Checkmate: The Endgame of The American Employee

When Fritz Aldrine and I wrote "Why Work Isn't Working Anymore" in 2001, I thought we'd seen the bottom of morale in the American workplace. Little did I recognize that the happiness and satisifaction of the American employee had a long way to drop.

And drop it has - like an anvil out a 10th story downtown window.

The Gallup-Healthways Well-Being Index registered 47.1 in August for the category titled "work satisfaction" -- the lowest it has been since the measurement was introduced. It means that fewer than half the employees surveyed last month answered "yes" to four questions: Are you satisfied with your job; are your natural aptitudes aligned with the job you are asked to do; does your supervisor treat you like a partner, and does he or she create an environment that is trusting and open?

Nope. Not here. Not in the American workplace.

Indeed, for most employees today there is only one place they can think of that is worse than where they are -- on the street. Everyone knows at least one or a dozen of the long-term unemployed and they know them well enough to not want to join them.

And, employers know that and most simply do not feel it necessary to engage in being nice, or encouraging managers to do so. Relationship development is no longer even discussed. For most employees, it is now "take it or leave it," although the best employers put it a little more gently.

So, employees remain unhappy, unfulfilled and afraid, not a recipe for long-term success. But, after all, many of these employees won't have to worry about the "long-term," because their work is killing them -- literally.

A study published this year titled, "Work-Based Predictors of Mortality: A 20-Year Follow-Up of Healthy Employees," found risk of mortality was significantly lower for those reporting high levels of peer social support -- i.e., the support of their co-workers.

"While higher death rates are clearly the most extreme evidence of workplace stress and job dissatisfaction, mental and physical ailments are also increasingly common, ranging from high blood pressure and heart disease to depression, ulcers and Alzheimer's. Employees faced with long hours, demanding bosses, unsupportive colleagues and unfulfilling work are typically advised to change supervisors, find another job, start their own company or consider other decisive moves. Today, because of the economy, these options are much less realistic." reports Knowledge @ Wharton.

Bottom line: For the average American employee, it is the proverbial rock and hard place. It is check and mate.

Reward Your Friends; Punish Your Enemies - A Universal Truth in Politics

We remain more than a year from the next Presidential election, but that isn't stopping either side from pulling out the battle axes . . .

President Obama, in deep trouble, sporting the lowest approval rating of his Presidency, is going back to his roots -- low wage, unemployed, organized labor, poor, and the intellectual left.

In an "in your face" move to let business know just where it stands, or better said, lies, he is sending Hilda Solis, his Secretary of Labor to attend a union organizing conference. This from the AFL-CIO blog:

U.S. Labor Secretary Hilda Solis will headline a panel, along, with AFL-CIO Secretary-Treasurer Liz Shuler at the second annual AFL-CIO Next Up Young Workers Summit beginning later this week (Sept. 29-Oct. 2). Since taking office in 2009, Solis, the daughter of union members, has changed the direction of the Labor Department from one that favored employers to one that protects working people."

To put this into perspective, what do you think would have happened if George Bush had sent his Secretary of Labor to a "union busting" conference hosted by a business group? The collective scream would have been palpable.

Then, in a "two-fer," the President proposes to add the "unemployed" to the list of legally-protected classifications -- the same as race, sex, religion, national original, disability, and age. However, unlike those classifications which really shouldn't make a difference as to whether someone gets a job, being unemployed really does often have something to do with one's employability -- i.e., the market for labor has determined that some people simply don't have the skill sets to deserve a job in today's tough economic environment. But, no mind says the President. The plaintiff's attorneys will sort it all out. Indeed they will.

And, what should an employer do? Or, better said, what will smart employers do in response to being relentlessly sued by the unemployed? A good friend and mentor had this to say, "Now, every time a company hires an employee who is still employed elsewhere, they are looking at a potential law suit by every applicant who applied that didn't have a job. What to do?  Reduce hiring and use contract workers or temps as much as possible.  If it is to fill a high skill or high tech job, farm it out to China, India, Pakistan, etc." Indeed, the law of unintended consequences at work again if this politically-motivated, pandering, ridiculous piece of legislation is pushed through both Houses of Congress.

