Mitt Romney, attacks the Obama administration for failed policies on the economy. Both presidential candidates set an interesting discussion on the role of the federal government in the economy. However, the most underpinning issue is who is best suited for job creation to 23 million unemployed Americans. 

The global economy is struggling even in emerging markets like China. Why would America be different? According to the Labor Department, the economy added only 96,000 jobs in August, which was down from 141,000 jobs in July. Additionally, unemployment fell to 8.1%, from 8.3%. This is not a positive statistic. The unemployment rate fell largely because 368,000 people stopped looking for work.

 

In fact, 64% of the working–age population was either unemployed or actively seeking work which was a record 30 year high. According to some economists, at least 150,000 jobs are needed each month to simply keep pace with population growth.

Job creation is a difficult concept. According to the financial dictionary, job creation is a “process by which the number of jobs in an economy increases.” In this partisan political environment, job creation is a hot buzzword without much practical application.

Some people may argue that the government is a job creator. Yet, the federal government, being bureaucratic and having a host of mission-oriented functions, is not equipped to handle this responsibility alone.

Others folks taunt businesses as the ultimate job creators. However, businesses were never started to be job creators as its primary mission. Ricky Griffin and Michael Pustay, authors of International Business would argue that businesses were designed solely as job creators: “The fundamental reason for the existence of a business is to create value (usually in the form of profits) for its owners.”

Therefore, a multinational company’s business strategy may not be in tune with job creation in America. Outsourcing relates to pulling various tasks from within an organization and getting this particular service outside of the organization.  Outsourcing continues to be a major tool for businesses.

Thomas Friedman, author of The World is Flat, makes a distinction between outsourcing and offshoring: “Offshoring, by contrast, is when a company takes one of its factories that is operating in Canton, Ohio, and moves the whole factory offshore to Canton, China. 

Therefore, it produces the same product in the very same way, only with cheaper labor, lower taxes, and subsidized energy, and lower health-care costs.” Countries search the globe for cheaper labor without considering the long-term perspective of their business strategies. I think you need to give the definition of outsourcing here to complete the comparison. 

Consequently, shipping more jobs abroad has a rippling impact across the globe. Globalization creates a more equitable average wage across the world while reducing the earning power of developing countries and increasing the living wages for emerging countries.

According to the United Nations’ Millennium Development Report, more than1 billion people on the globe live on less than $1 a day.  Ironically, as most Americans have watched their wages decrease, most other workers across the globe sees a significant increase.

The world’s middle income class earns between $700 to $7,500 per family member. Therefore, job creation has a different meaning on a global level because it produces a variety of winners and losers. Consequently, Americans must understand that the jobs that are created may not be fully realized in their own country. 

How do you define job creation in a global environment? What team arrangement (if any) can U.S. government and U.S. businesses create to help the 23 million unemployed in our nation? 

© 2012 by Daryl D. Green

Emerging Markets

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I remember listening to Kenny Rogers sing “The Gambler” growing up in my community.  As many of you know, Rogers is a country artist.  I was well aware that if my friends knew I listened to country music, I would have lost my ‘cool card’ among my rapped-crazed peers.  Today, the lyrics of “The Gambler” still guide my business strategy. 

“You got to know when to hold ’em, know when to fold ’em
Know when to walk away and know when to run
You never count your money when you’re sittin’ at the table
There’ll be time enough for countin’ when the dealing’s done
Every gambler knows that the secret to survivin’
Is knowin’ what to throw away and knowing what to keep”  

If most senior leaders would guide themselves with this simple lyric, their organizations would be better off.  For example, you find a good spot in the lake where there are an abundance of fish.  You keep this secret, but then start sharing it with a few friends. Sadly, the word gets out about your special spot.  

Finally, you find yourself squeezed out from your favorite spot.  It’s a hot spot now.  The fish are being topped out.  Yet, people continue to fish there despite obtaining less fish and requiring more time to get the same results.  Even though you love the spot and have a sentimental connection with this area, you abandon this location and move to another unknown location that shows plenty of potential.  You moved not because you wanted to move; you moved because you are a fisherman who loves catching fish. 

