“The share of US national income going to labor has plummeted since the 1970s (as shown in Figure 2, below).


Of the several theories that have been put forth to explain the above phenomena, the compelling role played by information technology and automation certainly cannot be ignored. In his book “Rise of the Robots: Technology and the Threat of a Jobless Future,” Martin Ford states that the advent of Information Technology has replaced workers instead of making them more valuable, leading to increasing income inequalities between workers who possess the skills to adapt to tectonic technological shifts and those who do not.

SD note: An old question, but previously there was always a line between manual labor tasks and cognitive tasks, the latter which was protected. With the examples in the article (link below), it’s easy to see this line is moving.

^^Are we heading towards a jobless future? (World Economic Forum)

On hiring stars

Fantastic article as a starting point for discussion. You could build an HR sr management retreat from this and fill a week’s worth of content. A few highlights:

Top performers who join new companies find that the transitions they must make are tougher than they had anticipated. When a star tries to learn about the procedures, personalities, relationships, and subcultures of the organization, he is handicapped by the attitudes of his new colleagues. Resentful of the rainmaker (and his pay), other managers avoid the newcomer, cut off information to him, and refuse to cooperate. That hurts the star’s ego as well as his ability to perform.

Meanwhile, he has to unlearn old practices as he learns new ones. But stars are unusually slow to adopt fresh approaches to work, primarily because of their past successes, and they are unwilling to fit easily into organizations. They become more amenable to change only when they realize that their performance is slipping. By that time, they have developed reputations that are hard to change…

At one investment bank, the head of the research department told us: “I painfully learned that hiring a star analyst resembles an organ transplant.”

It isn’t just that people make organizations perform better. The organization also makes people perform better. [Article suggests 70%/30% split of org/individual]

As we had suspected, the performance drop was most pronounced after the star analysts moved from one of the big companies to one of the small firms, losing company-specific resources in the process. When stars hopped between companies with similar capabilities, their performance dipped for only two years. From the third year on, they did as well as the analysts who had not changed firms, presumably because they were able to pick up some company-specific skills. The performance of analysts who migrated from smaller to bigger firms often did not dip, possibly because they acquired new resources, although they still didn’t do any better than before the move.

^^The Risky Business of Hiring Stars (HBR)

Yet another post on women in tech

“They have no one to point to that looks like them, where they can say, ‘I can do that, too,’ ” she says.

It’s ironic, given that computer science was founded largely by women. In the mid-1800s, Ada Lovelace, the only legitimate child of Lord Byron, did much of the work behind Charles Babbage’s proposed “analytical engine,” writing what’s now hailed as the world’s first computer program. A century later, Grace Hopper, after serving as an architect of the watershed Mark I, invented the “compiler”—a basic infrastructural program—and coined the term debugging after finding a moth in a machine.

^^Vogue: How Pinterest Engineer Tracy Chou is Breaking the Silicon Ceiling

Back in the mid-1980s, women represented 30-40 per cent of all university students in computing science courses in the UK and US. A similar proportion of women worked in this nascent industry, too. But, as the sector has grown, the female proportion has plunged: today barely one-tenth of all US students studying computer science are women, and, as Susan Wojcicki, chief executive of YouTube, recently lamented in a blog post: “Fewer than 1 per cent of high school girls express interest in majoring in computer science.”

^^FT: Tinder highlights tech world’s frat-pack culture

A story about leadership and trust

Lieutenant Lohr, a Nashville-born former Texan and father of three with an Army-style buzz cut, is one of the commanders overseeing security at the Ferguson police station. He never wears riot gear, even when he wades into a group of protesters to answer questions, resolve disputes or listen to a stream of insults. Protesters at the gates ask for him by name, so they can make complaints, for example, about the use of tear gas or of officers being too aggressive in arresting a woman.

^^NY Times

From every bad situation come plenty of opportunities to be introspective and to learn. Lieutenant Lohr sets a great example for others to follow. Leaders create trust, and with trust, communities and teams have a fair chance at stability and growth.

