FROLITICKS

Satirical commentary on Canadian and American current political issues

Nov 14

Recent Layoffs Among White-Collar Workers and CEOs Can’t Stop Saying Sorry

by bcurry

Last August a survey was released by consultant PwC which polled more than 700 U.S. executives and board members across a range of industries.  It found that half of respondents said they’re reducing headcount or plan to, and 52 percent had implemented hiring freezes.  The projected layoffs were seen to especially hit the high tech and financial sectors, primarily among middle- and lower-management.  Since rising interest rates in March resulted in home sales slowing to a crawl, there have also been widespread cuts for realtors, mortgage brokers and appraisers.  Unlike blue-collar workers where there is a current shortage of labour, most analysts would agree that this particular round of layoffs will have its greatest impact among white-collar workers.

As of today, forecasted layoffs in significant numbers are happening across the U.S. and Canada.  Many are occurring among some of our largest employers, including for example: Meta Platform Inc., Netflix Inc., Shopify, Wayfair Inc., Oracle Corp, and Apple Inc.  Walmart Inc., Ford Motor Co., Gap Inc., Zillow Group Inc. and Stanley Black & Decker Inc. also announced they plan to cut jobs at their head offices.  Of course, Elon Musk, following his purchase of the company, leads the way with his recent announcement that half of Twitter’s workforce is being dismissed.  These are all companies that did well during the pandemic, notably because of the growth in on-line sales and business.  However, now that the pandemic is coming to an end and interest rates are rising and stock price valuations are in decline, the boom appears to be over.  Thousands upon thousands are being laid off, largely because of massive hiring during the pandemic itself and management’s misreading of the markets.

The layoffs couldn’t have come at a worst time for white-collar workers given that the labour market today is extremely tight, with about 1.9 available jobs for every unemployed person.  What is interesting, many CEOs are openly expressing regret by stating that the situation is largely their fault.  They obviously recognize that they’ll probably need to hire back some of the talented and skilled people they laid off, and could be positioning themselves to recruit again when the recovery comes.  This is being done out of self-interest and to maintain a good product name.  At the same time, about two-thirds of firms surveyed are boosting pay or expanding mental-health benefits, largely to retain the remaining workers.  The most common move is making remote work permanent for more people.  For this reason, many CEOs are trying to appear to initiate the layoffs in as humane way as possible.

Otherwise, just saying you’re sorry is not enough!  There will obviously be a need to keep doors open once the economy recovers.  One question will be the nature of employment and the workplace down the road.  While replacing blue-collar workers with robotics for example is increasingly a concern, the advent of the greater use of artificial intelligence will be an issue for white-collar workers.  For example, Deutsche Bank’s CEO John Cryan hinted in 2017 that half its workers could be replaced by machines.  According to a survey in the same year by Greenwich Associates, around 75% of financial firms were intending to either explore or implement artificial intelligence technologies.  Among Canada’s five big banks, there are artificial intelligence-powered chatbots that now interact with customers through a bank’s digital channels — online, mobile and social media, and programmable software bots perform administrative tasks such as processing mortgage applications.  These virtual machines are already being tasked with some heavy lifting.

Otherwise, no one’s job is guaranteed to be safe now or in the future, including many of today’s white-collar jobs.  There is little doubt that, as more permanent cost cutting measures occur, companies will be looking to enhance their productivity and lower labour costs through the use of new technologies.  There is no profession or field of employment that is safe anymore.  The fact that CEOs are currently letting go so many white-collar workers, may also offer them an opportune time to look at new replacement strategies.  I wonder if CEOS like Elon Musk will continue to say ‘sorry’?

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Aug 9

Would You Be Interested In A Four-Day Workweek?

by bcurry

Between 2015 and 2019, several large-scale trials in the public sector of a four-day workweek were carried out in Iceland.  The results showed that the trials turned out to be an “overwhelming success,” with many workers shifting to shorter hours without affecting their productivity.  Some of the trials’ key findings showed that a shorter week translated into increased well-being of employees among a range of indicators, from stress and burnout to health and work-life balance.  The idea of the four-day week has been gaining ground in countries like New Zealand, Spain and Germany.  In the U.S. and Canada, a small but growing number of firms are moving to a four-day workweek that runs from Monday to Thursday.  In addition, the pandemic created a situation where employers began to experiment with alternative working arrangements, ranging from remote work to a variety of hybrid work routines including a four-day workweek.  Employers are expected to continue offering alternative working arrangements as a means to retain existing employees and to recruit new workers, especially given the tight labour markets found in most countries.

Now, there is not really anything new about employers implementing a four-day workweek for interested employees.  Long before the pandemic, I can recall several employers, especially in the public sector, who instituted policies allowing for some employees, where applicable, to work for four days a week and with the same number of weekly hours and wages.  For certain employees, the additional day off meant that they could spend more time with their families and use the extra free time to improve work-life balance.