Likewise, today’s businesses are operating abroad in order to catch more fish and obtain more profitability.  U.S. multinational companies, like Coke Cola and McDonalds, realize that America’s market is pretty saturated and riddled with hypercompetitions.  

How many more burgers or cokes can Americans continue to consume?  Additionally, companies hope to lower their costs by searching for a lower cost labor force.  Charles Hill, author of International Business, suggests that outsourcing is systematic:  “By doing this, companies hope to lower their overall cost structure or improve the quality or functionality of their product offering, thereby allowing them to compete more effectively.”[1] Therefore, emerging markets become more attractive. 

The fragility of today’s world’s economies demands that businesses act more prudently and decisively about their market strategies. Emerging markets, which were once stigmatized with the name ‘Third World’ markets, will be a dominate player in the world’s future economy.

 

The top four emerging markets include China, Brazil, India, and Russia.  According to Goldman Sach’s projects, these countries will overtake the seven largest industrialized countries (United States, Japan, Germany, France, UK, Italy, and Canada) by 2040.  Antoine va Agtmael, author of The Emerging Markets Century, argues that the prominent role of emerging markets is in future commerce.   

He predicts revolutionary changes due to these emerging markets and equates these changes to the second industrial revolution.  Some of the key success factors for these emerging companies are the following: (1) an obsessive focus on quality and design, (2) brand building, (3) logistics, (4) being ahead of competitors in adapting to changing market trends, (5) acquisition savvy, (6) sustaining an edge on competition in information technology, (7) clever niche strategies, and (8) unconventional thinking.[2]  

Additionally, these companies have a hunger to compete since their success will improve their way of life. Sadly, many Americans do not understand the level of poverty that motivates these countries. Agtmael further notes: “A new breed of companies will play a critical role in producing this shift; a select number of which truly deserve to be regarded as world class. 

In the face of these firms’ vigorous emergence on the world stage, there will be a temptation to go into protective mode….”[3]  However, globalization makes retreating a passive signal of being defeated in a world market.  Therefore, U.S. companies like IBM and Google may see themselves fighting to keep their dominance from unrecognized firms from these emerging countries with a hunger to topple established U.S. businesses. 

Discuss how U.S. companies can effectively address the competition from firms located in emerging markets. 

© 2012 by Daryl D. Green

[1] International Business by Charles Hills

[2]The Emerging Markets by Antoine va Agtmael

[3]The Emerging Markets by Antoine va Agtmael

Bubble Watching

/ nuleadership / 15 Comments

I knew something bad would eventually happen.  As a young boy in Shreveport, we would regularly ignite fireworks without adult supervision. Often these fireworks were loaded as if we were going to war. Being boys with unlimited courage (or foolishness), we would deviate from the prescribed manufacturer’s guidelines (there were none). 

Typically, we would get the most potent firecracker a/k/a Black Cats.  We would light the firecracker and release it at the last minute.  Of course, someone would attempt to be most courageous and wait even longer.  Yes, you may guess it.  Someone would eventually get hurt. However, we dared not to let an adult know.  

Likewise, our financial situation is in a crisis across the globe.  Yet, most business institutions continue to act in an unwise behavior which eventually will get them into trouble, a/k/a a bubble burst.   

A bubble can be defined as “whenever an asset’s perceived or psychological value exceeds its real economic value.”  It’s not rocket science in understanding bubbles. For example, people purchased overpriced homes that they could not continue to pay for.  The housing market’s bubble burst.  Millions of dollars came tumbling down with this bubble.  Therefore, bubbles can be toxic.    

Some bubbles are easier to see than others.  For example, Europe may be looking at a very rocky financial future.  In its book Beyond Austerity: A Path to Economic Growth and Renewal in Europe, the McKinsey Global Institute outlines the trouble that Europe faces: “The challenges Europe faces are serious-more so for some economies than others.”  

