Category Archives: Jobs

Big Jobs Gain in November … Really?

The media and the White House are having a field day celebrating the great news of the recent employment numbers… 321,000 new jobs added in November and a steady low unemployment rate of 5.8%.

The news also continues to dominate all of the first 10 pages of Google (I didn’t look beyond 10 pages).

Truly that is good news for 321,000 people who were looking for work, and I am happy for them.

But, here’s a group that can’t be all that thrilled about the current employment situation—the millennials (18 to 34 years of age).

Here’s why:

A recent survey by the U.S. Census Bureau shows that the millennials are much worse off today than the same age group over the prior three decades, as follows:

  • Only 65% of millennials currently have a job.
  • Close to 20% of them live in poverty.
  • Millennials with jobs earned an average $33,883 a year between 2009 and 2013—compared to $35,845 for the same age group back in 1980 (current dollar adjustment).
  • Over 30% of all millennials live at home, mainly because they can’t find a job.
  • Only about 2% of this age group (18 to 34) are veterans. In 1980 veterans comprised about 10% of this age group.

From the above, it appears that even though this generation has more education, are more diverse, and many of them speak multiple languages… they are having a tough time making their economic way in the U.S.

eeyore-150

Now, before you write me off as some kind of eeyore—Consider This!

Of the 535 lawmakers in Washington, over 50% of them are millionaires—excluding real estate holdings such as their homes… while only around 5% of their constituents are millionaires—including their homes.

In addition, our lawmakers annual salaries are $174,000 (plus perks and benefits), while the per capita annual income in 2012 was $28,051 (with no perks and few benefits).

 

So, here’s what I think: Our lawmakers and policy creators at all levels of government are totally out of touch with the people they are supposed to represent and serve.

Furthermore, I think it’s time to make our voices heard in Washington—not through riots and property damage to our neighbors, but through communication and the voter’s ballot. Somehow, our voices need to rise above the big money lobbyists and campaign contributors.

If we are going to have an actual sustained growth in our economy where everyone (who wants one) has a job—or better yet—an opportunity to start a business of their own—there must be change.

There needs to be some major changes in our representative government so we the people are being represented… instead of just the lobbyists and campaign contributors.

O.K., that’s what I think, now, what do you think? Are our lawmakers too out of touch with the real world to make the U.S. a better place for our younger generations (all of us for that matter)… or am I just being an eeyore, and everything will likely turn our fine for everyone anyway?

How do you feel about it?

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Exposing The Shadow Workforce

Some time ago, I posted an article titled “Wanted—Entrepreneurs.” The article discussed the decline of new entrepreneurs in the U.S.

Here is the chart again, showing this decline: (in thousands)

New Businesses Started

(Numbers [x1.000] from the Kauffman Index of Entrepreneurial Activity) 

In that article I went a step further by presenting a chart showing that more people were actually leaving the workforce than were finding a job.

Here is the chart showing this situation:

Share Giving Up

(Chart by Ben Casselman at FiveThirtyEight.com)

At the time, I suggested that perhaps the decline in new entrepreneurs was the result of many people simply giving up and leaving the workforce to subsist on government largesse.

Since then, however, I was directed to a recent study conducted by Edelman Berland, “Freelancing in America: A National Survey of the New Workforce.”

This study uncovers some interesting data about a shadow workforce the business community seems to look down on—the Freelancer.

Let’s look at some of the highlights from this study:

  • 53 million Americans—34% of the U.S. workforce—are working as freelancers.
  • 21.1 million of this group work full time as freelancers—freelancing is their only job.
  • 5.5 million of this group work as temporary workers on a single long-term project at a time.
  • 2.8 million of this group are business owners with employees, but still identify as a freelancer.
  • The remainder of the group work as an employee and as a freelancer on the side.
  • This entire group adds $715 Billion to the economy through their freelancing.

I should point out that this study did NOT address the issue of mobile or home-based employees… that is an entirely different segment of the modern workforce.

Most important, I believe, is the finding in this study that should make everyone in the business community sit up and take notice: 53% of this group got into freelancing by choice, not necessity. Freelancing was their chosen career path—it wasn’t by happenstance.

So, why did all these people choose to go into freelancing instead of the traditional job market? Here is what a couple of them said in the study:

“I prefer the freedom to choose what sort of work I do without my schedule being controlled and my choices being commanded by someone else. I can express myself and be appreciated for it as well as bring beauty to the world by way of my work.”

“I have more control over where I work, when I work, and what I do for my work.”

This study makes it clear that we are in a new era of work. But it is more than just an economic change—it is a cultural, political, and social shift perhaps as great as the Industrial Revolution.

