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News Flash! HR Causes Talent Shortage!

Hold the presses! I’m going to show you how HR created “the talent shortage.”

I recently did a Talk to Nick consultation that illustrates why employers aren’t filling important jobs — while they complain there’s a talent shortage. The real talent shortage is in corporate management, where hiring is treated as an expense rather than an investment. Here’s what crummy job offers cost employers.

In the October 7, 2014 Ask The Headhunter Newsletter, a job seeker turns down a lousy job offer:

I heard from my old employer today. I got an offer that’s approximately the same amount I was getting paid when I left five years ago!

Background

low-offer“Mark” (not his real name) is a successful engineer who asked me for help in 2012 — to land a better-paying job elsewhere. He succeeded, and since then his engineering skills have grown and he has developed expertise in operations and quality assurance. This talented R&D engineer can now convert technically challenging concepts into products ready for production. His skills and abilities are far more valuable today than they’ve ever been. He contacted me again a few months ago when a manager at his old company encouraged him to apply for an R&D engineering position — in other words, to return.

After an hour’s consultation with me, Mark had a series of interviews, including a meeting with the manager who knew him so well the first time around. Here’s what Mark reported happened next.

Mark’s Story

I heard from my old employer today. I got an offer that’s approximately the same amount I was getting paid when I left five years ago! I declined to state my current salary in the screening interview, and instead explained the salary range I’d expect for an engineer with my experience. The personnel jockey replied that, “You know you will have to provide this at some point to move forward.”

I suspect the HR people pegged me based on my last known salary. If I had stayed with this company for five more years, I would be making more than the offer — a figure around my current salary.

I negotiated with the hiring manager, but HR handled the offer. There was some motion on their side, but only in the form of a one-time check that had large strings attached. The deal fell through. Companies succeed in spite of themselves!

The reasons why they could not improve the offer were as bizarre as some of the excuses I used to hear on my personnel reviews about why I could not be rated higher. In my conversations with the hiring manager, he stated that they recently lost a good employee in much the same way they lost me. I just chuckled. Thanks again for your assistance.

Nick’s Reply

The McQuaig Institute (a developer of talent assessment tools) recently polled over 600 HR professionals. The #1 reason they lose job candidates — reported by 48% of U.S. companies — is because the offers they make are too low.

HR knows where the talent shortage comes from: Lousy job offers.

Peter Cappelli, a human resources and labor researcher at the Wharton School, confirms that “employers can’t get candidates to accept jobs at the wages offered.”

Employers know exactly what the problem is, but they play dumb.

Cappelli points out, “That’s an affordability problem, not a skill shortage. A real shortage means not being able to find appropriate candidates at market-clearing wages. We wouldn’t say there is a shortage of diamonds when they are incredibly expensive; we can buy all we want at the prevailing prices.”

loserEmployers today refuse to pay market salaries and wages, then blame the labor force. (See How to decide how much you want.) That’s how HR — which took control of your job offer — lost you, along with other employees, and created the talent shortage at this company. This is how HR turns companies into losers.

It can be hard to swallow the reality that a company just isn’t going to make a prudent decision when it makes a ridiculously low job offer. I can’t tell you how many times I’ve advised clients to raise offers — after I’ve shown them what it’s going to cost to leave work undone. Crummy job offers also cost employers their reputation — in their own professional community when word gets out that their offers are too low.

Many just don’t get it. Employers incorrectly view hiring as an expense rather than an investment with an ROI. The great irony is, the actual extra dollars spent on higher offers are almost irrelevant when compared to the value the new employee will create. The more subtle lesson that some companies — but not most — learn is that enhancing an offer can make a new hire happy, more loyal, and more productive. Money doesn’t buy love, but it can buy better work.

However, Cappelli points out that corporate accounting systems do not track the cost of leaving a job vacant, making it appear that the “cost savings” of leaving the job empty translate into “profit.” (Yes, I’m still laughing my A off at that one. Call it revenge against the bean counters!) A crummy job offer costs an employer — and our economy — quite a lot.

Employers are shooting themselves in the foot when they make silly job offers. An engineer plus five years’ more experience, plus expertise translating designs into buildable, quality products, plus the maturity to work across corporate departments is worth more than the same engineer five years ago.

Except to a cheap employer with a serious talent shortage in the executive suite.

Good for you for rejecting a lousy offer. I realize not everyone can afford to do that. (See Turn down that job offer.) I think such jobs get filled because employers wear applicants down and convince them that “this is the way it is, and you should accept it.”

In Pursue Companies, Not Jobs, I suggest that you (or anyone) should pick a good company, take the best job you can get there, and navigate the company once on board to get to the jobs you really want in time. It’s all about the quality of the company and the people. Salary is such a small component of a company’s business, yet HR is so focused on it that enormously bad business decisions are made over a few bucks. (Meanwhile, HR blows billions on job boards, applicant tacking systems, and other automated “tools” to help it make more low-ball offers to save money… gimme a break!)

Your old boss confessed to you what crummy salaries and job offers do: They make talent disappear. So you don’t need a news flash — you already know.

Thanks for sharing the outcome. Seriously – move on to a better opportunity. Start picking your next target, and be ready to express your desired salary range, and to negotiate a fair compensation package. You’ll learn more in Fearless Job Hunting, Book 9: Be The Master of Job Offers, and in Book 7: Win The Salary Games (long before you negotiate an offer).

Have employers created the talent shortage? Are they paying for crummy job offers in ways they don’t realize? Have you been smacked with a ridiculous offer? What implications do you think this has for our economy?

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79 Comments
  1. This article says it Nice: “All of the characteristics HR looks for in a job candidate are the polar opposite of what enlightened leaders seek in new talent. While HR is tediously focused on making certain that candidates “play well in the sandbox,” strong managers want those who don’t venture near the proverbial box. ”

    https://www.linkedin.com/pulse/article/20141006125226-10136502-why-you-must-lie-on-job-interviews-and-what-you-must-lie-about?trk=tod-home-art-list-large_0

    (Yes, most articles on LieIn are crap, but sometimes needles of gold are within the haystack).

  2. Nick-

    Spot on (you know I’ve also argued this!).

    Another thing that I’ve been hammering on in some of the interviews I’ve gone on is location, location, location. I just had a company say “No thanks!” – and that is their right, of course.

    During the interview I asked my “Am I A Fit?” question* and got told their only concern was that I might get bored. I hammered on the fact that the place is, literally, 10-15 minutes away from my home; that’s valuable to me too and a huge incentive to not go searching for something else.

    * http://davidhuntpe.wordpress.com/2014/01/11/am-i-a-fit/

  3. Here is some brain food for this morning.

    If you are hiring a highly trained professional at a 100k salary, and use a recruiter, you pay about 50k in fees on hiring.

    If you charge your managers with HIRETAINING his or her group, how much better candidate will you get for an extra 10k per year over the next 5 years instead of spending it on recruiters?

  4. Those who do no real work, producing nothing of real worth except orderly piles of paper, ought to be relegated to the back room stacking paper.

    Now, that’s a little unfair, as the problems relating to benefits maintenance and legal compliance require a skilled professional.

    The problem is extending them into areas of functional decision making, where the creative future of an enterprise is at stake. Doing so, I assert, is simply the work of lazy leadership.
    But yet, it’s done again and again. And candidates capable of doubling the size of a business are disqualified over HR’s lack of compensation research, and inept negotiation.