More recently, there are those that would argue that a four-day workweek would help to reduce our carbon footprint.  For example, one or more fewer commutes to and from work would be required each week.  Transportation is the biggest contributor to greenhouse emissions, especially for vehicles using gas or diesel.  In 2020, according to the Environmental Protection Agency (EPA), the transportation sector accounted for about 27 percent of total U.S. greenhouse gas emissions.  Commuting is a big part of that.  It’s noteworthy that global emissions plunged an unprecedented 17 percent during the coronavirus pandemic and the air quality in cities around the world showed a marked improvement.  In North America, the high cost of housing in urban cores has meant that many workers have bought more affordable homes in the outskirts, a trend increased during the pandemic by a significant percentage of workers working remotely from home.

In addition, Juliet Schor, an economist and sociologist at Boston College who researches work, consumption and climate change, noted that energy could also be conserved if less resources are needed to heat and cool large office buildings.  However, to reduce demands on electricity, buildings would have to be pretty well shut down entirely for a day.  According to Scientific American, when the Utah state government launched a four-day workweek trial among its employees in 2008, one report projected that shutting down buildings on Fridays would lead to a decrease of at least 6,000 metric tons of carbon dioxide emissions annually.  However, any potential energy-saving gains hinge on how companies and individuals use resources.  At a time when many companies are looking at ways to incur cost savings, the implementation of a four-day workweek might be appealing.

As more and more white-collar workers across the country settle into hybrid work routines, one thing is becoming clear: Nobody wants to be in the office on Fridays.  This premise came up time and time again in several related articles.  With hybrid working routines becoming more of a fixture in workplaces, it’s easy to see why employers are increasingly looking for more adaptable offices with more communal spaces and gathering areas instead of traditional cubicles or walled-in offices.  Issues surrounding work-life balance and healthy workplaces will continue to surface in the post-pandemic era.  Businesses and their workers will no doubt have to be more creative in developing appropriate alternative working arrangements, including possibly a four-day workweek.

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Aug 2

Return to Offices in Post-Pandemic Era

by bcurry

Over two years after the pandemic abruptly forced tens of millions of people to start working from home, disrupting family lives and derailing careers, employers are now getting ready to bring workers back to offices.  However, it appears that workers in North America’s midsize and small cities have returned to the office in far greater numbers than those in the biggest cities.  Offices apparently have filled back up fastest in areas where COVID lockdowns were shortest and where commutes are done by car, rather than by public transit. 

In light of the Omicron variants which are creating other waves, the fact that the COVID pandemic is not over has created a snag in how employers are dealing with remote and in-person work.  In particular, the situation has forced some large and major employers to delay a return to the office.  The pandemic has also pushed employees to look at the health and safety protocols of their jobs and to become more vocal about the level of risk and the hazards they are facing.  Recruiters note that regional differences in office attendance and flexible work are making for a bumpier job market, especially given the increased competition for skilled workers in the current labour market.  In certain cases, some companies are forced to advertise jobs where the work is primarily done remotely.

Back-to-office plans have to take into consideration a number of challenges in order to accommodate workers in a healthy and safety manner.  The era of stuffing people into offices like sardines is over.  The inadequacy and poor quality of many existing office buildings was simply illustrated by the conditions surrounding the pandemic.  Indoor ventilation, air filtration and overcrowding became major concerns given the fact that highly infectious COVID was shown to be primarily spread as an aerosol.  The interior of many office towers today are climate controlled whereby one cannot open the windows in order to increase air quality.  Improving the ventilation and filtration systems has led to increased costs for landlords and tenants alike.  Another cost has been the need to have more stringent and frequent cleaning practices.

With health restrictions lifting, many workers are being called back to the in-person workplace, which can bring up a number of different feelings.  Employers can help ease this transition by having a comprehensive return-to-work plan, and clearly communicating it to workers.  Besides potential physical health hazards, there is also a need to address potential psychological hazards given the anxiety and stress that some returning employees may incur.  A gradual return to the workplace may ease anxiety, possibly by allowing for partial in-person work in the initial stages of the return-to-work plan.  There may also be a degree of anxiety of employees working alongside people who have not been vaccinated for COVID.  The question of mandated vaccination of workers became a highly controversial issue during this pandemic, causing a major schism between the vaccinated and unvaccinated.  Employers will have to address the issue as a policy matter and communicate their policy in a clear and concise manner.  They will also have to acknowledge and follow up on worker concerns or complaints.  They will have to show compassion and understanding that workers, particularly those that are immunocompromised, may be stressed, harassed or feel anxious.