Europe’s political will is unable to change its social model.[1]  In 2009, EU-15’s productivity rates were 15% lower than the United States. In fact, Europeans work, on average, 5 weeks less than workers in the U.S. (U.S. workers are among the best in the world in productivity).  

Their seasoned citizens (ages 55-64 –years old) do not actively participate in work activities compared with the senior population in America. Many of their social services are provided by the government which puts a heavier burden on resources. Europeans are reluctant to change their current social model that is driving them into an economic ditch.  Consequently, a bubble will eventually burst. 

However, America cannot believe it’s immune to a bubble crisis like Europe.  John Wiedemer, Robert Wiedemer, and Cindy Spitzer, authors of America’s Bubble Economy, correctly predicted the 2008 economic crisis several years before it happened. 

 

Additionally, they predicted that America is headed for an even worse economic crisis, regardless of the political parties in charge.  They understand the power of understanding bubble trends:  “…the bursting of America’s bubble economy will create a temporary Bubblequake of shockwaves here and around the world, depressing stock and real estate values, driving up interest and inflation, and throwing the U.S. and other economies into temporary global recessions.”[2]  The following elements are what the authors saw as bubble busters for the American economy before the 2008 bubble burst:

  • Huge international trade deficits that just keep getting bigger.
  • An astronomical $8 trillion federal government debt, heavily financed by foreign capital.
  • Ever-expanding consumer debt with no equal rise in consumer income.
  • The lowest savings rates in America’s history.
  • A national housing market that has climbed 80% in the last several years while income rose only 2%.
  • An economy that is now heavily dependent on historically low interest rates and low inflation rates that require massive foreign capital to maintain.

 Clearly, those predictions were made for 2008.  However, has anything changed since then as it relates to these elements?  Consequently, those organizations that watch bubbling trends, analyze them, and act accordingly have the greatest opportunities for sustainable success. 

Discuss a potential bubble in your industry and how an organization or individual can leverage this problem into an opportunity? 

© 2012 by Daryl D. Green

[1] Beyond Austerity: A Path to Economic Growth and Renewal in Europe by the McKinsey Global Institute

[2] America’s Bubble Economy by John Wiedemer, Robert Wiedemer, and Cindy Spitzer

Following the Path of Globalization

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Why should I care what happens across the globe?  I have a mortgage to pay, a family to feed, and a job I hate. Who cares about globalization?  We should all be concerned about globalization.  It impacts us…and we do not even recognize it. 

Global disruptions plague most financial institutions.   For example, Europe offered a bailout package of up to (euro) 100 billion ($125 billion U.S.) to help secure the country’s banks. 

Spain became the fourth and largest European country to request financial help. Seventeen countries from the eurozone sent a statement explaining that this funding would go directly to a Spanish fund set up to recapitalize its banks.  

Nevertheless, the economic crisis in Europe worries financial experts in America because trading and commerce interlock countries together.   Therefore, America will not be able to escape any global financial crisis. 

As I teach international business, I often hear students state that they do not have any international experience. Yet, they do not understand that social media platforms like Facebook and Youtube make them global. 

In fact, Facebook continues to dominate the virtual landscape with 500-million-users. It is transforming how the world communicates.  If Facebook was a country, it would be the world’s third largest country. Therefore, Facebook represents a serious way individual citizens can be a part of this global community. 

More importantly, individuals need to understand that globalization is reshaping society and how we live as people.  Charles Hill, author of International Business, suggests that most people cannot avoid the impacts of globalization:  “As the world shifts toward a truly integrated global economy, more firms, large and small, are becoming international businesses.” 

 

Thomas Friedman, author of The World is Flat, further outlined the interconnectivity of economies with his concept of flattening. Friedman states that Globalization 1.0 and 2.0 were driven primarily by European and American influences. However, Globalization 3.0 was being driven by more inclusive and diverse forces. 

Friedman explains, “…the dynamic force in Globalization 3.0 – the force that gives it its unique character – is the newfound power for individuals to collaborate and compete globally.” 

Therefore, individuals do not need to wait on their countries or businesses to ‘go global.’ Individuals can build their own personal brands globally with social media platforms like Facebook.

