Economy

Companies behaving (not quite so) badly: Financial services firms continue their slow reputation recovery.

Phillip Nones Banking, Branding, Business, Economics, Marketing Communications, Social Commentary , , , , , , , ,

Financial services industryBack in 2009, no industry in the United States took such reputation beating as the financial services segment.  And to find out how much, we needn’t look any further than Harris survey research.

The Harris Poll Reputation Quotient study of American consumers is conducted annually.  The most recent one, which was carried out during the 4th Quarter of 2014, encompassed more than 27,000 people who responded to online polling by Harris.

In the survey, companies are rated on their reputation across 20 different attributes that fall within the following six broad categories:

  • Products and services
  • Financial performance
  • Emotional appeal
  • Social responsibility
  • Workplace environment
  • Vision and leadership

Taken together, the ratings of each company result in calculating an overall reputation score, which the Harris researchers also aggregate to broader industry categories.

Most everyone will recall that in 2009, the U.S. was deep in a recession that had been brought about, at least in part, by problems in the real estate and financial services industry segments.

This was reflected in the sorry performance of financial services firms included in the Harris polling that year.

Back then, only 11% of the survey respondents felt that the financial services industry had a positive reputation.

So it’s safe to conclude that there was no place to go but “up” after that.  And where are we now?  The latest survey does show that the industry has rebounded.

In fact, now more than three times the percentage of people feel that the financial services industry has a positive reputation (35% today vs. 15% then).

But that’s still significantly below other industry segments in the Harris analysis, as we can see plainly here:

  • Technology: ~77% of respondents give positive reputation ratings
  • Consumer products: ~60% give positive reputation ratings
  • Manufacturing: ~54%
  • Telecom: ~53%
  • Automotive: ~46%
  • Energy: ~45%
  • Financial services: ~35%

So … it continues to be a slow slog back to respectability for firms in the financial services field.

Incidentally, within the financial services category, insurance companies tend to score better than commercial banks and investment companies when comparing the results of individual companies in the field.

USAA, Progressive, State Farm and Allstate all score above 70%, whereas Wells Fargo, JP Morgan Chase, Citigroup, BofA and Goldman Sachs all score in the 60% percentile range or below.

Wendy Salomon, vice president of reputation management and public affairs for the Harris Poll, contends that financial services firms could be doing more to improve their reputations more quickly.  Here’s what she’s noted:

“Most financial companies have done a dismal job in recent years of connecting with customers and with the general public on what matters to them.  Yet there’s no reason Americans can’t feel as positively toward financial services firms as they do towards companies they hold in high esteem, such as Amazon or Samsung, which have excellent reputations because they consistently deliver what the general public cares about …  

[Individual] financial firms have a clear choice now:  Prioritize building their reputations and telling their stories, or let others continue to fill that void and remain lumped together with the rest of the industry.”

Here’s another bit of positive news for companies in the financial services field:  They’re no longer stuck in the basement when it comes to reputation.

That honor now goes to two sectors that are Exhibits A and B in the “corporate rogues’ gallery”:  tobacco companies and government.

Both of these choice sectors come in with positive reputation scores hovering around 10%.

I suspect that those two sectors are probably doomed to bounce along the bottom of the scale pretty much forever.

With tobacco, it’s because the product line is no noxious.

And with government?  Well … with the bureaucratic dynamics (stasis?) involved, does anyone actually believe that government can ever instill confidence and faith on the part of consumers?  Even governments’ own employees know better.

Americans’ Personal Outlook for 2014: The “Blahs” Have It

Phillip Nones Economics, Social Commentary, Uncategorized , , , , , , , ,

economic pessimismThe U.S. stock market may have achieved record-high performance in 2013, but a December 2013 poll of American consumers, conducted by Harris Interactive, is painting a decidedly different picture when it comes to the outlook for the New Year.

The degree of pessimism manifests itself in a higher percentage of adults believing that the economy will get worse (~32%) compared to those who feel it will get better (~27%).

The most optimistic contingent are Baby Boomers (age 49 to 67), where nearly 30% feel the economy will improve in 2014.  The opposite is true with the very youngest group (age 18 to 36), where only ~23% think the American economy will improve this year.

