WHAT WE'RE READING

AND WHAT WE THINK ABOUT IT

Reallocation & Retraining

Despite the headache caused by all of the labor market reading done for our last post, we’ve persevered.  

Some Chicago economists have had their thinking caps on, and their musings are worth sharing. They are asking the right questions as we contemplate labor markets and human capital post-pandemic.  

The Chicago Fed’s April paper focused on this:  Why didn’t more people from affected industries move over to industries that were NOT affected by the pandemic? “One sign that Covid might have increased the need for labor reallocation is the fact that even while unemployment rose substantially, firms reported an increase in job openings, the opposite of what normally happens in a recession.”

That article raised a nagging question:  Do workers lack the ability to retrain? The resources? Or the incentives?

One of Chicago’s most wry economists, Carl Tannenbaum, addresses the risks if people do NOT retrain. Solving these problems will not be easy, but he rightly points out, failing to address them will lead to even larger problems along geo-political lines. His piece’s topic sentence sums it up:  “Renewing human capital is as important as renewing physical capital.”

Solutions depend on cooperation and innovation. Education needs to orient to life-long upskilling, supporting a different concept of education before 18 and after 18, with government support. Companies must put their money where their mouth was when they signed the Business Roundtable document in 2019. If they create that ecosystem, they will retain workers for far longer—hiring based on competencies for life-long learning—and partnering with employees committed to constant up-skilling.

So many numbers, so little time

This past weekend seemed a perfect time to catch up on some labor market reading.  

First topic: the real unemployment in the U.S. This article does a great job of explaining the difference between the monthly numbers released by the BLS, U3, and the more accurate measure of U6, which includes those whose unemployment benefits have run out, or who are too discouraged to look for jobs. After reading their estimate on actual unemployment, anyone would be discouraged. 

Next was an article in Crain’s Chicago Business regarding staff shortages in Chicago restaurants. Many factors contribute to this, including the current, enhanced unemployment benefits. In addition, until fully vaccinated, some are very reluctant to come back to the workplace, especially one that demands constant interaction with the unmasked public.  

Finally, the most recent Economist issue featured a special report about the future of work.  These articles point out some bright spots, including how quickly employment rebounded despite dire predictions, to how many jobs were NOT automated during the pandemic. The newspaper’s overall take is this: “Today, as the economy emerges from the pandemic, a reversal of the primacy of capital over labour beckons – and it will come sooner than you think.” 

So, the only conclusion for this firm? We will be spending much more time pouring over even more jobs data to make sense of how the labor markets are affecting our clients.

Is All Well?

Once upon a time there was a farmer named Sam, growing impatient with the current drought. He thought that he had prepared for hard times; he had deepened their well to hold over 10,000,000 gallons of water. That was enough to water their fields and keep their household running. He was SURE it was deep enough to sustain his family for any crisis. 

No one had ever seen blight like the one of ’20 – but it drained his well. Rain did not come for a year. Then in March, some declared the emergency over because some rain fell, and 961,000 gallons filtered into his well … but it wasn’t even one-tenth full. He needed to start using that water immediately for household use, and he doubted if it was enough to water just ONE of his fields.

961,000 jobs created in March sounds great, but when trying to make up for approximately 10,000,000 jobs lost from Feb 2020 to Feb 2021, these jobs are just a drop in the bucket. Let’s be careful about headlines that talk about growth percentages, realizing this isn’t growth from the top of the flat, smooth, fertile field—they are measuring from the bottom of the dry well.

Old Uncle Sam will go out to his fields again today, eyes raised upwards, hoping for signs of more rain to replenish his fields, and his well. 

The Madness of March

There is March Madness, and then there are some things to get mad about in March.  

Mad as in frustrated. 

Texas and Indiana are miles apart—as were the facilities (and the swag bags!) provided by the NCAA to those college athletes competing in their national basketball championship.

Title IX was enacted in 1972. It stated that “[n]o person in the United States shall, on the basis of sex, be excluded from participation in, be denied the benefits of, or be subjected to discrimination under any education program or activity receiving Federal financial assistance.” 

Seems a decent weight room is somehow exempt from the “benefits of” when referring to a women’s program. The NCAA was forced to apologize last Friday when Sedona Price of the University of Oregon Women’s Basketball team posted pictures of the simple dumbbell set representing ALL of the workout equipment afforded the women’s team at the NCAA Tournament, while the men’s teams had vast facilities, with a myriad of machines and weights. 

