Tremendous tension between the Labour Party government and public sector trade unions over caps on pay increases led to widespread strikes affecting basic services like transportation and garbage collection. Add to that several blizzards, spillover of the strikes into private sector companies like Ford, and a severe downturn in the economy, and the winter of 1978-79 became a watershed moment for the UK.
In retrospect, that winter is viewed as the seminal moment when UK citizens ousted an unpopular, bureaucratic government in favor of a much more conservative one, aiming to deregulate, privatize state-owned companies and reduce the power of labor unions. Sound familiar?
This time around, the catalyst wasn’t quite the same. Instead, jobs shifting from one pool of workers to others was enough to spark a political revolution. The US economy gained nine million jobs under President Obama, but white people, who account for 78% of the labor force, only netted 700,000 of those. Hispanics, on the other hand, who account for about 15% of the labor force, netted about half of the jobs created under Obama.
The catalyst was different, but the groundswell of anti-government sentiment and economic strife for low-income workers are nearly identical to the winter of 1978-79 in the UK. In fairness to our across-the-pond brethren, the UK was in a recession at the time as well, so economic reality dictated the outcome of the subsequent election. In the US in 2016, perception was reality for that disenfranchised group of voters.
Thus, despite already-strong economic performance in the US, rising GDP and a stock market that seems to reach new records on a weekly basis, President-elect Donald Trump is almost entirely focused on jobs and the economy. His perception of the need for a fix – buoyed by a portion of the electorate that watched its share of the pie dwindle in recently years – is driving his choice of cabinet appointments more than reality. The result is that almost every single appointee can be viewed as pro-business and anti-regulation.
What that means for your business next year or your HR department is almost a complete mystery. Generally, deregulation can be good for some industries, but overall, it can have a negative impact on the economy. Ironically, one of the major risks of widespread deregulation is the loss of jobs. If you’re in the energy sector, suffice to say that brighter days are likely ahead, but for almost any other industry – including manufacturing – there is no telling what Trump’s policies and appointments will mean for your business. Trump has promised to save the manufacturing industry in this country, but economic trends tell a different story. US factories are already back to pre-recession levels in terms of their output, but they’re doing it with about 20% fewer human beings. Not even The Donald can stop automation.
You’re just as likely to be Carrier or IBM (the latter plans to hire 25,000 workers in the US) as you are to be Boeing. Not only is Boeing slashing jobs feverishly, but it has also been the target of Trump’s tweet-advocacy, which means bad news for stock prices. And Boeing, more than most companies, is beholden to the performance of the Chinese economy and its demand for air travel.
To Trump’s credit, he has already attempted to build bridges with corporate leaders and economic sectors far removed from the blue collar workers that ushered him into office. Just last week, Trump held a meeting with the heads of various Silicon Valley tech companies to discuss the future of the country. And surprise surprise, they want to ensure that their access to much-needed foreign STEM talent won’t be cut off by Trump’s immigration policies. On the same note, there are some lettuce farmers in Arizona who want to know – if Americans don’t want the jobs they’re forced to vacate due to tightening immigration restrictions, does that mean we’ll just let the lettuce go rotten?
For HR and business owners, all you can really do is take a wait-and-see approach insofar as what 2017 will bring to your industry and your company. Ten or 20 years from now, we may view this period as the Autumn of Our Discontent – the moment when perceived economic strife sparked a massive change at the top of the US government. But it remains to be seen what happens next amidst the current uncertainty.
HR Quick Hitters
The deadline to enroll in healthcare coverage through the federal government was extended to January 1, 2017 by 42 states in a last-minute push for coverage before the next administration starts tinkering with the Affordable Care Act. It stands to reason that the more people there are who have coverage, the harder it will be for the GOP to de-claw the ACA.
Apple is paying $2 million to settle a case over bathroom and meal breaks for 20,000 retail store workers in California, where regulations on meal and rest breaks are extremely employee-friendly. The settlement resulted from a class action lawsuit that was originally filed in 2011, so you can imagine the extent of the other legal fees Apple paid out just to get to this point.
North Carolina’s “bathroom bill” was back in the news briefly. A bipartisan group of state lawmakers tried to repeal the law – citing severe economic impact on the back of the bill – but their efforts were thwarted in the eleventh hour by Republicans who were allegedly prodded by conservative lobbying groups to stand firm.
Ohio Governor John Kasich blocked a measure that would have raised Cleveland’s minimum wage to $15 an hour, up from the statewide minimum of $8.10. There are lots of manufacturing workers in Cleveland, and despite a recent NBA championship, they just can’t catch a break.
In a first-of-its-kind case, a California restaurant owner has been sentenced to two years in jail for willful wage and hour violations against workers. The owner was charged with stealing about $20,000 in wages from his immigrant employees, having promised to pay them legal wages, but paying them only in tips. California’s labor commissioner called the case an “egregious” example of wage violations, perhaps explaining how a wage and hour violation can lead to jail time.
Your data analytics algorithms might make you or your company “small-minded.” We’re still very early in the data analytics revolution, so now is the time to be extremely cautious. Algorithms are only as strong as the people who build them, and people have unconscious biases they may not be able to account for. Organizations have biases as well, so even team-built algorithms can be problematic. Above all else, remember to keep an open mind even if an algorithm is providing you with a supposed answer. Open-mindedness is connected with well-being whereas close-mindedness is a good way to be viewed as rigid and cynical.
How is this song related to HR?
In the last edition of HR Intel, we asked you how “Only the Good Die Young” by Billy Joel is related to HR. It’s sort of a dark, twisted way to make the point, but while the HR industry attracts some of the most gregarious and people-focused candidates out there, it can also be a highly stressful professional environment. The ones who internalize all of their stress or simply keep to themselves when they are in trouble are the ones who will ultimately suffer the most – both in terms of their careers and their health. But don’t simply rely on your corporate wellness programs to fix the issue. Reach out to your colleagues, particularly the ones who might be acting out of character, and engage with them in a meaningful way.
We leave you with “You Can Call Me Al” by Paul Simon.
Tell us how you think this song is related to HR in the comments section below.