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The Canada Emergency Wage Subsidy: First steps, missteps, and next steps

Published by Anonymous (not verified) on Tue, 19/10/2021 - 2:35am in


Jobs, Unemployment

The Canada Emergency Wage Subsidy can reasonably thought of as an experiment not to be repeated. This post is an excerpt from the conclusion to my forthcoming paper called “The Canada Emergency Wage Subsidy: First steps, missteps, and next steps.” Download a copy and read the full paper.

The Canada Emergency Wage Subsidy as an employer-based response to the pandemic intended to prevent business closures and prevent layoffs was certainly a program constructed in haste, but perceived to be necessary in the face of limits in the capacity of better designed existing programs, particularly the national unemployment insurance program.

Even so, the program was not informed by fundamental lessons from economic theory. It was not addressed to the fixed costs that actually determine business closures; it did not recognize that a subsidy nominally directed to worker payroll can be shifted to other purposes; and it was not, or in principle could not be, targeted on the margin, on businesses that would indeed have closed in the absence of support. This implies that the job losses actually prevented are much lower than the actual payroll covered, each person-month of employment saved costing $25,000 according to one estimate.

Income support of this magnitude paid directly to affected workers would likely not be considered politically acceptable among informed citizens, and it is therefore hard to imagine that the program would pass any reasonable cost-benefit analysis.

Going forward it will also be important to recognize the practical considerations that shaped, and perhaps even motivated, this program. Their downsides should be recognized. They call for policy makers to be as concerned with program delivery as they are with program design, offering ongoing investments in the modernization of physical and human capacity to deliver benefits.

One positive consequence of the Canadian experience is that these investments have been promised to overcome limitations in the capacity of the country’s unemployment insurance program. The expectation should be that in the future this program will play an even bigger role should it be necessary, particularly provisions within it designed to promote work-sharing which reduces the reliance on layoffs by offering benefits for adjustments to work-hours.

The practical experiences during the pandemic also call for policy makers to recognize that programs may interact and should be designed to complement each other. Other programs, notably the Canada Emergency Response Benefit, making real-time direct payments to individuals suffering income losses, were in some measure a substitute for the Canada Emergency Wage Subsidy, which was slower out of the starting gate and undersubscribed when it mattered most to the most vulnerable businesses during the first weeks and month of the pandemic. Success in making direct transfers to individuals to some degree made the wage subsidy less relevant, delays in getting it off the ground made it less necessary.

Finally, the practical considerations of public policy also call for policy makers to avoid policy drift, the development of vested interests that can prolong the duration of a program after its need has passed, or pervert its intent by informing it design. This calls for increased reliance on programs designed as automatic stabilizers, rather than on discretionary interventions.

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Published by Anonymous (not verified) on Thu, 14/10/2021 - 3:17am in


Labor, Jobs, strike

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The General Strike of 2021

On Tuesday, the Labor Department reported that some 4.3 million people had quit their jobs in August. That comes to about 2.9 percent of the workforce – up from the previous record set in April, of about 4 million people quitting.

All told, about 4 million American workers have been leaving their jobs every month since last spring.

Add this to last Friday’s jobs report showing the number of job openings at a record high. The share of people working or actively looking for work (the labor force participation rate) has dropped to 61.6 percent. Participation for people in their prime working years, defined as 25 to 54 years old, is also down. Over the past year, job openings have increased 62 percent. 

What’s happening? You might say American workers have declared a national general strike until they get better pay and improved working conditions. 

No one calls it a general strike. But in its own disorganized way it’s related to the organized strikes breaking out across the land – Hollywood TV and film crews, John Deere workers, Alabama coal miners, Nabisco workers, Kellogg workers, nurses in California, healthcare workers in Buffalo.

Disorganized or organized, American workers now have bargaining leverage to do better. 

After a year and a half of the pandemic, consumers have pent-up demand for all sorts of goods and services. But employers are finding it hard to fill positions. 

