Reports from the Economic Front

a blog by Marty Hart-Landsberg

Working In America–Is The New Normal Acceptable?

There is a major (one-sided) ideological battle going on with business and political leaders seeking to convince us that things are basically fine, and if not now, soon will be.   If we buy their argument, I guarantee you that the great majority of us will suffer worsening living and working conditions for the foreseeable future.   

Given rising rates of profit and income for those at the top, it is easy to understand why they are working so hard to convince us.  They are basically fine with things and don’t want change.  But what about us? 

A lot of people are justifiably worried about finding a job.  Andy Kroll, writing for the excellent blog TomDispatch.com, provides one indicator of just how bad the job market is:

On April 19th, McDonald’s launched its first-ever national hiring day, signing up 62,000 new workers at stores throughout the country. For some context, that’s more jobs created by one company in a single day than the net job creation of the entire U.S. economy in 2009. And if that boggles the mind, consider how many workers applied to local McDonald’s franchises that day and left empty-handed: 938,000 of them. With a 6.2% acceptance rate in its spring hiring blitz, McDonald’s was more selective than the Princeton, Stanford, or Yale University admission offices.

It shouldn’t be surprising that a million souls flocked to McDonald’s hoping for a steady paycheck, when nearly 14 million Americans are out of work and nearly a million more are too discouraged even to look for a job.

What is especially stunning about this is that food preparation work is low paid and demanding.  For example, “The median wage for workers in food preparation and serving is $8.89 a hour — a little more than half the $15.95 median hourly wage for all occupations, according to the Bureau of Labor Statistics. The median annual wage in the sector is is $20,800 — less than half the median annual salary of $43,400 for all occupations.”  And, according to Kroll, the average wage for one of these new McDonald’s jobs is likely below the median wage for food preparers and servers.

Moreover, these jobs are hard—physically, emotionally, and intellectually.  Want proof?  Read this story by a Businessweek reporter who spent a day working at a Taco Bell.  Here is a short excerpt:

As a Service Champion, my job is to say my lines, input the order into the proprietary point of sale (POS) system, prepare and make drinks like Limeade Sparklers and Frutista Freezes, collect bills or credit cards, and make change. I input Beefy Crunch Burritos, Volcano Burritos, Chalupas, and Gorditas. My biggest worry is that someone will order a Crunchwrap Supreme, a fast-food marvel made up of two kinds of tortillas, beef, cheese, lettuce, tomatoes, and sauces, all scooped, folded, and assembled into a hand-held, multiple-food-group package, which then gets grilled for 27 seconds. An order for a Crunchwrap Supreme, the most complex item on the menu, sometimes requires the Service Champion to take up position on the food production line to complete it in anything like the 164 seconds that Taco Bell averages for each customer, from driving up to the ordering station to pulling away from the pick-up window.

Drive-thru is the operational heart of the fast-food industry, as central to a brand like Taco Bell as the kitchen itself, maybe more so. According to the National Restaurant Assn., the fast-food industry will do $168 billion in sales for 2011, and about 70 percent of that will come in through drive-thru windows. The technology deployed at order stations and pick-up windows has evolved to meet that demand. Every step is measured, every movement calculated, every word scripted. Taco Bell, with more than 5,600 locations in the U.S., currently operates some of the fastest and most accurate drive-thru windows in the industry, at least according to QSR magazine’s last survey, in 2009, though for years they lagged. The system is the result of a 15-year-plus focus on the window as the core of the business. Taco Bell’s pride in moving from the bottom of the pack to near the top is also part of the reason it allowed a journalist, unsupervised by public relations staff, to work the line.

Above me on the wall, a flat-screen display shows the average time of the last five cars at either the order station or the pick-up window, depending on which is slowest. If the number is red, as it is now, that means one, or both, of the waits is exceeding 50 seconds, the target during peak periods. It now shows 53 seconds, on its way to 60, 70 … and then I stop looking. The high-pitched ding that announces each new customer becomes steady, unrelenting, and dispiriting—85 cars will roll through over the peak lunch rush. And I keep blowing the order script. . . .

Go into the kitchen of a Taco Bell today, and you’ll find a strong counterargument to any notion that the U.S. has lost its manufacturing edge. Every Taco Bell, McDonald’s, Wendy’s, and Burger King is a little factory, with a manager who oversees three dozen workers, devises schedules and shifts, keeps track of inventory and the supply chain, supervises an assembly line churning out a quality-controlled, high-volume product, and takes in revenue of $1 million to $3 million a year, all with customers who show up at the front end of the factory at all hours of the day to buy the product. Taco Bell Chief Executive Officer Greg Creed, a veteran of the detergents and personal products division of Unilever (UL), puts it this way: “I think at Unilever, we had five factories. Well, at Taco Bell today I’ve got 6,000 factories, many of them running 24 hours a day.”

