Friday, July 29, 2022

Working from Home – or Not? Another Month Rolls By

Maybe because the issue is so unsettled, and ultimately involves tens of billions of dollars a year, we’re seeing more and more about whether cubicle sorts of workers need to be in the office.  These are from only July.

As a contractor at a company which had recently downsized or moved many employees, I worked in a large empty room, and felt like I was seeing “Lonely Last Days in the Suburban Office Park” (Emily Badger, The New York Times, July 5th).  These places, with “serene grounds” in “leafy” areas and named something ending in “park,” based on “the very American idea that office workers would do their best work if they could look out at manicured nature instead of the frenetic cityscape,” probably peaked in the 1990s, though were around at least four decades before.  However, “a younger generation wants more urban offices, real estate developers say, or at least suburban offices that feel (italics theirs) more urban, with sidewalks and somewhere different to eat lunch every day.”  Times change, and after over sixty years it shouldn’t be surprising.

Yet every shift will not succeed, as argued in “Hybrid Work is Doomed,” by Ian Bogost in The Atlantic on July 6th.  After tipping his hat to stock advantages of working from home, the author wrote that while “remote, flexible employment might be a win for everyone,” “actually, it isn’t.”  That, Bogost maintained, is because offices “serve as affirmations of a superseding value” which “gives identity to office workers and firms alike, by imposing its practices across the workforce.”  These settings “have never been about increased efficiency,” and indeed, “the intrigue and plotting of office politics, the sense of importance or position afforded by a corner room, the holding of court in a meeting… are not opposed to office life but central to it.”  Office time enculturates workers, which is necessary for management, and perhaps we can never get past that.

We can see the pendulum between remote and office work move some more in Rebecca Knight’s July 7th Business Insider “Less me-space, more we-space:  How a future-of-work architect advises companies to redesign their work environments to get employees back to the office.”  As I have mentioned, business knowledge is forever being lost – the example here is that we have already found that depriving workers of personal space is ultimately detrimental.  The author suggests that “concentrated work” can be done at home, but that not only calls for people to be allowed to stay there but have the ability to choose what work is done on which days.  The interviewed “future-of-work design expert” was planning spaces that looked like living rooms – fine for part of the time, but all day?  That idea will grind to a halt later this decade, as managers discover the wonderful advantage of saving square feet.  And, sometime later, the idea will return…

One side effect of more remote work is that “The Business Lunch May Be Going Out of Business” (Brett Anderson, July 11th, The New York Times).  Called a “power lunch” in the 1980s, the custom of workers, especially those relatively high-ranking, taking long mid-day breaks at usually fancy restaurants goes back longer than that – do you remember the “three-martini lunch”? – and if the title of this article is an overstatement, such indulgences, generally accepted as perks, are rarer, not only due to fewer worker-office days but unsettled in-person reporting mandates.  One high-end place owner asked “With this hybrid workday, is Wednesday the new Monday, or is Thursday the new Friday?  If I can crack that code, I might have a chance.”  Well, so would employees.

What people think they want may not be the same as what they should have, as Chloe Berger expressed in “Millennials and Gen Z are better off returning to office, says future of work expert” in the July 12th Fortune.  She relayed from a former large company chief human resources officer that younger workers have had “feelings of frustration over being less connected to their colleagues in a remote situation,” and “since remote onboarding takes time to catch workers up to speed and feel personal,” they need to be “intentional about how they foster their relationships and the time they come into the office.”  Others have mentioned difficulty in starting new hires in careers, as opposed to contractors on limited assignments, when it is harder to meet others in person.  That’s a problem, and it certainly contributes to the high rates of job-hopping which Berger cited.

Not every flag raised gets saluted, and as published by Berger in Fortune on July 18th, we learned that “Workers are calling their bosses’ bluffs on in-office mandates.”  When employers tell them that they must report in person, many “turn a blind eye,” with, in a recent survey, 35% thinking that “their employer would likely do nothing if they or their peers didn’t go into the office as much as required.”  Another study found that “only half of workers who were expected to return to the office are actually going in five days a week,” and Goldman Sachs’s and Apple’s CEOs got far from universal compliance when they announced office time requirements.  That’s one response, and with a perceived shortage of job candidates, it may be more common.  Yet it would take only one large firm consistently sending people down the disciplinary sequence, and firing some, for that to stop.  Will we get that?  As with everything else about remote work, we don’t know.