This general strike has nothing to do with the Republican bogeyman of extra unemployment benefits supposedly discouraging people from working. Reminder: The extra benefits ran out on Labor Day.

Renewed fears of the Delta variant of COVID may play some role. But it can’t be the major factor. With most adults now vaccinated, rates of hospitalizations and deaths are way down. 

Childcare is a problem for many workers, to be sure. But lack of affordable childcare has been a problem for decades. It can’t be the reason for the general strike. 

I believe that the reluctance of workers to return to or remain in their old jobs is mostly because they’re fed up. Some have retired early. Others have found ways to make ends meet other than remain in jobs they abhor. Many just don’t want to return to backbreaking or boring low-wage shit jobs. 

The media and most economists measure the economy’s success by the number of jobs it creates, while ignoring the *quality* of those jobs. That’s a huge oversight. 

Years ago, when I was Secretary of Labor, I kept meeting working people all over the country who had full-time work but complained that their jobs paid too little and had few benefits, or were unsafe, or required lengthy or unpredictable hours. Many said their employers treated them badly, harassed them, and did not respect them.

Since then, these complaints have only grown louder, according to polls. For many, the pandemic was the last straw. Workers are burned out, fed up, fried. In the wake of so much hardship, illness and death during the past year, they’re not going to take it anymore.

To lure workers back, employers are raising wages and offering other inducements. Average earnings rose 19 cents an hour in September and are up more than $1 an hour – or 4.6 percent – over the last year.

Clearly, that’s not enough.

Corporate America wants to frame this as a “labor shortage.” Wrong. What’s really going on is more accurately described as a living-wage shortage, a hazard pay shortage, a childcare shortage, a paid sick leave shortage, and a health care shortage.Unless *these* shortages are rectified, many Americans won’t return to work anytime soon. I say it’s about time.

Why ‘Work from Anywhere’ Works for Refugees

Published by Anonymous (not verified) on Mon, 20/09/2021 - 6:00pm in

Thon Mabior Jok was just 11 years old when he fled the violent conflict in his native South Sudan in 2002. He became one of millions of Sudanese forced from their homes, and settled in the sprawling Kakuma refugee camp in Kenya, which currently houses nearly 200,000 residents

Jok soon undertook his studies in the public schooling system and by graduation he had proven himself such a gifted pupil that he was hired as primary school teacher at the camp. Yet while helping to educate and improve the life prospects of refugee children in Kakuma was fulfilling, his salary of $50 per month was less rewarding.

“The money was very little,” says Jok. “It was not enough for me to sustain a decent lifestyle and cater for all my needs. I had brothers and sisters to support, too.”

But one day, Jok’s life prospects changed. The International Trade Centre and the Norwegian Refugee Council launched digital training on modern, in-demand skills such as email marketing and social media campaigns in Kakuma. Jok realized that, just like any worker looking to make themselves more marketable, he would need to upskill.

In 2020, he successfully applied to become a freelancer on UpWork, one of a new wave of apps and websites that facilitate internet-based work that are giving refugees the chance to earn a good income, to better integrate within their host countries, and to experience a kind of liberty and agency in their employment that they are rarely afforded. 

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According to a report published in August by the International Labor Organization (ILO), digital gig work has the potential to play a transformative role for refugees and migrants. Unlike location-based gig work like food delivery and taxi services, or on-demand domestic labor that is often exploitable, unstable and underpaid, the report found that desk-based work on digital labor platforms offers refugees a much more promising path toward steady, fulfilling employment.

“What’s needed more than ever are long-term durable solutions for refugees,” says Drew Gardiner, a youth employment specialist at the ILO who contributed to the report, which focused on case studies in Kenya, Uganda and Egypt. “If we can get them into decent work, that will help their integration.”

