by Kate Evert | May 29, 2020 | Economy, Human Capital, Labor Markets, Skilled Labor
For many years, we have been working with clients to explain the difference between labor market differentials and cost of living differentials, two related, but different numbers. Obviously, Mark Zuckerberg has never called us to ask for a tutorial. Put simply, it explains why a cold Midwesterner might give up a 4,000 square foot house to live in a 1,000 square foot home in San Diego—yet pay the same for both dwellings. While a basket of goods might cost more in San Diego, that same former Midwesterner will gladly pay it because they intend on never wearing a parka again, and spending more time outdoors, in the sun, than inside sheltering from the cold.
Labor costs, on the other hand, are all about the supply and demand of certain skills. If too many former Midwesterners with the same set of skills move to San Diego all at the same time, the labor market floods, and the price for their labor goes down. Perhaps the newly warm people don’t care?
Labor markets have been shifting along geographic lines since the US began to emerge from the 2008-2009 financial crisis. CHRC began to see it when clients would call with one-off jobs that were suddenly experiencing turnover, and they couldn’t believe it was due to an increase in wages, but it was. One project, in particular, clearly painted this new picture. We examined roles at various income levels across the entire US expecting all geographies to converge to a national geographic differential of 0% at some point; for all these geographies, north, south, east, west, rural, urban—they never did. The correlations that compensation consultants had typically seen to explain geographic differentials no longer held.
Our observations are well explained by the writings of economist, Enrico Moretti, including his book, The New Geography of Jobs. He uses examples to explain how the concentration of industries and human capital in certain areas leads to innovation (e.g. Detroit at the beginning of the 20th Century or Silicon Valley at the end of the century).
So, what will happen if tech talent is incented away from the Bay Area? Will this de-concentration dilute both talent and innovation? Perhaps it could drive down housing costs and the cost of living (but probably not proportionally). Our advice to Mr. Zuckerberg is that the law of unintended consequences will probably take over; the labor market pricing for talent will hold, people will take their talent to other firms, and move wherever they like. The new recipients of their talent will innovate with it. Mr. Zuckerberg might very well be left with those workers whose skills are not nearly as in demand, who are less likely to innovate, and who are very grumpy about their cost of living. Read More Here
by Kate Evert | May 27, 2020 | Competencies, Leadership, Work Place
Recently, when speaking with another woman of a certain age, we were both lamenting the loss of civility in the workplace. This loss of civility far predates working from home, Covid-19, and Zoom Meetings. As we grappled with this loss and tried to determine just what seems to be missing from the workplace—it came to us: deference.
Our conversation and the death of deference had been sitting in the back of my mind for days. Then enter Memorial Day weekend filled with articles and stories about military heroes.
One piece that appeared in my newsfeed over the weekend was about PT 109, the ship that President Kennedy skippered in WWII. At first I couldn’t understand why there would be a new item about PT 109; when I looked more closely I realized it was a reprint of one penned in 1944, shortly after he had recovered from the injuries sustained in that accident. This piece was written more to educate the readers to the terrors of the war in the Pacific Theatre, than it was to make a hero out of a young lieutenant. But as we all know, the rest is history.
I recently read how much President Obama admired President George H. W. Bush, and visited him just three days before he passed away. I re-watched the remarks and interaction when Number 44 awarded Number 41 the Medal of Freedom, and he began those remarks with “From a decorated Navy pilot who nearly gave his life in World War II …”
It’s history. How can you have deference without history? You might still find deference in families, because in families we tend to know people’s ages and their histories. We used to have it in companies, because people stayed in organizations their entire careers. I once was with a group of Nabisco professionals and one leaned over to me and whispered of another, “He is the guy who got the bubbles out of the Oreo cream”—not only with deference, but with awe! When I was a youngster at Coopers & Lybrand, someone confided about the nicest partner I’d met, “He was the youngest person to ever make partner.”
When people worked together for longer periods of time, folks remembered who had saved your behind—and it didn’t need to be as dramatic as tugging you behind them while swimming three hours in the Pacific. It was the opposite of having to sing your own praises, people sang YOURS because everyone worked together long enough to know your strengths and weaknesses, why you could be counted on, and when you’d been a hero and saved the day.
by Kate Evert | May 20, 2020 | Competencies, Diversity, Equity, Inclusion, Economy, Human Capital, Productivity
As the world begins to reopen and summer approaches, parents are still left juggling work and children. A (welcomed) end may be in sight for remote learning, but most daycares, summer camps, and kids’ programs are closed, leaving children perpetually home for the summer. How can America be open for business when so many parents need to remain home to care for children?
The federal government has tried to help parents during this time, implementing the Families First Coronavirus Response Act (FFCRA), but the measures put in place really only benefit some parents. A recent Time article addresses this same concern. “Businesses with more than 500 employees are excluded from the mandate, and firms with fewer than 50 can ask for an exemption. That’s left more than 59 million Americans… uncovered by those government leave provisions.” Without the option to work from home, some parents are forced to resign in order to care for children.