Finally, (not as in the end, but only that this is getting long enough for now), there is ObamaCare. The President has appealed the decision finding the mandate to purchase insurance is unconstitutional. The response from the marketplace is more of the same: raise premiums, which, of course, has the unintended, but very real, consequence of putting more employees and their families outside the system.

No one in government seems to "get it": The high premiums are the effect, not the cause, of a system that is broken. The reason the premiums are so high is the entire system is corrupt. Big business, including the doctor-business and the insurance business and the big pharma business are all on the same team with government. Forced participation in a busted, corrupt system isn't the answer, and neither side seems to have latched on to that little fact.

More to come and it should be an interesting ride . . .

Take your 2012 employment litigation budget and add 50%

If the government can't bribe or cajole employers into hiring, they have another idea . . .

Threaten them.

President Obama has proposed legislation that will prohibit discrimination In hiring against the unemployed just as it prohibits discrimination based on race, sex, religion, national origin and age.

Net-net: Plaintiffs' lawyers full employment act. Anyone unemployed who identifies himself as unemployed and who does. Ot get a job can file a charge which you will be required to defend.

More can be found here at the New York Times:

http://www.nytimes.com/2011/09/27/us/politics/obama-proposes-adding-unemployed-to-protected-status.html?pagewanted=print

New CrediblyConnect Feature: "Best Reads Of The Week"

Each weekend I will be blogging my "best reads of the week," along with their links. Thanks to everyone who sends me salient, creative and critical articles. Many of them will appear here each week . . .

Economics

America's Debt Woe Worse Than Greece (And an out of the box way to fix it)
http://www.cnn.com/2011/09/19/opinion/kotlikoff-us-debt-crisis/index.html?hpt=hp_t1

Every Age Group In America Is Getting Poorer, Except One
http://www.businessinsider.com/every-age-group-is-getting-poorer-in-america-except-for-one-2011-9

Student Default Rates Rise Sharply (Especially in For Profit Universities)
http://www.nytimes.com/2011/09/13/education/13loans.html?_r=1

Forgive Student Loans?  Worst Idea Ever
http://www.freakonomics.com/2011/09/19/forgive-student-loans-worst-idea-ever/

US Housing Starts Fall 5% in August
http://www.marketwatch.com/story/us-housing-starts-fall-5-in-august-to-571000-2011-09-20?siteid=bnbh

Feds Discouraging Americans From Saving Money
http://sayanythingblog.com/entry/feds-discouraging-americans-from-saving-money/

Poverty In America:  A Special Report
http://www.zerohedge.com/node/438067

US Poverty Rate Hits Record High In 2010
http://www.charlotteobserver.com/2011/09/13/2605070/census-us-poverty-rate-hit-52.html

Median Male Worker Makes Less Now Than 43 Years Ago
http://www.zerohedge.com/news/median-male-worker-makes-less-now-43-years-ago

Middle Class Death Watch:  As Poverty Spreads, 28% Fall Out Of Middle Class
http://www.truth-out.org/middle-class-death-watch-poverty-spreads-28-americans-fall-out-middle-class/1316275699

Only Advanced Degree Holders See Wage Gains
http://blogs.wsj.com/economics/2011/09/19/only-advanced-degree-holders-see-wage-gains/tab/print/

Wealthiest 5% Take Most Of Gains
http://blogs.wsj.com/wealth/2011/09/16/the-top-5-grabbed-most-of-the-americas-gains/?mod=e2tw

For US Workers, The Lost Decade of Opportunity
http://www.theglobeandmail.com/report-on-business/economy/for-us-workers-the-lost-decade-of-opportunity/article2169290/singlepage/#articlecontent

More Than One-Fifth of Mortgages Underwater
http://www.dsnews.com/articles/more-than-one-fifth-of-mortgages-underwater-report-2011-09-13

Doug Casey Answers The Hard Questions About Hard Times (Excellent Interview)
http://www.caseyresearch.com/doug-casey-answers-hard-questions-about-hard-times


