What’s happened to the “Middle Class”? According to the BLS cumulative inflation since 1970 is 500+%!

What’s happened to the “Middle Class”? 

According to the BLS cumulative inflation since 1970 is 500+%!

This is a series of Talent Stories from 2017 you may have missed.  
I find much of this very disturbing, even shocking. 

What are your thoughts?? 

It now takes $641.73 to buy what $100 did in 1970, or 541.73% inflation!  This is not the Consumer Price Index (CPI) we all read about.

In my validity check, economists agree.

Most have pegged inflation at 10% ± since the ‘50s.

Is a 542% inflation rate shocking to see on a page?

Unfortunately, Harvard Business Review  reports wages have only increased ± .2% per year over the same period; or, 12.5% actual for the same period of time.

This explains much of the erosion of the middle class….

People simply can’t afford middle class anymore!

The government reported CPI  has been a result of statistical manipulation for half a century.

This makes inflation look acceptable and keep the CPI low, the basis for most wage increases;

However, THIS AS A HUGE U.S. TALENT/PEOPLE (WORKER) PROBLEM‼

 

Corporate profits and U.S. worker productivity are at historical all-time highs.
Economic Policy Institute report’s indicate wage growth has been systematically negated!          The churn created by low wages and lack of opportunity costs the U.S. $1½ - 2 Trillion (2012 dollars) per year; and,

These statistics pertain to all but certain STEM and upper most corporate positions, not just first line people.

This results in more and ever increasing restriction on budgets, wages, benefits, talent attraction and retention.

How much more profitable could businesses become if they really questioned the current employment status quo?

      Next: Google has a solution for the lack of talent?

U.S. unemployment is actually 25 – 30+%, representing a huge hidden talent pool! Where are the jobs?

This is the first in a series of Talent Stories from 2017 you may have missed.

I find some of this very disturbing, even shocking.

What are your thoughts??

According to Morningside Hill actual total U.S. unemployment was closer to 25 - 30%!

 This is not the BLS U-3 rate of 4.1% or the U-6 rate of 7.9%, but the continuation of lowest labor participation rates in modern times.

Today’s employment is not remotely like the mid-‘80s.

However, the Bureau of Labor and Statistics’ calculation and reports are based in the 1980’s Reagan era model.

Today’s “gig” economy and the acceleration of part-time, contractual and contingent workforce has neither been accounted for nor factored into BLS reporting. 

For those not following the U.S. employment market, some of the most enlightening and perplexing Morningside points were:

1.   A person laid off from a living wage job gets counted as 1 unemployed; however,

2.   If a person replaces the lost job with 3 part-time jobs it is counted as 3 new jobs.

3.   The bizarre Reagan era BLS “birth / death rate” adjustment  accounts for 93% of all jobs created since 2008; but,

4.   According to Quartz almost all new jobs (10,000,000) created 2005 – 2015 were part-time temporary alternative gigs.

If 25 – 30% unemployment is correct, it looks more realistic than the published U-3 rate of 4.1%. 

Is anyone following the surge of homelessness?

How does high unemployment align with business’s understanding of the “Talent Gap” crisis? 

In today’s “Talent Gap” era this is a vast untapped talent resource for those who understand it and can harness it.

Did you know less than 20% of the U.S. talent market is actually looking?

However, nearly all talent (100%) would welcome contact for a new position!

W

Next: What’s happened to the “Middle Class”?

Ed Koch’s “I can explain it to you, but I can’t comprehend it for you.”

Your Corporate Strategy:  It Just Doesn’t Matter?      Final Part 29

In summary, this is not the whole story, but it’s a beginning and surprisingly simple.  The hard part isn’t actually doing it.  The hardest part, and the first step, is key people recognizing the problem exists in the first place.  Or, as the late New York City’s Mayor, Ed Koch, famously said, “I can explain it to you, but I can’t comprehend it for you.”

 

If it was easy and obvious we wouldn’t have this national problem.  The next hardest step, the giant step for the employer and people, is committing to and dedicating the entire organization to fixing it.  The third step is having the leadership and key people on board who represent, cultivate and carry this vision throughout the organization.  This may require some leadership additions or changes.   If you never start, you will never finish. 