  5. @Jim Jarvis you wrote, “Those who do no real work, producing nothing of real worth except orderly piles of paper, ought to be relegated to the back room stacking paper.
    Now, that’s a little unfair,”

    I do not find that unfair I find that statement an accurate assessment of most HR departments. I could not have said this better myself.

    @ VPSales you wrote, “…a highly trained professional at a 100k salary”

    I do not know a highly trained professional who is going to take 100K.

  6. Wow–talk about stupidity (and arrogance) exhibited by HR who offered a potential employee a lower salary in order to justify “saving money.” And, then told the candidate they had to provide current salary in order to move forward.

    The hiring manager needs to have a conversation with senior leadership to explain how their company’s HR cost them this candidate and probably others and then show how leaving work undone affects the bottom line.

  7. The only, and I repeat: the only way the job market will change is if job seekers grow a backbone, and accept work that is appropriate for them, including appropriate pay. Nick, you are telling it like it is. I turned down some abysmal job offers during the last several years and have survived with temporary work/PT/freelance work that paid a decent wage and earn much less than I once did. Just recently, as the economy is starting to lift out of its coma, I have networked into some interesting and well paid (still freelance) work with a young and growing company. They like my ability to turn work around quickly, my versatility and I credit some of that with the long trek through the weeds the last several years. When you have to get creative to find work, you turn yourself into the entrepreneurial type that many start-ups and growing companies want. I believe I am forging a new career in a new field.

    Too many people have pulled in their ears, taken too much garbage and have operated out of fear. This plays into the hands of the low-ball employers. Many companies are still sitting on piles of cash and refusing to hire at appropriate wages. The “qualified applicant” shortage is baloney and has been a tool to demoralize job seekers and drive very overqualified people to take miserable pay.

    No, everyone can’t afford to turn down poor job offers. But everyone can ask themselves, “What do I really want and what I am really worth?” Ask yourself that question over and over, and you will find it easier to see good opportunities and reach out to new people.

    Thanks for this blog and giving many of us inspiration and a forum to share a few insights, as we plow our way through the weeds.

  8. @VPSales:

    “HIRETAINING”. I like it. :)

    I don’t need a song and dance, I don’t need to be wooed and wined and dined (ok, maybe that’d be nice).

    Realistically, there’s missing feedback. If companies can’t fill jobs, something SHOULD be telling the higher-ups that there’s something awry.

    For ANY company need – people, materials, etc. – if there is a shortage of a needed thing, they take action.

    Nick is spot-on. People are investments, not costs. My skills have generated cost savings and revenue WELL in excess of my salary/benefits; I am sure the same can be said of most readers here. Tell an investor that he’ll have a ROI of > 100% every year, he’ll slit his own throat to get that kind of payback. And yet companies worry about a few thousand dollars here or there…

    What’s that definition of insanity again?

  9. @Survivor:

    One of my favorite sayings is by Abraham Lincoln, to the effect “If you want to test a person’s character, give them power.”

    It’s an employer’s market, and what you wrote boils down to the employer’s knowing that the pendulum has swung their way – and taking full advantage of it.

  10. I am a Hiring Manager for a smallish tech company and enjoy your columns for the breaths of logical fresh air they are.

    I do want to admonish you not to conflate HR with Senior management who actually decide what salary will be offered for a position based on their budgets. I am usually given a salary range for a given position, and told to fill it. There are times when I am thrown a range that the Director of a department found on GlassDoor and told “That is the market rate, fill the position” not taking into account that in a smaller company these positions are often extremely specialized, not the average of anyone who has that title.

    As an HR person, believe it or not, I do my best to preserve and grow the company’s profitability and reputation as best I can, where I can.

    BTW, I cannot agree enough with you about job seekers finding a company that you would LOVE to work for, finding the name of the hiring manager, and personally addressing them in your cover letter. Best advice ever! Should you show up at the front door and ask if someone is free to speak to you? Hell yes! If you do half my work for me, why would I not want to speak to you? If you can’t talk to HR, talk to a manager, or an employee. They are my eyes and ears on the ground and we both have a vested interest in finding excellent people to work with.

  11. @D.C.

    I find it ironic that you (and Nick) advise: find specific companies, work to identify potential hiring managers, network to them with an expression of interest in the company and industry… and nada.

    There are several companies where I would love to work, based on the industry, company reputation, and proximity (short commute). And I’ve located and networked to hiring managers, often with “warm referrals”. And they can’t be bothered to even meet for a 15 minute cup of coffee.

    Any suggestions?

  12. I saw a Fortune 500 fire a VP/ Engineering who’d supervised the design of the only product that company division was shipping; a product which was a market and technology leader.

    The firing was abrupt and rude. The Senior VP who fired him was from an overseas family connected to the industry, but otherwise had no credentials in that product arena.

    He subsequently recruited another immigrant as a Principal Engineer, who had opinions but no relevant competencies — didn’t even bother to learn the house CAD system. The new guy took charge.

    Recently all the companies in that industry have taken to advertising for people like the VP who was fired, but at Senior Engineer levels.

    Obviously there are companies looking for cheap employees, but there’s a version of Gresham’s Law at work as well: not only do some companies fail to recruit good people, but the mediocre people drive out good people.

  13. I’ve seen too many lowball opportunities in the past month or two.
    For a little while, I think I’m going to stop picking up the phone and responding to emails about anything approaching a regular job. Maybe the salaries will go up a little eventually.

    My time is better spent staying in touch with former colleagues, cultivating new ones at events and over coffees, and taking care of the consulting assignments that I have on my plate now. Heck, my volunteer work is more appealing than “being processed” and run through an HR wringer.

    However unappealing self-employment is in the eyes of the HR crowd (“he’s too independent”… “self-employment isn’t real employment” “but, who are you with??”, etc), I don’t care what they think.

    I’m my own man.

  14. One thing I have observed is the companies that tend to cling to below market rates of compensation tend to have a higher than average amount of H1B worker visas taking these measly paying jobs. In other words, these companies would rather pay the Feds and the lawyers more money on H1B workers than pay the workers directly. Even though there are rules and laws to prevent this, this is getting to be commonplace.

  15. People that take low job offers: either have low self esteem… do not know their local job market… have been unemployed for over 6 months… do not have the networking contacts they need to get a better paying job… already have a pension from another job… are worn down from the job hunting process … perhaps could be seen as an unmotivated (lazy?) new job/career seeker… are over age 40, 50, 60 depending on job skills, location etc…

    are willing to work for low salary because job: is 15 min from their house (like 1 man said)…the new job is close to their children’s school or daycare/babysitter and various other factors related to commuting time, distance, and cost of fuel

    Some people also have disabilities that may be invisible yet the ADA will apply to them after they have been at new job for a year.

    In some cities many businesses have laid off employees or left the area, so the jobs some of these people want and or are qualified for are now, few and far between.. unless they are willing to relocate. Relocation is a big deal and depends on the spouse’s job, friends, family and school systems in the current city… many people will not move. Money is not the issue, the other factors are more important.

    mctripat

  16. @VP Sales: I’d like to meet the recruiter who gets paid $50k to fill at $100k sales job! Has the max gone up from a third (usually 20%) and nobody told me? But I’m constantly harping to employers that it would cost far less if managers spent 20% of their time doing their own recruiting.

