Friday, February 26, 2016

Three New Job Interview Techniques, Trends, and Twists – Good, Bad, and Indifferent

Only weeks after the last batch, more stories about the latest in employment interviews crossed my computer.  Unlike those from December and earlier in January, not all are favorable for both potential workers and their employers.  What are they?

The first was from The Wall Street Journal on January 20th.  Titled “The Six-Month Job Interview” by Sue Shellenbarger, it essentially lamented the past few years’ lengthening of the hiring process.  Some reasons are more and more phone screenings, group interviews, and formal testing, but Shellenberger implied the real cause is that “employers are trying to avoid costly mistakes,” so may be making up their minds more slowly than ever.  The piece was directed at applicants, and recommended appropriate ways of defending their interests, such as by requesting that in-person sessions be consolidated into fewer days, and maintaining internal and external composure when, for example, the first employer’s contact was in June and success is still unknown when snow falls.  More than anything else the article conveyed that hiring decisions are taking much longer than they did only a few years ago, and reinforced that applicants should be prepared – meaning, as always, not stopping or even slowing down job searches before they have accepted a formal offer.

Second was a February 19th piece in the Harvard Business Review, “Interview Techniques That Get Beyond Canned Responses,” by Alicia Bassuk and Jodi Glickman.  The idea of organizations working to look behind planned and rehearsed speaking, or writing for that matter, is of course as old as job interviews themselves, and what is here is ultimately more review than breaking news.  The techniques Bassuk and Glickman, writing from the interviewers’ perspective, advocated, are “on-the-spot-coaching” or more properly rephrasing questions to get to the same information, group interviewing which also provides insight into social interaction between candidates, and “cultural fit dialogue” or turning interviewees’ questions about organizational culture back on them by asking what, for example, “entrepreneurial” specifically means to them, and probing the ways in which the applicant fits the culture as it actually is.  These are all good ideas, and those looking for business positions should not only be aware of them but give the right responses.

That idea of the right responses is exactly what is wrong with what is described in the third article, in Yahoo Finance.  This February 19th Jacquelyn Smith report described a technique used by Charles Schwab’s CEO Walt Bettinger – at breakfast interviews, he prearranges with the restaurant for the client’s food order to be bungled, so he can “see how the person responds.”  The article said that is because Bettinger “wants to know the type of person you are,” and went on to suggest that an interviewees’ choice not to mention the mistakes “may tell the interviewer that (they) are timid, pay little attention to detail, or are not willing to right a wrong.” 

What’s off base here?  That ploy exemplifies the worst of the hiring process.  Bettinger may have a clear idea of what response he considers correct, but he is erroneous in taking that further.  For one thing, it shows nothing about how the perpetratee would react to something logistically failing in their work life, in personal life, or anywhere else – the breakfast is part of an artificial setting, a job interview, and they know it.  Such a meeting is not about the food, but is focused on the potential employee’s perceived suitability for employment.  It is both proper and appropriate, if, for example, the restaurant brings the wrong kind of omelet for the applicant not to mention it, which would reflect only job-interview behavior judgment, not on workplace timidity, attention to detail, or correcting errors in others.  For these reasons, another evaluator could give highest marks to those who keep quiet.  That means a response to this situation is guesswork, which causes unnecessary stress in candidates and, considering the validity of alternative responses, helps employers not at all. 

Stunts such as the last are nothing new, on either side.  The same goes for efforts to dig deeper, which can take the equally valuable form of interviewees asking the pointed questions.  (I once asked an interviewer, who had just said that his company considered their employees their most valuable assets, how they showed that – he couldn’t give me an answer.)   As always, it is crucial for those trying for work to realize that all contacts with anyone from the company are part of the hiring process.  That ties these three articles together – and will never change. 

Friday, February 19, 2016

American Infrastructure: The Past Year and a Half

In July of 2014 I posted a rough view of how a new Works Public Administration, or WPA, program might be put together.  The need for improvements in the areas of roads, bridges, ports, airports, cellular and Wi-Fi service, train and bus stations, and enhancements to their operations, along with many other worthy secondary areas, was large, growing, and was pushing the United States away from greatness.