And the most pessimistic group when it comes to believing the economy will get worse?  That would be the oldest contingent (people age 68 and older), ~40% of whom share this opinion.

The message Americans seem to be sending is this:  “We may be in the fifth year of a recovery … but we’re still waiting for it to hit us.”

Comparing these Harris figures to what the pollsters recorded a year earlier, it’s interesting that the percentage of people who envision the economy “staying the same” has grown by ~11 percentage points.  So, treading water appears to be the order of the day.

How Americans are responding in their own personal lives to their views of the economy correlate to their level of general optimism or pessimism.  Here’s what the survey found in terms of their intentions for the year:

  • Cut back on my household spending:  ~45%
  • Save more in the year ahead:  ~40%
  • Pay down my debt level:  ~40%
  • Save more for retirement:  ~23%
  • Get rid of one or more credit card:  ~15%

Broadly speaking, the Harris poll findings point to a distinctly blasé environment.  And it helps explain the mediocre holiday shopping season we just witnessed – more than inclement weather and a shorter shopping days calendar can explain.

More Harris Interactive poll result details are available here.

Manufacturing in America: It is poised for a comeback?

Phillip Nones Business, Employment, Human Resources, Manufacturing, Social Commentary, Uncategorized , , , , , , , , , , , , , ,

American Made Movie (Documentary)On Labor Day weekend, the documentary film American Made Movie opened in theatres in key cities across the country.  And for a change, this film doesn’t chronicle the decline of American manufacturing, but instead its potential for rebirth.

Directors Vincent Vittorio and Nathan McGill have produced a film that’s both realistic and optimistic – two words that aren’t often used in conjunction with one another when the topic is manufacturing.

The directors don’t shy away from the facts:  U.S. manufacturing jobs shrinking from ~$17 million to just ~$12 million in the past 20 years due to technology, global competitiveness and outsourcing.

But there are signs of recovery.  At least the anectodal evidence for it is strong.

In August, Wal-Mart organized a manufacturers’ summit which was attended by ~1,500 people including U.S. and foreign-based companies, Department of Commerce and Federal Reserve officials, and eight state governors.

At this meeting, Wal-Mart affirmed its commitment to buy $50 billion in additional American-made products over the next 10 years.  GE, Element and other companies also announced plans to boost domestic manufacturing activities.

These developments aren’t merely patriotic or altruistic — although there may be some of that factoring into the decision.

In fact, with Chinese labor costs rising 15% to 20% each year, that country’s labor cost advantage is narrowing compared to the United Sates.

Harold Sirkin of Boston Consulting Group points out that factoring in raw materials and other costs, China maintains only a ~3% lead on product costs.  Add in transportation costs from Asia, and the “Made in America” alternative takes on new validity.

“We are at an inflection point,” Sirkin has stated, noting that the United States is now competitive with China.

GE’s chief executive officer Jeff Immelt echoes these sentiments, contending that on a relative basis, America has never been more competitive thanks to technology and improved productivity.

“High transportation costs mean you want to be closer.  It’s not just pure labor arbitrage,” Immelt notes.

As for productivity, the mere three hours it takes to assemble a GE refrigerator in America makes its total cost lower than a similar Chinese or Mexican-made models destined for the American market, according to Immelt.

I like what I’m hearing about the coming resurgence in American manufacturing … but I think we’ve heard this prediction before. 

The film directors discovered this inconvenient issue when traveling the United States and visiting manufacturing plants from large cities to small towns:  There’s a sizable gap between what manufacturers need in human capital, and the ability of the labor force to meet those requirements – whether it be older workers, or young workers right out of school.

Vincent Vittorio and Nathaniel McGill, movie directors
“American Made Movie” documentary film directors Vittorio and McGill.

“We need to provide the apprenticeship training necessary for a new generation of American workers to grow as fast as our technology is changing,” the documentary movie directors contend.

That may be happening at some technical colleges and a few community colleges across America.  But it’s not happening nearly enough if, like me, you hear constant complaints from manufacturing execs about the disconnect between the lack of (even basic) job skills and (increasingly sophisticated) job requirements on the manufacturing line.

