WHAT WE'RE READING

AND WHAT WE THINK ABOUT IT

Essentially Fair?

If we’ve learned anything the past few months, it’s that many of our lowest-paid workers are essential to keeping not only the overall economy, but also our individual households running. We rely on grocery store clerks, delivery drivers, caregivers, and cleaners in stores, hospitals, and nursing homes to keep our families fed and safe. And yet, in many states, these essential workers are paid at rates so low they could work full-time and still qualify for SNAP benefits. The federal minimum wage is $7.25 an hour and hasn’t increased since 2009. In our gut, most of us understand that the minimum wage should be increased for reasons of fairness.  

But there are reasons beyond fairness to increase the pay of these essential workers. A review of nursing home data shows that higher minimum wages lead to better quality of care, and even reduced mortality rates. “It appears that with better pay, jobs in nursing homes became more attractive, so employee turnover decreased. Patients benefited from more continuity in their care.” Studies also indicate that, across industries, employee performance improves as wages rise. Increased quality, reduced turnover, and better performance? So, it seems that not only is increasing low wages the fair thing to do, it’s the right business decision as well.  Read More Here  

Fatherhood at its finest

Sixty years ago this fall, two television shows premiered on American screens that featured single fathers. In 1960, of course both fathers were created as widowers.

After you wrap your mind around the fact that Opie is now a senior citizen, it is interesting that American popular culture has had two lasting images of single dads who had to do the mothering and the fathering. Aunt Bee and Uncle Charlie were around for a lot of the after school snack banter, but whether you watched in prime time or reruns, the lingering memories are the heart-to-hearts that these dads had with their sons about life, death, girls, and becoming men.

It’s probably not surprising that one of those TV sons went on to be a pretty good father himself, as well as a prominent director. In turn, he produced another director who has a brand new film debuting: Dads.

This heartwarming interview from last Sunday seems to be a nice way to wish a Happy Father’s Day to all those folks out there who father in oh-so-many-ways. Watch it here

What’s so funny about peace, love, and understanding?

Obviously that it’s hard.

It all starts with understanding. And understanding begins with listening. We’ve been doing a lot of listening, a lot of reading, a lot of absorbing. There is a lot of listening, reading, and absorbing still to do before this country reaches better understanding. 

Here are three articles that we think might be helpful.

The first is from a managing director at Goldman Sachs who has opened up about his experiences as a black man; perhaps because he feels like people are finally listening. In 2011, Frederick Baba had an incident with the police because he “matched the description of an individual who had reportedly stolen from a residence in the area. The description was of a black male in shorts and a T-shirt, with no other details. No color for either article of clothing, and in a city with just under one million black people, I was obviously the culprit.” 

The second is an article from the Harvard Business Review about what makes a good listener. Jack Zenger and Joseph Folkman describe good listeners being more like trampolines rather than sponges. “[Good listeners] are someone you can bounce ideas off of — and rather than absorbing your ideas and energy, they amplify, energize, and clarify your thinking. They make you feel better not merely passively absorbing, but by actively supporting. This lets you gain energy and height, just like someone jumping on a trampoline.”

The third is a letter from Tim Ryan, US chair and Senior Partner at PwC, outlining the firm’s continued steps to addressing the injustices that too often occur to Black Americans. Ryan states, “It is my responsibility as a leader to not only stand with [Black colleagues] against racism to condemn these killings, but to use my privilege to be a part of the solution and take action – to help dismantle the racism and injustice that has become so pervasive in our society.”  From the time Mr. Ryan co-founded the CEO Action for Diversity and Inclusion, PwC lost an employee, Botham Jean, to mistaken identity and police violence, PwC has gone way beyond a fancy ad campaign and is committing their people and hours—and applying peer pressure to other corporations to do the same. 

