Monday, September 7, 2009

Are Labour's Fortunes Turning?

The Calgary Herald reports on a Labour Day where more labour longer:

It seems a bit ironic. Labour Day, a national holiday since 1894, traces its origins to parades of tired workers appealing for a shorter work week. The emerging labour movement wanted to put an end to the 12-hour day.

This year, in the weeks leading up to Labour Day, the Conference Board of Canada issued a report entitled "Working 9 to 9, Overtime Practices in Canadian Organizations."

The report was actually a warning to employers that the downturned economy has produced lean operations in which many people were working long hours--and not always being paid for them. As well, Canadian workers, like their U. S. counterparts, were becoming more litigious--launching lawsuits against employers such as CIBC, KPMG, Scotiabank and Canadian National Railway Co.

Martin Martens, a management professor at the John Molson School of Business at Concordia University in Montreal, has studied justice and fairness in the workplace, and found that treating workers fairly has an impact in good times and bad. If they've been well-treated in good times, they will be more supportive of the company in bad times, such as accepting pay cuts. But if they feel mistreated during bad times, as soon as the economy recovers, they will leave.

Employers who expect employees to answer e-mails or cellphones at all hours could find themselves with high turnover. The 12-hour day should be history.

"People can't be expected to work that long," Martens said.

In his Labour Day statement, Ken Georgetti, president of the Canadian Labour Congress, complained that working people are paying the price for an economic situation they did not create.

"While people are reeling from job losses, they have also watched their pensions and retirement income evaporate as the stock market deflated and companies went bankrupt."

This has not been a great year for labour.

At the end of August last year, the economy was still spinning out jobs on a regular basis (notwithstanding the surprise gain of 27,100 jobs last month) and unemployment stood at 6.1 per cent. On Aug. 31 of this year, the TSX closed at 10,868. As of the end of August, the unemployment rate in Canada stood at 8.7 per cent.

The unemployment rate is lower that its has been in past downturns, noted Benjamin Tal, an economist with CIBC World Markets, and the average length of time people remain unemployed is only one week longer than it was before the recession. Right now it's 15 weeks, he said, whereas in 1991 people were out of work for 21 to 22 weeks.

The labour force today "is much more dynamic, that's why the numbers are not so scary," he said.

The labour force in Canada isn't "much more dynamic" than that of the U.S., but our economy has so far escaped many of the acute hardships because it is well diversified in energy, commodities, and a few other sectors which help buffer the job losses in the financial and manufacturing sectors.

And just to be clear, I do not believe in the Canadian economic miracle. So far, we have been lucky, but things can change very quickly as we enter 2010.

As far as time to find new work, it depends on the sector you work in. I know of a few excellent portfolio managers and senior investment analysts who are still looking for work after a year. It doesn't help that some pension bullies try to smear their names (it's a very dirty business....if you only knew half the bullshit that goes on in the background!).

I also agree with professor Martens that employers should treat their employees well in good times and in bad times. Employers should be aware that most employees hate petty office politics and nonsensical hierarchies that limit them from contributing to the overall results.

Importantly, employers should do away with hierarchical cultures in their offices that stifle creativity and meaningful exchanges and promote more openness where employees freely contribute their thoughts on making the organization thrive.

For example, start a blog on your intranet where employees from different divisions in your organization are encouraged to contribute their thoughts on what is going on in their areas, highlighting the risks and possibilities. If this was done properly before the crisis of 2008, many financial firms would have saved billions in losses.

Down south, the CBC reports that the U.S. unemployment hit a 26-year high in August as 216,000 Americans were added to the unemployment rolls, according to figures released Friday:

The U.S. jobless rate inched up to 9.7 per cent in August, a rise of three-tenths of a percentage point from July's 9.4 per cent, the U.S. Department of Labour reported Friday.

That meant that August's unemployment was at its highest level since June 1983, when more than 10 per cent of Americans who wanted to work could not find employment.

