Kevin Drum writes of a post by Yves Smith at naked capitalism about working:
The problem with having narrow skills, like being able to structure CDOs, is that if you lose your job, your employment prospects are limited. Unless you have personal connections that are willing to give you a chance at something where your skills might be distantly relevant (say being the CFO of a small company), most employers, especially large companies, want to hire someone who is already doing precisely what the job calls for. I've seen enormously talented senior people (and I don't mean from Wall Street) unable to land jobs because employers write the job specifications so narrowly.The impetus for Smith's post is the current situation on Wall Street, where jobs are disappearing and well-paid MBAs are having some trouble finding work at the same salaries. Smith makes it clear in comments that he is not limiting this discussion to finance jobs, going on to say:
Without thinking very hard, I can name at least 20 people, all over the age of 40, all with good backgrounds and good reputations, who were unable to get another job at anything remotely resembling what they did before. Some tried consulting, one bought a franchise business, which means they all turned to forms of self employment. Many retired at a more modest standard of living than they would have liked (those tended to have a working spouse that made this option more viable).Is any of this news to anyone? I guess so. I have lived so long in the gutter of "well-degreed, well-experienced, over 40, and underemployed" that I find it hard to understand there is anyone who doesn't know about this now. But we still see posts like this, and we still hear from people who think the key is ever-more education for young people, while we ignore the plight of those who have proven abilities.
Here's something I've tried out of desperation: Tell the hiring manager that your salary expectations truly are open, that you understand what the market is about, and that your previous compensation has nothing to do with the next job. Big surprise - that doesn't work.
At the same time, we hear business leaders lamenting the impending retirement of the baby boomers, which is not a real concern. It's just another smokescreen to cover up the desire to outsource and offshore, to claim that American workers are no good. As long as we accept this garbage, it will continue, and we will continue to utilize some of our best talent (even if it doesn't have the 3.4 years of Java specified in the job description).
6 comments:
You allude to frustration as a "well-degreed, well-experienced, over 40" underemployed person. I appreciate that you describe your own desperation. I will tell you how my own compensation negotiations work: I have a rate. It's a number. If I can't get a job at that rate, then I have a lower rate. It's one dollar less per hour. I also have another rate, it's one dollar more per hour. If I can't get a job at rate x, then I'll go with x-1. If I have a job offer at x, I'll quote the x+1 price to the next inquirer. I negotiate 2 or 3 rates per year using this method. I don't share compensation history because it has nothing to do with the job at hand. Sometimes I will share such details but mostly just with recruiters who aren't hearing my firm rates, i.e. trying to chisel a few dollars off my rate.
Outsourcing and offshoring are rooted in the most basic capitalistic impulses. It can be daunting to compete in a global labor market, but I am not aware of an alternative. Best of luck in your efforts.
John: Appreciate your comments and encouragement.
I think the problem is more in the screening than in the negotiation part. When companies pre-reject a candidate because they impute a salary expectation, the negotiation process never even happens. And I think that's bad for the candidate and, ultimately, the hiring company.
Point well taken, Androcass. Thank you for writing about this issue. I too, find it hard to believe that during this election cycle, a great many Democrats, in particular, are either oblivious to this problem or worse -- choose to be.
Whereas John offers a handy consultant's negotiation formula, I am sure you are no stranger to creative negotiation strategies (as you describe here) as many professionals increasingly are in this race to the bottom as disproportionate numbers of educated white collar citizens can no longer get past the gatekeepers.
impute a salary what? i think i see what you're saying: see an old cat and figure they charge too much? i want to believe you both, but do not. yes there are global labor markets. that fact alone does not favor either buyers or sellers, because there's still work to be done. i am 38. i'll get to see if my compensation drops over time. it could be some sort of ageism, or just changes in the market. i remain skeptical that "educated white collar citizens" are experiencing underemployment any moreso than everyone else in this particular economic moment of history.
a "race to the bottom" seems to describe consumer culture more aptly than the impact of global labor arbitrage. i know you don't mean it, but it's an insulting turn of phrase. people willing to work for $5/hour are motivated. they're also empowered as consumers, growing markets. i get unsettled at the impact on the planet, and see that as a race sometimes to a very real bottom. but India can package CDO's and Manhattan's having the second purge in a decade? business as usual that doesn't represent a diminished demand for skilled labor, or oversupply of skilled laborers.
my view's still: let the market set your rate. if you don't like it, change something. nobody's saying it's anyone's fault. nor is anyone saying it's utterly fair. exploitation of labor is kinda the goal, insofar as labor is free to choose. i know i sound like some kind of Friedmanite. I stand Miltoned!
2truthy: And the gatekeepers are many and odd. From the "search professional" who will ignore job requirements to get a warm body in the door (I've had people send my resume on jobs that, had they been honestly represented, I would have said no to), to the screening computer programs, to the HR rep who is only barely connected to the technical side of the company, to the hiring manager who is hiring without talking to his team about what they really need, I've seen them all. Each one of these things is an impediment to getting the best person (as opposed to the best resume) in the seat, doing some real work.
