Labor Economics – Page 10 – artdiamondblog.com

Elon’s “Musketeers” Will Gladly Commit to “Long Hours at High Intensity”

(p. A12) Your boss probably hasn’t demanded a loyalty pledge and almost certainly doesn’t own a rocket ship, but the person calling the shots at your company might be more like Elon Musk than you realize.

. . .

What is consistent—and alluring to some bosses—is the billionaire’s unapologetically high standard for employees. He spelled it out last week in an emailed ultimatum, saying that Twitter employees must commit to “long hours at high intensity” or leave with three months’ severance.

. . .

Managers who think the working world has gone soft in recent years, with all the talk of flexibility and work-life balance, say they envy Mr. Musk’s unfiltered style and share his craving for maximum effort—even if they wouldn’t act quite as forcefully as the world’s richest person.

. . .

. . . he is the rare CEO with a fan base—“Musketeers,” as this male-dominated bunch is known—and might be able to fill the company’s ranks with devotees who believe in his vision of a more freewheeling and profitable platform and are willing to grind.

. . .

“He can do whatever he wants, and everyone that has an opinion about it can piss off,” says Derek Grubbs, director of sales development at Crux Informatics, a software company. “If everybody exits from Twitter, there are plenty of other people who will be ready to enter because it pays well, and working for Elon Musk has a flair to it.”

For the full commentary, see:

Callum Borchers. “ON THE CLOCK; The Bosses Who Want to Emulate Elon Musk.” The Wall Street Journal (Wednesday, November 23, 2022): A12.

(Note: ellipses added.)

(Note: the online version of the commentary has the date November 22, 2022, and has the title “ON THE CLOCK; Is Elon Musk Your Boss’s Anger Translator?”)

Regulation of Truckers’ Driving Hours Caused Higher Speeds and More Fatalities

(p. A13) Falling asleep at the wheel is deadly. “It is obvious that a man cannot work efficiently or be a safe driver if he does not have an opportunity for approximately 8 hours sleep in 24,” the Interstate Commerce Commission declared in 1937. Ever since, federal rules have limited the work hours of interstate truckers. Also ever since, truckers, their employers and their customers have circumvented the rules when they stand in the way of making money.

Congress tackled the problem in 2012 by requiring long-distance truckers to track their hours with an “electronic logging device” connected to the engine. The mandatory rest breaks and the limits on drivers’ daily and weekly hours didn’t change, but the Transportation Department estimated that monitoring compliance with an ELD would avoid 1,844 crashes and save 26 lives annually. . . .

. . .

In “Data Driven: Truckers, Technology, and the New Workplace Surveillance,” Karen Levy makes a provocative case against this approach. . . . Her concise and lively book will interest anyone concerned with the complicated business of regulation.

. . .

. . ., Ms. Levy raises important questions about regulation in general by examining the unintended effects of a well-meant initiative designed to address a serious safety problem. She reports on a 2021 study linking ELDs to greater compliance with regulations but no reduction in truck crashes. Fatalities in crashes involving large trucks actually increased, as drivers sped up to cover as many miles as they could during their permitted driving time.

For the full review, see:

Marc Levinson. “BOOKSHELF; Miles of Mandates.” The Wall Street Journal (Wednesday, Jan. 4, 2023): A13.

(Note: ellipses added.)

(Note: the online version of the review has the date January 3, 2023, and has the title “BOOKSHELF; ‘Data Driven’ Review: Miles of Mandates.”)

The book under review is:

Levy, Karen. Data Driven: Truckers, Technology, and the New Workplace Surveillance. Princeton, NJ: Princeton University Press, 2022.

As Sole Owner Musk Was Able to Act Quickly to Cure Twitter’s “Systemic Paralysis”

(p. A17) Since Elon Musk purchased Twitter, he has undertaken a rapid restructuring that few large technology companies would attempt unless faced with an immediate liquidity crisis. Minutes after closing his purchase of the company, he started a process that reduced the workforce from 7,500 to 2,500 in 10 days.

Media pundits immediately slammed him, arguing that his slash-and-burn strategy would destroy one of the world’s most important social-media platforms—already in danger under the burden of $14 billion in debt. Much of this criticism came in the form of tweets, as the irony of using Twitter to denounce Twitter apparently escaped Mr. Musk’s critics. But the restructuring of Twitter won’t destroy the company.