If this shift continues (and I believe it will), it will have a tremendous impact on our lives, our communities, our government, and certainly on how we view our economy.

After reading this study, and in view of the above charts, here’s what I’m thinking:

Yes, there are many people leaving the U.S. workforce entirely, but it appears that there are also a large number of people leaving the workforce—or not ever joining it in the first place—for the purpose of setting themselves up as freelancers. Primarily for the reasons expressed above.

If we were to add all the new freelancers who earn a full-time living on their own terms, to the number of new entrepreneurs each year, I wonder what the first chart above would look like?

So, what do you think?

  • Are we seeing a new workforce revolution unfolding?
  • Is freelancing a new form of entrepreneurship?

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The American Jobs Act

Well, we’ve seen the President’s new jobs plan—The American Jobs Act—and it looks pretty much like the programs of the 1930’s (which didn’t work very well then until the second world war started). Although I think it is a good idea to fix some of our roads and highways before they are beyond repair, the jobs incentives fell woefully short of accomplishing much of anything.

All the small business owners I know hire employees to grow their business in support of an increase in sales. Likewise, when sales fall off, we all reduce our workforce because there is not enough for all the workers to do. Most small businesses do not have huge cash reserves to carry non-producing workers.

To take it one step further—in a growing economy most small business owners will hire more employees in ANTICIPATION of increased business. However, no anticipation—no hiring.

The federal government can pass out all the incentives they want—in the form of hiring bonuses, payroll tax reductions, and on and on—but the fact remains; if a small business owner does not need a new employee to fill a current (or anticipated) job opening, they will NOT hire a new employee. Small business owners are too savvy to fall for the government’s financial smoke and mirrors incentives.

Why aren’t the people in the White House and Congress smart enough to know this?

Maybe this is one reason why:

  • Only 8.4 percent of all lawmakers majored in a field related to economics.
  • Only 13.7 percent of lawmakers studied business or accounting.
  • Only 11.5 percent studied a field related to science or technology.
  • Over 55 percent focused on government or law studies (perpetuation of professional politicians?).

(Data from The Employment Policies Institute [EPI]).

I have yet to find any information on how many people in the White House, or in Congress, have actual experience as an entrepreneur in a small business—but it appears the number would likely be quite small.

And we wonder why Washington cares so little about small business!

Where does this situation leave American Businesses? I think a recent article in The Huffington Post spelled it out pretty well—at least in the manufacturing sector—with the title: “American Manufacturing Slowly Rotting Away: How Industries Die.” What more can I say?

What about your business? Your industry?

I am also wondering if this situation is endemic to the U.S., or do other developed nations, such as the European Union also suffer from government suppression of small (or not-so-small) businesses?

Leave a comment and let me know how your business/industry has been (and is being) affected over the last few years.

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A New Demand for an Old Industry

This subject would not have caught my attention had I not just read about how rich the executives of big companies were becoming…while everyone else was moving backwards. A recent article in the Huffington Post pointed out that the executives of S&P 500 publicly traded companies had pay increases of more than 28 percent in 2010, over 2009, while rank-and-file workers are at the same place they were in 1980. This doesn’t count all the other new millionaires made within partnerships, and non-S&P 500 big businesses.

So, I guess it should be no surprise that a nearly extinct (at least according to media attention) industry has been resurrected and made fashionable again. I’m talking here about “professional domestic service.” All of a sudden the domestic service industry in the U.S. is taking off to try and meet the demands of the new wealthy.

Butler School

Of course, the “domestic service industry” has a long and prestigious history dating back centuries. The industry is steeped in pride, because not just anyone can be a professional butler, chauffeur, housekeeper, governess, personal assistant, houseman, laundress, or chef (emphasis on “professional”).

That is why Christopher Ely, former butler and estate manager for the powerful figure of Brooke Astor, teamed up with Manhattan’s “French Culinary Institute (FCI)” to form the “Estate Management Studies” program. This new program is now a part of the FCI overall curriculum, and is directed by Christopher Ely.

The training is not cheap. They currently have five different special curriculums set up and they cost about $1,750 for each class. More detailed culinary training is more costly. However, Ely doesn’t think his school will have any problem attracting students, since the demand for “trained” people is rising so fast, because, in the words of professional butler, Charles MacPherson: “The rich just want to live like rich people.”

At the same time, the rewards can be substantial, Professionally trained domestic staff can make a very good wage. Ely says a “good” butler should make about $80,000 per year in base salary.

So, for everyone out there who is unemployed, maybe this is something to consider. Professional domestic service is an industry that prides itself in a long history of integrity, professional service and financial success.