How can academic institutions in America best serve students in understanding the ramifications of globalization?  Feel free to use your personal experiences as examples.

 © 2012 by Daryl D. Green

Ethical Compromises in Organizations

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Organizations have their own set of ethical issues. On July 12th, former FBI Director Louis Freeh requested a blistering report about the cover up associated with the Jerry Sandusky case. Freeh’s report found coach Jerry Paterno (now deceased), former president Graham Spanier, athletic director Tim Curley, and vice president Gary Schultz had ‘repeatedly concealed critical facts about Sandusky’s child abuses.” 

The reviewers found handwritten notes and emails in a decision to hide information from child welfare and police authorities. Sandusky is awaiting sentencing after being convicted on 45 criminal counts of abusing 10 boys. 

Freeh noted, “The most saddening findings by the Special Investigative Counsel is the total and consistent disregard by the most senior leaders at Penn State for the safety and welfare of Sandusky’s child victims. The most powerful men at Penn State failed to take any steps for 14 years to protect the children who Sandusky victimized.” 

Reports showed Paterno and administrators knew about Sandusky’s child abuse activities as far back as 1998.  However, they attempted to conceal this information for the school’s reputation and perhaps—Coach Paterno’s legacy as a dynamic coach. The blanket cover up went beyond the school. 

 

The local district attorney when provided with evidence of Sandusky’s child abuse did not prosecute.  Many people in the community were in denial because Coach Paterno was a national icon and local legend.  

For many organizations, it is the proverbial “doing as I say and not as I do” for some managers.  Most managers can get away with this philosophy. As businesses continue to falter and competition begins to bear down on the economy, workers are looking for leadership.  

However, it is virtually impossible to lead an organization if you’re unethical. Why is this true? Well, followers will not respect leaders without integrity. A leader can’t trick them with promotions or bribe them with money. In the long run, character does count in an effective organization.  We will discuss the dangers of empowering unethical leaders.  

Ethics plays a critical role in good leadership. Charles Hill, author of International Business, defined as ‘accepted principles of right or wrong that govern the conduct of a person, the members of a profession, or the actions of an organization.  It is one situation when an individual makes an unethical decision.  However, it is a very complex matter when an institution or a group of leaders representing an institution acts in an unethical manner.

Richard Daft, an organization management expert, explains that leaders at the highest management levels develop internal moral standards that can often allow them to break laws if necessary. However, managers should be personally connected with their organizations’ values. Sadly, some managers feel they are bigger than their organizations. 

In fact, ‘they are the organization!’ In this scenario, leaders become the problem, not the solution. They become trapped by the “Seven Deadly Sins,” which consist of pride, avarice (greed), envy, wrath, lust, gluttony, and slothfulness.

These attributes are not good leadership qualities. Evidently, these unethical leaders bring about their own demise, shaming their organizations. Penn State was no exception. Unfortunately, it only takes one bad leader to destroy the core values of an organization.  

How does Penn State recovery from this leadership void?

 © 2012 by Daryl D. Green                                    

 

Guest Blogger – The Retirement of the Baby Boomers….real or fantasy?

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My initial thoughts on the pending dilemma of retiring Baby Boomers within my industry were that of alarm.  The knowledge and skill set that would be lost is an  issue that most US institutions face daily.  My background is in the engineering field where I have always worked with the Utility, Industrial, and Government markets.

 Therefore, when I work for a company that averages 36% of their workforce being Baby Boomers, I find myself cringing.  Anyone who works in a diverse age group of people (or to be politically correct, we’ll call it a “multigenerational” workforce) know that these work environments can breed misunderstanding and conflict and may compromise growth.

And as I begun thinking this dilemma through, a few points cropped in this crazy blonde brain of mine….that’s right, I do have real moments of clarity at times!

  1. With the financial and economic crisis these past few years, many soon-to-be retirees are choosing to stay employed.
  2. The trend of salaries for Baby Boomers is significantly higher than that of entry level employees.  Therefore, my company is noticing a decrease in project awards due to the fact we are out pricing ourselves with our competitors.
  3. With the Baby Boomers continuing to work longer, we are not bringing in younger employees to mentor out of college.  The employee pool is becoming stagnant. 