Mr. Musk is trying to cure a degenerative corporate disease: systemic paralysis. Symptoms include cobwebs of corporate hierarchies with unclear reporting lines and unwieldy teams, along with work groups and positions that have opaque or nonsensical mandates. Paralyzed companies are often led by a career CEO who builds or maintains a level of bureaucracy that leads to declines in innovation, competitive stature and shareholder value.

Mr. Musk set his new tone immediately. He eliminated a 12-member team responsible for artificial-intelligence ethics in machine learning, the entire corporate communications department, and a headquarters commissary that cost $13 million a year (despite prior management’s pandemic decree that Twitter employees would be “remote forever”).

Three attributes give Mr. Musk a better chance of rebuilding Twitter into an innovative force in social media: He is an operator, an engineer and a sole owner.

For the full commentary, see:

Rob Wiesenthal. “Elon Musk Slashes Bureaucracy, Giving Twitter a Chance to Soar.” The Wall Street Journal (Friday, Dec. 9, 2022): A17.

(Note: the online version of the commentary has the date December 8, 2022, and has the same title as the print version.)

Workers Who Feel They Matter Are More Satisfied with Their Lives and Are “Less Likely to Quit”

(p. C5) So how do you know if your employees and co-workers feel that they matter? In a 2021 study published in the Journal of Positive Psychology, researchers developed a scale to measure mattering in the workplace. In online surveys involving nearly 1,800 full-time employees at a variety of companies, participants were asked to rate on a 5-point scale how much they agreed with statements such as “My work contributes to my organization’s success” and “The quality of my work makes a real impact on my organization.” Other statements had to do with feeling valued and recognized: “My organization praises my work publicly” and “My work has made me popular at my workplace.”

Participants were also asked about job satisfaction, recent raises or promotions, and whether they intended to leave their job. What the researchers found was that mattering isn’t only good for employee well-being, it’s also good for a company’s bottom line. Employee turnover is costly and disruptive, and “when employees feel like they matter to their organization, they are more satisfied with their jobs and life, more likely to occupy leadership positions, more likely to be rewarded and promoted and less likely to quit.”

. . .

Research by Dr. Prilleltensky and colleagues shows that being treated fairly increases workers’ sense of mattering, . . .

For the full commentary, see:

Jennifer Breheny Wallace. “The Power of Mattering at Work.” The Wall Street Journal (Saturday, Dec. 3, 2022): C5.

(Note: ellipses added.)

(Note: the online version of the commentary has the date December 1, 2022, and has the same title as the print version.)

Jack Welch’s Protégés “Were Just Cost Cutters”

(p. 8) . . . in more than 100 conversations for “The Man Who Broke Capitalism,” my new book, from which this article is adapted, a broad range of people said some version of the same thing: While it has been more than two decades since Mr. Welch was C.E.O. of G.E., his legacy still affects millions of American households.

. . .

For a time in the early 2000s, five of the top 30 companies in the Dow Jones industrial average were run by men who had worked for Mr. Welch. “That’s why they got hired,” said William Conaty, G.E.’s longtime chief of human resources. “Because they had the playbook. They had the G.E. tool kit. And boards back then thought that was the answer.”

. . .

The Welch protégés who struck out on their own rarely fared well. At Home Depot, Albertson’s, Conseco, Stanley Works and many other companies, the same story seemed to repeat itself ad infinitum.

A G.E. executive was named C.E.O. of another company. News of the appointment sent the stock of that company soaring. The incoming leaders were lavished with riches when they took their new jobs, signing multimillion-dollar contracts that ensured them a gilded retirement, no matter how well they performed. A period of job cuts usually ensued, and profits sometimes rose for a few quarters, or even a few years. But inevitably, morale cratered, the business wobbled, the stock price sank and the Welch disciple was sent packing.

“A lot of G.E. leaders were thought to be business geniuses,” said Bill George, the former C.E.O. of Medtronic. “But they were just cost cutters. And you can’t cost cut your way to prosperity.”

For the full essay, see:

David Gelles. “Jack Welch and the Rise of C.E.O.s Behaving Badly.” The New York Times, SundayBusiness Section (Sunday, May 22, 2022): 1 & 7-8.

(Note: ellipses added.)