How long will employers remain flexible?  When the pandemic loosens its grip, inevitably bosses could well demand that people file back in, and pronto.  The real question is whether the return-to-office plan will be done in a gradual, effective and controlled manner.  Several serious issues will have to be considered by employers as part of their plan, as highlighted above.  If the plan is not well thought out and effectively communicated, the issue of employee retention will quickly surface.  The situation of each individual employee will have to be taken into account and continuously monitored at the outset.  Flexibility is a key.  Employers may incur additional initial costs but they will be worthwhile in the long run.

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May 28

What’s a Billion Dollars? President Biden’s Proposed $6 Trillion Budget for 2022 Fiscal Year

by bcurry

During the Second World War, Canada’s newly appointed Minister of Munitions and Supply, the Honourable C.D. Howe, had allegedly said “What’s a million?” in response to his war spending estimates in 1945 (which totalled $1.365 billion).  This was in response to opposition queries about cutting a million dollars from that budget.  Howe responded that a million dollars from the War Appropriations Bill would not be a very important matter, which of course in those days represented a lot of money.  Howe eventually went on in 1944 to become Minister of Reconstruction in the post-war government’s successful overhaul of the Canadian economy. 

Now one has President Biden’s apparent proposal for a $6 trillion budget for the 2022 fiscal year.  Wow, this is a lot of money!  The budget proposal would call for the most sustained spending in more than a half-century, which forecasts deficits at more than $1 trillion for at least the next decade.  As in the case of WWII funding, the President sees the proposed expenditures as necessary to turn the economy around after the pandemic is over.  Most of the planned new funding would go to building up America’s infrastructure: everything from roads, bridges, public transit systems, passenger and freight rail, airports, water infrastructure, broadband infrastructure, etc., etc.  Already, in addition to the American Jobs Plan, the President has put forward a $1.8 trillion American Families Plan, a massive package that would invest in education, childcare and paid family leave.  To pay for all this, the President plans to increase taxes on the wealthy and to raise the current corporate tax rate.

Of course, the Republicans have raised their objections, especially to any increases in personal or corporate tax rates.  A group of Senate Republicans apparently have announced a $928 billion counteroffer on infrastructure.  After all, what’s a few billion dollars less?  Needless-to-say, many Democrats dismissed the Republican counteroffers as being too small.  Sounds familiar.  Another group of Republicans reportedly has suggested using unspent funds from previous coronavirus relief plans to pay for the infrastructure bill.

As in the case of the American and Canadian extensive efforts and massive spending for their economies to fund the war and recover from WWII, it would make sense that similar efforts are required of governments to do the same in order to recover from the damages incurred as a result of the global pandemic.  One way is for a massive investment in the much needed upgrading of our infrastructures, many of which have suffered from past neglect.  Yes, a billion or more dollars is a lot of money, but not when you’re talking about trillions.

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May 1

May Day is here, but where is organized labour?

by bcurry

Today is May 1rst, a day celebrated in many countries as ‘May Day’, including in Canada and less so in the U.S.  It should be noted that May Day is one of the most important holidays in communist countries such as China, North Korea, Cuba and the former Soviet Union countries.  Since the late 19th century, unions and worker groups have celebrated the first day in May as an International Workers’ Day, since referred to as May Day.  In North America, May Day largely grew out of the 19th-century labour movement for worker’s rights and an eight-hour workday in the U.S. and Canada.  In numerous cities, there will be parades, picnics and celebratory gatherings by both unionized and non-unionized workers and families.  However, historically, both the U.S. and Canada chose to celebrate the contribution of workers on an alternative national statutory holiday in September, ‘Labour Day’.  So much for the history lesson.

The fact is that May Day is celebrated much more in Europe where countries have long ago implemented universal health care systems, extensive social welfare nets, labour standards laws and other programs aimed at improving and protecting the livelihoods and health of workers.  This is why European countries did not need to introduce very many new assistance programs during the current pandemic, as their existing programs, including paid sick leave and unemployment benefits, cover most of the labour force.  Europe remains a relative stronghold of social democracy in which higher levels of taxation fund national health care systems as well as programs that automatically help those who lose their jobs.  In this way, European countries generally seek to limit economic volatility.  In addition, unions play a greater role in Europe than in the U.S., often sitting on management boards in countries like Germany, Sweden, the U.K., Austria, France and several others.  Together with a right to elect work councils, this is often called “codetermination” — something rarely seen in the U.S. or Canada.

On the other hand, the American economy has been described as a study of inequality, with risks and rewards stretching to extremes, and failures often capable of precipitating disaster, as unemployment frequently separates people from their health insurance policies.  This has forced the U.S. to be much more dependent on economic growth and emergency relief injections if something goes wrong, as it has under the current pandemic.  The Biden administration is pouring trillions of dollars into supporting American families and communities adversely affected by the pandemic, hoping to stimulate the economy as the U.S. emerges eventually from government-imposed shutdowns.  Increasing economic growth is expected to continue, but there are questions as to just who will benefit from such growth?  Recent studies have indicated that the rich have gotten richer.  Wall Street has thrived versus the evident losses experienced by the Main Street economy, especially small businesses and their workers.