    @dlms: “The hiring manager needs to have a conversation with senior leadership to explain how their company’s HR cost them this candidate” You nailed it. Complacent managers who are afraid of HR are the real culprits. Who will stand up for hiring the best people at costs that reflect a new hire’s potential contribution? Nobody. This is why smart managers and smart job hunters have virtually NO competition in our economy. Take that to the bank.

  17. I know that this goes counter to Nick’s advice, but during this current job search (9 months) I put my resume on all of the usual job board and tweaked it often to refresh it. It mostly brought in more job board e-mail with a lot of irrelevant jobs (the nature of my work includes a common key word hits many jobs) but still enough relevant ones to help me get my quota for unemployment. Lately I have been getting calls for good positions.

    Less than two weeks ago I got a call from an agency found my resume on-line. The position’s job description would draw on my best skills and let me learn a different aspect of my field. The drawback was a long commute and the position was a temp to hire deal at low pay. Due to finances, I agreed to the interview to test the commute and find out about the boss and working conditions. Turns out that the work involves only the least important and most boring task on the JD for at least 8 hours a day with virtually nil prospect of converting to perm. The boss did not impress me at all. After a 20 minute interview she showed me the door. I called the agency to complain about misrepresenting the position and sending me on a 100 mile round trip for nothing. The kicker is that the company still wanted me but I refused because the job was not as originally presented, too far way and the pay too low. Even when offered a token pay increase I refused. The agency is p***d and I don’t care. Continue unemployment would be better than that.

    While still fuming over this last Friday, another agency found me on that “big” job board and called about a job that hit my skills and would provide room to grow. I asked for my full price (which in line with the market) for a job and they set me up with a phone interview later that day with the hiring manager. The interview went well-the right questions about me were asked and the job description was fleshed out. To cut right to it, my offer letter will be delivered this morning (Tues.) and they want me to start ASAP after the drug test.

    Earlier this year the same position was open. I applied directly and heard nothing. I told the hiring manager who said that she had not seen my resume. I suspect recruiting staff is going to hear about this.

  18. @D.C. Nice to hear from an HR manager who sees hiring as a task for the job seeker and the hiring manager – not just for HR.

    But try as you might, as you point out, top management can gum up the works, too. You’re right – it’s not just HR that does this. But let’s face it: HR’s charge is to make sure this is all done right.

    “There are times when I am thrown a range that the Director of a department found on GlassDoor and told “That is the market rate, fill the position” not taking into account that in a smaller company these positions are often extremely specialized, not the average of anyone who has that title.”

    What do you do when this happens?

  19. Two additional things not mentioned that also bolster the argument:

    1) If a company pays an employee a good salary or better, then the employee is on the hook to return the value invested. If not, then they’re gone! That is one way to look at it.

    2) I use to work for a company that did employee surveys. And many times pay ranked 3rd or 4th in a list of five things that mattered to employees regarding job satisfaction. HR and other managers may take this as if pay is not important. What they lack in understanding is that underpaying a candidate will not keep pay in 3rd or 4th for job satisfaction – it shoots straight up to #1 – tired of hearing managers say pay is not important!

  20. @David Hunt – I can only speak for myself, but If a job seeker makes an effort I will reciprocate within reason. It shows initiative that that person reached out. As I said, if you can’t reach the person doing the hiring shoot for someone else in the company. Find someone that you have a common interest with.

    @Nick – If I am given an unrealistic salary I start the search, and present options to the person in charge of the salary. I can go back with the experience I can find for the salary offered. Sometimes they adjust what they are willing to pay, sometimes they reallocate resources or alter the Job description to fit the salary.

    I do ask on the application what the applicant is looking for – I know you aren’t a fan of that but I need some starting point and can open a frank dialogue with a qualified applicant at the first phone screen rather than wasting their and my time. There may be a position in the future that they would be a fit for, and my foot is in their door now.

  21. Lowballing isn’t just for initial offers:

    About six years ago, my current employer (small family company) made me a low-ish offer (which I accepted), after demanding to see my full salary history (which I refused – TY Nick for giving me the inspiration and courage for that).

    Fast-forward to last year when I had seen only a single 2% pay increase in four years. During this time, I was the serving as lead engineer and department manager of a small subsidiary of the company. With almost no support from the parent company, I increased annual revenue from $500K to $2MM, and net profit from negative $100K to $600K. I insisted upon an appropriate adjustment which I calculated to be recalculating my salary from my initial base plus cost-of-living plus 2% (for performance) for each year plus 10% for the year that I took over the struggling subsidiary.

    The conversation went something like this:

    BOSS: “But that’s like a 23% raise”
    ME: “Correct, but that’s what you would be paying me had you paid me fairly for the last four years.”
    BOSS: “But 23% is more than I’d give anyone”
    ME: “First, this is an issue of fairness, not a specific number. I do excellent work for you, I make you a lot of money, and for four years, you have effectively cut my pay each year. Second, my work currently nets you nearly ten times what you pay me.”
    BOSS: “But 23% is just too much, I’ll give you 15%, and that’s the best I can do”

    Needless to say, this did not endear me to the man. And this year, when he offered no salary increase at all again (despite continued revenue and profitability increases in my division), between that and an increasingly abusive company culture, I decided to hit the bricks. I will do my work for someone with a longer view.

    And my first one-on-one interviews with my target company are scheduled for next week.

  22. @Rich N I’ll elaborate a little on your point #2: Pay is crucial, but only to the extent that is fails to show disrespect for the employee. If the compensation is in line with either the job description/responsibilities or by impact of the work (if that can be accurately measured), then the employee will feel she is compensated fairly, and the “importance” of salary would diminish into nothingness. However, once the employee feels that she is being taken advantage of, salary will rise to number one in importance, even though it’s not the salary that’s really the problem, it’s the lack of professional respect.

    Only when there is real professional respect between an employer and employee can they each focus on doing their best work building something worthwhile. If that respect is damaged, everyone begins just going through the motions, finding it just a little harder to care.

  23. @D.C. It’s nice to have a thoughtful HR person in this discussion. Thanks for explaining what you do when a manager’s budget seems to be inadequate for a position. I think that may give some job seekers some ideas.

    As for asking what the applicant is looking for, I’m a big advocate for that. What I have a problem with is asking for salary history. Big difference. The former ensures you’re both on the same page, or why invest time talking? The latter creates an unfair bias, usually in the employer’s favor and usually puts the applicant at a disadvantage.

  24. @Christopher: Nice job. There’s one other way you might have put it so your boss would understand it.

    How to Say It:

    “Boss, let’s do it this way. I quit. Now, would you pay 25% more than you were paying me, to get me back? If not, would you pay 25% more to someone else who could generate the kind of revenue I did and cut costs as much as I have, or would you pass, and let our competitor hire him? Or hire me? Because I plan to stay in this business.”

    Kinda harsh, but so is your boss telling you you’re not worth a fraction of the profit you’ve already delivered.

  25. @Nick

    I once asked the company owner (at a small business) at a previous employer for a upgrade from consultant to salaried employee status mere weeks after helping bring in just over $6 million in government contracts.

    He said he couldn’t because ‘things were tight’. I mentioned my role in bringing in this money, but he was unmoved.