(Note: the online version of the review was updated June 27, 2022, and has the title “How Jack Welch’s Reign at G.E. Gave Us Elon Musk’s Twitter Feed.”)

The essay quoted above is adapted from Gelles’s book:

Gelles, David. The Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate America―and How to Undo His Legacy. New York: Simon & Schuster 2022.

Racial Disparity in Wages Is Mostly Due to Racial Disparity in Skills

(p. A11) I was raised, in part, by my paternal grandmother—a phenomenal black woman born in 1925 who came of age during Jim Crow, attended Bethune-Cookman University in the early 1940s, and experienced both the promise and limitations of the civil-rights era when integrating schools in Florida in 1969. She did her best to teach sixth-graders subject-verb agreement minutes after being spat on by their parents. Her life’s journey provided unlimited content as we sat together for nearly three decades, stuck to the plastic slipcovers on her sofa, playing cards, drinking sweet tea, and talking uninhibitedly about race in America.

. . .

. . ., in graduate school, I read a 1995 paper titled “The Role of Premarket Factors in Black-White Wage Differences.” Using a nationally representative sample of more than 12,000 14- to 17-year-olds from 1979, Derek A. Neal and William R. Johnson estimated that blacks earned between 35% to 45% less than whites on average.

. . .

“We find,” they wrote in the abstract of their paper, “that this one test score explains all of the black-white wage gap for young women and much of the gap for young men.” With their approach, antiblack bias played no role in the divergent wages among women; a black woman with the same qualifications as a white woman made slightly more money. And it accounted for at most 29% of the racial difference among men, with 71% traceable to disparate performance on the AFQT. The AFQT itself was evaluated by the Pentagon, which found that black and white military recruits with similar AFQT scores performed similarly on the job—indicating no racial bias.

The paper felt like an attack on what I knew. An assault on all those conversations with my grandmother, which taught me that racism—present-tense racism—dictated black-white inequality.

. . .

I vented about my battle with Messrs. Neal and Johnson to a fellow graduate student at Penn State, a white guy from the cornfields of Southern Illinois.

. . .

I told him I was sure discrimination was a bigger factor than Messrs. Neal and Johnson were letting on, but “I just can’t get this data to cooperate.”

. . .

He pointed out how far I was straying from our Euler equations. How on any subject other than race, I would have never given in to such sloppy thinking.

. . .

Messrs. Neal and Johnson, as it turns out, aren’t bigots, and their conclusions have stood the test of time and my attempts to disprove them. I extended their analysis to unemployment, teen pregnancy, incarceration and other outcomes—all of which follow the same pattern.

. . .

Taken together, an honest review of the evidence suggests that current racial inequities are more a result of differences in skill than differences in treatment of those with the same skill.

. . .

A black kid who believes he will face daunting societal obstacles is likely to underinvest in trying to climb society’s rungs. Every black student in the country needs to know that his return on investment in education is, if anything, higher than for white students.

. . .

The solution isn’t to look away from discrimination. It does exist. But we also can’t point at every gap in outcomes and instantly conclude it’s racism. Prejudice must be measured rigorously. Statistically. Disparity doesn’t necessarily imply racism. It may feel omnipresent, but it isn’t all-powerful. Skills matter most.

For the full commentary, see:

Roland Fryer. “Disparity Doesn’t Necessarily Imply Racism.” The Wall Street Journal (Saturday, November 26, 2022): A11.

(Note: ellipses added.)

(Note: the online version of the commentary has the date November 25, 2022, and has the same title as the print version.)

The Neal and Johnson paper discussed by Fryer in passages quoted above is:

Neal, Derek A., and William R. Johnson. “The Role of Premarket Factors in Black-White Wage Differences.” Journal of Political Economy 104, no. 5 (Oct. 1996): 869-95.

(Note: the reference is linked to the NBER draft of the paper, and not to the final published version, which can obtained from academic databases such as JSTOR.)

Inequality Has Not Increased If Government Transfer Payments Are Included in Income

(p. C10) This book—by Auburn University economist Bob Ekelund, economist and consultant John Early, and former U.S. Sen. Phil Gramm—shows that the political debate over inequality since the 1960s has had almost nothing to do with reality. . . . When the Census Bureau, which provides the source data everyone uses for inequality, calculates income, it counts only cash income. Nearly every transfer payment—money redistributed by the government for the purpose of attacking poverty—is left out! Once you include that money, the bottom half of the income distribution has almost exactly the same income from top to bottom. “The Myth of American Inequality” is in my view the most important book published this year.