Maybe it’s time to look harder at appropriating pieces of the German/Austrian apprenticeship model, wherein talented students are plucked from high school and placed with manufacturing firms for on-the-job training in lieu of college.

In such environments, a structured program of learning and training provides the roadmap for successful transition and integration into the job force.

An apprenticeship may not seem as “classy” an accomplishment as a college diploma.  But a college diploma doesn’t mean nearly as much these days.

What once was a sure-fire ticket to a career has given way to an environment in which half of all new college graduates are unemployed, underemployed, or working jobs for which their degree is irrelevant or unnecessary.

To that half of the young labor force, the near-100% placement/success rate for apprenticeships must seem awfully attractive now.

What are your thoughts about a coming manufacturing renaissance in America?  Please share your comments here.

Is Charlie LeDuff’s Book the Final Word on Detroit and its Social Pathologies?

Phillip Nones Uncategorized , , , , , , , , , , , , , ,
Abandoned Apartment Building in Detroit, MI
Abandoned apartment building in Detroit.

I’ve blogged before about the city of Detroit, surely our country’s “Exhibit A” when it comes to chronicling urban decline.

The saga of Detroit’s recent history is pretty widely known, thanks to a bevy of articles in news magazines, lurid photo essays by prominent “ruin porn” photographers like Camilo José Vergara, and books by author Ze’ev Chafets and others.

Detroit: An American Autopsy, a book by Charlie LeDuffBut the most recent volume, Detroit: An American Autopsy, authored by journalist and reporter Charlie LeDuff and released earlier this year, is perhaps the most impactful of these — which makes it required reading.

That’s because not only is this book the most contemporary one on the subject – with up-to-the-minute references to the city’s most recent governmental follies – but also because the author happens to be a Detroit native.

In my view, Charlie LeDuff is one of the most fascinating reporters in the news industry today, with a background that is hardly common for journalists.

Prior to joining the staff at the Detroit News in 2008, LeDuff’s reporting career included more than a decade at the New York Times, along with a stint as a writer for an Alaskan trade publication. His reporting has taken him all over the country and the world, including the war theater in Iraq.

So LeDuff approaches his topic with all the insights of a seasoned reporter – yet he is not the dispassionate observer. After all, Detroit is his hometown. And throughout the pages of the book, you can distinctly feel the anger, the despair, and the grief the author feels about his city.

Indeed, the saga of Detroit “hits home” in many personal ways for Charlie LeDuff. Consider these points:

  • Witnessing the 1967 race rioting mere blocks from their family home in West Detroit, LeDuff’s parents, like so many other middle-class residents, choose safety for their children, moving out of the city in a matter of days following.
  • LeDuff’s mother’s florist shop, located on Jefferson Boulevard on the east side of town, is broken into multiple times – with a final act of vandalism forcing her to move to a suburban location. (The site of her former shop is now a pile of rubble.)
  • Battling chemical dependency, LeDuff’s only sister is sucked into a life on the streets, becoming a prostitute and dying one evening while leaving a dive bar on the city’s far west side.
  • LeDuff’s three brothers become casualties of Michigan’s worsening business climate, bouncing from one dead-end job to the next – each one a step lower on the economic ladder as meaningful employment for high school-educated workers dries up.
  • LeDuff’s niece, barely 20 years old, dies from a heroin overdose.

The author may have been drawn back to Detroit because of the pull of family. But what he discovers is an urban environment that has a corrosive effect on all who come into contact with it. Although he moves his wife and young daughter to a suburban enclave just outside the city limits, LeDuff finds that no one is immune to its negative effects.

In the pages of his book, LeDuff reports on the unscrupulousness and/or incompetence of entire classes of Detroiters: politicians, government bureaucrats, street hustlers, business leaders (the car company executives come in for particular opprobrium) – and even the artist community.

But the author is also quick to point out that most Detroiters are simply attempting to survive in an urban environment that is so dysfunctional, so stress-inducing, that civil behavior is nearly impossible to practice.

During his time at the Detroit News, Charlie LeDuff would pen many columns exposing the squalor and corruption he witnessed in his city. For that, he received many an irate phone message or e-mail missive lobbed his way, criticizing him for failing to spotlight the “good” attributes of Detroit.