Friday, July 22, 2022

More Economy Reality: Earnings by Sex, Bogus Stagflation, Rockets and Feathers, Retirement Delays, and Inflation versus Unemployment

Aside from interest rates, inflation rates, and the chance of a rather peculiar recession, what’s been happening with the American economy?

I’ve written several times over the years about pay differences between men and women, and the case for widespread, long-illegal discrimination is so thin that now in general there are “Young women making more money than young men in nearly 2 dozen US cities:  Study” (Talia Kaplan, Fox Business, April 10th).  Per a Pew Research Center survey, “in 22 of 250 U.S. metropolitan areas, including New York, Washington, D.C. and Los Angeles, women under the age of 30 earn the same amount or more than men.”  A professor who wrote her dissertation on “gender differences and perceptions of pay” called that unsurprising, and credited better information available to job seekers, but did not mention one of the largest factors, the declining birth rate, especially among younger people, which causes much of something else she mentioned, “how long they are going to be working in a particular job.”  As for the chance of reverse discrimination, though, fair is fair, and with men’s and women's hormones not being identical, maturity and suitability for high-quality positions at low ages may not be either.

If predictions of anything like a normal recession were misguided and imperceptive, forecasts of “stagflation” were ridiculous.  Paul Krugman worked to put that non-possibility to rest in “That Was the Stagflation That Was,” in the July 7th New York Times.  He asked, “what are the odds that falling gas prices will get even a small fraction of the media coverage devoted to rising prices?,” which has been debatable in the 15 days since, and “markets are now more or less sounding the all-clear on persistent inflation,” which is almost certain to decline from June’s 9.1% reading with the next report.  It’s a simple matter of being willing to react to changing circumstances. 

Another Krugman piece had the effect of confirming something often believed but factually questionable.  In “Wonking Out:  Rockets, Feathers and Prices at the Pump” (The New York Times, July 8th), he pointed out that President Joe Biden’s exhortation to gas stations to lower prices had more truth than those either on the left or the right first thought.  The reason was that the idea of gasoline prices rising immediately when oil goes up but drifting down only slowly when it falls was substantiated by St. Louis Federal Reserve economists, who confirmed that it actually happens.  Understanding its cause, though, is not yet complete, but one “relatively old paper” attributed it to “when oil prices shoot up, owners of gas stations feel empowered not just to pass on the cost but also to raise their markups, because consumers can’t easily tell whether they’re being gouged when prices are going up everywhere… and gas stations may hang on to these extra markups for a while even when oil prices fall.”  This pattern “seems to be strongest in areas where individual gas stations face relatively little competition.”  I add that relatively steady oil prices, which have not been the case, are the best for price wars, small but steady decreases, and using fuel as a loss leader to push up convenience-store sales.  So this complaint is for real, but has no reasonable solution, other than stations choosing to react to this newly legitimized knowledge by bringing prices down.

The decision of when to leave one’s main job permanently has shifted around for many workers, the most recent trend documented in “Economic worries further older Americans’ pandemic-era plans to delay retirement, survey finds” (Andrew Osterland, CNBC, July 9th).  It’s a dramatic short-term change, as in July 2021, “about one-third of older Americans surveyed by Edward Jones and Age Wave said they planned to delay retirement,” but the number by “early 2022” was 59%.  Complicating the matter, as quoted eminent futurist Ken Dychtwald put it, “retirement is going through a period of transformation,” and not all agree on what that means, choosing between thinking “it began at a specific age,” with some “when they left their main job or began collecting their pension,” and “still others… when they achieved financial independence.”  Dychtwald also said that “people are terrified about running out of money in retirement, and this year has taken a lot of money out of nest eggs.”  Some also got “a taste of what retirement might be like,” by working remotely during Covid gusts.  Expect plenty of change with all aspects of this major life change in the rest of this decade alone.