For the full review, see:

Kevin Hassett. “12 Months of Reading; Kevin Hassett.” The Wall Street Journal (Saturday, Dec. 10, 2021): C10.

(Note: ellipsis added.)

(Note: the online version of the review has the date December 8, 2022, and has the title “Who Read What in 2022: Political and Business Leaders.”)

The book praised by Kevin Hassett is:

Gramm, Phil, Robert Ekelund, and John Early. The Myth of American Inequality: How Government Biases Policy Debate. Lanham, MD: Rowman & Littlefield Publishers, 2022.

Dependent, Missionless Resignation Can Be “Fundamentally Degrading”

(p. A13) At the Harvard Business Review, Joseph Fuller and William Kerr wrote this spring that the Great Resignation was an “unprecedented mass exit” but also the reversion to a long-term trend, one we’re “likely to be contending with for years to come.” Quit rates have been rising steadily for a long time. When the pandemic first hit, workers held onto their jobs for fear of layoffs and recession. But by 2021 stimulus money hit the system and uncertainty abated. That’s when the Great Resignation hit. “We’re now back in line with the pre-pandemic trend.”

. . .

. . . political economist Nicholas Eberstadt of the American Enterprise Institute . . . notes that recent workforce changes follow a postwar pattern. Usually after recessions, male labor-force participation drops, and when the recession ends it ticks up, “but never gets back to where it was.” Labor-force participation for both sexes, he notes, peaked in 2000 at 67%. We’re now 5 points lower than that.

The work rate for those in their prime working years, 25 to 54, has been declining since the turn of the century. The economic implications are obvious—slower growth, less expansion—and the personal implications are dire. “By and large, nonworking men don’t ‘do’ civil society,” Mr. Eberstadt says. They stay home watching screens—videogames, social-media sites and streaming services. There is something “fundamentally degrading” in this, and Mr. Ebestadt refers to an “archipelago of disability programs” that help make not working possible.

Staying apart, estranged from life and not sharing a larger mission can create “really tragic long term consequences,” Mr. Eberstadt says. These young people aren’t taking chances, leaving a job to start a small business. They aren’t finding themselves. They aren’t even looking.

For the full commentary, see:

Peggy Noonan. “DECLARATIONS; The ‘Great Resignation’ Started Long Ago.” The Wall Street Journal (Saturday, July 23, 2022): A13.

(Note: ellipses added.)

(Note: the online version of the commentary has the date July 21, 2022, and has the same title as the print version.)

Steve Case’s “Heroic Push” to Encourage Entrepreneurship Outside Silicon Valley, in “Surprising Places”

(p. C12) This is why one of the most energizing books I read this year was Steve Case’s “The Rise of the Rest.” It chronicles Steve’s journey to nurture tech startups in what some might consider “surprising” places. Think: Milwaukee vs. Silicon Valley.

. . .

Steve’s book is a heroic push encouraging us to widen the aperture. With the right investments and visibility, we can change the American landscape for the better, leveling the playing field and creating a more inclusive economy for years to come.

For the full review, see:

Asutosh Padhi. “12 Months of Reading; Asutosh Padhi.” The Wall Street Journal (Saturday, Dec. 10, 2021): C12.

(Note: ellipses added.)

(Note: the online version of the review has the date December 8, 2022, and has the title “Who Read What in 2022: Political and Business Leaders.”)

The book praised by Asutosh Padhi is:

Case, Steve. The Rise of the Rest: How Entrepreneurs in Surprising Places Are Building the New American Dream. New York: Avid Reader Press, 2022.

New Technology Creates More Jobs Than It Destroys

(p. 3) The pessimist’s basic mistake is to focus too much on what is lost to competition and technology, and too little on what is gained. Over the past 25 years, as McKinsey & Company, the consulting firm, has pointed out, about a third of the new jobs created in the United States were types that did not exist or barely existed 25 years ago.

. . .