    Of course, he was also the same guy who furloughed nearly the whole for the month of December a year earlier because of a month-long delay in cash flow from another government contract… and then asked us to come to his Christmas party while we were doing a mixture of working for free, spending our free time frantically searching for other work, and generally not enjoying the holiday season because of financial hurt.

    On top of this, I just heard that they won a gigantic contract that I helped them with in my last month with them last fall- a month before I decided to not ask to renew my consulting arrangement with them. Funny thing is– two of my former colleagues — and not this cheap CEO- recently asked me to call them about work on this new contract. Hahahahaha

  26. Oops- missing a word in my post
    (*furloughed nearly the whole department for the month of December”)

  27. @David Hunt

    “and got told their only concern was that I might get bored.”

    Translation: We haven’t thought about career development or challenging our employees so that our business grows and everyone profits.

  28. @D.C. Certainly trying to do that!!

  29. HR. How shall I smite thee? The first thing they have going against them is the ATS, then add in their lack of follow through or leaving a candidate hanging and it is a recipe for extreme frustration on a candidate’s part. I know there are some good HR staff out there, I have not come across many and most of the external recruiters are even worse. My question is, why are companies not doing more to ensure their management is more involved in the hiring process? Last year I interviewed with Pandora and the HR woman had no clue about software systems, finance or what the job entailed (except what was clearly written on the requisition!) complete incompetence and I will never apply there again.

  30. @LisaMBA09: What never ceases to amaze me is how little a company’s corporate management seems to care (or know) about the damage that lousy HR departments do to their business. They really think there’s no impact. They need only read the stories here.

  31. @Carl: Either that owner was squandering the profits, or it was a case of incredible greed. Best recourse is to leave people like that to themselves.

  32. I have been approached by three head hunters with a few positions in the past year. One long conversation with one head hunter revealed that American businesses are just not offering many executive situations and nor are they paying the right money for the right talent if they are looking, as she herself put it “it is very scary what is happening.”

    This is the reality of the current economy in this country it has nothing to do with an age issue or lack of talent, it has to do with the reality of economics and future projections. There is great concern about the future economic picture of the West, and most are proceeding accordingly.

    You can go to a firm or individual and talk all you want but talk is cheap. The best interview tactics and approaches are fine however when business is simply not hiring in your price range you are not going to move them. When it boils down to money or talent they are looking at cost cutting.

    By the way the situations being offered to me? All were C-level, high paying, but OUT of the country! Two of them being in China.

  33. @Nick and @LisaMBA09: Nick nails it. They THINK there’s no impact.

    I suspect the only way they’re going to “get it” is if they start measuring how long it takes to hire people, how long jobs are left open, and – in the ideal case – they run into some nice, intelligent, clean-cut person at a networking event… discuss their company… and that person tells them their experience.

    Something like “Yeah, I applied for a job there a year ago.”

    “Really? Well, we have an opening that I think you’d be perfect for.”

    “No thanks.”

    “WHAT? Why?”

    And then the tale starts of the ATS, and so on.

  34. @Jim Jarvis: Highly specialized legal compliance work should be done by lawyers and/or paralegals. Heck, garden variety, run-of-the-mill legal work should be done by lawyers and/or paralegals.

    HR should lose the Mighty Title and go back to being Salary and Benefits: Keep the pay envelopes correct and filled on time, and make sure the medical/dental programs are in force.

    @David Hunt: If a hiring manager can’t be bothered to meet for a 15 minute cup of coffee, do you REALLY want to work there? That speaks volume about the environment of the place.

    @Survivor: “The only, and I repeat: the only way the job market will change is if job seekers grow a backbone …”

    Not exactly. A very brief look at the Labor Force Participation Rate for September shows that 62.7% of the available workforce in the USA is working, and a little grade school math reveals that 37.3% of the workforce is not working. This same 37.3% I’d be is also not able to fully participate in the economy (buy things, rent things, etc.)

    The job market cannot and will not change until employers get off their piles of cash and prime the pump by giving people not currently fully employed decent middle-class paying jobs so they can again participate in the economy of this nation.

    Source: http://data.bls.gov/timeseries/LNS11300000

  35. @Nic: With reports like these, we should buy stock in the makers of Paxil.

  36. @LT There are two things I do not do drugs or the stock market. But, I get your point!

  37. You are absolutely correct, Nick! The “software giant in Redmond, WA” is a primary example. They SAY they cannot find qualified engineers in the U.S. What they mean is, THEY DON’T WANT TO PAY THEM WHAT THEY ARE WORTH. So, they hire graduates from the tech university in India en masse, and bring them here to work. Just one example of many. So, HR is shooting itself and the companies it works for in the feet. Both of them. What can we do about it?

  38. @D.A.C.

    Spot on. Here they (Microsquat) and others laying off by the thousands… by the tens of thousands… and then pleading for more H1-B visa slots.

  39. More great news:

    Time to fill positions at a record high!

    http://www.dicehiringindicators.com/

    (I wonder how they factor in ‘time to fill’ stats for positions for jobs that are NEVER FILLED…?)

    Verdict?:
    Talent Shortage!

    OR

    Talent Shortage… in the Human Resources department, Hiring Departments, and C-Suite (who apparently are in charge all of these clowns…)!

  40. May I suggest that one big problem with the current employment scene is that too many jobseekers don’t know how to present themselves as a valuable investment that will deliver positive ROI rather than as a cost. If every jobseeker knew how to do this, and refused to kowtow to management games, the talent shortage would soon vanish because employers would stop seeing a flood of unconvincing resumes.

  41. @Tim

    I appreciate a good resume, but a good resume is not a job search panacea.

    Floods of resumes go into the HR industrial complex because they are poured into electronic troughs where computers (ATS) (and not humans) ‘read’ them and summarily shred them into oblivion because the high keyword threshold was not reached.

    What a ‘qualified’ candidate is is someone who can get past the gauntlet of:
    – ATSes
    – the 25 year old HR drones who checklist,
    Google stalk you, test you with invalid
    psychometric garbage, or try to disqualify you
    for everything from being too old, too ugly,
    having a “black-sounding name”, or otherwise
    just not ‘feel you’ as qualified.
    (notice that you haven’t even reached the
    hiring manager at this point.)

    – Anywhere from two to five interviews with different sets of people from the company, often different types of interviews (stress or good cop/bad cop interviews, panel interviews, etc)

    – Additional work assignments and writing samples, presentations, etc.

    – Reference checks.

    – Background check- filters out those with anything from bad credit to bad jokes on their Facebook profile.

    – Salary negotiation, often with low-ball salary or temp/probationary period as starting point. Often, no negotiation is allowed.

    – Other extraneous factors – second thoughts or indecision on candidate choice, second thoughts on hiring anyone at all, last minute call from hiring manager saying that his niece might fit for the position, etc., OR a smarter job searcher goes around HR, has coffee with the hiring manager, and takes the job.

    – Alternate ending- job ad was out long enough for H1B to be hired at nickels on the dollar.

    – Alternate ending- No one is hired, and job ad is re- posted, because that Purple Squirrel Unicorn ‘has got to be out there!

    In summary, the job search is a mine field, and the system is broken.

    @Nick- did I miss any of the booby traps in the process??

