Jobs, jobs and jobs. It’s all about the jobs! Like my previous post about the election hinging on which candidate can be perceived to deliver for the middle class, the second thing following closely after that are jobs. Good jobs, not jobs at McDonalds paying the minimum wage. Living wage jobs. There are plenty of McJobs that don’t even pay enough to cover rent and gas. No one wants those jobs.
Economists, policymakers and experts have each expounded their ideas on how to create and replace the middle class jobs that don’t require college degrees which were lost for good in the Great Recession, namely, factory jobs at the rust belt and in the automobile industry. These jobs have begun slowly moving overseas in the 80’s and 90’s when the China Market opened up to the world but when the 2008 recession hit, it was dealt big irreversible blow. Some would argue that the closure of the Packard plant in Detroit in 1958 was the beginning of the death knell of the once giant and impenetrable US automobile industry, it survived the Great Depression and countless other business downturns but the owners decided in 1958 to cut its losses and close down the manufacturing plant that once employed 40,000 people. The ruins of that huge Packard plant still remain, since its closure the owners sold off portions of the plant and leased out some portions, but as the whole city of Detroit declined in jobs and population, the building stood emptied, ruined and abandoned, a symbol of the city of Detroit itself and in some ways the automobile industry.
There are two extremes of thought here, the first is the Republican policy of giving every tax cut available to business owners, the ‘trickle-down economics’ model, believing that they will reinvest the tax cuts to its employees by way of higher wages. That’s hasn’t happened and it’s never happened, they don’t give it to their employees, they keep it for themselves. The other end of the spectrum are economists such as Robert Reich and Larry Summers who belong to the Keynesian school of economics believe that one way to revive the middle class and good paying jobs is to revive the unions in some capacity where collective bargaining will result in better pay for workers. Unions are not the answer, unions are not what they were since its inception in the 18th and early 19th centuries where workers were treated horribly with poor wages and absolutely no laws to protect them, unions morphed into a giant body of uncompetitiveness and at times unreasonable demands which resulted in worker complacency. The few industries left where its governed by unions leave its employers very frustrated with the bureaucracy and red tape. It requires up to 55 layers of bureaucracy to terminate a non-performing school teacher. Unions today are not here to guarantee fair wages and treatment, unions exist to guarantee workers a good paying job for life with minimal input. No business owner, large or small, wants to deal with that, they would rather close shop in the United States, spend money and resources to move all the equipment and facilities to China or some other loosely regulated country and set up there, hire workers there for a fraction for what they have to pay US workers and those workers are happy to have those jobs, they don’t complain, they don’t demand sick days or vacations, they work until their fingers bleed and are happy to do it. The average US worker has to keep in mind that in this competitive global economy, there is always someone out there who will do your job for cheaper, faster and better. You can count on it. With computer technology advancing, even clerical work can be outsourced.
The most recent strike at the Port of Long Beach was the International Longshore and Warehouse Union Local 63 Office Clerical Unit, a relatively small union which represent documentation workers at the port, the workers where striking because they accused the port authorities of outsourcing their jobs overseas to Malaysia and India. When a documentation worker retired or quit his or her job, instead of filling that position with local workers, they outsourced that position, it was a slow drain. The Port Authority maintains that they did no such thing that they just chose to not refill all the vacant positions. The strike carried on for a few days with members of other unions showing solidarity by not crossing the picket line and this caused a delay in shipping containers being returned timely. They reached an agreement which guaranteed more pay and generous pension for employees and that they were guaranteed jobs for life. But the Port Authority didn’t cave into the demand that they must refill all the vacant positions with local workers. The documentation worker’s compensation is very generous compared to non-union documentation workers, with a base salary of $90,000 and if you include all the benefits like paid vacations, pensions and health care, the total comes out to $165,000 annually. What unions do not realize that because the compensation for their occupation is at least double of what a non-unionized documentation worker would receive, they’ve indirectly taken the jobs for other documentation workers. Unionized employees pay hefty union dues to be represented and of course it’s natural that one wants to see a return on that investment, but it does not mean that it’s good for the economy at large. Also, there are no such things as lifetime guarantees of employment unless you are in business for yourself, that also died with the recession. It’s also unreasonable to ask any employer (big or small) to guarantee lifetime employment to anyone in an ever shifting business cycle and advancement of technology, it’s not a promise most employers can reasonably keep.