What has happened since then?

The month after that post, The Week, a magazine usually devoted to summaries of material published elsewhere, printed “Inside America’s Crumbling Infrastructure.”  The piece summarized what had happened up to that point, such as the Seattle, Minneapolis, and Lake Champlain bridge collapses, and mentioned the American Society of Civil Engineers’ overall 2013 grade (their next assessment is scheduled for 2017) of D+.  It included the fall of our 2012 infrastructure spending to 1.5%, the lowest in 20 years, and gave a global infrastructure rank to the United States of 14th.  Other problems listed here, which had received less national news than the bridge failures above, included water treatment plants, sewer and water mains, and pipes in general.

Four months ago, Business Insider published a list of “the 11 countries with the best infrastructure around the world.”  The United States did make that, in the final spot, getting first overall in available airline seats, fifth for general air transport, but 14th for road quality.  The ten countries doing better, top to bottom, were Hong Kong, Singapore, Netherlands, the United Arab Emirates, Japan, Switzerland, Germany, France, the United Kingdom, and Spain.

That same month of October 2015, Fortune magazine had a piece asserting through its title that “an investment in America’s infrastructure could cost taxpayers nothing.”  It included the conclusion that simply borrowing, as it put it, hundreds of billions of dollars at current 2% interest rates, would “boost gross domestic product by far more than it costs, and create hundreds of thousands of jobs.”  It mentioned poor road conditions costing city motorists $700 to $1,000 extra apiece per year, on additional repairs, fuel, and wear and tear, with, as well, time lost to otherwise unnecessary detours and lower speeds.  According to the article’s authors Sheila Tschinkel and Marcelle Arak, $18 billion spent this way could not only raise GDP by $29 billion but would add 216,000 jobs.  That last number looks at first glance too optimistic, but is worthy of investigation and more serious consideration.

A fourth piece appeared only this week, in USA Today.  It reported the results of an American Road and Transportation Builders Association report, which found that over 58,000 bridges, out of 600,000-plus nationally, were structurally deficient as of last year.  In our area, they include the Brooklyn Bridge, and some of the over 4,700 in one of the worst-off states, Pennsylvania.  While Congress accepted a $305-billion bill for highway work in December, that would leave about $115 billion more needed for other bridges. 

Both Democratic presidential candidates, Hillary Clinton and Bernie Sanders, have made a major infrastructure project part of their platforms.  I am disappointed that Republicans have not done the same.  After all, it is not only their country also, but improving our roads, stations, power, ports, and more to truly world standards would coincide with their passion for American exceptionalism.  That needs to be more than a groundless belief, and is endangered when things as expected as highway speed and smoothness and passage through and into our largest cities drop further from modern world standards.  It can be done, and it must be done - we may be apart on the conditions of the project, including how much its workers should be paid, but we can work through those things.  There will be no better time to start.    

Friday, February 12, 2016

For Once, a Good New Tax Proposal: On Financial Transactions

When we consider the jobs crisis, it has implications for sources of tax revenue.  If fewer people are earning income, then income tax may not be as good a primary source of government income as it has been since its constitutional approval only 103 years ago.  A flat tax, as easy as it would be to implement, would be unacceptably regressive; although George Will wrote a fine December Washington Post opinion piece titled “The nonexistent case for progressive taxation,” in which he said there was no justification for that without “a moral assertion about equitable sacrifices,” it is still the least of evils.  While much in resources have trickled down from the wealthy over the centuries, such is at a low point now, with cash pooling up at historic levels in the largest corporations and richest individuals.  And most of all it is necessary for us, when considering new and existing taxation, to assess how it affects the number of jobs; for example, Social Security payments, along with high rates for employee-laden companies, clearly discourage employment.