    Honestly, it’s so bad that there should be a low-tech video game that makes fun of the process- complete with everything from chasing dollar bills while navigating around swarming computers with gnashing teeth, young HR staff wagging their fingers, and, of course shredded resumes.

    I’d model it after the old “Slick Willie” Bill Clinton video game where, in his pursuit of hamburgers and women, he had to avoid everything from Ken Starr, Linda Tripp, Newt Gingrich, Rush Limbaugh, and of course Hillary.

    http://www.youtube.com/watch?v=WCg7YIckPeA

  42. @Carl:

    Yet another nail in the coffin of “The Shortage”. If there were a TRUE shortage, people – when presented with something acceptable-if-not-perfect – would ACT.

    Yet the exact opposite is happening. Waiting for the purple unicorn-squirrel ;) is what you do when you think that there are “plenty of fish” out there. (OK, I’m mixing my metaphors.)

    And at the risk of shameless self-promotion, you directly hit two topics I’ve written about on my blog:

    On googling / vetting with SM (last in the series):

    http://davidhuntpe.wordpress.com/2014/03/13/social-media-vetting-proposed-standards-long/

    And on ATS systems:

    http://davidhuntpe.wordpress.com/2014/07/15/jurassic-park-hiring/

  43. I thought my comments on this thread had ended. I want to make something clear that I do not see being discussed, which most people are not even aware of (if they do not study modelling, statistics or theory) and that is that we are clearly in the early stages of an Economic Winter.

    I personally study what is constantly taking place in finance, business, and the world economy. This cycle I am discussing is based on the theory of a Russian economist called Nikolai Kondratieff.

    If you look up the man, and his Kondratieff Wave, it will make far more sense. The job market and business issues experienced today are cyclical and I feel today’s situation is largely due to gross incompetence, mismanagement, greed and horrendous economic policies that stem back over 30 years. Now is an even more unique and dangerous situation in my view due to being off the gold standard since the mid-1970s and the rise and gross manipulation of the Internet, artificially low interest rates and uncontrollable Federal debt fueled by money printing just to keep the game going.

    In my opinion, I see a number of factors affecting business. One being due largely to sheer ignorance and having the wrong people in too many positions of decision making and power large sectors have been destroyed. Having think tanks dictate to industry, people at these groups who have never themselves owned or worked in the businesses they are consulting on have impacted many sectors. In my view, retail especially high-end retail has been all but ruined by the e-commerce and social media push, quality publishing has been all but ruined, banking is a mess, so on and so forth.

    I believe we are currently in the midst of a concerning continuation of 2008, where everything teeters on a razor’s edge of ultimate collapse. We are in asset bubbles like never before seen, and yes, this is influencing the job market and both a result of economic and political policy, all the while the country is trillions in debt and growing.

    This is my take on the entire scenario of a questionable job market and poor salary offers that often occur as a result. I see the public being manipulated from all angles being led to buy into plenty of manipulation and financial BS at a time when it clearly is near the end because it cannot continue.

    The bottom line for me regarding all of this is that I have planned conservatively and accordingly. I hope that as we all move forward we do so with caution, never allowing interests to force us into making bad decisions, but proceed with intelligent informed decisions.

  44. @Carl: You forgot “too Veteran” and it’s corollary, “Veteran from the Wrong War” (Vietnam).

    @Nic Re: Kondratieff Wave & gross incompetence, mismanagement, greed and horrendous economic policies that stem back over 30 years.

    Should be required reading. I may print it and post it anonymously in the break room in the executive suite.

  45. Here’s a musical take on Kondraetiv waves.

    https://www.youtube.com/watch?v=3_XswHm514w

    “It’s alright cause the historical pattern has shown
    How the economical cycle tends to revolve
    In a round of decades three stages stand out in a loop
    A slump and war then peel back to square one and back for more

    Bigger slump and bigger wars and a smaller recovery
    Huger slump and greater wars and a shallower recovery

    You see the recovery always comes ’round again
    There’s nothing to worry for things will look after themselves
    It’s alright recovery always comes ’round again
    There’s nothing to worry if things can only get better

    There’s only millions that lose their jobs and homes and sometimes accents
    There’s only millions that die in their bloody wars, it’s alright

    It’s only their lives and the lives of their next of kin that they are losing
    It’s only their lives and the lives of their next of kin that they are losing”

  46. @Nic:

    “I asked my financial advisor what he’s buying. He replied ‘canned goods, guns, and ammo.'”

    I don’t know this Wave, but I can tell you that it’s estimated that next year we’re going to go over 20 TRILLION in debt. I strongly suspect that our creditors are going to start getting very nervous about that.

    Add to that the bubbles and intertangled networks of debt across the world, flash points in the world piled high with tinder and people playing with matches, and a potential pandemic with a virus (Ebola) that is NOT well understood and is mutating with each host it goes through… (e.g., imagine someone with early Ebola and a cold going through LaGuardia, JFK, or LAX)

  47. I don’t mean to come across as apocalyptic, but I see all the possibilities in the world today for… call them “discontinuities”… that the Heinlein quote comes to mind:

    Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded- here and there, now and then- are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.This is known as “bad luck.”.

  48. @Tim: Enuf w/the self promotion

  49. @marilyn: A job seeker doesn’t need a resume to meet a hiring manager and to prove he or she is a profitable hire :-) The biggest management game is trying to force people to “represent” themselves with a resume. Resumes are a crutch, and a poor way to open doors… right behind all the millions of other resumes being eaten by the ATS.

  50. @Nick: Good point ?

  51. @LT One of the best comments on this thread, you made it right here, “If a hiring manager can’t be bothered to meet for a 15 minute cup of coffee, do you REALLY want to work there? That speaks volume about the environment of the place.”

  52. @David Hunt I agree with all points made. You wrote, “I asked my financial advisor what he’s buying. He replied ‘canned goods, guns, and ammo.’”

    I have to say I have heard the same. And what may appear on the surface of the statement to be a bit strange, you would not believe the famous high-level individuals who have expressed similar sentiment to me.

  53. I know this is off track of the original concept of the thread, and I am sure many do not follow the IMF meetings which do have relevance in the West on economics and business, however I wanted to post this for consideration.

    I refer to Christine Lagarde, Managing Director of the IMF, speaking at The National Press Club meeting and this segment, coincidence or something more?
    http://www.youtube.com/watch?v=QYmViPTndxw

  54. I had a conversation with someone a few days ago and it just came to mind. Essentially, this person is a senior-level VP – of engineering. He expressed disbelief that I, with my experience, education, accomplishments, etc., wasn’t employed.

    When I started talking about “purple squirrels”, the “perfect fit” syndrome, and so on, he said “Oh, come on, the unemployment rate is down to 5.whateveritis.” I mentioned that the labor force participation rate was down in Jimmy Carter numbers, that every networking group is brimming with people looking for work, and so on.

    He looked at me with a WTF are you talking about? “My HR people tell me there’s a shortage of qualified people.”

    I’d like to know where he gets his lotus flowers. That’s some strooooong stuff he’s consuming.

    • Comments like that baffle me. Are these folks Rip Van Winkles? Never experienced unemployment, or know anyone that has? No adversity ever? Maybe they really have perfect unblemished lives, and assume everyone else does too.

