February Retail Labor Index

The February release of the Kronos Retail Labor Index shows that in January 2010, retail applicants came back into the market in force, with a 20% increase in applications over December 2009. We had observed a seasonally adjusted decline in applications at the end of 2009, possibly due to workers becoming discouraged by their holiday employment prospects.

Hiring for January was also down, but by a smaller 4.26%. The good news is that although hiring was down compared to one month ago, it was up over one year ago, by 12%. The combination of greatly increased application volumes, combined with a reduction in hiring, led to a decline in the Index of 20.41%, to 3.20% (for every 100 applications received, 3.2 hires occurred on average).

In this month’s report we also introduce a new model of the consumer economy. Through this model we will use data to observe how three major markets interact: (1) the market for goods & services; (2) the financial markets which supply credit to consumers; and (3) the labor market which, through employment, enables spending, saving, and investing by consumers. We will introduce the different components of the model in upcoming reports in 2010.

The conceptual model introduced in the current report demonstrates how consumers’ motivation to increase their liquidity by decreasing their debt (negative liquidity), including exactly the kinds of revolving credit that retailers extend to stimulate purchases, correlates to the Index. According to the report, a “choke point” can be seen in late 2008, where at its peak the ratio of consumer liability to disposable income had reached 138% in the U.S. Since that point, consumers have reduced the amount of revolving credit for the first time since World War II. This has a direct negative impact on retail spending and thereby retail hiring.

What’s your attitude toward retail spending these days? Many retailers seem to be offering non-stop sales and promotions to loosen your wallet. Are you biting?

February 8, 2010 | This post has no comments yet | Read this post »

The Myth of Job Creation

Our board member Mark Lange is a former presidential speech writer, and in fact wrote the George H.W. Bush’s 1991 state of the union address. In today’s Christian Science Monitor, he writes about last night’s speech in an article entitled Obama and the myth of job creation.

Here are some highlights of Mark’s article:

Redefine our idea of a “job.” The labor market already has, ever since the employment “contract” began to change forever back in the 1980s. Particularly for white collar workers – disproportionately affected in this recession – the prospect of contract work and free agency has never been easier. And by doing something of value, the résumé expands and the long grind (and potentially paralyzing shame) of joblessness is eased.

Re-tool, quickly and regularly. Small businesses looking to expand are finding more independent contractors for Web design, programming, marketing, videography, and similar work. Focus on areas of employment in healthcare and education, where there’s growth.

Reconsider unemployment benefits. Rather than make unemployment insurance an all-benefits-for-no-work proposition (which discourages any work and earnings at all), states should apply the same kind of incentive that worked with the Earned Income Tax Credit – as beneficiaries earn a little more, they receive a little less in benefits, but their net take-home is higher.

Welcome free trade. For seven decades, America’s economic and political leadership has told the rest of the world to open up trade. They did – and we and the global economy prospered. The irony of our closing down trade now makes no sense. It’s our responsibility to mitigate the negative consequences of global trade for the vulnerable (that’s something government can be good at). But to drive living standards up, we need more and freer trade, not less.

Recognize immigration for the competitive advantage it is. Our great secret, relative to Europe and much of Asia, has always been our ability to assimilate and engage the most ambitious people from around the world. This applies as much to the PhD student here from Asia or India as it does to the guy with the leaf-blower. We need to find better ways to enlist them here, not erect paper walls of visa requirements.

Innovation is no abstraction. In fact, all innovation is local – it applies to the payables clerk who comes up with a more readable spreadsheet, or the line manufacturing employee who tweaks and improves a machining process. There’s nothing exotic about “knowledge work” – we all work with our brains. Some of us use them to run our mouths. Others, our hands – on paint brushes, keyboards, school chalk, machine tools – but we all use our brains. And we can all use them better, starting tomorrow.

The economy and unemployment remain burning issues for most of us as this recession marches on worldwide. What do you think about the role of the government vs. the role of individuals and organizations in creating new jobs?

January 28, 2010 | This post has 3 comments | Read this post »

Consider helping out in Haiti

I usually confine my blog posts to workforce matters, but the people of Haiti are top of mind today. I was happy to hear that my friend and his family in Haiti survived the earthquake without harm, but many others are in dire need of medical assistance. Please consider a contribution to Doctors Without Borders to help them out. This recommendation comes from my friend in Haiti.