26.11.12

LOW WAGES IMPLY AND ARE IMPLIED BY LOW PRODUCTIVITY.

Labor markets have a supply side and a demand side, and Paul Krugman suggests that employers who whinge about the quality of the help might have their pay packets and job descriptions to blame.
Whenever you see some business person quoted complaining about how he or she can’t find workers with the necessary skills, ask what wage they’re offering. Almost always, it turns out that what said business person really wants is highly (and expensively) educated workers at a manual-labor wage. No wonder they come up short.

And this dovetails perfectly with one of the key arguments against the claim that much of our unemployment is “structural”, due to a mismatch between skills and labor demand. If that were true, you should see soaring wages for those workers who do have the right skills; in fact, with rare exceptions you don’t.

So what you really want to ask is why American businesses don’t feel that it’s worth their while to pay enough to attract the workers they say they need.
An analysis of labor conditions in Chicago-area Internet businesses might be observing precisely that outcome.
While job creation may come as good news to the nearly 400,000 unemployed workers in the Chicago area, some people in the industry question the quality of the jobs that have been created post-recession. Designers, engineers and programmers used to be the positions associated with Internet companies, but experts say that most of these new jobs are low-skill and entry-level, often in sales or distribution.

Outplacement expert John Challenger, of Challenger, Gray & Christmas Inc., went as far as comparing these entry-level tech jobs to factory jobs in the Industrial Era.

“While they might be cleaner and safer, these tech jobs are still low-skill jobs that are in demand,” Challenger said. Essential, but not necessarily high profile, much of the Internet’s job growth is due to the demand for these positions.

Chicago-based Groupon Inc. is an example of a company that hires primarily in its sales division. Roger Coakley is a former employee of the “daily deal” company that has hired a slew of workers since its launch in 2008. He was at the company for more than a year when he left in November 2011, looking for a “higher quality job experience.”

“It’s not a bad entry-level position for kids straight out of college, but they should expect terrible hours and unrealistic quotas,” said Coakley who started at the company after several other sales positions. “My job was based on cold-calling vendors in Charlotte, people I couldn’t even talk to face to face. I was making hundreds of calls a day and getting hung up on regularly.”

Also discouraging, Coakley said, was the lack of a career path. “The problem is that there’s not a lot of potential to move up,” he said.
A few years ago, short-term thinking in business led to the loss of institutional memory, as older middle managers seemed like a good source of savings by way of down-sizing.  The current round of short-term thinking is likely to prevent the development of institutional memory of any kind.

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