I can’t help but think of the lyrics to the Nick Lowe song that Elvis Costello made famous. The song asks, “So where are the strong and who are the trusted? And where is this harmony, sweet harmony?” Perhaps if we all do our homework, we can be strong and the trusted for one another and bring some of the much-needed harmony to one another, our workplaces, and our world. Read More Here

Running on Empty

Imagine running a marathon. After crossing the finish line, you’re expected to go straight to the office for the day and lead a meeting or present a new proposal to your company. You’d be exhausted—physically and mentally drained. It sounds crazy not to be able to rest and catch your breath after such a daunting and strenuous task.  

And yet, this is exactly what many companies are asking of their Black employees. Already overwhelmed and emotionally exhausted, many are often asked to lead the charge against racism. In a recent Fortune commentary, Najoh Tita-Reid, a senior executive of marketing reinvention at Logitech, urges that “while this is indeed a unique moment, the responsibility of dismantling systemic racism must not be placed solely on black employees by asking them to fully lead diversity and antiracism efforts.”

Tita-Reid encourages non-Black leaders to accept responsibility to lead the charge, rather than asking Black employees and leaders—who might already be burnt out. She suggests a few ideas to protect the emotional wellbeing of Black peers, while actively tackling racism in the workplace. Don’t expect Black co-workers to teach you all about race issues; they carry this burden every day. It is your job, as their coworker/boss/peer, to do some emotional heavy lifting, educating yourself on these issues and how to best become a good ally. 

Equally important is being respectful of Black colleagues who don’t want to discuss race issues. Once you’ve completed your marathon for the day, you may have no interest in talking about running for a while. Are you suggesting another 5K at the end of the day, or are you handing out Gatorade at the finish line? Read More Here

Dangerous Territory

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

Deference: respect and esteem due a superior or an elder

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.

Summer 2020: A whole new ball game

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

Photo Credit: ©Angelina Zinovieva
Photo Credit: ©Angelina Zinovieva

Two Full-Time Jobs

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

Essential Economics

For some time now, the compensation consultants at CHRC have been keeping an eye on the wages of those in the service sector. We watch the monthly JOLTS data aggregated by the Atlanta Fed and often have criticized news headlines that put an overemphasis on Manufacturing and Construction job gains and losses because they under-emphasize the large percentage of the U.S. economy that the service sector comprises.

We think Covid-19 has changed America’s understanding of how reliant the economy and all of us are on this service sector.

Given CHRC’s attention to this area of the labor market, and the recent wage pressure caused by over demand and under supply, this headline immediately caught our eye: Returning to Business Is Going to Take a Pay Raise. This sentence in particular caught our attention: “The coronavirus has laid bare that without workers to produce and consume their products, even the most formidable companies are just empty shells.” The author was not an HR consultant or a labor economist; he is an investment advisor who writes a column for Bloomberg. 

We agree. If there was already a shortage of workers for the service sector, when we return to normal, whatever the new normal looks like, and whenever normal kinda sorta returns, we do think that some of these roles will see an increase in wages.

Two weeks later we came across the same sentiments, in a theological magazine.  While this author’s vantage point was slightly different, his meaning was exactly the same: “Societal value is more subjective, and even higher-paid workers and executives are now recognizing that a well-functioning society really needs people to provide these services.” This author, like the Bloomberg columnist, referenced The Business Roundtable’s “Statement on the Purpose of a Corporation” that 181 executives signed in August 2019. In the statement, these leaders concede that in addition to shareholders, they also serve stakeholders, which includes employees and customers. 

Nobody knows what the new normal will look like, but we all know what the world’s been like without haircuts and without meals out, exchanging banter with our favorite servers. We know that many people that do invisible but essential jobs—from garbage collection, to hospital laundry, to first responders—have died from Covid-19. The hope of this Human Resource consultancy is that if financial and theological magazines are publishing pieces that reach the same conclusion, perhaps business leaders are synthesizing similarly and the new normal will involve some evolved compensation conversations. Read More Here and Here