  55. @David Hunt you said, “He looked at me with a WTF are you talking about? “My HR people tell me there’s a shortage of qualified people.”

    To me that ridiculous remark you heard must translate to: …shortage of “qualified” people (qualified as in the sucker ready, willing and able to do what they do – for the lowest Third World wages that the desperate firm is offering.)

  56. Talent shortage is one phrase that really burns me up like gas on fire. HR is so clueless why don’t they just abolish the departments and let hiring managers handle the process and get general office staff to push paper.

    Example, one of my first and oldest college friends came back to the US after living in Europe from the mid-80s to late 90s. He was working in Southern California but when his company folded he left his town to take a senior level programmer position up at a Silicon Valley firm. A few years into this new job (great people, highly talented, great atmosphere, great reviews all around) he along with a slew of others were all laid off with a series of departmental organizational corporate so-called cost cutting measures(I will not mention names, but this is one of the Big Boy major world renowned firms.)

    He thought by taking the job and accepting the move that if all hell broke loose he would be in Silicon Valley and have a sense of security in IT. The only problem that he realized after the fact? For every position there were ten or more highly qualified individuals to fill it.

    Yes, he secured another same level/ same pay position, where you might ask? Estonia!!!

  57. @David Hunt: Your story lays bare the effects of inept HR behavior. Just consider what this manager believes:

    “He looked at me with a WTF are you talking about? “My HR people tell me there’s a shortage of qualified people.””

    This is what HR and the media are telling him, and he is so divorced from the hiring process that this fool takes it for granted and believes it. Worse, he’s practicing it. Don’t engineers test ideas before putting them into production? Why is this clown swallowing what HR tells him?

    If anyone believes the HR hiring travesty is not laying management to waste, they need to look at this guy’s assumptions. Just take a look at Nic’s story about his buddy who now works in Estonia.

  58. @Carl

    You wrote:

    I appreciate a good resume, but a good resume is not a job search panacea.

    Floods of resumes go into the HR industrial complex because they are poured into electronic troughs where computers (ATS) (and not humans) ‘read’ them and summarily shred them into oblivion because the high keyword threshold was not reached.

    I said not one word about resumes in my post; my point was that the overwhelming majority of jobseekers still don’t know how to present a positive ROI case for hiring them. The sooner job seekers learn how to do this, the better off North American business will be. And while resumes are one way to present such a case but they are not the only way.

    Researching ATS’s and position keywords, then applying the result to achieve a high scoring resume is not rocket science. In addition, when one uses Nick C.’s networking and interviewing approach, which is something I strongly encourage my clients to follow, the danger from the ATS black hole is substantially minimized if not almost eliminated.

    (BTW in this model, a resume doesn’t carry the weight of persuasion. It will be a written guide to and summary of the conversation the job seeker has with a hiring manager.)

  59. (This goes back to my ‘I wanna be a magazine writer’ days)

    There used to be a trade magazine called “The Purple Squirrel” for HR professionals. I was prepping an article for submission when their terms become jukey. Shortly afterwards they went out of business and failed to pay a number of writers for work already published. HP pros, I tell ya …

  60. @Tim,

    Sorry if I thought you were talking about resumes.

    I blame that mis-perception on having read this part of your post:

    “the talent shortage would soon vanish because employers would stop seeing a flood of unconvincing resumes.”

    That, and your link to a resume writing service.

  61. Speaking of canned goods, I found this funny pic:

    http://3.bp.blogspot.com/-F69OZhxWqrU/VDWpKJRXSYI/AAAAAAAAEGg/N7s-osg86jU/s1600/Ebola-Epiphany.jpg

    My question: How’d a photographer get into my basement? ;)

  62. HR managers have gotten lazy because they still believe the great depression is in full swing and that there are lots of unemployed, but highly qualified people, who will take anything salary wise to get a job. Wrong. The labor market is improving, somewhat slowly, but holding out for a “walk away” minimum is essential to not hating yourself three months into a new “minimum” job.

  63. @Mayor Bongo

    You’re right. Holding out for a minimum salary.. and basic level of decency from an employer is key.

    Right now, I know of a few positions I could interview for and likely get (where I know the hiring manager), but they are positions where the salary is bad and, the position is tenuous at best.

    There is one particular position where I would work with a guy I used to drink with, but the position (that was FT with benefits up until a year or two ago) is now a combination of temp- to perm, 20 hour PT hourly “salary” with an expectation that I work more than 40-60 hours. They expect people to leave their current situation/job and/or pick up and move for a position like this??

    Needless to say, no one has been hired and my old friend is overworked to the point of exhaustion.

    I know that the hiring process that he went through last year was grueling, because I went put in for the same position and he obviously made it through the gauntlets. Although I am happy for him, I know he is being run ragged. Next time I see him I’m buying drinks.

  64. As someone who, as a co-op, won a Management Award for dedication to a project “above and beyond” from General Electric at a time when co-ops didn’t win them, I am no stranger to Whatever It Takes.

    But I’m becoming amazed at the people who, as line employees, not managers, who are becoming accustomed to a 50+ hour work week as a standard thing.

    Company uber alles is becoming the standard even as loyalty to employees is fading into obscurity. The demands get more and more extreme. For example, at a prior job I was asked to come in for a weekend – normally not an issue – on the weekend after my son was born.

    “Pound sand” is the polite version of what I thought. I didn’t go in; my “lack of dedication” was one thing cited in my dismissal. (It turns out the lead engineer already had a solution to the problem; my guess is he wanted to “power play” us…)

  65. @David Hunt

    My dad worked for GE for 43 years- for turbine engines in Lynn, MA…

    After starting as general labor, he trained up towards production control management work. It was his only job, outside of two years in the army at age 18.

    He got a fair salary, health benefits, a basic but reliable pension and, once in every couple of years he even got two tickets to the NBC luxury box at Fenway Park.

    Those were the days of employer loyalty.

  66. I suppose this is only a newsflash to those in HR and to managers who have completely turned over the hiring of new employees to HR.

    Not paying enough is a big problem, and so long as companies are rewarded for the “savings” from not hiring, and so long as the work can be pushed onto others, or so long as there are plenty of H1B visa holders willing to work for 2 rupees per month, companies will continue to do it. They’re looking at short term profits vs what it takes to make the company successful in the long run.

    @David Hunt: in my last job, 60 hour weeks were the norm, not the exception. I was the only one in my sub-dept., and the work multiplied like a bad science experiment. Not only was I just expected to do it, I wasn’t compensated for it and my efforts were neither acknowledged nor appreciated.

    I was talking to my brother yesterday, and he routinely works 50-60 hours per week, gets paid for 37 hours (but earns a very nice salary). My folks were appalled–wondered why he doesn’t get paid OT for the extra hours he routinely logs. It is the new normal, and has been for some time. His employer would have him put in more hours if they could.

    @Carl: my dad was a construction worker for the 40+ years he worked. Same industry, same employer. No benefits other than family health insurance though.

    • What you and Carl are describing is just another form of wage theft. That it remains legal, and how companies bend the exempt employee rules beyond all reason, could be a book in itself.

  67. Since the great recession the low balling got so bad I quit hesitating to offer my current salary to avoid wasting time on openings that sometimes wouldn’t match the compensation of my last job! (Luckily I work at a company that pays well above average for our area.) That cut a lot of interviews short. I’ve started asking sooner than usual about the salary range, and routinely shocked at the junior level salaries for senior level expertise.