In his book LeDuff has this to say to those people:

“[They] complained that I was focusing on the negative in a city with so much good. What about all the galleries and museums and music …? What about the good things?

It was a fair point. There are plenty of good people in Detroit. Tens of thousands of them … There are lawyers and doctors and auto executives with nice homes and good jobs and community elders trying to make things better, teachers who spend their own money on the classroom, people who mow lawns out of respect for the dead neighbor, parents who raise their children, ministers who help with funeral expenses.

But these things are not supposed to be news. These things are supposed to be normal. And when normal things become the news, the abnormal becomes the norm. And when that happens, you might as well put a fork in it.”

Charlie LeDuff is now a reporter for WJBK, the Fox affiliate TV station in Detroit. He took over for Brad Edwards, another newsman whose hard-hitting-yet-poignant stories of a city on the edge of the abyss have moved many and made both reporters so respected – even loved — by the public.

It’s a journalist’s duty to report the news, of course. But sometimes he or she can attempt to do more. I have no doubt that Charlie LeDuff felt a certain sense of “mission” when he returned to his hometown.

But traces of any significant progress are hard to find, five years on. After a string of corrupt mayors, Detroit elected the affable but ultimately unsuccessful ex-NBA player and businessman Dave Bing to the office.

Today, not only have city operations been turned over to a state-appointed administrator, Mayor Bing announced this past week that he will not be running for reelection. And so it goes …

LeDuff evokes this sense of “no hope left, writ small” as he describes the family scene at the burial of his 20-year-old niece:

“[I] looked up at the old people around the grave and considered the great turmoil of human history that they represented. My mother, her ties to the Native people of the Great Lakes and the drifting whiskered French settlers. My stepfather, whose people emigrated from the port of Danzig, the long-disputed city claimed by both the Germans the Poles, which ignited World War II. My niece’s other grandparents, hill folk who hailed from Appalachia and traced their heritage back to the Lowlands of Scotland and the warrior William Wallace.

People from all corners of the earth who came to Detroit to work in its factories and make it one of the most significant cities of history.

I looked up over the grave and surveyed the heaving sobs of my nieces and the strained faces of my brothers. Jimmy looking for work. Frankie on the verge of losing his house. Billy in the screw factory. Somehow, the city of promise had become a scrap yard of dreams.”

Yet then … LeDuff adds this glimmer of light:

“But fighters do what they do best when they’ve been staggered. They get off their knees and they fight some more.”

The question is, how much longer can Detroit go on fighting?

The American middle class may be squeezed … but why?

Phillip Nones Economics, Employment, Social Commentary , , , , , , , , ,

Middle class under attackIn recent years, there have been numerous analyses and articles addressing threats to the middle class in America, and who or what is to blame for what’s happening.

The latest article, The American Dream, Downsized, is written by Amy Sullivan, a writer and former editor at TIME and Washington Monthly  magazines and was published in the National Journal magazine this past week.

The statistics presented by the author – including those showing the middle class “squeeze,” a smaller proportion of Americans falling within the middle class as compared to poorer or richer segments – are indeed sobering.

But in reading the article, I also got the sense that the premise of the argument – that the economic conditions in the America of 50 years ago represented the “norm” – may be flawed.

What if the conditions today represent the “norm” and the conditions back then are the ones that were “skewed”?

I shared the article with my brother, Nelson Nones. As someone who has lived and worked outside the United States for years (in Europe and Asia), to me his thoughts on world economic matters are always worth hearing because he has the benefit of weighing issues from a global perspective instead of simply a more parochial one (like mine).

Here’s what Nelson shared with me:

I have a very no-nonsense view of what’s happening to the American middle class, and why. The American Dream was “real,” the article says, during the post-World War II prosperity of the 1950s when a “middle-class family bought a house, put a car (or two) in the driveway, and raised children who ran around a safe neighborhood and later went to college with their parents’ support.”