So what is the answer?  Is the issue of retiring Baby Boomers really a crisis or is it just an adjustment period for employers to incorporate new blood?  Dave Bernard of U.S. News stated that retirement can be a time to explore creative new avenues, and put the skills you have cultivated throughout your career to work in new ways (June, 2012). 

He is dead on when I notice that many retirees are returning back into the engineering field as “consultants” or they are reducing their hours to continue their insurance coverage and reducing their pace a little.

However, the demands on today’s knowledge workers are more mental than physical. Many baby boomers, who have already begun to reach age 65, are far from physically exhausted and often have much more to give (Bernard, 2012).  

Whatever happens, the baby boom retirement crisis is bound to have its unexpected turns. As they age, they’ll surely continue to change the economy, though the effects are hard to predict (Gelinas, 2011).   Employers today must strategize on how to best incorporate the knowledge skills from these employees through Mentoring programs or Internships. 

Ultimately, we must stay competitive in the marketplace to keep the jobs here at home.  

References:

Bernard, D. (2012, June).  Baby Boomers Search for Second Careers.  U.S. News.  (http://money.usnews.com/money/blogs/On-Retirement/2012/06/01/baby-boomers-search-for-second-careers).  

Gelinas, N. (2011, November).  As baby boomers retire, the times will be a-changin.’   The Los Angeles Times.  (http://articles.latimes.com/2011/nov/06/opinion/la-oe-gelinas-baby-boomers-retire-20111106).

Please share your comments with this industry leader.

ABOUT THE BLOGGER

 

Brandi Reilly currently works for Mesa Associates, Inc., a multidiscipline engineering design firm based out of Knoxville, TN.   Her experience spans 16 years in engineering, project management, and consulting services.  She graduated from Clemson University with a Bachelor’s degree in Environmental Engineering and recently completed her MBA at Lincoln Memorial University in 2011.  She has completed her Project Management Professional (PMP) accreditation and is currently pursuing her Professional Engineering (PE) license.  

(c) 2012 by Dr. Daryl D. Green

Spotlight on Industry Expert – Caesar Andrews

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Periodically, NuLeadership Revolution discusses emerging trends with an industry expert.  We are happy to talk with Caesar Andrews this week.

Tell our audience a little about yourself.

My current adventure is in journalism education. Teaching ethics, writing and editing courses. Most recently at the University of Nevada, Reno. My transition to the classroom follows years of work in newsrooms.

 How did you start your career in this industry?

Interest in news goes back to high school. I majored in journalism at Grambling State University in Louisiana, with many hours spent working on the campus newspaper – great experience.

When first hired as a staff writer in Cocoa, Fla., I figured I would report for a few years, then move on to some other field of interest. Well, “a few years” turned into about 30 with the same company.

I did not start out feeling journalism was some kind of lifelong destination for me. But I ended up loving the work and the challenges (most days) and the many ways journalists get to witness so much of the world.  

Discuss your experience working in your industry.

I was fortunate to work with many talented people. I was fortunate to be part of newsrooms covering major events –launch of the first space shuttles, national political conventions, the Sept. 11 attacks, sports championships, and more. I likewise appreciated the impact of covering local community news.

I was able to work in markets big and small, from a weekly in Florida, where I was first promoted to manager, to the start-up staff at the national daily USA TODAY.

Other career stops were Lansdale, Pa., suburban New York, a news bureau in Washington, D.C., and Michigan, where I completed my Gannett Co. career in 2008 as executive editor of the Detroit Free Press. 

I enjoyed the improvisation found in newsrooms. Even during calm periods, breaking news was always on the verge of happening at any moment. A major project or something small but meaningful was always working its way toward publication.

Journalism is a great match for those with an appetite for constant learning. Lessons can be found all over. From sources. From an often critical public. From many wise souls who populate newsrooms.