With the presidential campaign, one taxation idea has popped up again, that of charging a percentage on financial trades.  That would call for a small fraction, possibly as low as 0.1 percent, to be levied on sales of stocks, bonds, derivatives, and related instruments.  A January 28th Washington Post editorial cited a survey by what they called the “nonpartisan” Tax Policy Center concluding that that share could produce $66 billion in revenue each year, which would increase to $76 billion if it were 0.3% but be lower, as it would cause drops in trading, for higher rates. 

Why would this tax be one of the best ways we could obtain revenue?

First, it would be small enough to have little effect on all but the most frequent traders.  One part in a thousand for transactions initiated by investors who tend to buy and hold would have only a minuscule effect on their annual or decade-long capital accumulation.  The tax would hit high-volume buyers and sellers, who once had to pay much higher transaction fees to brokers than they do now, the hardest, and might also have the effect of moderating market swings, as people and organizations with heavy trading volumes would need better reasons than before to buy or sell.

Second, with the huge dollar volumes involved, it would be as close to a painless tax as about anything I, anyway, can think of.  It would be better than the proposed federal gasoline increase, which would cascade through the prices of many goods and services and have a large inflationary effect.  

Third, it would be progressive.  The Tax Policy Center study found that 40% of the tax would be paid by those with incomes in the top 1%, with another 35% from others in the top 20%.  Money saved on lower costs for refilling gas tanks is vastly more likely to be spent elsewhere than money saved on lower stock purchase charges.        

Fourth, it would have almost no negative effect on jobs.  Almost every tax you can think of, from customs duties to highway tolls, rakes in money that would go for products, as it comes from people who would otherwise, for the most part, spend it.  Financial transactions have almost no such effect, as they involve existing savings or investments likely to be held.  They are electronic, so there would be no loss of employment from lower demand for executing them.

One possible problem with a federal transactions charge, the possibility of avoiding it by executing trades in other countries, is not as bad as it may seem.  As the Post article points out, there are already such taxes, sometimes more than 0.1%, in Great Britain, Switzerland, South Korea, Hong Kong, and elsewhere, and 10 more European Union countries are expected to start one next year.  It is more likely that the United States will stand alone without such a levy than it would with one. 

Taxes are no fun.  As Americans, we culturally hate them.  However, that does not mean they are all equally fair.  A financial trading levy would be as reasonable, as trouble-free, and as effective as any revenue source our governments have now.  It would be well positioned for the continuing and hardly endangered trend of more and more of these transactions.  Implementing it would not necessarily mean higher taxes overall – it could replace, for example, some share of payroll assessments.  Its merit, though, as such necessary evils go, is clear-cut.

Friday, February 5, 2016

America Now 18.36 Million Jobs Short as AJSN Gains Almost 900,000 Seasonally – And On More People Marginally Attached

I didn’t know what to expect with this morning’s jobs numbers – and, looking over the press, most others didn’t either.  We’re creeping closer to recession both here and elsewhere in the world, yet is hasn’t happened yet.  On the other hand, December’s 262,000 net nonfarm private employment gain, though revised 30,000 downward, was way up there, so we had reason for it to fall.  Per Bill James’s Plexiglas Principle, something going up or down an unusual amount for random reasons is likely to go the other way next, so I was also anticipating a drop in the numbers of those in the major marginally attached categories, specifically those not searching for a year or more, which were up sharply in December. 

The first happened, but the second did not.  There were 151,000 net new nonfarm payroll jobs, seasonally adjusted as that broadcasted number always is, created in January.  Adjusted unemployment fell to 4.9% from 5.0%, and average private hourly earnings bounced back from their 1 cent per hour December loss to a 12-cent gain, finishing at $25.39.  This measure fluctuates a lot, and over the past year is at 2.5%, hardly huge but nothing shabby with inflation significantly lower. The count of those wanting to work but not having looked for it for a year or more, the group contributing the third largest latent demand for employment, shot up again and is now at 3.5 million, more than 400,000 beyond only two months ago.  The Other category rose a surprising 152,000, but the count of those discouraged was off 40,000.  Overall, the American Job Shortage Number, or AJSN, gained 874,000 as follows:


The two measures of how common it is for Americans to be working both improved last month, with the labor force participation rate up 0.1% to 62.7% and the employment-population ratio up the same to 59.6%.  The counts of those working part-time for economic reasons, or doing that while unsuccessfully seeking full-time opportunities, and those officially unemployed for 27 weeks or longer held at 6.0 million and 2.1 million respectively.  Unadjusted joblessness was up, essentially completely from moving from job-rich December to job-poor January, from 4.8% to 5.3%. 