With the decline in private sector unionization in the U.S. and Canada, there are fewer and fewer workers willing to march on this May Day.  The pandemic may have greatly knocked the wind right out of the unions’ sails.  There is also every indication that the pandemic may further reduce the number of good paying blue collar jobs, leaving many workers scrambling to secure employment in lower paying non-unionized jobs.  Alas, it is really difficult to happily celebrate this year’s May Day, or next Labour Day for that matter.

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Jan 30

Did the U.S. and Canadian Economies Hit Bottom in 2020?

by bcurry

Starting back in March/April of last year, economists began to see that the lockdowns and restrictions caused by COVID-19 were beginning to show a detrimental impact on both the American and Canadian economies.  The economic decline is clearly shown by the Gross Domestic Product (GDP) statistics which are used as a comprehensive scorecard of a given country’s economic health.  As a broad measure of overall domestic production, the GDP is defined as the total monetary or market value of all the finished goods and services produced within a country’s borders in a specific time period.

The U.S. GDP shrank by 3.5 percent last year as the novel coronavirus upended American businesses and households, making 2020 the worst year for U.S. economic growth since 1946. Similarly, the real GDP in Canada decreased 5.1 percent in 2020 (from the 2019 annual level to the 2020 annual level), compared with an increase of 2.2 percent in 2019.  In addition, unemployment rates in both countries climbed and continue to climb to this day with new layoffs by major companies being announced daily.

The real question now is as to whether the economies have hit bottom?  Or will things just get worst as we continue to battle the current coronavirus outbreaks, especially the new variants, and the rate of vaccinations continues to lag behind?  Optimistically, economists surveyed by the Wall Street Journal predict a strong rebound in 2021, with the economy growing by 4.3 percent.  Looking forward in the long-term in Canada, the GDP growth rate is projected to trend around 2.70 percent in 2021 and 1.70 percent in 2022, according to several econometric models.  Nothing really to brag about!  The Chinese GDP is expected to grow by over 6.0 percent this year.

While GDP projections are all good and dandy, there are several issues of concern when it comes to both economies.  The longer the pandemic reigns, the biggest concern continues to be the impact on small businesses.  Many small businesses in the retail and service sectors will not survive.  Remember that small businesses are still the biggest creators of new employment.  Travel, hospitality and recreational sectors have also been hit hard, and their survival will greatly depend on how quickly their customers feel safe enough to once again travel.  One must ask also just how well our health care systems will cope with rising COVID cases?  In addition, the economy will emerge in a very different form, especially when it comes to the make up of the labour market and the increasing use of new technologies.  We more than likely will continue to see high unemployment rates in the near future, especially among women, youth, minorities and vulnerable groups.  Given continuing job security concerns, will people begin to once again consume at normal rates?  My feeling is that our economies have not as yet really hit bottom.  Unfortunately, it may be months before one really sees any kind of actual turnaround.

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Jul 2

Lack of Affordable Daycare as a Major Obstacle for Return to Work

by bcurry

It’s no real surprise that analysts view that the lack of affordable, reliable and quality daycare will be a serious issue when more people return to work during the next few months. This is a societal issue already and will be even more of a concern during the pandemic.  Now, one has to add in the additional safeguards that daycare centres and providers will have to have in place to prevent any outbreak of coronavirus cases among staff and children.  With the gradual reopening of small businesses, many owners and their employees have already highlighted that those with young children believe that the return to normal will take longer because of a shortage of affordable childcare.

In addition, the need for daily childcare is further complicated by the fact that early indications are that schools may have to rotate the school days to accommodate physical distancing requirements. There will be fewer school days available, with on-line learning at home making up the difference.  This means that families will have to provide for childcare when their children are not in school during the week.  It’s not everyone that can rely on immediate family for assistance during this period.  For many low income parents, working only a couple of days a week and caring for children on the other days may not be feasible.  Near or below the poverty line, they need full-time work in order to provide for the necessities in an era of increasing housing and food costs.

There are huge implications for women in particular, especially low income single mothers, who risk being edged out of the workplace. There hasn’t been enough recognition for the struggle that women and single parents are facing right now with the reopening of businesses.  Governments at all levels need to recognize their struggle and provide support to families.  This situation appears to be an ideal time for society to reevaluate the availability of affordable childcare and the need for a real national childcare strategy.  After all, what could be more important than provisions to ensure the safety, health and socialization of our children.

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