And certainly from mistakes – the most painful ones can end up making you stronger. Even the knuckleheads encountered can play an educational role. An awful lot can be learned by observing what not to say, what not to do, and how not to be. 

What are some industry challenges over the next several years?

For traditional news media gatekeepers, the old iron grip on access to information and on steady growth in ad dollars is gone. For most consumers, unending streams of words, images, audio and video on almost any conceivable topic are just a click away.

Large portions of this information come from providers who do not label themselves professional journalists. But the impact on those who are journalists is unmistakable.

News organizations as well as individual news professionals are forced to sharpen their sense of purpose. The smart ones concentrate on making what they offer even more distinct. They specialize in content that extends beyond what readers, viewers and listeners can easily get elsewhere. 

Mastering the right delivery technology is one challenge, as more and more people bypass printed news pages and traditional network newscasts.  

Managing the clash of company motivations is another big challenge. Serving the civic good AND making a profit that sustains the business have to be reconciled. 

Tension between noble purpose and profit margins is not new, just more painfully apparent in this period of economic turmoil for traditional media. 

What steps are market leaders in your field doing to address these problems to ensure sustained success?

Media companies are fiercely rethinking how to thrive under new rules of the road. Not all will survive, as is the case in other fields disrupted by massive shifts in revenue, technology and other marketplace fundamentals. But there is no shortage of initiatives:

  • Every serious media organization is rewriting strategies. They are rethinking news content for digital users, refining their pitches to advertisers, and pushing to charge users for information consumed online.
  • Newsrooms are seeking workers who help identify and connect with targeted audiences. The best job applicants come armed with digital awareness.
  • Media organizations are consolidating, collaborating and remaking themselves in ways unimaginable not long ago. This is all driven by the need to reconsider traditional boundaries, especially as audiences, and therefore advertisers, dramatically change their patterns of media consumption.
  • Newsrooms are making use of more citizen contributors. Modern consumers expect wide-ranging interaction through media, not just old-style, one-way presentation of news. Citizens’ blogs, reviews, commentary and ubiquitous public comments online have altered the community conversation.

 What tips would you give individuals interested in getting into your industry as a new prospective employee?

Treat development of skills as if mining for gold. Place high value on curiosity.

Prepare to take on different opportunities, whether with established companies, or innovative start-ups, or as a freelancer, or in some other customized role you choose to create.

Any additional insight you would like to discuss?

The finest journalists hold on to some timeless principles that do not go out of style. They tell compelling stories that ought to be told. They practice the art of personal credibility.

Please share your comments with this industry leader.

(c) 2012 by Dr. Daryl D. Green

Caesar Andrews is a visiting professor in the Reynolds School of Journalism, University of Nevada, Reno. He holds the Paul A. Leonard Distinguished Visiting Chair for Ethics and Writing in Journalism at UNR. 

Previous visiting professorships were completed at Washington and Lee University in Lexington, Va., Arizona State University, Phoenix, and at  his alma mater, Grambling State University, Grambling, La. 

Andrews worked as a senior editor for the Gannett Co. for nearly 30 years, most recently at the Detroit Free Press and previously at newsrooms in Washington, D.C., New York, Pennsylvania and Florida.  He is a former president of the Associated Press Managing Editors and was an officer in the American Society of Newspaper Editors. 

He serves on the boards of directors for the Council for Higher Education Accreditation and for the Student Press Law Center.

Demising the American Living Wage

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Are you worried about your children and grandchildren’s future in terms of a better life?  You should be!  Market forces will make it harder for individuals to make an honest wage.  American companies, once loyal to their employees, have abandoned the social contract with their employees.  

Leaving today’s workers vulnerable to the consequences of globalization.  Thomas Friedman, author of The World is Flat, notes ‘The best companies outsource to win, not to shrink. They outsource to innovate faster and more cheaply in order to grow larger, gain market share, and hire more and different specialists—not to save money by firing more people.”  

Sadly, most companies do not have this long-term perspective about globalization.  In hindsight, globalization may produce a more equitable average wage across the world, while reducing the earning power of developed countries and increasing the living wages for emerging countries.  These realities on living wages are a critical concern for most Americans.  

