Blog Archive - June 2015
During his last State of the Union Address, President Obama declared that “America needs a raise.” Yesterday, he acted on those words. The president announced that salaried employees (5 million Americans) making as much as $50,400 would be eligible for overtime. As Laura Clawson of Daily Kos puts it, employers will no longer be able to use exempt status (salaried employees) to keep from paying overtime. This move by the Obama Administration (if it’s not overturned by a court challenge) will either give employees more money or more time off. The 40 hour week will again become meaningful to millions of Americans. It’s a good day for working people.
P.S. President Obama is featured in The Huffington Post on his overtime reform. The president express great confidence that he is doing the right thing for American workers: "That's how America should do business. In this country, a hard day's work deserves a fair day's pay. That's at the heart of what it means to be middle class in America." I agree, but would add that what the president is doing will also help the working class and the working poor, who are often victims of wage theft. We all deserve a fair day's pay.
Where is the money going? Corporate profits are up. Productivity keeps going higher and higher. Despite this “good news,” most Americans feel insecure in their jobs and income. So, where is the money?
Laura Clawson of Daily Kos shows one area where the money has gone: CEO pay. While I recommend that your read Clawson’s article, the whole story is told in a graph that accompanies the article. Before the mid-1990s, CEOs’ average pay was less than 100:1 the pay of average workers. By the end of the 1990s, the ratio had moved to 300:1. Since that time, the average has gone up and down. Still, it has ranged between 200:1 to 400:1.
This trend is only part of the story. If CEOs pay has moved this way, it’s logical to assume that other senior leaders have received healthy raises. I’m not arguing that these salary increases can’t be justified – because anything can be justified. The reality is that if pay disparity rewards the top of the pyramid, those at the bottom and middle will lose. The fight over the minimum wage is a good thing, but we also need to thing about who is being reward for economic growth and enhanced productivity. Do we want a society where a few have security and most people are running scared?
Yesterday’s Redeye (Chicago Tribune) featured an interesting article on the growing time between first interviews and the time a job offer is made. In 2010 the average time for the interviewing process was 13 days. Now, according to research by Glassdoor.com, the average time is now 23 days. A client who is senior HR manager told me that this process is a good thing for both companies and applicants because more time is being taken to match the right candidate to the right job. She said companies lose millions when new hires wash out in the first 90 days.
That may be true. However, from the job seeker’s prospective, this increased waiting time sounds maddening. Part of the job search now means being more patient once the interviewing process begins. It also means that while you are interviewing you need to continue looking for other jobs. Just as a company focuses on its needs in evaluating and selecting candidates, job seekers need to give themselves every advantage and opportunity. Don’t wait for an answer that you might not want to hear. Keep applying for jobs and networking. You can always tell employers that you’ve accept a position. It will feel good.
I love this quotation from Henry Ford: "Obstacles are those frightful things you see when you take your eyes off your goal."
Great advice. As long as we're really focused on our goals, fear shouldn't be a problem. In fact, fear is the negative power that distracts us and keeps us from achieving our goals. Two of my favorite writers Seth Godin and Steven Pressfield have called this the "resistance" that keeps us from "delivering." I frequently tell clients who are wrapping themselves in paralyzing blankets of fear to do something very different: Practice talking about your strengths. What makes you good at what you do? How will you be an asset to an employer or company? If you can answer those questions, the obstacles and fears will be manageable.
I love Seth Godin’s blog. Seth writes about big issues, but he does so in simple clear language. In a post called Plenty More, he presents two options for early career professionals: work hard with a commitment to excellence or wait for success and do the least possible work. In Seth’s words, “The biggest cause of excellence is the story we tell ourselves about our work.” We become those stories.They also apply at all stages of our career, but are especially important for young people. Whenever we tell ourselves that we’ll do it later, that we’ll do it tomorrow, or that "I’m doing the best I can," we are writing the story of our own failure. Let’s change the script and find a way to make whatever we do better. Then we’ll tell stories about our work that will make us proud.
Bloomberg reports what seems to be good news. John Williams, president of the Federal Reserve's San Francisco bank, says that the job market is doing so well that the central bank might need to raise interest rates. The article cites lower unemployment rates as the reason for the Williams' statement. Unemployment has declined greatly from its peak during the Great Recession. Even so, many Americans who are counted as employed are only working part-time. Many more are working full-time, but doing so at a low wage. Even workers who make middle class incomes are struggling because they have only received minimal raises over the past 5-8 years.
It’s great to be optimistic, and the Fed should be concerned with inflation. However, most Americans do not feel secure in their jobs and incomes. According to the Consumer Confidence Index of the Conference Board, Americans are not enthusiastic about the current economy. Almost as many people (11.1%) expect their incomes to decline as the small number (17.4). These metrics also show that most American are treading water, not what should be expected in an expanding economy. Politicians and the Fed need to address that concern and not simply focus on the unemployment rate. There will only be a real recovery when Americans feel financially secure.
Laura Clawson of the Daily Kos reports on a big change in labor law that might impact millions of Americans. The Department of Labor is considering an increase to the threshold for overtime pay from $23,360 to $52,000, which means any worker, including salaried employees, making less than that amount would be legally entitled to overtime pay. Clawson notes that this is a change President Obama could make without legislative approval. She also says that the move would probably be opposed in the legislature and courts. Even so, changing the threshold would be a good way to help low wage workers, and it would be a fit punishment for employers who pay employees salary so they do not have to pay overtime. I hope President Obama and the DOL put working people first – raise the threshold.
According to the Department of Labor, there are more than 5 million open jobs in the U.S., the highest number since such statistics were first kept in 2000. Huffington Post reports that this news is good for the labor market and the overall economy. This good news does not guarantee that you can find a good job. Finding a job and managing a career is always an individual enterprise. It’s a lot easier when companies are hiring.
The news that the U.S. economy added 280,000 jobs sounds great. Bloomberg offer charts that show a more mixed situation. Yes, job growth is up. However, the unemployment rate went up because more people have entered the job market. Similarly, average hourly earnings is up, but that measure has moved like a yo-yo over the past year. The best news is that long-term unemployment is moving steadily down. If you’re thinking about looking for a new job or asking your boss for a raise, this could be a good time to act. Even if the news is mixed, the job market is much better than it was five years ago.