Compared with a year before, the AJSN improved significantly once again.  In January 2015 it was 1,200,000 higher at 19.56 million, with 1.07 million of that difference from lower unemployment and the rest from the largest categories of marginal attachment, except for those claiming no interest in working.  The latter is about the surest bet you can find to increase over the course of a year, and over the past one rose about 1.7 million.

Where does last month’s jobs data fit in?  In most ways it was like treading water, but two numbers make the difference.  With labor force participation and employment to population both up, I tip the balance to positive.  The turtle has taken his first 2016 step forward.   

Monday, February 1, 2016

What’s Happening with European Employment?

We have heard quite a bit about that string of grapes across the Atlantic, and most has not been good.  The refugee situation has magnified their long-term individually debated and addressed issues of how to deal with their shrinking populations on one hand and the prospect of massive Muslim immigration, which would change their cultures but allow continuing funding of their lavish social programs, on the other.  What else is going on there, and how does and will it affect their joblessness and ours?

First, on jobs, the continent is in bad shape.  Average Eurozone unemployment reached 10.5% in November, and that was on the way down.  That conceals an atrociously high age 15 to 25 jobless rate of 20% overall, with individual countries, as of the fourth quarter of 2014, achieving rates such as 52% for Spain, 51% for Greece, and even 42% for Italy and 25% for France.  Their shares of long-term unemployed are much higher than in the United States, where 26% of jobless have been out for 27 weeks or longer; of the 27 European Union countries, only Denmark, Sweden, Finland, Austria, and Luxembourg have below 30% of their unemployed without work for a year or more.      

Second, the Schengen agreement, which allows Europeans to travel between countries without passports or border checks of any kind, is seriously endangered and is likely to be splintered if not obliterated.  I expect some subgroups of nations, such as Belgium, the Netherlands, and Luxembourg, to keep their mutual borders open, but it will prove unworkable to maintain it on its current scale.  With that, there will be conflict about whether to continue the Euro.  There could also be sets of two and three countries continuing to share a currency, but it has already proven tenuous to keep the likes of frugal Germany and profligate Greece under one central bank.  Either of these changes would hurt European prosperity and thereby cut jobs overall, but would, of course, create more in the fields of security, administration, and currency exchanging.

Third, along with the United States, Europe has been hit hard by China’s slowdown.  Sales of construction materials for their massive infrastructure work, and of consumer goods for their increasingly higher-paid workers, went nowhere but up for decades, but have now not only leveled off but actually decreased.  The worldwide oil glut has largely been caused by slowing Chinese demand.  Europeans are not finding it any easier to adjust to the dwindling of such a large customer than we have in America.

Fourth, despite all these problems the continent’s economy may be improving.  German unemployment was down to 6.1% in December, compared with 5.0% in the United States.  Ireland and Great Britain reached seven-year lows this fall, at 8.9% and 5.3%.  Eurozone economic growth reached an annual 1.6% in 2015’s third quarter, or about twice the previous 12-year average.  Its jobless rate is down from 2013’s 12.0%, and manufacturing and consumer confidence are both at two-year highs.    

So, are the problems above, as they have been manifested in the recent stock market fall an indicator of a coming world recession?  That is quite possible but far from certain.  Can the United States avoid it?  Probably not.  We are too entwined with Europe and China to avoid their worst problems.  Yet we may continue, as we have been, doing better.  What may become (and already is, if you are under 26 in the European Mediterranean) a depression and near-depression in these places may be held to an ordinary periodic recession here.  Just the same, it’s nothing for our next president to look forward to.