For a few months there, it seemed to me like more people were upset about higher prices than were elated about almost nobody needing to go without work.  Which is more meaningful?  Peter Coy, in the July 20th New York Times, opined that “Inflation is bad, but unemployment is far worse.”  It’s critical that the Federal Reserve governors take a view on this comparison, as their interest rate hikes or the lack of same will influence both in different directions.  The author maintained that “higher unemployment is worse than higher inflation if you go by the feelings of real people rather than the theories or economists,” as shown by one paper finding that “people are nine to 13 times as likely to report sadness or physical pain in the short term when there’s been a one-percentage-point increase in the unemployment rate as when there’s been a one-percentage-point increase in the inflation rate,” and another placing unemployment rises as “about six times as potent as an increase in inflation in lowering people’s self-assessments” about their lives, something which a previous study found to be five times.  Something for the Fed to think about – and us if we are trying to be objective.  The same goes for the rest of this post.

Friday, July 15, 2022

Unions in 2022 at Amazon and Beyond: Where Have They Been Going, and Where From Here?

Since the time when labor unions were needed for the likes of getting workers’ widows paid for the days when they died on the job, they have taken a long fall in value, constructiveness, and membership, which has fallen from a high of 34% of private-sector workers in the 1940s to 6.3% two years ago.  While participation among government positions has grown significantly, it is not the same, as those workers do not have to deal with people whose own success is tied to cutting costs.  But could unions be coming back?

The main reason they have declined is workplace conditions, which, with physical safety, compensation, hiring practices, unemployment benefits, overall pay, and more, have improved vastly from the middle of the past century.  However, the possibility of worsening has never gone away.

The highest-profile company which has recently spurred its employees to organize into a union is Amazon, where, last year in Bessemer, Alabama, workers voted to start and join the independent Amazon Labor Union.  In the April 6th New York Times, Spencer Bokat-Lindell asked “Does the Amazon Union Win Portend a Comeback for Organized Labor?”  He attributed the effort’s success to problems with warehouse safety and organizers’ “deeply personal, grass-roots strategy,” coupled with TikTok promotional videos.  There have also been “recent union victories at six Starbucks coffee shops in Buffalo,” which may be joined by flight attendants, who also have long-time complaints about scheduling and compensation.  A cause of more, per Bokat-Lindell, could be “broader dissatisfaction with the economy,” including raises not matching inflation.

Those operating unions, who have not been in a mode of frequent successful organizing for decades, are learning from these experiences, as “Amazon Workers Who Won a Union Their Way Open Labor Leaders’ Eyes” (Noam Scheiber, The New York Times, April 7th).  As Scheiber said, the aforementioned previously unusual organizing techniques may spread to many more places.  Disagreements, conflict, and power struggles will certainly appear, but other victories, including “at the outdoor retailer REI,” will fuel interest in doing what seems to work.

One more factor feeding certain workers’ discontent was in the headline of “NY bill targets Amazon quotas,” by the Associated Press and published in the June 8th Times Herald-Record.  That company has been using “warehouse productivity quotas” which “log how workers pack and stow packages,” meaning that “if workers are inactive for a set period of time, the company’s “time off task” tool can ding them for taking too many breaks, which critics have blamed for the company’s injury rates.”  The law would require Amazon, in New York state, to share information on these measures and their use, and “would also prohibit employers from putting in place quotas that prevent workers from taking bathroom breaks or rest periods.” 

Another look at these events, from Daniella Genovese in Fox Business on April 27th, was “Why union efforts are sweeping the nation.”  It named organizing attempts “targeting” Apple also, and told us that “during the first six months of the 2022 fiscal year… unfair labor practice charges… increased by about 14%.”  A Stanford source considered as causes employees being “frustrated with how wealth is allocated under our current system,” and “longing for a sense of belonging and connection to others.”

On June 15th in The New York Times, Lauren Hirsch told us that “Weaknesses in the Social Safety Net Disrupt the U.S. Work Force.”  Participants in a Washington policy forum considered unions a worthwhile force against “monopoly power” held only by employers, a better choice than “more government standards” possibly leading to “government overreach.”  One more win took place in a surprising location and industry, as “Chipotle workers in Maine move to unionize, a first for the chain” (Ken Martin, Fox Business, June 24th).  That was spurred by “unsafe conditions,” and helped by locations being company-owned, a communications and opposition-identifying advantage not available at, for example, McDonald’s.

