Monday, October 30, 2023
The End of Overtime
Saturday, April 2, 2022
Middle Managers That Weren't
The 1940’s to the 1990’s were the golden age of middle management. World War Two was foisted upon a United States that still had a large agricultural population. To ensure quick learning for workers transitioning from farm to industry, it was necessary to break work into small tasks, with rigid supervision of personnel and production of reports. This method won the war.
The high overhead of this kind of supervision meant many
jobs for middle managers, who often were picked from liberal arts colleges
rather than the assembly line. As foreign countries built their industries
along different management systems (such as Japanese quality control or German
quality design), high overhead costs and large internal bureaucracy strangulated
profits and ingenuity.
To rework these byzantine processes and procedures, “re-engineering
the corporation” meant re-evaluating the hierarchical organizational charts.
Work once performed in narrow silos, (for example- clerks who processed one or
two lines on a form) now became assigned to functional groups centered on a
tangible result (customer satisfaction or widget-making machines repaired).
Prospective management, which prevents employees from inducing errors; was
replaced with less-costly retrospective management, which trusts the auditing
process to find errors.
Middle management stood outside of the “value chain”, as
found in Six Sigma theory; or the rolls of “essential workers” in the COVID-19 Pandemic.
While the implementation of re-engineering created efficiency and return to
profitability; the 1993 namesake book’s author, Michael Hammer, did not discuss
what to do about displaced middle managers; or how the nascent internet would
many first post-college jobs obsolete. Nor what to do about the continued rate
of business and liberal arts majors graduating college each year; as college
counsellors were late to the news.
Broken expectations are topics for a different day. Even if
these graduates never reach the upper-middle class lifestyle, there is still a
baseline consumption of goods and services; think food shelter, and medicine;
which must be provided by essential workers. Those large student loans are a
millstone on disposable income, whether it is to start a family or small
business, or buy a home.
Many essential workers in the oft-forgotten “value chain”
proclaim themselves “open to work”. They are commonly credentialed in multiple
trades and professions; yet if they’re shipping war matériel to Europe, they
aren’t available for offshore oil drilling. If they’re building houses, they
aren’t available for over-the-road trucking. They are in-demand, and many are
paid handsomely up-front; in contrast to the long-term payout envisioned by future
middle managers. For whatever the reasons, vocational-focused colleges tend to
be magnitudes more affordable than liberal arts colleges.
How do you retool those middle-managers to become more
essential, and to become part of the value chain? Some might cite the use of
vocational aptitude tests, to determine that many people are not suited for
manual labor, technical, or field work. But the experience of the military,
through its promotion rates of Corporals and Petty Officers, shows that at
least half of the population is suited for both labor and supervision; blue-collar
and white-collar work (not just in today’s highly-selective military; but in
Cold War times, when most volunteers were accepted for service). Occupational
elitism is another concern: Would degreed construction managers lend a hand on
the worksite?
When colleges and non-essential businesses were closed
during the heart of the Pandemic, I could see with my own eyes that many young
adults rolled up their sleeves, and went to work on construction sites, as independent-contract
delivery drivers, and as trade apprentices. If it was not just the ennui of
boredom, the Invisible Hand of Economics finally did its work. Those college
graduates will have some concrete skills to put on their resumes.
Saturday, February 6, 2021
The Educated Working Class
Despite the vocal assertions of mainstream media, student loan debt is not killing millennials as a whole- 2/3 do not have loans as they have paid them off, acquired scholarships or grants (such as the GI Bill for veterans), or did not attend college. Furthermore, the average balance for those with outstanding loans is a reasonable $8000. (The conservative National Review provided these stats). But there are 6% with over $100,000 in loans, and likely a larger group with high five-figure debt: we could say a solid demographic quintile have large outstanding student loans.
While the college graduate still out earns the non-college grad, the wealth gap has closed. At age 35, the skilled tradesman has a higher net worth than the loan-taking college graduate
An economic realignment of the tech and COVID eras has occurred. White collar unionization at workplaces such as Google is emerging. This reflects the precarious nature of employment: contract workers without a sufficient war chest (cash reserve) to mitigate the risks of self employment or small business entrepreneurship.
A decline in entry-level positions makes it more difficult for new graduates to deploy learned skills in a meaningful way. Such self-employment is a principal part of the skilled trades. In the trades, the “get a good job” mantra could bring a middle class income, but creating your own job was the ultimate goal. White-collar professionals must now reckon with the change.
Politically, what can be done? Portable health insurance ( through the Affordable Care Act) is a key enabler. Universal Basic Income would assist in lieu of unemployment benefits
I advocate for student debt relief through interest rate reduction, rather than cancellation of principal. This is the fairest approach considering that a majority of students do make compromises to manage the cost of education, such as attending community college as a commuter student, or pursuing part-time studying while working.
The college grad is in a different cultural milieu than the traditional working class, but its economic standing is not too far. It is a force to reckon with, electing progressive candidates. The hippie generation recovered its economic standing during the 1980s-2000 bull market; some college educated millennials from the comfortable middle class may not.
There exists dichotomies in political theory: working class vs rich, highly educated vs not; as well as labor vs management.
Senator Marco Rubio, a Republican, has called for a multiethnic working class party. Most likely speaking of Economically secure part of the working class, holding rare or marketable skills, who is in control of their work life.
Wednesday, May 1, 2019
May Day for Who?
(Upton Sinclair, The Jungle, 1906)
Today, working-class interests are back in the public sphere. New York State is clearly debating a progressive agenda, which covers the gamut from rent control, the minimum wage, transportation policy, and the gig economy. From what I've seen, the progressive approach is to put the agenda forward, and work the details later. I caution the zealous to tread steadily.
Rent control, for example, has populist appeal. But in New York City after World War Two, this led to disinvestment in older neighborhoods, ultimately ending in urban blight. (See a previous blog post on South Bronx decline and revival). Changes to rent control, beginning in 1974, provided a balanced approach that allowed new market development while preserving some affordable housing. Small, multifamily properties; found in places like Queens and Brooklyn; are the foundation of middle-class investment. Universal rent control, as proposed, would soak these working savers as much as it would "soak the rich".
As we debate the path forward in the digital age, consider putting away the spite towards either side (owner and worker), and work towards creating upward mobility (which in many aspects has stalled) by "sharing the pie".