Category: Business News

Forbes: While Some Blame Immigrants For Low Wages, An Alternative Theory Gains Traction Among Economists

 

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If these researchers are onto something—namely, that industry concentration dictates wage shares and wage levels—it could have important implications for how we think about antitrust enforcement and other labor policies (such as minimum wage, unionization, and state-based occupational licensing.

Wages are falling when expressed as a percentage of national income. The share of national income captured by labor (“labor share”) has declined sharply since the early 2000s, falling from 66 percent in 2000 to 58 percent in 2017 according to the Federal Reserve Bank of St. Louis. The decline in the labor share over the past 30 years reflects the gap between labor productivity (which has continued to grow) and compensation (which has stagnated).

The relevant economic questions are: What is causing wage growth to be so anemic? And what can be done from a policy perspective to accelerate it?

To say that there is lack of economic support [for the claim that immigrants have caused falling wages] is an understatement. The economic literature reveals that immigration does not reduce wages for native-born workers. Ottaviano and Peri (2012) and Borjas (2014) find that foreign-born workers (that is, earlier immigrants) bore the brunt of the wage impact from immigration, with native-born workers actually experiencing a slight increase in wages owing to immigration.

What is a plausible alternative for stagnating wage growth? Several recent studies have focused on the role of industry concentration. The working theory is that as firms gain control in product markets, the opportunities for job mobility within a given industry are restricted, which permits these firms to exercise buying (or “monopsony”) power in the labor markets.

MIT economist David Autor finds that concentration of sales of the largest firms in an industry (and of employment) has risen from 1982 to 2012 in each of the six major sectors covered by the U.S. economic census.  —each percentage point rise in an industry’s concentration index (as measured by the share of shares accruing to the 20 largest firms) predicts a 0.4 percentage point fall in its labor share. In an effort to determine the causes of industry concentration, the authors further find that the fall in labor share is mainly due to a reallocation of labor toward larger and more productive (“superstar”) firms with “lower (and declining) labor shares, rather than due to declining labor shares within most firms.” Why their workers aren’t sharing the productivity gains of these “superstar” firms is an open question that deserves further research.

In Declining Labor and Capital Shares (2016), London Business School economist Simcha Barkai attributes most of the decline in the labor share to Continue reading “Forbes: While Some Blame Immigrants For Low Wages, An Alternative Theory Gains Traction Among Economists”

Manufacturers Must Invest in Training for Digital Factory Jobs

3D Printer Photo
3D Printer Photo
If manufacturers don’t train workers for next-generation jobs, American industry will have a workforce shortfall.American manufacturers need to step up and invest in training and education for a new breed of digital factory jobs, otherwise those jobs will leave the country.

 “Our big message is that blue collar jobs have become digital,” Sarah Boisvert, founder of the non-profit Fab Lab Hub and author of the book, The New Collar Work Force, “To meet the needs of Industry 4.0 and smart manufacturing, manufacturers are going to have to train people for ‘new collar’ jobs.”

New skills will be needed in digital factories. Those skills include the ability to run and repair 3D printers, the ability to collect data, and the ability to work with CAD files and programs. Equally important, prospective employees will need to have hands-on experience in the so-called “maker space;” they will need basic math skills; and they will have to be adept at problem solving.

Those skills are largely unavailable in today’s youth.

Pacific Design& Manufacturing connects you with serious professionals for three days of industry immersion you can’t find anywhere else. Connect with over 20,000 engineers and executives who are ready to forge business partnerships. Learn from industry luminaries presenting their insights. This is your chance to find answers to your current design engineering challenges while keeping up with the latest innovations reshaping the industry. . .  full article . . . .

The State of Working America

“The State of Working America, 12th Edition” finds that policy-driven inequality has undercut low- and middle-income workers for past three decades.