For specific information on “Estate Management Studies” at “The French Culinary Institute,” click here. They have classes in both New York and California.

No Worker Left Behind?

It appears that the concept of “no worker left behind” is a mythical term, at least according to a recent article in the New York Times. This article discussed what is happening to the American labor force, and here are some interesting statistics from that article:

  • In 1954, around 96 percent of American men between the ages of 25 and 54 were in the workforce.
  • Today, only 80 percent of American men in the same age group are in the workforce.
  • One-fifth of all American men in their prime working years are not even in the workforce today.
  • The U.S. has a lower percent of prime age men in their workforce than any other G-7 nation.

Please note that this does not include those who are in the workforce, but are currently unemployed. The numbers above are only for those men who cannot work, or do not want to work…they are out of the workforce entirely.

So, why are so many American men dropping out of the workforce? What has happened to the concept of “no worker left behind” on the national level? Here are some additional statistics that may shed some light on the reasons:

  • Ten years ago there were 5 million Americans receiving Disability payments, primarily from federal funds.
  • Today, there are 8.5 million Americans on disability—and the number is growing like wildfire. Today’s annual cost to U.S. taxpayers is $115 Billion, or around $1,500 per household.
  • There are now more non-working men in the U.S. than at any time since the “Great Depression.”

All of these statistics are interesting in view of a post I wrote last week—Places That Are Hiring—about how large tech firms cannot find qualified people to work for them, and so they are buying up their smaller brethren just to acquire the talent.

In addition, it seems that many companies are not outsourcing work for monetary gain, they outsource because they can’t get the work done in the U.S. They move their business to where the qualified labor force is located. What a sad commentary on the quality and capabilities of America’s workforce.

America is losing its vigor. People in the U.S. today no longer exhibit the energy that made us great. Worse yet, no amount of stimulus money from the government is going to help—in fact our government has become so obsessed with programs that provide “comfort,” they have ignored programs to reinvigorate our country.

Capital is unavailable to small businesses, regulations are crushing, incentives are non-existent, there are no effective training programs that help people develop the skills they need to enter the workforce, and on, and on…and no one in Washington seems to care. All we hear today are rants on Social Security, Medicare, and war. What happened to the concepts of “no worker left behind” and “full employment?”

Isn’t it about time we looked at the big picture and tried to figure out how best to reinvigorate America, so we can provide good paying jobs for well-trained people in our workforce, and help that workforce grow back to be the best in the world—again. With more successful businesses, there would be more taxes paid, and we could stop the “slash and burn” approach to trying to balance budgets.

Never doubt that a small group of thoughtful, committed citizens can change the world. Indeed, it is the only thing that ever has.  —Margaret Mead

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The New American Workforce

It appears that in the wake of ongoing—and lengthy—unemployment, the U.S. is creating a new class of worker—the “Permanent Temporary Worker.” Of course there has always been this classification of worker, but it now appears to be going mainstream and currently accounts for 26% of all U.S. workers.

With the U.S. economy in disarray, and government legislation in process that will heavily impact employers, companies simply are not hiring full-time employees. There is such a wealth of talent available on an “as-needed” basis there is no real reason why companies should hire full-time employees. A company can enjoy the flexibility of using temporary employees—without all the hassle and expense of benefits.

But, what about the employees? How is this current trend going to affect them? Well, here is a part of the reality:

  • No paid health insurance
  • No sick days
  • No paid vacation
  • No company-funded retirement plan
  • Usually no premium for overtime pay
  • Without any job security, benefits, or social ties to the rest of the workforce, stress levels are increased and depression sets in, which results in permanent temps being twice as likely to report symptoms related to mental illness than their counterparts who are permanent employees.

With 26% of today’s U.S workforce falling into the permanent temp category, what does the future hold—for either the employer, or employee? When the new healthcare reform becomes law, and every person is required to buy health insurance, that will reduce the permanent temps disposable income. When small business owners are required to provide health insurance for their employees, they will likely reduce their workforce in favor of permanent temps, thus increasing the role of permanent temps even further.

A recent Princeton University study predicted that 22% to 29% of all U.S. jobs would be offshored within two decades. It may not take that long—IBM had 71% of its workforce outside the U.S. at the end of 2008, and in 2009 reduced it’s U.S. workforce by 10,000 (8%). It seems so many companies are offshoring today that any “permanent” jobs left in the U.S. may only be in the service sectors—auto, food, health, and yards.

If the U.S. should ever get to this point, the permanent temporary worker may really have the best deal of all, and that would be a very sad situation.