In New York City the car replaced the horse carriage within the first 15 years of the 20th century, killing off the carriage trade and giving birth to the taxi trade — as well as to highly paid auto mechanics. Uber threatens the taxi trade, and the self-driving car threatens the Uber driver. But it has also brought multimillion-dollar signing bonuses for self-driving-car engineers and created new opportunities for mechanics. People tend to find a way to work with and profit from new technology.

. . .

In most cases, an industry without enough workers to meet customer demand would simply hire more, or at least raise wages to attract them.

Yet, according to the Bureau of Labor Statistics, neither of those things happened last year. The number of pharmacists employed in the United States dropped about 1 percent from 2020 to 2021. On balance, employers did not raise wages — in fact, median pay fell slightly, even without adjusting for inflation.

. . .

. . . there is no evidence so far to support forecasts of a nearly jobless future. If robots threatened human labor, human joblessness would be growing. But it’s not. In fact, since 2008, job growth has been strongest in countries like Germany and Japan, which deploy the most robots.

For the full commentary, see:

Ruchir Sharma. “No, That Robot Will Not Steal Your Job.” The New York Times, SundayReview Section (Sunday, October 8, 2017): 3.

(Note: ellipses added.)

(Note: the online version of the commentary has the date Oct. 7, 2017, and has the same title as the print version.)

Pharmacy Benefit Managers (PBMs) Create Incentives to Reduce Hiring and Pay of Pharmacists

(p. A1) If any group of workers might have expected their pay to rise last year, it would arguably have been pharmacists. With many drugstores dispensing coronavirus tests and vaccines while filling hundreds of prescriptions each day, working as a pharmacist became a sleep-deprived, lunch-skipping frenzy — one in which ornery customers did not hesitate to vent their frustrations over the inevitable backups and bottlenecks.

“I was stressed all day long about giving immunizations,” said Amanda Poole, who left her job as a pharmacist at a CVS in Tuscaloosa, Ala., in June. “I’d look at patients and say to them, ‘I’d love to fill your prescriptions today, but there’s no way I can.’”

Yet pay for pharmacists, who typically spend six or seven years after high school working toward their professional degree, fell nearly 5 percent last year after adjusting for inflation. Dr. Poole said her pay, about $65 per hour, did not increase in more than four years — first at an independent pharmacy, then at CVS.

For many Americans, one of the pandemic’s few bright spots has been wage growth, with pay rising rapidly for those near the bottom and those at the top. But a broad swath of workers in between has lagged behind.

. . .

(p. A16) Pharmacies also faced external challenges. To hold down the cost of prescription drugs, insurance companies and employers rely on so-called pharmacy benefit managers to negotiate discounts with drugmakers and pharmacies. Consolidation among benefit managers gave them more leverage over pharmacies to drive prices lower. (CVS merged with a large benefits manager in 2007.)

Big drugstore chains often responded by trying to rein in labor costs, according to William Doucette, a professor of pharmacy practice at the University of Iowa. Several pharmacists who worked at Walgreens and CVS said the formulas their companies used to allocate labor resulted in low levels of staffing that were extremely difficult to increase.

According to documents provided by a former CVS pharmacist, managers are motivated by bonuses to stay within these aggressive targets.

. . .

In most cases, an industry without enough workers to meet customer demand would simply hire more, or at least raise wages to attract them.

Yet, according to the Bureau of Labor Statistics, neither of those things happened last year. The number of pharmacists employed in the United States dropped about 1 percent from 2020 to 2021. On balance, employers did not raise wages — in fact, median pay fell slightly, even without adjusting for inflation.

. . .

Several pharmacists said they were especially concerned that understaffing had put patients at risk, given the potentially deadly consequences of mix-ups. “It was so mentally taxing,” said Dr. Poole, the Tuscaloosa pharmacist. “Every day, I was like: I hope I don’t kill anyone.”

. . .

Asked about safety and staffing, CVS and Walgreens said they had made changes, like automating routine tasks, to help pharmacists focus on the most important aspects of their jobs.

Many pharmacists contacted for this article quit rather than face this persistent dread, often taking lower-paying positions.

Still, none had regrets about the decision to leave. “I was 4,000 pounds lighter the moment I sent my resignation email in,” said Dr. Wommack, who left the company in May 2021 and now works at a small community hospital.

As for the medication she had taken for depression and anxiety while at Walgreens, she said, “Shortly after I stopped working there, I stopped taking those pills.”