These benefits have certainly been denied the women of college sports. 

This Women’s History Month let’s not confuse the rules with the reality. Saying someone is equal does not make them so. Enacting a law stating discrimination is wrong, does not eliminate it. Let’s be more demanding, like Sedona Price, about real equality that lives up to the law’s intent. Sedona might wear a different uniform than the Suffragettes, but 100 years later, she used a different platform to make sure that the voices of female athletes were heard.

Notorious

It is hard to read the news right now and not encounter the word she-cession.  

Given that it is Women’s History Month, one aspect of the she-cession came into focus while re-watching the movie On the Basis of Sex, a partial biography of Ruth Bader Ginsburg.  

It is that woman who is highly skilled at her job—years of experience that cannot be replaced.  Maybe it is someone, like Ruth Bader Ginsburg who was top of her class, has a brilliant legal mind, and cannot stand watching her own children flounder as they are not suited for online learning? Perhaps a young pharmacist whose childcare has closed? These are people who have amassed extraordinary amounts of human capital that are currently not being employed.  

As sad as all of this is, the larger tragedy will be if workplaces do not establish approaches and programs to transition these workers back into the fold. A recent study done by three economists at the San Francisco Fed estimates that between the onset of Covid in February 2020 and the end of 2020, the employment rate of mothers fell by 7% and their labor participate rate fell by 4%. 1

Despite RBG never landing that big law firm job, she gained attention when she took on a court case involving a section of the tax code regarding the deductibility of caregiving expenses. It seems the issue of trying to balance work to financially support and care for those we love has been flummoxing Americans for a very long time. RBG was notorious for trying to eliminate the barriers that prevented many from contributing both at home and at work.

HERstory

In March, we celebrate women’s history month in the United States. Traditionally, women’s history is harder to document – legally women had fewer rights, often could not own property, and in some instances were the property of their fathers or husbands. Yet the tiniest bit of digging into family history, company history, and national history, will unearth the many contributions women have made.

To kick off this month, CHRC wanted to provide this link to various programs and resources ranging from the National Archives to the National Park Service that highlight the contributions of American women in our country. Spend a lunchtime getting to know some of the heroines of our past!

But we can’t just look backwards.

In an effort to ensure that women no longer have to bring their folding chair to get a seat at the table and now work in equitable work environments, we are taking the advice of Rachel Schall Thomas, of LeanIn.org. For International Women’s Day, March 8, LeanIn.org has developed free resources so that companies can build more equal workplaces—this International Women’s Day and beyond.

Not only is there a hands-on approach for teaching organizations 50 ways how to fight bias with digital cards—but there are training resources, a PowerPoint, and moderator materials that can be delivered in person or virtually.

Lovin’ It?

It’s complicated.

A phrase that we associate with romantic relationships as we close out this month of Valentine’s Day.

But McDonald’s and the African-American community? Oh yeah. 

When Marcia Chatelain published her book, Franchise at the end of 2019, she couldn’t have imagined what 2020 would bring. But for those of us struggling to understand all the complexities of systemic racism, she employed a clever device to convey its many mechanisms.

There are few among us who haven’t tasted, or craved, something from McDonald’s. It’s a fairly universal American icon. Yet in tracing the inception, growth, urban retrenchment, and eventual Black franchise-ownership, she is able to walk us through a journey that few of us know enough about.

There are many aha moments. These insights detail examples from why returning Black GIs weren’t allowed to take full advantage of all that the GI Bill had to offer, to why Black franchise-owners continually had higher per store sales, yet saw those margins erode because of the unfavorable terms McDonald’s “offered” them.  

This book transforms systemic racism from a vague but overwhelming concept to a process outlined with concrete steps for permanence.  It becomes very easy for those of us who understand what the post-WWII boom did for the majority of Americans, to now understand how so much of that economic prosperity was not afforded to a whole group of Americans. 

“Two all-beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun!” 

So that special sauce of success? 

Franchise helps you understand a series of decisions that kept the special sauce from all of America.

63

What do you think when you see this image?

Some may think this is a very overused image. 

Perhaps it’s a cliché.  It’s over-done.  It over-simplifies something that isn’t simple at all. 