Like the other structural flaws that Covid-19 has exposed, it’s abundantly clear that there’s a bigger problem with our current childcare system. Elliot Haspel, author of Crawling Behind: America’s Child Care Crisis and How to Fix It, says, “I think that the crisis calls for a complete re-envisioning of the American childcare system.” Hopefully, we will take what we’ve learned during these times to create solutions that work for all families. Until we do, this will limit the labor supply of those 20 to 45, which are typically key earning years. Read More Here
by Kate Evert | May 13, 2020 | Competencies, Human Capital, Productivity, Work Place
By Lisa Aggarwal
Photo Credit: ©Angelina Zinovieva
Looking for a new job? Many people have gotten one they didn’t ask for. Parents fortunate enough to remain employed have the additional unpaid role of providing full-time childcare, entertainment, and assisted education to their children. Schools are closed. Daycares are shuttered and an estimated 50% will not return to operation in the future. Try working while a two-year-old tugs on your sleeve for 8 hours…it’s great!
Many professionals are tending to their children’s countless needs during waking hours and then working all through the night. If you work outside the home, you may have no choice but to entrust your children’s care to someone else. If you are among the growing number of unemployed workers, finding childcare for when job hunting activities or once re-employed poses another real challenge. Not every household has a reliable caregiver available to remain home. Affordable and available childcare isn’t a hallmark of American culture.
There are some options for working parents, however. A recent Time Magazine article outlining worker rights during the pandemic highlights that in companies who employ 50 or more people, the Families First Coronavirus Response Act (FFCRA) could provide a solution. “The FFCRA was intended to prop up the U.S. economy during the pandemic, and includes some new or expanded worker protections that last through Dec 31, 2020. The FFCRA also extends up to 12 weeks of paid ‘expanded family and medical leave’ at two thirds’ pay to employees unable to work (or telework) because they are caring for a child whose school or place of care is closed because of coronavirus. It’s subject to caps and requires that employees have been at their company for 30 days before taking leave.”
Once areas emerge from the pandemic, will parents even feel comfortable sending their children to school and those daycare facilities that economically survive? New reports are surfacing of COVID-19 symptoms affecting children, and aggregate group settings are undoubtedly of higher risk. Childcare solutions are critical to having a population able to return to work. According to the Pro-Market, the blog of the Stigler Center at U of C’s Booth School, “While there is scope for a large rebound in employment even if schools and daycares remain closed, the economy will remain 17 million workers short of normal employment in this scenario. Furthermore, many of those working when schools are closed will only be able to do so if a spouse or partner or who would typically be working instead remains home.” It’s a tightrope we will all walk in finding a safe, yet economically viable way to proceed, and parents will likely continue to have a two-year-old tugging at their sleeve while we walk it. Read More Here
by Kate Evert | May 13, 2020 | Competencies, Human Capital, Productivity, Work Place
By Lisa Aggarwal
Photo Credit: ©Angelina Zinovieva
Looking for a new job? Many people have gotten one they didn’t ask for. Parents fortunate enough to remain employed have the additional unpaid role of providing full-time childcare, entertainment, and assisted education to their children. Schools are closed. Daycares are shuttered and an estimated 50% will not return to operation in the future. Try working while a two-year-old tugs on your sleeve for 8 hours…it’s great!
Many professionals are tending to their children’s countless needs during waking hours and then working all through the night. If you work outside the home, you may have no choice but to entrust your children’s care to someone else. If you are among the growing number of unemployed workers, finding childcare for when job hunting activities or once re-employed poses another real challenge. Not every household has a reliable caregiver available to remain home. Affordable and available childcare isn’t a hallmark of American culture.
There are some options for working parents, however. A recent Time Magazine article outlining worker rights during the pandemic highlights that in companies who employ 50 or more people, the Families First Coronavirus Response Act (FFCRA) could provide a solution. “The FFCRA was intended to prop up the U.S. economy during the pandemic, and includes some new or expanded worker protections that last through Dec 31, 2020. The FFCRA also extends up to 12 weeks of paid ‘expanded family and medical leave’ at two thirds’ pay to employees unable to work (or telework) because they are caring for a child whose school or place of care is closed because of coronavirus. It’s subject to caps and requires that employees have been at their company for 30 days before taking leave.”
Once areas emerge from the pandemic, will parents even feel comfortable sending their children to school and those daycare facilities that economically survive? New reports are surfacing of COVID-19 symptoms affecting children, and aggregate group settings are undoubtedly of higher risk. Childcare solutions are critical to having a population able to return to work. According to the Pro-Market, the blog of the Stigler Center at U of C’s Booth School, “While there is scope for a large rebound in employment even if schools and daycares remain closed, the economy will remain 17 million workers short of normal employment in this scenario. Furthermore, many of those working when schools are closed will only be able to do so if a spouse or partner or who would typically be working instead remains home.” It’s a tightrope we will all walk in finding a safe, yet economically viable way to proceed, and parents will likely continue to have a two-year-old tugging at their sleeve while we walk it. Read More Here