Let’s step away from the specific facts in this one case, because it’s not about just one case.

Justice is still a work in process in America. According to the WSJ, “Prison sentences of black men were nearly 20% longer than those of white men for similar crimes in recent years, an analysis by the U.S. Sentencing Commission found.” If you’re interested in dozens of similar statistics, see the article “If Trayvon Martin, Eric Garner, and Michael Brown Were White, Would the Tea Party Declare Tyranny?” from the Huffington Post.

But why? The rhetoric in the press & from our elected officials is irresponsible at best, misleading and fear-mongering at worse. Take the former mayor of NYC, Rudy Giuliani:

“I think just as much, if not more, responsibility is on the black community to reduce the reason why the police officers are assigned in such large numbers to the black community,” He added: “It’s because blacks commit murder eight times more per capita than any other group in our society.” (Atlantic)

How irresponsible and inflammatory from a man who almost surely knows better. Worth about $45M, 70 years old, NYU educated lawyer, who presided over a around 60% decline in crime rates in NYC as Mayor. This makes it sound like blackness itself causes crimes. But we know better. It’s the economy, stupid!

Income inequality has become increasingly the norm, especially since monetary policy has become a major growth driver (we left the gold standard in the 70s and haven’t looked back).

The results were unambiguous: when income inequality was higher, so was the rate of homicide. Income inequality alone explained 74% of the variance in murder rates and half of the aggravated assaults. However, social capital had an even stronger association and, by itself, accounted for 82% of homicides and 61% of assaults. Other factors such as unemployment, poverty, or number of high school graduates were only weakly associated and alcohol consumption had no connection to violent crime at all. (ThinkProgress)

Let’s not kid ourselves that communism is the answer. That’s a red herring. This isn’t about redistribution and actually having net worths the same. No, it’s about having improvements in wealth levels be shared by the entire workforce. The American dream coming true (or not). About having communities that are whole, where families stay together and parents have time to take care of their kids’ emotional well-being.

If the interpretation from social capital is correct, it suggests that building relationships through our schools, labor unions, farmers’ markets, and gun ranges, at City Hall and the State House, or active participation in our churches, temples, and mosques, can ultimately make us all more secure. … Remarkably, this kind of social activism is the single most important factor associated with reduced violence for any neighborhood in the world. (Scientific American)

My point is that the two are related: income inequality is directly linked to social capital. When you’re poor and working three jobs, do you really have time to shop at a farmer’s market, volunteer at school, and take up a hobby? Or you’re long-term unemployed and discouraged. Or you’re hungry and tired. Or maybe you’re uneducated. Or you don’t have an interest in contributing to the community.

Some circles are making a big deal of rioting and looting in Ferguson, MO. Do we think very low income, low education white folks would behave any better, if they felt trampled on?

But I’m surprised there aren’t more riots in America. If you set aside the top 10% of income earners in the US, real incomes have increased by a mere $59 since 1966 (vs 2011). That’s absolutely outrageous, given productivity levels have jumped in that time.

“In 2011 the average AGI of the vast majority fell to $30,437 per taxpayer, its lowest level since 1966 when measured in 2011 dollars. The vast majority averaged a mere $59 more in 2011 than in 1966. For the top 10 percent, by the same measures, average income rose by $116,071 to $254,864, an increase of 84 percent over 1966.” (Tax Analysts)

People must be aware they are getting a raw deal, yet they are still willing to stick with one of the two parties that are, together, responsible for how our government works today.

I still absolutely believe that those who take risks and build companies, who add jobs, deserve to be rewarded handsomely.

(to be continued)


PS: What about guns?

In a follow-up study in 2001 Kawachi looked specifically at firearm prevalence and social capital among U.S. states. The results showed that when social capital and community involvement declined, gun ownership increased (see Figure 3).

