Jobs Report Anemic. Can Work Work?

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By Barbara Dyer, President & CEO of The Hitachi Foundation

We just celebrated Labor Day -- our tribute to the American workforce. Yet, this year our claims of fidelity to the ideal of hard work as a path to a good life were muted by harsh reality. Only 43.7% of working-age Americans are employed full-time according to the August Gallup P2P numbers. And while today's Bureau of Labor Statistic's jobs report shows a declining unemployment rate, much of this is due to people giving-up and dropping out. The last time we experienced this low a level of labor force participation was 1978.

It should be no surprise that the tools to fix 20th century cyclical unemployment don't work in the 21st century. A dramatically altered economy has changed work. Global competition and an unrelenting push for short-term quarterly gains transformed the orientation of many firms. Virtually entire industries moved off-shore seeking lower-cost labor. Many that remained in the U.S. flattened their organizations, increased reliance on contingent workers, and/or outsourced. The cumulative effect has eroded many of the integral first-rung jobs on the career ladder. Job security has become an anachronism, a story told by the elders of earlier days. Workers can expect to transition through ten different jobs in a twenty-year span.

Good jobs with decent pay are hard to find.  But occasionally a "good news" story appears featuring workers gaining a leg-up in a firm that does well by its people.  Five years ago, we at The Hitachi Foundation asked: Are these merely idiosyncratic employers with big hearts? Is the era of valuing workers lost to global economic pressures?

We took a closer look at the landscape. And our new report: Doing Well and Doing Good , portrays a surprising picture. 

Across the country, in all sectors and in significant numbers, are workplaces that respect the dignity of workers, maintain the efficacy of work, and not only offer decent wages but extend pathways for dramatic earnings gains and career advancement. What's more - these firms claim 

DWDG_coversuccess, often outperforming their peers, because of, not despite their commitment to workers. Are they simply outliers?  Maybe. But we see them as "positive deviants." They've already found some answers to 21st century challenges. Within their firms they put in place practical solutions that simultaneously bolster performance, lift workers and communities, and strengthen long-term economic prospects.

Take GR Spring & Stamping (GRS&S) in Grand Rapids, MI for example.  They produce high value-added automotive parts by investing in their frontline workers.  While entry wages for the company's machine operators are competitive, completing training pushes them up typically by 4-6% within six months.  Employee turnover is 40% below the industry average and sales per employee and machine utilization and other productivity measures rank at the top of the industry. "We realized that we had to provide more growth opportunities for associates and elevated our associates through workforce development," notes GRS&S Chairman Jim Zawacki, "The firm developed new and difficult processes based on these talents." And the growth followed – expanding from fewer than 250 workers in 2005 to over 600 now and tripling sales to over $100 million following several years of 25%+ growth.  All employees begin their careers in the classroom and in on-the-job training.  GRS&S University also raises skills, and mastery is linked to specific pay increases.  Pay for performance also is a key incentive.  Pay ranges start at a competitive level for the region, but press operators for example can earn significantly more than their starting wages in two or three years.  Finally, the firm forms "mini companies" that relies on teams and is partly aimed at improving communication both with customers and within the firm.  Each meets weekly to review performance and solve problems. A minimum of three officers from manufacturing, quality, and technical departments lead the mini-companies and they all meet to share best practices and discuss improvements.  Each quarter, mini-companies meet with management in "bankers meetings" to review results. They also discuss plans to improve and requests for capital expenditures.

New York's Union Health Center concentrates on improving quality of care while managing costs. They can accomplish this "holy grail" of healthcare reform in large part by incorporating Medical Assistants (MA) as full members of the care team.  The nearly 10,000 patients, many with chronic diseases, now benefit from working with these highly trained MA health coaches.  Medical Assistants, more typically characterized in other places as high turnover, low-wage, and low-skilled, are valued among doctor and nurses as they advance-up a career with commensurate pay increases.  As a result, patients are greatly improving management of chronic illnesses. That led to far fewer emergency room visits and reduced patient-care costs.

The August jobs numbers are sobering testimony to high and growing levels of inequality. This is a jolting contradiction to our self-image and it need not be our destiny. The workplaces and firms we uncovered are largely under the radar of policymakers and pundits. In the months ahead, we hope to shine a brighter light on their examples and lessons. From these examples we can build.

Blog posts are authored by Hitachi Foundation staff and do not necessarily reflect the views or opinions of the Foundation Board, Hitachi, Ltd., Hitachi America, Ltd., or any Hitachi company affiliate.

 

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