 

Cultivating this awareness and commitment to becoming an “Employer of Choice” or “Best Employer to Work For” requires the sustainable effort, employee champion management  along with programs and policies your employees can and will recognize. The distinction of being an “Employer of Choice” or “Best Employer to Work For” is a popularity contest voted on by your own people.  Whether you want to become an employer of choice or the best that YOU can be, it will not happen with idle lip service, misdirected programs and/or wishful thinking, but internal and external advertising, marketing, recognition efforts and delivery of real quantifiable products and results to your people.  

Good Luck, Have fun and Happy Culturing!!! 

You can read my take on the $$$ aspect of good employment practices in previous blogs.

http://johnspeoplethoughts.blogspot.com/2011/10/light-at-end-of-black-hole-part-2.html

Do You REALLY Want an “Employer of Choice Plan ?” Part B

Your Corporate Strategy:  It Just Doesn’t Matter?      Part 28b

The next time you recognize the constant external and internal customer (employee) recruiting hiring and training as “churn and a tremendous training cost”, know and understand your buying customer, new hire or employee satisfaction is low because of Black Hole alienation or a poisonous culture.  Recognize it as an opportunity to begin changing your workforce environment.  Instead of looking at your product(s), plan expensive solutions or blame your people and customers, realize it is an opportunity to begin changing the company’s employment practices and culture.

The initial solutions could and should be just as simple (and cheap) as listening and communicating with your employees and customers while showing them acts of recognition, kindness and value.  This is part of the culture change necessary to begin changing your employment strategy while you’re planning a more comprehensive long term strategy.  It is part of the larger cultural change your company can implement for little if any cost.  Employees will see it, relate to it, engage and stay with you for it.

Most employees are looking for a whole package.   Rewards, benefits, training and development are unique to every company, even within the same industry, and may not cost as much as you think.  This is especially true as you begin ending the tremendous expense of “churn and training” and free up money to fund other programs and benefits. It all works together.

People want a path ahead.   People want communication(s).  People want to feel valued and recognized for contributing to, and being a valued part of, their organization.  People are looking for the “whole package”.  People want to work with people they like.  People want to be treated with respect, caring and kindness, but mostly people want to BE valued for their contribution and communicated with, not to.

Next: Ed Koch’s “I can explain it to you, but I can’t comprehend it for you.”

Do You REALLY Want An “Employer of Choice Plan”? Part A

Your Corporate Strategy:  It Just Doesn’t Matter?      Part 28a

“In a great company culture, your best and talented employees do not require top dollar to remain engaged and retained.  Companies with poor, poisonous or dysfunctionally inbred cultures cannot engage and retain their best people no matter what they pay!  Part of their dysfunction is they don’t and/or can’t recognize or value a best candidate, their best people or their best/better leadership because those traits aren't recognized, valued and rewarded within the culture they have created.” – John Hagen

The People/Talent (HR) Department occupies a most unusual place within an organization and performs very unique functions for its many types of customers.  It is the company culture representative and first company contact for customers wanting to be potential employees.  (This is true whether an Applicant Tracking System (ATS) is used or not or whether Recruiting or Talent Acquisition.)  It is also the first formal company representative and company introduction to the newly hired.

It is the ongoing intra-company representative and contact for all employees within the company.  It acts as the link between upper management and company through communication, policies and procedures.  It acts as a window to your employee's views of the company, culture, problems and liability.  It may act as the union grievance (or discrimination) investigator and negotiator.….It also acts as the company manpower strategist and forecaster, change agent, skills developer and trainer, benefits manager and communicator as well as the employee needs, complaint and suggestion department.  Some have defined it as the company’s trust department where the company’s and the employee’s expectations meet.

Next: Do You REALLY Want an “Employer of Choice Plan ?” Part B

How to Misdirect a People Strategy! Part C

Your Corporate Strategy:  It Just Doesn’t Matter?     Part 27c

CFO financial and accountant skills can provide a great benefit in helping People leaders quantify their sales, profit and savings benefits through their accounting systems and setting up measurable data points and corroborating statistics.  It’s just that people’s sensitivities, personal and professional problems, challenges and their solutions are not well suited to a typical financial education, training, personality or strengths.

