Here is my Wall Street Journal review of Clair Brown, John Haltiwanger, and Julia Lane, Economic Turbulence: Is a Volatile Economy Good for America? Excerpt:
In short, America is not becoming
a nation of part-time Wal-Mart cashiers or burger flippers. In four of
the five sectors studied by the authors–semiconductors, software,
financial services, retail food and trucking–the growth rate for
full-time jobs exceeds the growth rate for jobs in general. (Retail
food is the exception.) Separate research, conducted by Ann Huff
Stevens at the University of California, Davis, shows that the average
tenure for employed U.S. male laborers has been broadly stable over the
past 35 years.Insofar as individuals move to
lower-paying jobs, the turnover of firms is not the driving cause. The
most original proposition in "Economic Turbulence" is the claim that a
big part of measured wage declines derives from job downgrades within
firms–sticking with the same employer but moving from, say, mid-level
manager to gopher.
One person I worked with made the decision to return to craft from management at his then employer. His nominal wage was much lower than the straight salary, but he started getting overtime for all those extra hours, and he actually made more.
Not demotions. Annual wage increases of less than the cpi.
sammler,
There have recently been numerous demotions in the passenger airline industry.
When I worked for Fedex, always a profitable company, first line managers were occasionally demoted if they failed to maintain leadership within their workgroup.
I have also known managers who, growing tired of the grind near the end of their careers, elected to step down to non-management positions.
I certainly agree that economic turbulence is a sign of desirable creative destruction, but there are downsides. For instance, turbulence manifested as a large revenue variance will force businesses to keep fixed costs at a lower fraction of average revenue. Fixed costs include wages and salaries.
I think this may go a long way towards explaining the (argued) failure of wages to track productivity. Workers are accepting higher risk (laid-off in a bust year) with little prospect of reward (little bonus for a boom year). If so, I’d rather fix the risk/reward sharing than “fix” the turbulence.
I haven’t read the paper, but I also find the idea about demotions surprising. I wonder if they are acounting for measurement error in their data? If someone is falsely reported to be more highly paid then they are, but then this is later corrected, this might look like a demotion. It’s probably not very common, but then neither are real demotions.
Don’t forget, these are “the poor.”
My BIL took a lesser position, was tired of dealing w/the politics.
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thanks admin
certainly agree that economic turbulence is a sign of desirable creative destruction, but
certainly agree that economic turbulence is a sign of desirable creative destruction, but
Thanks so much for this! This is exactly what I was looking for
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