Politics

The Great Obama Catharsis
http://pajamasmedia.com/victordavishanson/the-great-obama-catharsis/?print=1

Is Romney Obama lite?
http://pajamasmedia.com/blog/romneys-electability-card-is-a-joker-to-perrys-four-aces/?singlepage=true

Another Judge Finds ObamaCare Unconstitutional
http://www.zerohedge.com/news/median-male-worker-makes-less-now-43-years-ago


Government Inefficiencies and Corruption

Man Works One Day For Chicago - Receives $158,000 pension
http://globaleconomicanalysis.blogspot.com/2011/09/man-works-1-day-for-chicago-goes-on.html

Why A Patriotic American Became An Expatriate
http://www.escapefromamerica.com/2011/09/patriotic-american-dave-vonkleist-expat-in-argentina/

Scientists On Trial For Failing to Predict Italian Earthquake (Overcriminalization taken to the extreme)
http://www.msnbc.msn.com/id/44596501/ns/technology_and_science-science/t/scientists-trial-failing-predict-italian-quake/#.Tn3Nntl5mSN

Does Fear of Losing Your Job Make You More Productive? Creative?

Good news for employers - employees are afraid of leaving with nothing but their lunchbox and family photos work harder.

Bad news for employers - those same employees are less creative in their work.

"Lack of job security makes people more productive and less creative. This may say a great deal about the era we are in right now. 

"Organizations frequently downsize in the hopes of creating a ‘lean and mean’ company able to be flexible and quick to adapt to changing environmental needs. The purpose of the current research was to assess the effects of job insecurity on productivity, counterproductivity, and creativity in a simulated organizational environment and a field setting.

"In the first study, 104 non-traditional undergraduate students (M= 30.48 years) participated in a laboratory experiment that manipulated the threat of lay-offs (job insecurity) and measured creativity and productivity over two time periods. Compared to control group participants, results indicate that participant productivity increased in the condition of higher levels of job insecurity, whereas creative problem solving decreased.

"In the second study, 144 employees in five organizations completed a survey measuring their job insecurity perceptions, enactment of counterproductive work behaviours, and creative problem-solving ability. Regression analyses indicate that job insecurity predicted lower creativity scores, yet was also related to lower numbers of counterproductive work behaviours.

"Taken together, these studies suggest that job insecurity may have adverse effects on creativity, yet moderately beneficial effects on productivity. Results are interpreted in light of the increasing prevalence of job insecurity and organizational downsizing in today's workplace."

Source: "Productivity, counterproductivity and creativity: The ups and downs of job insecurity" from Journal of Occupational and Organizational Psychology, Volume 80, Issue 3, pages 479–497, September 2007

Courtesy of: http://www.bakadesuyo.com/

"What's An NLRB?"

A recent survey illustrated the importance of the National Labor Relations Board in the minds of the General Public, as follows:

"Do you have a favorable or an unfavorable opinion of the National Labor Relations Board? If you do not have an opinion or have never heard of it, just tell me and we’ll move on."
 
13%​FAVORABLE (NET)
 5%​STRONGLY FAVORABLE
 8%​SOMEWHAT FAVORABLE
 
15%​UNFAVORABLE (NET)
 6%​SOMEWHAT UNFAVORABLE
 9%​STRONGLY UNFAVORABLE
 
44%​HEARD OF/NO OPINION
18%​NEVER HEARD OF
 
9%​DO NOT KNOW (VOLUNTEERED)
1%​REFUSED (VOLUNTEERED)

That's right. 44% of America either have never heard of this 75 year old federal agency or just don't give a _hit. Another 15% don't like the idea. That's nearly 60%. You couldn't do better if you asked 1000 people the time of day.

Which leads me to a thought -- let's do away with the NLRB.

I made this argument in a speech recently in which union officials were present and it goes something like this . . .

1. The NLRB is, well, worthless. No, they are less than worthless. They don't do much except interfere with the free market for labor, and they also interfere with employees rights' to exert economic pressure on their employers, e.g., secondary boycotts, hot cargo agreements, reserved gates, etc. In other words, they stop unions from doing the only thing that works -- shut the damned facility down with a mass of humanity at the entrances and exits. In short, organized labor is powerful not because of the government but in spite of the government -- because they can (in some cases) get employees to withhold services and close facilities.