    As for nutty hours, that has been the norm for decades in the tech industry, not always at decent salaries. I’ve never been a manager. Usually the worker bees put in the most insane hours. Managers often went home long before the engineers.

  68. @Steve you wrote, “Since the great recession…” Yes, I do agree with you on the low balling and that is a fact we all see on a regular basis in all businesses.

    However, in my opinion, we are in a climate with too many unqualified people pulling the strings who cannot make swift executive hardball economic decisions without personal and crony pecuniary interests first because they have to pander to certain groups where greed comes first. These types like test runs instead (and anyone with a shred of their brain still functioning can see these situations all around us taking place.)

    Let us begin with what is the start of this so-called “Great Recession,” which I consider nothing but a BS term for a clearly growing ongoing problem, and precursor to far more economically hideous results. I feel the post ’08 decisions that have been made by many have caused just another level of the same behaviors pre-’08.

    Shall we begin here? Check this article and decide for yourself if the patients aren’t running the asylum.
    http://www.zerohedge.com/news/2014-10-16/pompous-prognostications-permanently-high-plateau-prophets

  69. @Marybeth (and others):

    I fortuitously stumbled across this article:

    http://normsaysno.wordpress.com/2014/10/11/michael-teitelbaum-visits-davis-invited-by-the-provost/

    Read it all. Slowly. After taking blood pressure medication. Then read it again.

    Please understand that in this next bit I am deliberately NOT calling for violence, and I condemn not only the thought, but the possibility. BUT… I wrote an article, this one:

    http://davidhuntpe.wordpress.com/2014/06/20/offshoring-dont-breed-bolsheviks/

    In one LinkedIn venue where I posted this, a person commented to the effect that “… until executives are swinging from the lampposts”. Think about this. They weren’t meaning at a party, either.

    In my own job search I talk to a lot of people; I network with a lot of people who are unemployed. Lately I have started to hear this phrase: “I’ll never work [professionally] again.” Most are over 40, many over 50. Instead of using their education and experience, accumulated over decades of careful cultivation, they’re now working multiple part-time jobs scraping by.

    Now, as word spreads of the first article I just shared, and doubtless others, as well as other evidence like Microsoft laying off 18,000 people while complaining they can’t find qualified Americans… consider the tinderbox this is creating. Tens of millions of people watching their life savings vanish, looking at the future of a lower standard of living, while the corporate oligarchs get richer and richer off – perception, as I said in my article – their suffering.

    Unions and the “99%” already protest at peoples’ HOMES. Protests at offices and headquarters? Sure, no problem; legitimate. Protests at peoples’ homes? That’s scary.

    When enough people get desperate enough, someone will come along politically savvy enough to draw on that anger. When the perception that “The People” are being screwed gets wide enough, and enough people see their future being razed as “the 1%” sup on Yagyu beef (or whatever)… bad things happen.

    I’m not advocating for that. I want to see that NOT happen. For the sake of NOT having that happen, executives need to understand that a stable middle class is essential – and that means keeping American jobs HERE, with Americans in those jobs.

  70. @nic:

    When I saw your link about “permanent plateaus” I hearkened back to my high school American history paper, discussing the crash of 1929. And, wonder of wonders, the link highlighted quotes from that period (some of which were awfully and painfully familiar).

    WHEN the Fed has to raise interest rates, the house of cards will come crashing down. The nations of the world are so interlocked in exchanges of debt that – I suspect – nobody truly understands who owes who what. But it’s unraveling will – I fear – not just be economic, but military, as countries finally wake up. Economist Bastiat once said “If goods don’t cross borders, troops will” to which I add “Just because goods cross borders doesn’t mean troops won’t.”

    And we, in America, will find the true and horrific cost of having offshored so much of our manufacturing capability:

    http://davidhuntpe.wordpress.com/2014/04/08/offshoring-to-insanity-and-beyond-long/

  71. @David Hunt

    Yes, interest rates this entire mess is all about debt and interest rates. When the rates go up (and they will) that will be the final nail in this economic circus act. This issue of debt and rates has impacted everything in our lives.

    I know we talk business and employment but this issue makes me consider the recent round of idiots (sorry I mean buyers) who didn’t see 2008 for what it was all about who have now gotten involved in what I call the scam du jour of buying into the BS of an average house at an outrageous bubble price for 500K (or worse)and either put good money into such a place or took on enormous debt for it, during this phrase in this outright smoke and mirrors economy show. What do they think? They are going to get rich? It does not work that way.

    Btw, who does not notice all the house flipper shows again?! Come on, put the pieces together. There is even a show for flipping mobile homes and used items. It is hilarious what the masses fall for and they know it.

    When mortgage rates go back to normal which means at minimum double? Interest will go back to normal during a massive and real economic downturn, what does that “buyer” do with that place then? When there are no more fools coming around?

  72. @David Hunt: thank you for the links. Both summed up nicely what I have long thought, namely that a stable, sizeable middle class is good for the country politically. I majored in history in college, so studying revolutions, particularly their causes and effects, was a good part of my readings and papers. Even today, if you think about the countries that are the most unstable politically, you will find that they tend to have a very small group of people at the top of the food chain, who have the vast majority of the country’s wealth and its political power. The majority of the population is poor, barely getting by, and there is often no middle class. When you realize that you have nothing to lose (your family is already starving, the lord has evicted you, you don’t have a job, etc.), that fuels revolutions. When there is a stable, more sizeable middle class, it usually means there are greater opportunities for those who are lower on the economic ladder to try to improve their lives, but when there isn’t, there is not only no proof of opportunity, but there is no incentive for rulers to create better opportunities until the peasants are at their gated communities with pitchforks and tumbrils to take them to the guillotine. If you have a stable middle class, they’re less like to join a revolution because they have more to lose.

    This happened in France in 1789 (French Revolution), with an end result that wasn’t good for the country either–king, queen, members of the aristocracy and clergy executed, and eventually a dictator took advantage of the chaos from revolution and war to seize power. He (Napoléon) brought more war and destruction before he was finally defeated and exiled.

    This happened in Russia in 1917–slightly different circumstances in that losses in World War I, an unpopular Tsarina (who was German and thus their enemy), masses of poor people who were cold and starving, paved the way for the Tsar to abdicate, Kerensky (a moderate) to take over before being outsmarted by Lenin and the Bolsheviks. Unlike the Kaiser who fled to the Netherlands at the end of the war, the Tsar and his family weren’t treated so well. His entire family, including all 5 of his children, were shot by the Bolsheviks in 1918. No “former” Tsar or Tsarevich alive to make claims on the throne after the war simplified things for the new ruler. Those who were well off lost land, money, and many lost their lives, just as the French aristocrats did during their revolution.

    At the time of both countries’ revolutions, there were tiny (in proportion to the whole population) ruling classes who controlled all or almost all of the wealth and opportunities, no or a tiny middle class (with few to no opportunities to improve their lives) and the majority of the people were poor. Those with nothing to lose found it easier to take the big risk of joining revolutions, of eliminating the governments, of looting property, of killing those who had more.