Low- and middle-income workers and their families would have had far better income growth over the past 30 years if economic policies had not directed the fruits of economic growth to the highest-income Americans, a new Economic Policy Institute book, “The State of Working America, 12th Edition” finds. For example, had there been no growth in income disparities since 1979, annual income for a middle-income household would have been $88,875 in 2007, $18,897 higher than the $69,978 it actually was. The median household lost wealth between 1983 and 2010 and had just $57,000 in net worth in 2010, rather than the $119,000 it would have had if wealth had grown equally across all households over this period.

“The State of Working America, 12th Edition” explains that economic policies, including policymakers’ actions and failures to act, have undercut the ability of workers to benefit from economic growth in the United States. Its primary findings include:

  • America’s vast middle class has suffered a “lost decade” and faces the threat of another.
  • Income and wage inequality have risen sharply over the last 30 years.
  • Rising inequality is the major cause of wage stagnation for workers and of the failure of low- and middle-income families to appropriately benefit from growth. . . . more

read full press release and find link to full report . . . . 

Impatient with Colleges, Employers Design their own Courses

. . . . the massive problem of conventional higher-education institutions that largely operate at a 19th-century pace trying to keep up with the fast-changing demands of 21st-century employers — and an example of how tech companies and some businesses in other industries, impatient with the speed of change, are taking matters into their own hands by designing courses themselves.

. . . . “industry would be very satisfied if higher education was taking care of it . . . I don’t think there’s a desire to get into this space, other than that it’s not.”  . . . . While 96 percent of chief academic officers at higher-education institutions say they’re effectively preparing students for work, only 11 percent of business leaders strongly agree, the polling company Gallup found.

. . . . 1.8 million new tech jobs will be created between 2014 and 2024, many of them requiring people with data and computer-science credentials. Retiring baby boomers will leave countless additional positions open. But colleges and universities are turning out only about 28,000 computer-science graduates with bachelor’s and master’s degrees per year, based on the most recent figures from 2015, according to the consulting firm Deloitte.

. . . . ‘We need people with X, Y and Z skills and [colleges are] not providing that.’

click here to see full story on our emerging tech page.

GRIT is out and about in our Glendale Business Community

pictured left to right: Glendale Economic Development staff Jacqueline Bartlow and Ani Pogossian, City Councilman Vrej Agajanian, Karagozian & Case’s Vice President Zachery I. Smith, City Councilman Ara Najarian and Verdugo Workforce Development Board’s VJC staff member Jack Krikorian.

The Glendale Relationship Initiation Team (GRIT) visited science and engineering consulting firm Karagozian & Case to thank them for maintaining their business in Glendale, and to offer them services the City of Glendale may be able to provide.

GRIT has been meeting with businesses and is trying to address their individual needs. Some businesses have expressed concern about parking fees while others have asked for assistance with hiring the right talent. The team has been tasked to assist the businesses by providing resources for their needs. It has also provided employee recruitment events for local companies and helped companies with navigating the world of city codes and ordinances. VWDB and VJC staff discuss free financial incentives they have available for companies that need to retrain employees in order to retain them, on-the-job training subsidies for new employees, as well as individualized recruitment assistance and customized recruitment events they can produce for a local business.

Karagozian & Case established their business in 1945. It is an internationally recognized science and engineering consulting firm that supports a broad range of clients across different sections of defense, transportation, manufacturing, aerospace, energy, and construction industries – for technically challenging and complex problems.

K&C’s scientific and engineering services mainly fall into the following functional areas of expertise:

– Providing vulnerability assessments for a variety of man-made and natural hazards.

– Generating innovative and cost-effective structural and mechanical designs to mitigate hazards.

– Development and application of state-of-the-art analysis methodologies and software.

– Conducting testing, research and development (R&D) to advance knowledge, develop products, and validate solutions.

If you are a local Glendale business, GRIT and the City of Glendale thank you for locating and maintaining your business in Glendale. If your business would like to be contacted by the team, contact Melissa Younesian at MYounesianATGlendaleca.gov