Since the recession in 2008, U.S. businesses have posted historical profits even while unemployment has risen.  Consequently, the market place is saturated with seasoned individuals who are willing to take massive pay cuts in order to obtain a secure job.  Employers understand that it is a buyer’s market where employers can be picky. This reality has bottlenecked millions of young college grads who must fight for entry level jobs with career veterans.  

According to a Manpower Group analysis, 52% of U.S. employers state they have a difficult time filing positions because of talent shortage.   Peter Cappelli, author of Why Good People Can’t Get Jobs, outlines the hypocrisy of most employers:  “With an abundance of workers to choose from, employers are demanding more of job candidates than ever before.…To get a job, you have to have that job already. It’s a Catch-22 situation for workers—and it hurting companies and the economy.”  Employers are setting unrealistic hiring expectations and offering low wages.  

People, from every country, seek to earn a living to sustain themselves, by taking care of their basic needs.  According to the United Nations’ Millennium Development Report, more than1 billion people on the globe live on less than $1 a day.  

Ironically, as most Americans have watched their wages decrease, most other workers across the globe sees a significant increase.  The world’s middle income class earns between $700 to $7,500 per family member. Consequently, individuals making more than $7,500 are considered part of the global affluent class.   

Some experts argue that globalization has eroded America’s standard of living, especially during the resurgence of manufacturing.  Economist Gordon Hanson notes, “The U.S. has held manufacturing wages in check while there has been strong wage growth in China and moderate wage growth in Mexico.  

With high unemployment and fierce global competition, manufacturing companies has used this fact to their advantage.  This reality has forced two-tier contracts with unions to pay new hires less than existing workers and reduce new hires’ benefits.  In 2010 and 2011, new hires (manufacturing of durable goods) who had three years or more of experience, were paid an average of .3% less than workers in 2007 and 2008. 

Today’s American workers are finding it difficult to make ends meet. According to the Pew Charity study, economic mobility will be more difficult for individuals, especially depending on where they live.  Economic mobility relates to the ability of a person to move up or down the economy ladder.  

The Pew study concluded that people living in Louisiana, Oklahoma, South Carolina, Alabama, Florida, Mississippi, North Carolina, and Texas would be less likely to improve their economic standing.  However, states such as Maryland, New York, and Pennsylvania would have a better chance of economic mobility due to higher wages in manufacturing and public jobs.  

While the poorest American class wouldn’t consider itself part of an affluent class, this relative inequality of incomes is a bitter pill from citizens of poorer countries.  According to an UN study, the poorest countries across the globe consume 14% of the planet’s resources while 20% of the richest countries with the industrialized nations (including the United States) consume 86% of resources.  

Due to globalization, economic mobility will produce a variety of winners and losers.  Consequently, social mobility becomes more difficult as Americans are forced into a caste system of unemployed or underemployed workers. 

What will happen to economic mobility in America? Will the inequality of wages for global workers create new problems for businesses and society at large?                                                                                              

 © 2012 by Daryl D. Green                                    

 

 

Global Production Collision

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Racing through the parking lot at work, I carry out my ritual of counting import versus domestic cars.  Like the Olympics, I hope that the home team would win.  During my ritual, domestic cars often lose to their foreign competitors in the number of cars. However, it would be difficult to identify what an American product is because of the transformation of the world due to globalization.

In June, the Dow Jones Industrial Average sank into the red for the year after a dismal U.S. job report. Stocks globally have been on a downward spiral since the beginning of May due to worries about Europe’s debt troubles and China’s economic engine which has begun to stall.  Many people hope that companies like General Motors can jumpstart the American economy.  

Like Detroit, Knoxville would embrace the return of the manufacturing industry.  According to a recent Brookings Institute report, “Locating American Manufacturing: Trends in the Geography of Production,” manufacturing jobs in the Knoxville Metropolitan area increased 9.9% from 2010 to 2011. 

