by CHRC | Jul 13, 2021 | Community, Compensation, Economy, Hiring, Human Capital, Inspiration, Jobs, Labor Markets
Lots of the country has been suffering from blistering heat.
Back in the days before most homes had air conditioning there was one really good way to escape the heat.
The movies.
If you weren’t around in 1947, you, too, may have missed “The Best Years of our Lives” which won multiple Oscars that year, including Best Picture and Best Director for William Wyler. The story begins with the unceremonious way in which three returning WWII veterans must find their way back to their shared hometown, bonding in the process. As the story unfolds, the viewer realizes that pre-war life didn’t necessarily dictate war-time rank, and that being a hero in one uniform, might not translate stateside. After watching our essential workers, who were called heroes at the height of the pandemic, it was uncanny to watch a wartime hero strive to earn a living wage once the conflict was over.
While there seems to be no excuse for NOT having seen this movie before, watching it now, as the U.S. is emerging from our battle with Covid, seems eerily fitting.
We’ve all been telling ourselves that never before have we had to deal with such a crazy labor market. That people have never had to readjust after such a life and death struggle; so many have lost loved ones. What about those that might never be 100% healthy again? How does our society and business world work around that? What about folks that have skills that are obsolete? How are workers supposed to retrain and reskill yet again?
Whether you are trying to escape the heat, sit out a rainy weekend, or finally understand why everyone raves about William Wyler and his films, “The Best Years of our Lives” will knock your socks off.
The U.S. has seen this show before, and after watching this movie, you will feel the resolve that we can get through this again, despite all of our collective wounds.
by CHRC | Jun 22, 2021 | Covid-19, Economy, Future of Work, Labor Markets
We received an email from a friend sending her regrets for an event. She said: “still trying to get my sea legs” regarding the return to mostly normal in this mostly post-Covid world.
Who isn’t?
It’s as if we have all been on various desert islands, and now ships are arriving to take us back to our previous lives. Or so we thought. But some shipping lanes aren’t quite open, and others are overcrowded.
It is definitely NOT smooth sailing, and it is very hard to find your footing.
The seas roil as nearly all of us are entering the same markets at the same time causing quite a wake in the process. As a result of rushing to so many of the same places at once, it looks as though the water levels are rising around certain islands containing cars, lumber, housing, while some of the potential labor seems trapped on other islands. The port masters keep hoping some sort of craft will be able to ferry workers to the appropriate islands, but here’s the rub: everyone keeps using old charts of obsolete shipping lanes. Assumptions are being made that everyone wants to return to where they were in February of 2020.
This past week a few articles emerged with insights that defied all the economists: multiple months on a desert island make you re-evaluate your life. Sometimes you find yourself. Other times, you don’t want to be found. Sometimes you’ve thrown away the map determined to chart a new course. Other times you’ve taught yourself so many new skills, you want to get paid for those skills. And of course, there is the issue of the “real clothes” required when returning to civilization.
The real lesson that may emerge is that man may be a more rational actor than all the economic texts taught us. He may have found the meaning of his particular life and he is not willing to go back to the one he had before the Covid Tsunami.
by Kate Evert | Jun 8, 2021 | Economy, Hiring, Jobs, Labor Markets, Recruiting, Unemployment
Many very smart people have been working overtime trying to make sense of the May jobs numbers. Economists have been poring over them. Journalists have tried to translate them – some to explain to those who aren’t economists, some to soothe the fears of the average American, and of course, some to play to their audiences.
Compensation consultants comb over the numbers looking for clues. Will they affect IT jobs? Will this relieve pressure over in another industry? Will job gains overall, regardless of industry, drive people back to stores and restaurants?
Suddenly the image came into focus. Regardless of who you are, economist, journalist, or comp consultant, we all keep looking to the past for contextual clues to interpret these numbers. That is about as sophisticated as the sorting toys that you gave toddlers in the 1960s.
But that is how everyone IS looking at the jobs numbers. “Oh, we have this many jobs openings and this many people out of work, so let’s just stack them up, and we know they will fit in this order. DONE.”
Kids sorting toys evolved. In the 1970s, toys emerged that required you fit several different shapes into the space. Far more analogous to trying to match skills and openings. Then came the toy with the crazy shapes fixed upon wavy wires – they wouldn’t stay in place, very representative of today’s labor force. Today, kids’ sorting toys are so complex that they demand collaboration, one of those soft skills.
We all need to get that simple ring stacking sorter out of our head. It will never be that simple again.
by CHRC | 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 CHRC | Feb 26, 2020 | Diversity, Equity, Inclusion, Labor Markets
The Economist claims that in a recent lecture, an esteemed economist at The University of Chicago asserted that “the decision to participate in a market is not simply about maximizing utility given a set of tastes and constraints.”
Underpinning much of what is taught and believed about economics at U of C is that all people are rational actors. But like Adam Smith, who understood that the invisible hand of efficient markets would only work within a system of moral actors, Marianne Bertrand’s research has uncovered that the labor market for women isn’t efficient within a system of societal biases.
To understand more about what Bertrand’s data reveals about the contributors to gender gaps in the labor markets Read More Here