Tragically, the general pay and working conditions found in the food service industry seem likely to become the “new normal” if meaningful structural changes to our economy are not made.  As Kroll explains:

According to a recent analysis by the National Employment Law Project (NELP), the biggest growth in private-sector job creation in the past year occurred in positions in the low-wage retail, administrative, and food service sectors of the economy. While 23% of the jobs lost in the Great Recession that followed the economic meltdown of 2008 were “low-wage” (those paying $9-$13 an hour), 49% of new jobs added in the sluggish “recovery” are in those same low-wage industries. On the other end of the spectrum, 40% of the jobs lost paid high wages ($19-$31 an hour), while a mere 14% of new jobs pay similarly high wages.

As a point of comparison, that’s much worse than in the recession of 2001 after the high-tech bubble burst.  Then, higher wage jobs made up almost a third of all new jobs in the first year after the crisis. . . .

Meanwhile, NELP found that hiring for temporary administrative and waste-management jobs, health-care jobs, and of course those fast-food restaurants has surged.

Indeed in 2010, one in four jobs added by private employers was a temporary job, which usually provides workers with few benefits and even less job security. It’s not surprising that employers would first rely on temporary hires as they regained their footing after a colossal financial crisis. But this time around, companies have taken on temp workers in far greater numbers than after previous downturns.  Where 26% of hires in 2010 were temporary, the figure was 11% after the early-1990s recession and only 7% after the downturn of 2001.

While working people may not know how to respond to these trends, surveys make clear that they are fully aware that expert declarations of economic recovery have little meaning.   The National Bureau of Economic Research, the official designator of recessions and expansions, determined that the U.S. economy moved into expansion starting June 2009.  Yet:

In a recent Gallup poll, a majority of people agreed that the country was still in either a depression (29%) or a recession (26%).  When sorted out by income, however, those making $75,000 or more a year are, not surprisingly, most likely to believe the economy is in neither a recession nor a depression, but growing.  After all, they’re the ones most likely to have benefited from a soaring stock market and the return to profitability of both corporate America and Wall Street. In Gallup’s middle-income group, by contrast, 55% of respondents claim the economy is in trouble. They’re still waiting for their recovery to arrive.

Significantly, even those with so-called good jobs are finding things getting worse.  This reality is perhaps best captured by a Wall Street Journal article entitled “’Superjobs’—why you work more, enjoy it less.”  Unfortunately, there is nothing super about these jobs accept the effort now required to keep them.  As the Wall Street Journal explains:

In this new era of the superjob, everyone does windows, and anyone who gripes about working too hard will hear an even hairier tale from the exec on the next bar stool. Emboldened by an unemployment crisis that’s only now easing up, businesses of all sizes have asked employees to take on extra tasks that have little to do with their primary roles and expertise — with engineers going on sales calls, accountants pitching in on customer service and chief financial officers running a division on the side. And some believe this shift is permanent, as the quickening pace of change demands more flexibility from everyone at the office. . . .

Some workplace experts say the superjob is the logical next step in management’s quest to make the workplace more cost efficient. The latest shift started when businesses redistributed the workload during the recession; last year’s nascent recovery intensified the process. In a recent survey by Spherion Staffing, 53% of workers surveyed said they’ve taken on new roles, most of them without extra pay (just 7% got a raise or a bonus). Now that sales are picking up, there’s even more work to do, but companies are reluctant to hire, say human-resources experts. Some are anxious about what the economic future holds, while others are seeing their profits increase now that their work forces are leaner.

Sounds a bit grim for the workers, but the Wall Street Journal, always keeping the boss’s perspective in mind, encourages us to have the right attitude.  Remember this situation can help us stretch and grow.  And, of course, companies are there to help us.

To their credit, some employers are doing more to help their superstars. And companies that saw a rebound in 2010 are helping executives with time management and delegation.

Another popular tactic: recognition programs that reward employees for taking on extra work. Major companies are turning to software “wizards” that dole out laurels on preset, automated schedules, says Adrian Gostick, a co-author of “The Carrot Principle” and a former vice president at employee-recognition consultancy O.C. Tanner.

Of course, the ultimate responsibility for workload management falls to the employee. Experts say that in many cases, employers have no idea how many tasks they’ve loaded on one person, so workers have to “manage up.”

So, I guess our choice is clear: either “manage up” or start working to transform our economic system.

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