2. Labor, all of it, is a commodity. Let the market decide what it is worth. Propping up $10 an hour labor to $20 an hour only insures the ultimate failure of the business involved and loss of jobs. In the case of government jobs, it results in people objecting to having to pay for whatever they are getting, or not getting. Hell, some people even leave the country out of frustration.

3. The battle between labor and capital shouldn't be sanitized. It's a battle, after all. Let's get it on! No cops, no federal agencies, no badges. Mano a mano. As long as no one brings a gun to the party, let's take the gloves off and resolve the dispute over who gets what. To insert the NLRB into the mix only delays the inevitable result and makes it a whole lot more expensive.

4. And, dear clients, this is the best of all. You wouldn't have to deal with me, a relentless critizer and bitcher and complainer who always believes the steaming pile in the floor was left there by you.

So, write your Congressman and tell him/her to "End the NLRB." Who knows, as the economy burns to to the ground, the government is going to be looking for agencies to eliminate and my vote is firmly in the court of those who ask, "What's an NLRB?"

Ready For A Facebook "Flash Mob?"

Read the current account from the labor dispute at Kroger and ask yourself, "Is my company ready"

Kroger union workers stage 'Facebook flash mob'
Date: Monday, September 19, 2011, 10:53am EDT
Kroger Co. employees from Ohio Valley stores posted numerous messages on Kroger’s Facebook page on Wednesday, expressing concerns about unfair treatment and wages.
The United Food and Commercial Workers Local 23 called it a “Facebook flash mob,” posting a stream of comments on the page starting at 4 p.m. and continuing until about 7 p.m. yesterday.
“This action is an outgrowth of the Kroger employees’ concern over wages, their passion for their jobs and their customers, and their growing frustration with Kroger,” Tony Helfer, president of the UFCW Local 23, said in a news release. “The idea arose because the employees in these stores have expressed their concern and frustration on Facebook and used it to support each other very actively. This comes from them.”
UFCW Local 23 represents about 1,000 workers at 12 Kroger stores in West Virginia and Ohio. Kroger and the union have been in labor negotiations, though workers have already authorized a strike.
Keith Dailey, Kroger’s spokesman, said the company’s focus remains on reaching an agreement at the bargaining table.
“Social media is an open medium, and we aren’t the first company to see someone attempt to use a Facebook page for PR and I’m sure we won’t be the last,” Dailey said.
Negotiations are scheduled to resume Friday after talks broke down before Labor Day.
People posting as Kroger employees continued to make comments on Kroger’s page throughout the week.
On Kroger’s Facebook page, Tonya Gatts posted, “I know you keep deleting my posts but I am hoping someone is still reading them, so they will understand the employees, we really do deserve a raise and affordable insurance, just as much as the managers did. Thank you.”
Kroger has put pay increases, affordable health care and 100 percent company-paid pension on the bargaining table, Dailey said.
Cincinnati-based Kroger operates 2,439 supermarkets and multidepartment stores in 31 states. The company also operates 788 convenience stores, 361 jewelry stores, 1,046 fuel centers and 40 food processing plants in the U.S

Really, don't kill the messenger . . .

In 30+ years of working with senior managers in corporate America, one of the most glaring weak points in most has been their open display of disdain for bad news. Indeed, in many, if not most, organizations, communication is hindered by the fear of being the bearer of bad tidings and I have often wondered how those companies would have been better served had there been a culture of openness.

A new study of 300,000 employees confirms not only my anecdotal perspective that there is a real problem, but goes further to confirm that those companies where there is no fear of communicating bad news are nearly three times as profitable.

The study is found here:
http://www.executiveboard.com/corporate-integrity/pdf/Open-Door-Policy.pdf

IRS, Department of Labor and States Targeting Employers Using Independent Contractors

In a first joint strike, the Department of Labor is teaming up with the Internal Revenue Service and State governments to go after home builders and others who allegedly misclassify emplyees as independent contractors, thereby avoiding the payment of overtime compensation and the withholding of taxes.