But about two years ago, those of us in Chicago learned, or re-learned, how a group of young white men from Mississippi sent a decoy group to board a plane, then drove out of their way, across their state border, and came to the frigid north in March, just so they could play a ball game.  

And that meant a white player shaking hands with a Black player at center court. For the whole country to see.  Including the Governor of Mississippi who had forbid them to leave their state precisely because he didn’t want them to compete with Black athletes.

When Loyola beat Mississippi State, the Chicago school went on to win the NCAA championship;  so far, the only Chicago college to capture such an honor.  A stirring reminder of that achievement reverberates throughout Loyola’s Gentile Arena whenever the Ramblers reach 63 points: the student section chants “six – ty  three,  six – ty  three.”  

Many have argued how significant or insignificant that game was.  Against a backdrop of Civil Rights issues that were yet to be addressed, and the violence and economic hardship that continued, how much did that game change? 

But in 2011, when Jerry Harkness attended Joe Dan Gold’s funeral in Kentucky, there, next to the casket was a picture.  It was from 1963, of the two of them shaking hands at the beginning of the “Game of Change” – a game that the Governor had tried to stop by issuing an injunction, and that had been overridden by a handshake. 

True Grit

By Lisa Aggarwal

Commonwealth HR Consulting is a firm composed of women who love math. So perhaps it’s not surprising that the movie Hidden Figures resonates with several of us. 

We are told from a young age that we can do hard things. “Things” have certainly been hard lately. Who better to learn from than women who looked hard in the face and told it to try harder.

One of the most amazing things about this movie was that no embellishments were needed to tell the stories of these female African-American “human computers” whose work and dedication was critical to the space race. This, at a time when WHO they were (African-American and female) was an inherent obstacle to their own success…still to this day. 

Instead, they were pioneers who charted their own courses. Katherine Goble Johnson became the best known of this group when she received the Presidential Medal of Honor; she calculated the trajectories of the Apollo 11 and Space Shuttle. Mary Jackson was the first female African-American engineer at NASA. Dorothy Vaughan was the first African-American supervisor at NASA … because she taught herself FORTRAN. 

 “Their path to advancement might look less like a straight line and more like some of the pressure distributions and orbits they plotted, but they were determined to take a seat at the table.” – Margot Lee Shetterly 

How was their world altering success accomplished, against all odds? GRIT.

There are many ways to describe grit: being resilient, having a strategic mindset, continuously striving for self-development. It is a competency, or innate behavior. You can sometimes develop it, but it is usually a part of a person’s make up.  Without leverage, without a voice, the heroines of Hidden Figures demonstrate so many aspects of grit, then out-prepare and then out-perform their peers.  It is a muscle that they have been using their whole lives.

The easy path is rarely the most rewarding. Invest your time in someone you see has potential, or in yourself. Sometimes, in order to get some traction, you need to put some grit down on that slippery slope and see where it might take you. 

How many more weeks of Covid?

If Covid had a mascot, it would be the groundhog, at least in the United States. Different animals in different northern regions have stuck their necks out to foretell if winter is over.  Every year on February 2, many cultures look for a sign that winter might be over.

Recently, a podcast caught my attention; hadn’t hit start, hadn’t heard of the book, but who wouldn’t keep listening about a book called Wintering when it is January in the snowy North? The author, Katherine May, read a passage: 

“Plants and animals don’t fight the winter; they don’t pretend it’s not happening and attempt to carry on living the same lives they lived in the summer. They prepare. They adapt.”

Suddenly you recall an Aesop’s fable, of the Ant and the Grasshopper.  One creature is busy storing food for the winter, one plays in the sun and does not. You probably first heard this tale at about the age of five, and Aesop wrote, or at least recorded it, 5,000 years ago. 

In her interview, the author says she feels that Covid has been one L O N G Wintering.  Many of us have forgotten how to winter—how to store away preserves in our cellars for the seasons in which the harvests are not plentiful. Companies either don’t retain earnings for a rainy day or are pressured to pay them out to shareholders.  

This February 2, the groundhog represents us emerging from our Covid Hibernation, looking for hope, an efficient vaccine distribution system, some semblance of normal. As we all know we will have at least six more weeks of Covid Winter, but perhaps we can resolve to prepare a bit more for our next “wintering”—whatever it may be—so that we might be more prepared, like the ant, and not have to go underground, like the groundhog.