 

Always remember: People are not numbers.  Numbers don’t feel, can't be motivated to excel, have no heightened sense of company, friendship, team work, accomplishment or loyalty.  That's what a great culture and HR brings to the table.  A vast majority of an individual’s decisions are guided by their feelings, perceptions, gut and instinct.  Numbers don’t spread rumors, complain, send tweets, chat or post their everyday experiences on Facebook or similar.  Numbers don’t quit, can’t be fired, can’t be counseled and, above all, are not your customers.  Addressing these people centered issues are what a great culture and great HR leadership brings to the table.

Today’s social media means younger people are equally guided by their friends’ and acquaintances’ feelings, experiences, perceptions, gut and instincts.  If there was ever a more perfect time for the saying, “bad news travels like wild fire”, we have arrived with Snapchat, Tweets, texting/instant messaging, Facebook, Glass Door, etc.

Having already covered the costs to sales in part 18, “When the Black Hole application process tick customers off so much they will never again buy your product or services it reduces sales…”, the negativity of the Black Hole application and hiring process spreads from every applicant’s negative experience to virtually every one of their connections or friends - other potential applicants – like wildfire…..How does one calculate the costs of re-attracting a potential customer to you website or store vs. keeping the ones you already have????  Ask your marketing/sales department.

 As the great poet, Maya Angelou, said "I have learned people will forget what you said, people will forget what you did, but people will never forget how you made them feel.”

HR/People/Talent leadership is best matched to the CEO/President/COO, depending on structure.  Most importantly, People Leadership in partnership with all C-level leadership, including financial, is required for organization-wide success.

What is being said about your company???

Next: Do You REALLY Want An “Employer of Choice Plan”?  Part A

How to Misdirect a People Strategy! Part B

Your Corporate Strategy:  It Just Doesn’t Matter?      Part 27b

This section is especially directed to the HR organization led by the typical financial type…….. The typical CFO type usually believes they are right and ONLY their financial results are relevant and count and have the data to prove it.   The major obstacle to financial education is it can only educate and train accounting principles and quantifiable knowns.   However, as stated numerous times, being unaware and neither knowing of the problems nor what to look for and measure means the problem doesn't exist and therefore a solution never contemplated let alone found. 

How often we hear praise regarding a leader who worked their way to the top.  Why are these same values not required of or sought for the leaders at the very top…especially the CEO, COO or CFO?  How unfortunate for all concerned!

The recent example of GM ignition fiasco illustrates how an extreme focus on $.90 in costs can wreck havoc on a reputation.  As Stephen Pascoff, Esq., writes for ELI, “Is My Life Worth a Buck”, “…it appears that GM looked at costs primarily from the perspective of direct out-of-pocket expenditures. For organizations committed to quality ……this is a myopic, dangerous business view. But cost control as a primary business driver makes sense [only] as long as the full range of critical metrics is considered.  The true cost of …….aberrant workplace cultures is the resulting damage caused to brand reputation and trust when the public or an organization’s own team members suffer injury.” 

http://www.eliinc.com/blog/bid/196250/is-my-life-worth-a-bucksource=Blog_Email_[Is%20My%20Life%20Worth%20a%20B

At this point, the cost is 13 lives and many injuries.  Any guess what the financial impact will be in the future?  How will this effect customer loyalty and trust ?  Mega-dollar-settlements will soon be forthcoming.  All this for saving an estimated $.90 on the price of a car????? As of this writing it ate up all $1.2Billion 1^st quarter 2014 profits for GM.  Fixing the recalled cars hasn’t yet started and the more time the dirty laundry is aired the more it will cost.

Steven is addressing the aberrant workplace culture fostered by a financial only focus.  There are sizeable unknown costs, soft and hard, when people policies fail to recognize the value of the company’s own employees or public consumer, your customer.  If you don’t understand what a financial focus does to a people culture, talk to your people…. They are already talking to each other via any means at their disposal when you don’t ask, don’t listen and/or don’t do anything about it.

Next: How to Misdirect a People Strategy! Part C