Anonymous: The impute business is absolutely true, though you reject it. Here's the mechanism: you hire someone with a wealth of experience for a mid-level position, you have to fear that someone else will come along and offer that person something close to what they were making before. You lose that person, you start the search over, and you look bad. So you hire someone who is an "exact" fit.
As for your argument that there is always work to be done, that is true in every market, and hasn't led to inexorably upward movement in compensation or worker power.
The reason I use a term like "imputed expectations" is to avoid the topic of whether ageism is at work. I don't know if it is or not; what I do know is that the conversation has very cleverly been steered to the competence and compensation of new grads, and few want to talk about the market for experienced hires. There is almost certainly some ageism in that, and there are certainly market changes at work. That's why this is such a complicated topic, because so many changes are happening at once, and so does not allow simplistic conclusions on anyone's part (and I, at times, tend toward those).
Not that it is my job to defend the quite articulate 2truthy, but the term "race to the bottom" is not insulting. It simply refers to the bottom of the salary structure, drawing no conclusions about the value of the people or the cultures involved. I have stated in the past that I support the elevation of the economic status of various people around the world; I just think that Americans should be aware of what's coming, instead of hiding their heads in the sand.
The last point in the second paragraph is correct, but incomplete. If you have a "stable" market in American workers packaging CDOs for the American market, and those jobs are moved overseas, there certainly is both a diminished demand for labor and an oversupply of those workers, in the American labor market.
You can argue that that implies greater efficiency, or lower ultimate prices for consumers, or greater opportunities for the labor of developing nations, and that those are good things in the greater sense. I see those benefits myself. But that doesn't mean that it doesn't provide real challenges for American workers (and, clearly, not just in the CDO packaging market).
It is also fair to inquire where the gains from this are going. There is evidence that consumers have seen scant benefits from globalization. Chinese factory workers may be better off at 60 cents an hour than they would otherwise be, but that doesn't mean that's what they "should" get (and I well recognize the challenges of determining what that statement means). There is evidence that the owners of capital, and, even more so, the managers of capital, are benefiting from these trends. Too much so? I don't know, but a democratic society gets to work on that together, if democracy works as it should.
Letting the market set everyone's rate works only as well as the market does, and even the most ardent marketeers (yes, even Friedman) acknowledge that the assumptions that are the underpinning of market theory are not met in the real world. Exploitation of labor is not the goal of a well-ordered society, it is the goal only of a minority of that society. Other institutions are supposed to do the job of creating a true "Free to Choose" world.
As for Professor Friedman, I am very familiar with him. He came along at a time when his message was needed, when we almost certainly were looking to the government too much for solutions. But he was not 100% correct. I still recall his criticism of India protectionism, and he turned out to be wrong there. India took the gains from that (added to some well-meant assistance from developed countries) and used their government, yes, the government, to build the educational and infrastructure that has allowed them to become such a player in the world.
Absolutism tends to be static, dynamism requires flexibility. Any dogma, maintained past its shelf life, will fail to adapt to a new environment. That's as true of pure free-market principles as it is of any other system. The goal should not be to ping-pong from one extreme to the other, but to have a core set of beliefs that retain opportunities for operational responses.
"Letting the market set everyone's rate works only as well as the market does, and even the most ardent marketeers (yes, even Friedman) acknowledge that the assumptions that are the underpinning of market theory are not met in the real world. Exploitation of labor is not the goal of a well-ordered society, it is the goal only of a minority of that society. Other institutions are supposed to do the job of creating a true "Free to Choose" world." -A.
Many good points here, Androcass.
For one, globalization has ended up providing negative benefit to the American economy while it has positively served a relatively very small, isolated and smug management class responsible for these ostentatious McMansion communities festooning the hillsides here in the once picturesque SF Bay area and cementing over every last inch of the greater Chicago area (my hometown) from Barrington to Lake Forest to Park Ridge to west of Wheaton and beyond. I happen to live in one of these places and my neighbors, I am afraid to say, would more likely run you over than help you out in an earthquake or some other 'natural disaster' if there wasn't something in it for them. So much for that quaint notion called THE SOCIAL CONTRACT.
anonymous: Androcass correctly notes that "expoitation of labor is not the goal of a well-ordered society." Here's something to sleep on:
Contrary to your tired dictum of 'let the free-global market sort it out', let me remind you that the earth has it's share of dwindling natural resources despite the globe's rapidly unsustainable pupulation growth. What does this mean? All politics is local. Exploitation of labor has a finite point: it's called slavery, my friend. That's what this thinly disguised sham of a "great labor shortage" bullshit is all about -- driving out talented American citizens from their communities and driving down wages with 'no end in sight.'
So wake up and smell the curry. And no -- I'm not PC so no apology need apply.
Again, great post, Androcass.
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