For almost 100 years, unions have offered their organizations to employees.  American business executives, especially those managing buildings full of relatively low-paid workers, are now on notice that changes originating with the Covid-19 pandemic, expected rates of pay on the upswing, inflation the highest in 40 years, and high employee awareness of workplace problems and inequities will bring them back if management won’t cooperate.  Financial strength, number of apparently happy workers, and overall size (Walmart was also named in at least one of these articles) will not protect them.  In short, it’s the 1940s again, and that’s healthy.  It is not the unions, or even the workers, who will decide how much organizing will take place later this decade – it is the employers.

Friday, July 8, 2022

It Would Sure Be a Strange Recession: 372,000 More Jobs, 3.6% Unemployment, People Pouring Into the Labor Force – AJSN Says We’re 17 Million Positions Short

You can hardly scan a newspaper business section without seeing references to a recession – probable, almost certain, here already.  I know that we can declare one when the Gross Domestic Product drops for two consecutive quarters, and the last quarter qualified, but if that happens would we really have an economic downturn in spirit?  This morning’s Bureau of Labor Statistics Employment Situation Summary voted no. 

Once more, we blew the top off published estimates of the gain in nonfarm payroll employment.  I saw 268,000 and 270,000, and it came in at more than 100,000 over either.  Seasonally adjusted joblessness sat at 3.6% for the third straight month, not a bad rut, and with the change from above-average-jobs May to below-average June, the unadjusted number increased 0.4% to 3.8%.  That included 827,000 on temporary layoff, up 17,000, and 1.3 million out for 27 weeks or longer, down 100,000.  The count of those working part-time for economic reasons, or holding such positions while looking unsuccessfully for full-time ones, ditched last month’s 300,000 gain and 400,000 more, and is now at 3.6 million.  The number of employed gained only a tiny percentage, 69,000 to 158,678,000, but still did not lose.  The two measures of how common it is for Americans to be either working or one step away, the employment-population ratio and the labor force participation rate, fell off 0.2% and 0.1%, seasonally, to reach 59.9% and 62.2% – for the same reason, the count of unemployed shed 100,000 to 5.9 million.  Despite a continually aging population, the number of people not in the labor force fell 700,000 to reach 98.8 million.  The only truly bad news was on average private nonfarm payroll earnings, which improved but still did not match inflation, with a 13-cent hourly gain to $32.08. 

The American Job Shortage Number or AJSN, the metric showing how many more positions could be quickly filled if all knew they would be easy to get, gained almost 600,000, as follows:

Compared with May’s results, the number of unemployed pushed the AJSN 700,000 higher, with everything else, mostly an improvement in those wanting work but not looking for it for a year or more, partially offsetting that.  Year-over-year, the AJSN fell 3.7 million, 3.2 million from the jobless count and the rest mostly from fewer people discouraged, fewer people not looking, and fewer in armed services, institutions, and off the grid, partially balanced by more American-citizen expatriates.  A hair over one-third – 33.4% – of the most recent AJSN is from the official unemployed, up 3.3%. 

On the pandemic side, per The New York Times, the major results were negative if generally small.  From May 16th to June 16th, the 7-day average of new cases gained 8% to 103,425, deaths up 6% to 321, hospitalizations 35% more to reach 30,137, and total new vaccinations down 16% to 313,249.  Once more, nothing here indicates imprudent decisions to work. 

What’s the real story this time?  We’re still improving.  More and more people are going back or at least trying to do that, the latter still held off by too-frequent too-low pay.  Yet we added about seven times as many employed people as our population increase needs, and, despite many not working yet, absorbed them without boosting that 3.6% jobless rate.  The AJSN rose again only because more people said they want to work – once they hook on, especially likely if more employers raise wages and turn perpetual “job openings” into actually filled opportunities, it will come down.  Those with axes to grind may, if GDP falls again, tout the resulting recession as a sign that our employment situation is poor, but it is not.  The turtle took another vigorous step forward.