This characterization paints a scene that is peaceful, tranquil, secure and prosperous – but it completely misses a couple salient points:

  • The Cold War – The 1950s were also a time of fallout shelters and fighting Communism. It’s easy to forget all that.
  • The Communist and Socialist countries – two of which today are part of the “BRIC” countries (Brazil-Russia-India-China). Russia (then the Soviet Union) and China barricaded themselves and their vassal states behind the Iron and Bamboo curtains – and slowly but inexorably starved themselves to death economically. The other two, Brazil and India, barricaded themselves to a degree as well. As an example, they threw out Coca-Cola and forced the locals to drink the disgusting domestic variants Campa-Cola in Brazil and Thums Up in India, just to thumb their noses (no pun intended) at those wicked ex-Colonialists and American capitalists.

In other words, while income equality and middle class prosperity were peaking in America between 1945 and 1970, the situation at the global level was exactly the opposite.

As we all know, the political and economic barricades fell quickly in late 1980s and early 1990s. The effect is precisely what political economist Adam Smith predicted in The Wealth of Nations (1776):

“If a foreign country can supply us with a commodity cheaper than we ourselves can make it, better buy it from them with some part of the produce of our own industry, employed in a way in which we have some advantage.”

Not coincidentally, Singapore’s per capita GDP today, at US$50,800 (according to the CIA World Factbook) exceeds that of the United States, at US$48,400. Of course Singapore is a small country and it’s just one example – but it’s a telling one.

I would argue that the American Dream, or at least the ideal of it framed in the 1950s, might have been “real” at the time (people, after all, were buying real houses and cars with real money).  But it was temporary. And it could never be permanent if you believe Adam Smith.

Consider this: Many of the middle-class breadwinners were union workers. Their rising incomes were directly attributable to collective bargaining agreements that American companies could afford to enter into because they had little or no foreign competition and hence could pass rising costs on to the very consumers who benefited from those agreements.

Today, some of those same companies are bankrupting themselves just to rid themselves of unions and the unfunded pension liabilities they took on board when the good times were rolling. And why is this? Because they have to fight foreign competition just to stay alive.  (This CNBC article, published just a few days ago, says it all.)  

I would also contend that today’s “scaled back” notions of the American Dream might reflect the more realistic (less idealistic) views of the vast number of immigrants who have come to America since the barricades have fallen – many of whom fall squarely within the article’s definition of “middle class” (which I calculate to be $13,725 – $39,215 per year per capita, using the per-household figures quoted in the article divided by the current average U.S. household size).

For these immigrants, the assurance of being able to “hold on for dear life” is actually a big step up from the mayhem, extortion, hidebound traditions and general hopelessness that often run rampant in the countries or societies they’ve fled.

It astonishes me that this National Journal article hardly mentions any of the above: The word “foreign” can’t be found anywhere in the article … “immigration” appears only once in the context of how Hispanic immigration is exerting a “steady downward pull on income” … and “union” is stated only once in the context of children in the 1950s skipping college and entering the workforce with a “secure, often union-protected job.”

How could the article’s author have missed what is so obvious? I’m quite sure she’s not so ignorant … so she must have an agenda. But if that’s the case, and if I were to believe her agenda-based screed, what would that make me?

Just like author Any Sullivan, my brother Nelson has a strong point of view about the current situation of the American middle class!

As for me, I think the article’s statistics are real. But I also believe that post-war conditions in America were an anomaly borne of special circumstances. For the author to treat them as the “baseline” for evaluating the “fairness” of all that has come since … reveals a serious flaw in the underlying argument.

Besides, what’s “fair” today versus what was “fair” 50 years ago takes on a completely different complexion based on where one lives in the world!

OK, readers:  Have at it. What’s your perspective? Please share your thoughts here.

America’s “Summer of Funk”

Phillip Nones Uncategorized , , , , , , , , , ,
Consumers are in a funk in the Summer of 2012.

How much do American consumers spend in an average day? According to a July 2012 Gallup Poll, they spend about $70 per day in stores, gas stations, restaurants and online. (Housing, utility costs and vehicle purchases are extra.)

It turns out that this figure is a pretty big drop from the average daily spend of $104 Gallup found in 2008.

That meme we’re hearing on the campaign trail about people’s livelihoods having shrunk over the past three or four years? Evidently, it’s a fact.