US workers cannot extort its way to better wages, it won’t work, employers are in business to make money, that is the most basic business model no matter where you go, even in China, so to make conditions so uncomfortable for business owners so that they either go overseas where it’s cheaper to bribe officials in that country than deal with the unions here, or not be in business at all, it’s the US workers who lose. And workers need to give up that pipe dream of gainful factory worker where you retire with a pension, that’s gone too. The digitized economy has changed all that, for better for worse, there’s no going back, there’s only forward. US workers needs to stop competing for good factory jobs with workers overseas, we will lose each time. There are scores of people in this world who will gladly work at a factory for $5 an hour doing the same work some as someone getting paid $25 per hour in the U.S.
I was in a unique position to be involved in the hiring of an assistant for myself. I worked in a small business with annual sales around $100 million per year and office staff of 4 people, business was growing so we needed to hire one extra person. Like all small businesses, one person had to wear many hats and execute multiple functions in any given day and at times all at once. It was a good paying position, annual salary of $40,0000 to $43,000 depending on experience, college degree not required but preferred, good computers skills was a must, especially Microsoft Excel. Since I would be working closely with this person, I was given an opportunity to screen candidates and train with them. This was still at the height of the recession where unemployment was over 8%. I was expecting a steady stream of well qualified candidates ready to take this on, we didn’t even require experience if the candidate was a fast learner and took initiative in his or her training. This wasn’t a monotonous single function job, the job required the candidate to be on top of all email correspondences to make sure they were replied to timely as what we did was extremely time sensitive, to problem solve within a given range, to apply commonsense in situations and work out the best solution in the timeliest way possible. It was not a position that was to be micromanaged by a superior because we didn’t have that type of manpower. And after the candidate has been properly trained, he or she will have to make judgement calls on his or her own without much input from superiors. It wasn’t an easy job but it was by no means brain surgery.
The candidates that were referred to us by a well reputed local employment agency was less than inspiring. Some recent graduates couldn’t even manage basic Excel spreadsheets, let alone create one of their own. One recent accounting degree graduate actually wrote out by hand her spreadsheet when she was told to organize some accounting figures, why she didn’t directly type them on Excel first, I’ll never know, I didn’t even bother asking. Sometimes the president of our company will need us to write an email to our business partners on his behalf but he wouldn’t have time to dictate verbatim so he’ll give main points and we compose an email from that, some candidates couldn’t do this to save their lives. I wasn’t asking them to write an in depth essay about Shakespeare’s Macbeth, it was just a few simple instructions or questions for our business partners. For most candidates, basic writing skills and composition of original content in a timely manner was nonexistent. One candidate told me ‘I wasn’t hired to think’ when I asked her to think and process what should be the next logical steps of a certain task. By this time, I’ve graduated from college for about ten years, not a recent graduate but by no means ancient, I begun to wonder what exactly are people learning in school these days?
One turns on the news and you hear about how there are millions of qualified American workers ready to take on new challenges, new jobs and are willing to do anything to start over and at our company, here was an opportunity for a well paying and challenging job, candidates just had to show some initiative and drive. There was plenty of training being provided, people were available to answer any questions as it was our goal to take extra time to train candidates and when they were done training, they could work independently. There appears to be a skills and requirement gap between what employers are looking for and what the workforce is providing, with so many people looking for work, employers have the luxury of being picky.
With the modern digitized economy, there will be no one to look out for us but ourselves. There’s no union, no government and definitely no big corporations will look out for the average worker. Workers today need to be well armed in skills in all areas, as jobs and industries change so quickly. Computer skills need to be constantly updated, a lot of self-learning needs to take place, multi-tasking is a requirement, not an extra skill you add at the bottom of your resume. The ability to learn new softwares quickly and efficiently is vital, the worker needs to be adaptable in every work environment across multiple fields of work. The days where one person just did one type of job are gone. The computerization of all industries made workers more efficient and that means workers have time to do more than one task.
Mr. Reich and Mr. Summers mean well, but they would serve the American public better by telling the truth about the current state of the economy as it is now and that unions will be a thing of the past in advanced economies, and yes, machines and robots have taken some jobs from humans but this is due to technological advancement and it would be silly to stop that advancement so that humans’ jobs can be saved, technological advancement should be always encouraged even if it cost some jobs, people have adapted to all sorts of economic changes and the adaptation process is difficult but the human race has always prevailed.