Figure 3. Social Capital and Gun Ownership

Kawachi points out that it is impossible to prove whether one factor caused the other, but the most reasonable interpretation is that people who don’t trust their neighbors are more likely to think guns will provide security. In this way the number of guns and the number of homicides both stem from the same root, suggesting that guns don’t cause murders anymore than cars cause fatal accidents. This was also the conclusion of a policy paper conducted by the London-based Centre for Economic Policy Research in 2005 that found no support for the argument that more guns cause more homicides. “The appearance of such an effect in past research,” wrote the authors, “appears to be the product of methodological flaws.” Unfortunately, gun control may not save us after all. (Scientific American)

above: video from Google on conquring the unconscious conscious

“Last year, Google said it was moving away from the crazy brainteasers it used to ask people in job interviews in favor of structured, behavioral queries like, “Give me an example of a time when you solved an analytically difficult problem.”
At the time, the company’s SVP of People Operations, Laszlo Bock, said this line of questioning provided more information about a candidate’s abilities than bizarre hypotheticals like, “How much should you charge to wash all the windows in Seattle?”

But a new video the company published yesterday reveals another reason Google has shifted to a standardized set of questions: It helps prevent hiring managers’ implicit biases about gender and race from influencing their decisions.”

^^Why Google Asks Everyone Applying For A Job The Same Exact Questions

“There is an old belief that women perform differently than men on musical instruments—not different and equal, mind you; rather, different and not quite as strong. If you believe someone plays less powerfully and you are watching him or her play, you might think to yourself, ‘I hear that sound less forcefully.’ Symphony orchestras around the world use blind auditions so that musicians are behind screens in order to prevent this belief from influencing a tryout.”

^^The Loudest Duck: Moving Beyond Diversity while Embracing Differences to Achieve Success at Work

Knowledge workers

Pretty clearly, although business is paying for knowledge workers, it isn’t getting much back. And if you look at the way we manage knowledge workers, the reason is obvious: we don’t know how.

One of the few things we do know is that for any knowledge worker, even for the file clerk, there are two laws. The first one is that knowledge evaporates unless it’s used and augmented. Skill goes to sleep, it becomes rusty, but it can be restored and refurbished very quickly. That’s not true of knowledge. If knowledge isn’t challenged to grow, it disappears fast. It’s infinitely more perishable than any other resource we have ever had. The second law is that the only motivation for knowledge is achievement. Anybody who has ever had a great success is motivated from then on. It’s a taste one never loses. So we do know a little about how to make knowledge productive.

^^McKinsey Quarterly from 1967

The heart and mind

For individuals’ behavior to change, you’ve got to influence not only their environment but their hearts and minds. The problem is this: Often the heart and mind disagree. Fervently.

^^Switch: How to Change Things When Change Is Hard

Managers primarily interested in power

The managers primarily interested in power, were the most effective, not only in achieving positions of influence inside companies but also in accomplishing their jobs.

^^Power: Why Some People Have It and Others Don’t

The female presence

Men not only trade more often than women but do so from a false faith in their own financial judgment. Single men traded less sensibly than married men, and married men traded less sensibly than single women: the less the female presence, the less rational the approach to trading in the markets.

^^Boomerang: Travels in the New Third World

Intelligence is overrated

Intelligence is often overrated as an attribute that will help people obtain power. That’s because intelligence seldom accounts for much more than 20 percent of the variation in work performance in any event, and the relationship between performance and attaining power is equally weak.

^^Power: Why Some People Have It and Others Don’t

The ones who achieve

The ones who achieve do so by experiencing and conquering obstacles, … even from their childhood days. These are the ones who were never denied their right to face some struggle, some adversity. Others were, in reality, cheated.

^^The Millionaire Next Door

It takes courage

It takes considerable courage to work in an environment in which one is compensated according to one’s performance.

^^The Millionaire Next Door

Liking what you’ve got to do

“And that,” put in the Director sententiously, “that is the secret of happiness and virtue—liking what you’ve got to do. All conditioning aims at that: making people like their un-escapable social destiny.”

^^Brave New World

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