According to a report by the Wall Street Journal, "allegations of worker misclassification in the construction industry generally come in two forms: that builders misclassify laborers they hire directly as independent contractors, or they knowingly hire subcontractors who misclassify workers. The Labor Department's efforts focus at least in part on holding large builders accountable for classification violations by their subcontractors, according to person familiar with the matter."

A statement by the Department of Labor makes it clear this is only one of many industries they intend to target, including hospitality, janitorial services, agriculture, day care, health care and restaurants.

Bottom line: If you utilize independent contractors, regardless of industry, you are vulnerable. The proper classification for a worker depends on a number of sometimes complex factors including how much control or direction an employer wields over the workers. Contact us if you have questions.

You can find the Journal article here:
http://online.wsj.com/article/SB10001424053111903927204576574892314453196.html?mod=WSJ_hp_LEFTWhatsNewsCollection

The Economy . . . Getting It Real

While I do not provide economic counsel to my clients . . . I do occasionally throw water on particularly terrible ideas, like this one . . .

"Jim, we are thinking the economy is turning up. Might start hiring in anticipation of increased demand," eager anticipation in his voice.

"Really? You want to hire "in anticipation" of demand, in the face of continuing intractable unemployment, a long term poor housing market, low business confidence, unsustainable growth in sovereign debt, uncertain political and global leadership, and debt problems in Europe?"

"Either you are very lucky and know it, or you don't read the newspaper," I reply, non-plussed. "How about you wait and see some of that "anticipated demand" before hiring?" I add.

"You are negative," came the disappointed reply.

"Correct, I am."


 

Peter Schiff Deconstructs Obama's Jobs Bill

20 minutes worth your time . . . Peter Schiff's recent testimony before Congress . . .


http://www.youtube.com/watch?v=_BHLguFEN3M&feature=youtube_gdata_player

Competing to Hire The Best and to Motivate the Rest

"Surveys have suggested that about four out of five employees would leave their current job if they could, but most think they would have trouble finding another one at the moment. A global Gallup survey found that at the average big firm only 33% of employees describe themselves as fully engaged in their work, 49% say they are not engaged and 18% say they are “actively disengaged”. At what Gallup calls “world-class” companies, the proportions are 67%, 26% and 7% respectively."

Sound familiar?

An excellent article in this week's Economist I commend to your review . . .


http://www.economist.com/node/21528436/print

With a view from an employee's perspective . . .

Courtesy of: www.zerohedge.com

An Obituary For Labor Day, 2011

There is little I can say about the economic and political situation that I have not already said in this blog. So, instead, I thought I would share an obituary that came to me via a friend that acts as either a predictor, or as a warning, your choice, of what is in store for us if change is not on the horizon.

In 1887 Alexander Tyler, a Scottish history professor at the University of Edinborough, had this to say about the fall of the Athenian Republic some 2,000 years prior:
 
"A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse over loose fiscal policy, (which is) always followed by a dictatorship."
 
"The average age of the world's greatest civilizations from the beginning of history, has been about 200 years. During those 200 years, these nations always progressed through the following sequence:
 
From bondage to spiritual faith;
From spiritual faith to great courage;
From courage to liberty;
From liberty to abundance;
From abundance to complacency;
From complacency to apathy;
From apathy to dependence;
From dependence back into bondage." 
 
As we watch government struggle to solve our problems, i.e., the same ones our elected representatives created, think about where we might be in this progression and more importantly how to reverse it. I suggest that looking to government to solve the problems we now face is akin to asking the arsonist who lit your house on fire to put it out.

Government Has No Tools To Fix What Ails Us - Time To Man Up

14 million Americans are unemployed, and the real number is actually much larger.

So, what's news? Most of the same 14 million are going to be jobless this time next week, month and probably next year.

But, you ask, "What about the President's new jobs program?" And you would be referring to the upcoming, "Obama does his impersonation of FDR," live on primetime TV.