And Gallup is also finding that upper-income Americans have undergone the same degree of spending reduction as everyone else. Their spending is now down to about $116 per day.

Evidently, confidence in the U.S. economy and the stock market’s uneven performance have taken their toll on the psyche of even the affluent classes in America. And Gallup isn’t the only organization charting this. Ipsos MediaCT is finding a similar story in its surveys.

Last week, Stephen Kraus, an Ipsos senior vice president and author of several books on the upper-income sector of society, wrote: “Widespread uncertainty plays a role in a fundamental fact of today’s “affluent” marketplace. For the most part, affluents today simply don’t feel affluent.”

Krauss continues, “This feeling isn’t new; for most, it is part of the lingering hangover of The Great Recession. But it is particularly pronounced in the summer of uncertainty.

Krauss concludes his remarks with this rather gloomy observation: “It’s a summer of uncertainty indeed – about the economy, about the future, and even about one’s own standing in today’s financial hierarchy.”

Reading these very latest reports on the level of uncertainty – even resignation – that people have about the economy, it underscores the collective funk the American people seem to be in as the 2012 presidential campaign grinds on inexorably to its conclusion.

Perhaps once Election Day has come and gone, Americans will “snap out of it” and begin to feel brighter about the future.

Perhaps. But don’t hold your breath.　

Rude Awakening: Google to Cut Jobs

Phillip Nones Uncategorized , , , , , , , , , ,

Google is cutting 4,000 jobs at MotorolaNow here’s some interesting news: Google is downsizing – the first time it’s ever done so.

More precisely, it’s cutting ~20% of the workforce of its Motorola subsidiary, which it acquired earlier this year. And most of those job cuts are happening in the United States.

While Google is known for being a money machine, the fate of its Motorola subsidiary has been far less stellar. In fact, Motorola hasn’t turned a profit in 14 of its last 16 quarters.

Motorola proves how dicey the world of hardware is compared to the search advertising realm where Google makes more than 90% of its revenues and profits.

The fact is, despite Motorola’s strong lineup of smartphone models like the Droid RAZR and RAZR HD, it’s just very difficult to turn a profit on the hardware side — especially in the entry-level mass market where Motorola has also attempted to compete.

But more to the point: Motorola’s subsidiary is one industry sector where Google isn’t in the driver’s seat. By contrast, it’s easy to be a veritable profit machine when you control 65%+ of the billions that make up the search marketing world.

Recently, it’s clear that Google has been sniffing around to add other products and services and not be so dependent on one silver-bullet business category.

The big question is … what does Motorola’s experience portend for future forays by Google into new segments where the company doesn’t command an overwhelming advantage?  Or, will it spend more of its capital on search-related acquisitions, like the just-announced absorption of Frommer’s travel-related media properties?

Welcome to the real-world competition, Google.

Over-Hyping the “Made in China” Situation?

Phillip Nones Uncategorized , , , , , , , , , ,

Made in China ... as threatening as we think?“Made in China” aren’t the most welcome-sounding words to American workers these days. Many of us believe that the plethora of goods it manufactures means the People’s Republic of China is grabbing scads of U.S. jobs as well.

Recent reports about Apple’s scads of assembly facilities in China only add fuel to fiery debate … and at least one presidential candidate is making the loss of manufacturing jobs a key component of his campaign rhetoric.

So I was surprised to read the findings of an analysis performed by economists Galina Borisova Hale and Bart Hobijn which contends that goods and services from China accounted for only ~2.7% of personal consumption expenditures in the United States in 2010.

What’s more, less than half of that amount reflected the actual cost of Chinese imports. The remainder went to American businesses and employees transporting and selling the products carrying the “Made in China” mark.

The report, which draws on data published by the Bureau of Economic Analysis, U.S. Census Bureau, the Bureau of Labor Statistics and other sources, states that total U.S. imports in 2010 amounted to about 16% of total Gross Domestic Product.

More specifically, imports from China amounted to ~2.5% of GDP. Moreover, nearly 90% of consumer spending in the United States during 2010 was on American-generated products and services.

Of course, services – which comprise about two-thirds of total spending – are mainly produced locally. And when we consider items like automobiles and electronics, the picture is different: One-third of U.S. consumption on durables goes for goods that are made outside the country.