In fact, this manufacturing gain was more than 3 times the national average, ranking Knoxville 6th in the nation.  However, many globalization critics argue that weak international trade agreements destroy manufacturing jobs in developed countries like the United States.  The net results are American businesses move operations to countries with cheaper labor.  

Charles Hills, author of International Business, argues, “In the past few years, the same fears have been applied to services, which have increasingly been outsourced to nations with lower labor costs.” Most businesses attempt to stimulate growth through a variety of efforts, including technology investments, acquisitions, and major market campaigns. Companies hope that customers will purchase their products and services due to the value component. 

Robert Jacobs, Richard Chase, and Nicholas Aquilano, authors of Operations & Supply Management remark, “Companies today have found how essential great operations and supply management are to the success of the firm.” 

However, globalization has further linked the financial welfare of each country’s constituents.  In May of 2012, HP announced it would slash more than 27,000 jobs, which is 8% of its worldwide workforce by 2014 in hopes of saving billions of dollars against fierce competition.  

It is the largest restructuring campaign in HP’s 73 year old history. At the time, former HP CEO Meg Whitman stated restructuring was “absolutely critical for the long-term success of the company.”  The downsizing of HP’s workforce was the third largest in tech history.  However, other high tech companies have also been impacted.  IBM downsized 60,000 jobs and AT&T downsized 40,000 employees in the mid-90s. 

At the same time of dealing with global production, each country seeks to increase exports of goods while spearheading job creation in their own markets.

With globalization upon us, can domestic products be considered American when some components are made abroad? Please share your opinion on this topic. 

© 2012 by Daryl D. Green

Father’s Day: A Character Test

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I had two take a second glance at the news headline on Yahoo.com.  Desmond Hatchett, a 33 year old man from Knoxville (TN), was requesting relieve from the court for his child support. According to news sources, Hatchett had 30 children by 11 different women. 

However, Hatchett struggled with his financial commitments with his children due to his low paying minimum wage job. The court required him to turn over 50% of his wages because child support payments were based primarily on the children ages and their needs.  Sadly, some mothers were only receiving $1.49 a month for their children.  Consequently, Hatchett could not meet his financial responsibilities as a father.  However, not meeting their mental or spiritual needs may have more lingering effects on his children. 

With Father’s Day upon us, the adequacy of fathers will eventually be dissected by media pundits and culture experts.  America is in trouble as it witnesses millions of fathers missing from today’s homes. Unfortunately, there are unintended consequences to this national epidemic. 

Despite all of the government and social support available, today’s children still need a strong male role model in their homes.  For a few people, today’s fathers do not make the grade. In fact, the question must be considered: Can anyone concretely define the contributions of a father in a home? 

Clearly, today’s women are more independent. In fact, many families lack a male figure in the household anyway.  Fathers are often the forgotten fixture in the life of the average child. I am constantly reminded of the shortcomings of men in all walks of my life.  

Yes, some people claim both the traditional structures of families and roles of family members are too outdated. Clearly, the demographic shift in America suggests something is different.

According to the 2006 Census Report, there are over 60 million fathers in the United States.  Sadly, everything is not a pleasant story. There are 4.6 million fathers who pay child support, representing 84 percent of child support providers.

Fathers are a staple in our community. Fathers are like a creek in your backyard. You don’t miss it until it runs dry. Likewise, the absence of a caring father makes a difference in a child.   Furthermore, the trends for missing fathers have varied.

With the increase of out-of-wedlock births and the high degree of divorces, children living away from their biological father have become common place. The National Survey of America’s Families estimated in 1997 that one in three children under 18 years lives apart from one of their parents. 

National attention needs to be placed on developing better fathers and retrieving any lost ones…if possible.  Many good fathers are forced to fill in during those situations when fathers are absent from their children’s lives.  Obviously, there are numerous examples of abusive and absent fathers in today’s home. 

If today’s leaders buy into the notion that fathers are irrelevant, we dampen our children’s sense of optimism about the significance of good fathers in influencing positive behavior in our children. Consequently, effective fathers should be celebrated as a link to a successful future for our country.  

Please share your opinion on this topic. 

© 2012 by Daryl D. Green