The Aging U.S. Population

Older individuals traditionally have lower workforce participation, and falling fertility rates - due in part to economic instability - meant were fewer young people coming up behind them to take jobs. A larger percentage of those over 65 years old were still working than at any time since the early 1960s, though, driven either by … Continue reading The Aging U.S. Population

Scarcity and the Labor Pool

At their most fundamental level, labor costs are set on the same supply-and-demand principles as the market for most any other goods or services. Prices - wages in this case - are set based on finding the point on the chart where lines representing what buyers are willing to pay and what sellers feel their … Continue reading Scarcity and the Labor Pool

What’s Driving Wages For Workers

While CEO salaries have skyrocketed following the mid-70s, everyone else’s pay has not only remained largely stagnant but the buying power of those wages has actually diminished. A Pew Research Center analysis of BLS data showed that average non-management private sector wages have remained largely stagnant since 1964 when accounting for inflation. $2.50 earned in … Continue reading What’s Driving Wages For Workers

How is Value Creation Compensated?

In 2017 the heads of the top 350 companies in the U.S. earned an average salary in 2017 of $18.9 million, including stock-related compensation and other bonuses based on performance. That made their income roughly 312 times that of the ordinary worker. In 1965 the gap between the two was only - “only” being used … Continue reading How is Value Creation Compensated?

Who Creates Value For a Company?

If we’ve established that the primary representation of value creation is the return offered to shareholders, it’s necessary then to examine who is responsible for that value creation. In corporate America someone is, on average, either management or not. While more specific tiers may exist in different organization there’s often a clear differentiation between those … Continue reading Who Creates Value For a Company?

What Kind of Value is Being Created?

It used to be profits were the main indicator of a company’s value and success. If it made more money, it was seen as doing better. Those profits were invested into growth, be it physical expansion, hiring more workers to keep up with demand or buying new tools and technology. As the 20th century wound … Continue reading What Kind of Value is Being Created?

Value Creation as Compensation Yardstick

Just as productivity as an economic measure has its roots in Adam Smith’s 18th century theories and observations, the pressure put on the American worker to be productive is grounded in what’s commonly referred to as “The Protestant Work Ethic.” Introduced into the popular vernacular by Max Weber in The Protestant Ethic and the Spirit … Continue reading Value Creation as Compensation Yardstick

Productivity and Worker Investment (Intro)

For most of history advances in technology and growth of worker productivity went hand-in-hand. As companies spent more on technology and tools meant to improve the ability of workers to do more, more got done. And as workers got more done they were compensated accordingly. That is no longer the case by any reasonable measure. … Continue reading Productivity and Worker Investment (Intro)

Productivity and Technology Investment

Tools have been making work easier for human beings since the first sharp rock helped crack open a piece of fruit. Throughout history advances in workplace technology have aided in improving productivity, from Thomas Jefferson’s polygraph to Eli Whitney’s cotton gin to Excel spreadsheets that aid in data retrieval and almost everything else you can … Continue reading Productivity and Technology Investment

Growing Productivity Through Investment (Intro)

When economists and others talk about corporate investment in productivity, it’s usually in terms of technology. How much is being spent on tools - manufacturing equipment, computers and other material - is used almost exclusively as a measure of how companies are seeking to improve worker productivity. That singular focus comes from the fact that … Continue reading Growing Productivity Through Investment (Intro)