But there may be some good news ahead. According to Stéfane Marion, Chief Economist and Strategist at the National Bank Financial, the U.S. wage bill expanded in August:

As today’s Hot Chart shows (click on image below), the total wage bill (total hours worked time hourly earnings) rose for the second month in a row in August. This is crucial to keep the economy moving forward since there can be no talk of a self-sustaining recovery without a pick-up in income. At some point we will obviously need to see some job gains but keep in mind that the first step to recovery for labour markets always starts with an expanding wage bill. We have not changed our view and still think that payrolls will turn positive this fall.

But even when employment eventually picks up, it will be the most meager recovery ever and the pick-up in activity will likely be in sectors like education, health care, infrastructure and alternative energy.

Finally, if you think it's tough finding a job out there, please bear in mind that for individuals with disabilities, higher unemployment rates have reached a crisis point:

People with disabilities represent the largest American minority group, yet they still suffer an astonishingly high rate of unemployment (65 percent). In fact, new research from the Bobby Dodd Institute (BDI) has revealed that nearly 50 percent of all workers in Atlanta, Georgia alone believe that unemployment among people with physical and mental disabilities has reached a crisis point.

Many are unaware (as was I) of the fact that October is National Disability Employment Awareness Month. And even more are unaware of the staggering unemployment that plagues America’s disabled.

So why are such a high percentage of disabled individuals unemployed in the United States? There are many reasons, all of which have to do with the barriers, both real and perceived, that prevent disabled candidates from being hired. According to Atlanta's workforce, the following barriers top the list of reasons why employers are reluctant to hire disabled individuals:

  • Lack of knowledge. Respondents to the Atlanta survey identified lack of knowledge about accommodating people with disabilities (54 percent) and lack of knowledge about people with disabilities in general (52 percent) as the primary deterrents to hiring and employment. In fact, when respondents were asked to identify which groups of people the term "equal opportunity" applied to, only 2 percent of respondents included "workers with disabilities."
  • Accommodation concerns. Survey respondents also referred to concerns over cost for workplace adjustments and accommodations (46 percent) as a barrier to hiring individuals with disabilities.
  • Concerns about job performance and abilities. Respondents felt that among the reasons why disabled persons aren't hired more often is that both employers and coworkers alike may perceive that they cannot adequately perform required work duties (27 percent).

While it is unfortunate that many employers lack knowledge about accommodating people with disabilities and about disabled individuals, might I suggest that they perform some due diligence on the subjects? A simple visit to the US Department of Labor’s website can help employers learn about what they can do to make reasonable accommodations for their disabled employees.

And as far as lacking knowledge about disabled individuals, just ask a disabled individual what you would like to know. Scurrying around the issue of a disability is offensive to most disabled individuals, the majority of whom just want to be treated like everyone else.

For those employers who lack knowledge about what accommodations for disabled individuals are and how much they really cost, let me summarize. With very little investment, companies can provide meaningful employment opportunities for disabled workers, as the average cost of a workplace accommodation for an individual with a disability is less than $500. (US Department of Labor)

Finally, when it comes to dispelling employers’ concerns about job performance and abilities, research has shown time and time again that adequate or better performance of job duties correlates to long-term job retention. A national survey by DuPont shows that disabled workers have a higher retention rate than their non-disabled peers, which means that it is highly likely that these disabled individuals perform at or beyond the level of their non-disabled peers.

Employers need to start realizing the benefits of hiring workers with disabilities. The bottom line benefits of employing workers with disabilities far outweigh initial accommodation costs, and as the nation’s largest minority group, disabled individuals as a whole in the US have an estimated $1 trillion in aggregate consumer spending power. And the research shows that disabled persons are loyal in their consumptions of goods and services from companies that hire disabled individuals. New BDI research shows that 90 percent of Atlanta workers would be loyal to a business that has a track record of hiring individuals with disabilities.

Is there a company in the United States that wouldn’t want 90 percent of a $1 trillion market?
I can tell you from my experience and that of others I've met and discussed this issue with, people with disabilities are routinely discriminated against. It is a disgusting practice but unfortunately it happens everywhere, not just in the private sector. The laws protecting the disabled are toothless and until employers change their practices, introducing more workplace diversity at all levels, this abuse will keep going on, leaving a large minority of the population chronically unemployed.

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