It’s not hard to guess which products are the ones most likely to be imported from China; they’re primarily electronics, furniture, clothing and shoes. Offshore sourcing is most pronounced in apparel and shoes, where more than 35% of U.S. purchases in these categories were of items labeled “Made in China.”

No wonder so many clothing mills in America have gone the way of the dodo bird.

Without dismissing the impact of overseas manufacturing on manufacturing jobs in the United States, the broader statistics suggest that any long-term drop in American manufacturing employment is due to more factors than merely Chinese labor competition. Undoubtedly, advanced manufacturing technology and productivity gains per worker have a lot to do with it as well.

It looks like the “Made in China” debate may be another example of how the issues and challenges we face in the world are rarely ones of “black and white” … but rather “shades of gray.”

The employment cunundrum: “Workers, workers everywhere … and ‘nary one to hire.”

Phillip Nones Uncategorized , , , , , , , , , ,

Labor shortage in the midst of high unemploymentThese days, conservative estimates are that ~13 million Americans are seeking employment. And yet, more U.S. companies are reporting that they can’t find qualified workers to fill their open positions.

In fact, more than half of American employers surveyed by Manpower Group, a leading staffing group, report that they’re having trouble hiring qualified workers. That’s nearly 40% higher than what was reported in the company’s 2010 survey.

The most obvious reason for the incongruity is the disconnect between the background and capabilities of available workers and the skill sets companies are seeking.

But there may be a few other factors at work as well. Spokespersons for Manpower Group suspect the following:

 The 2009 recession made it very easy for companies to find qualified candidates … but those days are now over.

 Employers are less willing to invest the time or dollar resources to train new employees for specialized or unique work.

 Employers may be less willing to hire candidates from outside their area so as to avoid incurring relocation expenses … even as job candidates may also be less willing to consider moving because of the soft housing market.

Melanie Holmes, a Manpower vice president, puts it this way: “Employers are getting pickier and pickier. We want the perfect person to walk through the door.” She and other specialists contend that companies need to get more realistic about the situation and react accordingly.

The Manpower survey results were part of a large global research study of ~40,000 employers worldwide. The trends it sees of greater difficulties in hiring were clearly evident in several other countries, besides just the U.S. (India, U.K. and Germany), whereas in China the trend was just the opposite.

More results from the 2011 Manpower Group survey can be found here.

Adult Children Today: Dependency Redefined

Phillip Nones Uncategorized , , , , , , , , , ,

Adult kids financially dependent on their parentsThose of us with children who are recent college graduates might wonder if we’re the only ones continuing to support them financially in a big way.

It turns out, we’re far from alone. In fact, a recent consumer survey by Vibrant Nation, an online community focusing on Baby Boomer women, finds that parents are supporting their adult kids (defined as up to age 30) in all sorts of ways:

 Paying for cellphone service: ~60% of parents are supporting
 Paying for insurance: ~53%
 Paying for rent: ~39%
 Paying for non-school related trips and travel: ~38%
 Paying for clothing: ~36%
 Paying for cars and computers: ~33%

Looking down this list, it’s no wonder so many “empty nesters” feel like their child-raising years are far from over!

[But thank goodness for small favors: At least it’s only a minority of parents who are buying their adult kids automobiles and computers.]

Thinking back ~35 years ago when I finished my college studies, there wasn’t one thing on the list above that my parents covered for me (although they were helpful when it came to loaning me money for the down payment on my first home purchase — barely three years out of school).

So at first blush, it’s quite startling to see these numbers. Then again, considering the ugly employment situation for today’s recent college graduates, perhaps it’s not so surprising after all.

And there’s another interesting twist to the “new dependency” as well. In the past, once adult children left home – financially as well as physically – it was much easier for them to break the ties of parental influence and control. I don’t recall asking my folks for their opinion about much of anything in those years following school.

Today, with kids so financially dependent on their parents for pretty much anything of consequence, it’s much easier for parents to exert that influence.

Let’s just say, our opinions carry a lot more weight.

How about you? In what ways are you continuing to support your adult kids? And is there a downside?