Dead on arrival. It took Congress and the White House two days to agree on a time for the President to address Congress. Bohner has already scheduled his rebuttal and he hasn't even heard the President's plan to insert government further into America's rectum to find the source of our pain.

Teamsters president Jimmy Hoffa, Jr., on the other side of the ledger, already doesn't like it, either -- it doesn't go far enough. He hasn't heard the President's grand plan, either, but according to Jimmy it needs to give everyone a good government job fixing something. Jimmy doesn't know, or perhaps he forgot that the US government is dead broke, can't afford a stick of gum on a cash basis, and but for the printing press, would have burned up it's creditors long ago.

We have a problem here - a fundamental belief that government is somehow going to pull out the right tool and make it all better. The Republicans and Democrats are just arguing over whether the tool should be a scalpel or a meataxe.

In fact, it should be neither. Government isn't the solution. It is the problem. It is why we find ourself on this predicament. What we have is not an employment problem. That is not a cause. It is the result of our inability to compete in a global marketplace. We have lived on our reputation and our credit for too long and now reality is setting in and our creditors want to be paid in something other than the US dollar which hasn't had a good run over the last 100 years, having lost 94% of it's value. The Federal Reserve is working overtime to insure that the last 6% meets the same fate.

The White House reminds me of the old USSR - central planning via next five year plan. Sounds good, but didn't work out so well for the Ruskies.

The National Labor Relations Board is a good example. This agency has become so politicized, so liberal, that some Republicans are urging it's only Republican member to resign, not in protest, but so that the remaining members will not have a quorum and effectively shut the agency down. Based on it's recent decisions that turns labor law on it's head and anticipating, as we should, that they fully intend to shorten the period between a union petition and the date employees vote such that only one side (the union side) has time to be heard, it is understandable. And, the NLRB's attempt to force Boeing to close a billion dollar plant in South Carolina and move the work back to it's union plants in Washington state is breathtaking. If the government wins, it would not be surprising to see all Boeing aircraft being made in Mexico, Brazil and even China in not too many years.

The Republicans have no better record even though they are assuming the noble pose. George W. Bush still is undefeated in profligate spending and running up the national debt. He just did it in a different way -- by blowing things up and letting the global financial elite not only run the country, but own it.

No one is going to say it, so I will. It is time for a good old fashioned Depression to fully deleverage America and start over again with a clean balance sheet.

And whether I say it or not, that is the most likely scenario, sooner or later.

Government has no tools in it's bag to fix this one.

It Really Is About Relationships . . .

In the book "Why Work Isn't Working Anymore," now almost 10 years from its writing, Fritz Aldrine and I hypothesized (based on statistical as well as substantial anecdotal evidence) that what was missing in most workplaces was satisfaction and further that the failure of employers to engender and support positive relationships with co-workers was the primary reason. Now, 10 years later, "using the rich data set of the German Socio-Economic Panel (GSOEP) this article analyzes the effects of job characteristics on job satisfaction as well as the conditions under which low job satisfaction leads to job search, and under which job search leads to job changes. Individual fixed effects are included into the analysis in order to hold unobserved heterogeneity constant. According to the empirical results, the strongest determinants of job satisfaction are relations with colleagues and supervisors, task diversity and job security. Furthermore, job satisfaction is an important determinant of the self-reported probability of job search, which in turn effectively predicts actual job changes. The effect of job search on the probability of changing jobs varies with job satisfaction and is strongest at low levels of job satisfaction. The effects of job dissatisfaction on job search and of job search on quits are stronger for workers with lower tenure, better educated workers, workers in the private sector and when the economy and labor market are in a good condition." See: "The Interaction of Job Satisfaction, Job Search, and Job Changes. An Empirical Investigation with German Panel Data" from JOURNAL OF HAPPINESS STUDIES, Volume 10, Number 3, 367-384, via http://www.bakadesuyo.com/ Takeaway: Satisfied and happy employees are more productive. Satisfaction is most predictive among those employees who share positive workplace relationships. Providing opportunities and training in cultivating positive and functional relationships in the workplace is time well spent.