Friday, July 1, 2022

Working From Home – No Consensus, but Plenty of Exploration

This very ongoing issue is nothing new – employees and companies waged battles on telecommuting when George H.W. Bush was president, with little resolution or even lessons learned or retained.  It’s gone through different phases since then, but only with the Covid-19 pandemic, now about 2 ½ years old, did it become critical for so many companies.  A lot of prosperity, profitability, and worker satisfaction will hang on it, so let’s check in on the latest.

On on April 11th, Alex Christian wrote about “The simmering tension between remote and office workers,” documenting specific workplaces where some but not all were allowed to continue doing their jobs from elsewhere and others were ordered to stop.  As a result, “this disparity between who gets to work from home and who has to return to the office has created friction:  different employees are subject to different rules, and it feels unfair that the rationale has never been explained.”  Allowing only some people de facto privileges, which remote work for most certainly is, without openly communicated business justification is a recipe for unhappiness, especially when, as put by one respondent, management “just made (the policy) up as they went along.”  Even if eligibility for remote work is determined in part or more by individual suitability, the reasons for differing benefits must be shared as well as consistent.

One answer to the problem of labor being potentially unlimited in specific or total hours came up in “Working 9 to 2, and Again After Dinner” (Emma Goldberg, The New York Times, April 29th).  This example, or ones like it, would work well for mothers of school-age children, who could get them ready for and off to school before putting in a main stretch of work, and return to it when all was more settled in the evening.  That sort of thing should be a natural advantage of flexible time, without posturing about something close to 24x7 being the preferred norm.  Expect further such plans, possibly more formally agreed upon.

Now that the coronavirus is settling down if not ending, with extra-low death rates meaning little employment interference, are most employees returning from home?  Not at all, per Emma Goldberg on May 10th in the same publication, as “Just 8% of Manhattan office workers are back full time, survey shows.”  It is true that in this area of New York, employees have expressed an unusual amount of concern about crime, but it’s not the national norm for “nearly two-thirds” of companies to be “offering workers incentives to return to the office, including 43 percent that are giving free or discounted meals.”  Per the study in the title, “78 percent of workplaces have adopted a hybrid model, allowing a mix of remote and in-person work… a leap from 6 percent before the pandemic.”  At least in this place and time we aren’t going back.

These sorts of benefits aren’t always effective.  Per Quentin Fottrell in MarketWatch on May 23rd, “’Workers don’t want toys or free food, they want a higher quality of life.’:  The Great Resistance is here – as companies struggle to get workers back to the office.”  A Stanford economics professor quoted said “neither hard nor soft nudges will work,” and that “nobody commutes for one hour for a free bagel or box or to use a ping-pong table.”  He advocated companies naming “two or three days a week” during which all workers were expected to be in the office, more realistic than trying to “enforce a five-day week and fail.”  That could be the answer, seemingly strict but concentrating employee appearances together for greater cooperation and sanctioning permanent reductions in shuttling between home and work.

Not all employers are willing to implement such a thing.  As mentioned in Vivian Giang’s June 4th The New York Times “A test of devotion,” around then, CEO Elon Musk “issued an ultimatum to Tesla employees requiring them to return to the office for at least 40 hours per week – or lose their jobs.”  His view that “remote work is an affront to productivity and personal commitment” was shared by Goldman Sachs chief Jamie Dimon, who said “that working from home isn’t for people who want “to hustle.””  There’s plenty of controversy, as there should be when something this critical is disputable and lacks good supporting data.

Finally, on the other side we return again to Emma Goldberg, whose June 9th New York Times piece was titled “A Full Return to the Office?  Does ‘Never’ Work for You?”  Opposite to Musk’s wishes, per a Gartner Group human-resources-practice vice president, “there are fewer and fewer companies expecting their employees to be in the office five days a week,” and Google, Apple, and Intuit have all backed off of “rigid” employee reporting requirements. 

That’s the situation – reasonable views on both sides, nothing settled, and massive differences between companies, meaning that we’re nowhere near even talking about industry standards.  The remote-work issue will probably be unresolved long after Covid-19 is a memory.  That’s what we’re facing.