    Great Britain didn’t have that kind of instability during the 18-20th centuries because they had a larger middle class (still faced classism issues and an entrenched aristocracy, but the theory was that there were still better opportunities. A poor or middle class boy could never be king, but he still had a better chance to improve his life than a like boy did in France, Germany, or Russia).

    Years ago, I remember a boss telling us that if we (the US) weren’t careful, we wouldn’t have to worry about Mexico, we’d be (just like) Mexico–a tiny ruling class/aristocracy, no middle class, and the vast majority of the people starving peasants with no opportunities. I don’t think we’re there….yet….but we’re much closer to the Mexican model of 25 years ago. Those who can leave will leave. Those who can’t could topple the government (assuming that the military shifts its support from the rulers to the people as they did in Russia in 1917) and then who knows what you’ll get in a political vacuum or in a time of political chaos.

    I’m with you; I don’t advocate for the kinds of violent revolutions such as the French and Russians experienced. However, since our ruling class seems to be so clueless, so unaware of how an average person lives and struggles, I am beginning to think that a little revolution every now and then is a healthy thing, especially if it serves as a wake up call to fix the problems BEFORE leaders and their families are sent to the guillotine or executed in a cellar.

  73. @David Hunt: I’d go further and bring politicians into the discussion, not just executives and the titans of industry, although perhaps beginning with the executives is best. Government won’t respond unless the pressure gets to be so great that they have no choice and wish to remain in office. Since big business has bought the government, perhaps the government will listen to business if business tells them to do whatever it takes to help the middle class and build up the middle class, although I think business has some ownership too. Sure, they pay cheap wages because that is good for business in the short term and ensures that the CEOs and shareholders are happy (more money for them). Globalization means that businesses don’t care if locals aren’t working or not earning enough to buy their products–someone else somewhere else (in the world) will, so the profits continue to pour in. There is no incentive to change unless it somehow hits their bottom line. I’d be happy if Congress stopped rewarding businesses for outsourcing jobs (currently, they get a tax break when they outsource jobs) and brought the jobs back to the US. It is more expensive here, but bringing the jobs back would help other businesses, government, and the economy too. Businesses have no reason to be concerned about other businesses, yet we’re all connected. The engineering firm that outsources all of the jobs to India has a ripple effect on more than just those who lost their jobs. The companies that supplied the engineering firm with supplies, be it lightbulbs, rugs, paper, post-it notes, ink, etc. get less business, so they let people go or close. People lose their homes, which hurts the banking industry.

    I’d like to see more CEOs take a refresher course in macro economics as well as in history, and maybe, just maybe, they’ll see that they can live very well with only millions or billions in profits vs trillions. Spreading the wealth around means people will have money to spend on products other than the basic necessities (shelter, food), which improves the companies’ bottom line, maybe not this week or this month or this quarter, but in the long term.

  74. @David Hunt: Re your comments about what people who are in their 40’s and 50’s tell you about doubting that they’ll ever work professionally again, I have to agree. I don’t think it is a pity party, but an acceptance of reality. Employers complain about the lack of soft skills the college graduates and young people have, but they’re against hiring older people who do have those skills. That tells me that they want it both ways–a 20 year old who has the experience and soft skills of a 50 year old because they have no intention of paying for the experience and skills they claim are in short supply.

    I learned that a high school classmate of mine lost her job earlier this year, despite having the requisite professional master’s degree, and despite having been with this particular employer for 23 years. The employer decided to make cuts, and let go of four people in her dept. They kept the younger, less experienced, less educated employees, who are cheaper. Eventually it will catch up with them if they don’t have enough people with master’s degrees–it will affect their accreditation, which will affect their bottom line, but probably not for years. So in the meantime, the fired employees’ salaries are considered savings.

    One of my cousins lost his job last year; he repaired medical and surgical machinery (lasers) and despite having the requisite degree and more than 25 years of experience, he can’t find a job. He lost the house, and had to move in with his in-laws last month. His wife works, but the slave wages of a teacher in Florida didn’t enable them to keep the house.

    Another friend’s husband lost his job in Feb. 2013. He was a STEM major and worked in a lab, and like my cousin, he hasn’t been able to find work. Trying something different doesn’t help because of the hiring process and how employers view him (he’s in his late 40’s and feels it is too late for him to go back to school for another degree, much less that there would be a job for him when he finished)–and are unwilling to take a chance on a hard worker, an intelligent man, and give him the training necessary to do a job.

    So yes, it is very frustrating and discouraging.

  75. @Marybeth – “However, since our ruling class seems to be so clueless, so unaware of how an average person lives and struggles, I am beginning to think that a little revolution every now and then is a healthy thing,”

    RANT ALERT!
    ————————-
    I loved your post, @Marybeth. I always learn a lot from the perspectives here.

    I don’t think the ruling class is clueless and unaware. 1%’ers know exactly what’s happening because they in fact orchestrated the situations whereby we – be that middle or poor working class – struggle. Recent news indicates if you are one of the disenfranchised middle or poor, take a hard look at your current financial/home/job situation. You will not be able to improve it. The so-called American Dream was a false ideal created in the post-war years when social programs abounded and a house with a picket fence was 6 grand. The last car my father bought, prior to his death in 1980, was a Ford LTD for $10,000, a truly mid class car/price for (some) luxury. We all bought into TAD one way or another and it morphed into today’s misguided Consumerism. (iPhone update anyone?)

    Fast forward 35 odd years and we’re smack in the middle of a hidden Depression, not a recession. When qualified people cannot get work, and when food banks cannot feed the needy because no one has money to donate, and I will not be able to make my 30 yr requirement for maximum Social Security because I can’t get a job – any job – , nor can I afford to pay for community college for my graduating son — THAT is a Depression. Braces or College? THAT is a depression. My husband has gone overseas to the danger zones 5 times on our behalf – my son has lost over two full years of time love and experience with his Dad so that we could ensure we didn’t lose our house.

    1%’ers know full well what’s happening because they own the companies that aren’t hiring us. They retreat to 30 million dollar homes and attend the theatre, bring down the twin towers on purpose (I was there and I claim privilege to talk about it) to make lucrative deals, save money and gain power. Manipulate the stock markets, buy water rights in foreign countries, restrict the collection of rainwater, send their children to elite schools and don’t concern themselves with beef prices because their cronies set the price of beef. They’ve put on selective blinders because life for them is simpler and more pleasant that way and it allows them to use us up and suck our marrow, thereby reducing the ‘surplus population.’ They call us lazy. Unemployable. “Immigrant.” Worker-bees. Building private communities over international waters? Ain’t that something! And we marvel at their prowess.

    Their bigger concern is staying liquid because market returns for the next several years might reach 2-3%. Bezos wants the first trillion dollar company? Sick Bas*a*d!!! Trump for Prez? Outsourcing prison management? Holy crud! I guess size 00 really is the new four and we’re all going to be wearing it soon enough – overworked, starving, stressed out, electronically chipped stripped and camera-tripped, 80 hour weeks for 28k a year with a PhD. When my Dad died Reagan made sure that, as an orphan, I could never receive his Social Security. He changed the law to f**k over orphans because SS has always been bankrupt. They know exactly what they’re doing.

    We have been set up and we didn’t see it coming because we were watching Inside Edition to see where Johnny Depp is filming the next Pirates movie, for which they own the franchise rights.

    But hey, rich or poor, we’re all in this together, and that’s what counts.

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