Gardiner says the lower barriers to entry and greater informality of digital labor platforms make them practical for uprooted workers looking for a foothold. Jobs such as digital design and data entry can often be done from anywhere that has internet access. And platforms like UpWork, making use of a legal grey area, accept alien ID cards and refugee documents, circumventing the issue of refugees often being unable to obtain work permits. At the same time, they provide more opportunities for women and those in vulnerable situations, as well as encouraging innovation and upskilling through the cutting-edge job opportunities available.

refugee campA refugee camp in Burkina Faso. Credit: Oxfam

Jok, who is now 30, works as a freelancer doing translation, data entry and social media campaigns from a computer lab in the Kakuma camp set up by the UN Refugee Agency (UNHCR). Like Jok, some 140 refugees living in Kenya’s Dadaab and Kakuma refugee camps have recently been trained in online freelancing, often with jobs such as translation or language teaching. 

Increasingly, intermediary organizations between platforms and workers are also being launched to help the latter with negotiating employment terms, contracts and protections. In Kenya, there is Digital Lions, which calls itself a “fair trade” digital agency; freelancing platform Ureed caters to Egypt and across the Middle East; and  Bulgaria-based social enterprise Humans in the Loop employs and trains refugees to provide data services to companies training machine learning algorithms.

Ghazaleh, a 22-year-old Iranian who emigrated to Sofia, Bulgaria, is now working for Humans in the Loop as their annotation coordinator, managing teams of freelancers who provide labeling data for images and video to help power AI programs. Tasks might, for example, include looking at images of products in a supermarket and entering data for their prices and descriptions.

“Image annotation is easy, so it helps lots of people,” says Ghazaleh, who began her job in May after being trained as an annotator herself. “If you have a computer or PC at home, you can be an annotator from every place and every hour.”

But these resources are far from guaranteed for refugees, and therefore mean that work on digital labor platforms does come with serious limitations. In refugee camps, access to computers, suitable workspaces and digital infrastructure is a luxury that many residents are not afforded.

Jok echoes these concerns: the internet and electricity connections aren’t reliable in Kakuma. And with clients living in different time zones, sometimes there are tough working hours. As with all freelancers, the work can be irregular too. “It’s not perfect,” he says. “That’s for sure.”

Gardiner, of the ILO, points to other areas for improvement. Algorithms should be used to prioritize workers who have had fewer work offers than others. Collective bargaining and basic principles for negotiations between workers and employers need to be established. And platforms should create insurance schemes that cater specifically for individual refugee workers. 

“We do promote the extension and inclusion of refugees in digital labor platforms, but we must have these minimum requirements,” he says.

Despite the teething problems, Jok is unequivocally positive about the opportunity that digital labor platforms offer to the millions around the world who have been forced from their homes.

“In Kakuma, we have lots of youths that are jobless,” says Jok. “Online platforms can create a new life. It’s helped me a lot and has given me a future. It can do the same for them.”

The post Why ‘Work from Anywhere’ Works for Refugees appeared first on Reasons to be Cheerful.

Grandparents Watching the Kids? Your Job Could Be Paying Them

Published by Anonymous (not verified) on Mon, 30/08/2021 - 6:00pm in

Originally published by The 19th

In rural northwest Arkansas, one of the country’s child care deserts, it likely would have taken Morgan Edington many months before she found a reliable sitter to care for her one-year-old son on the unlucky nights when both she and her husband were called into work at the Clorox factory a town away.

She could manage most days, when the two parents were on opposite schedules. What she needed was what the child care industry calls “backup care,” the kind taken up by friends, family members or the occasional high school or college student when a parent is in a pinch. If it’s paid at all, it’s often not enough, and, for parents like Edington, who need it at odd hours, it’s usually unreliable.

Until recently, Edington would have had few options. She has no friends or family nearby, and even big providers — like and Bright Horizons, which offer backup care as an additional service — can’t always fill the gap.

But that’s all been changing. The pandemic caused mass closures of child care centers, putting a focus on just how weak the existing structures for care really are. That sent parents — especially mothers — in search of solutions.

Edington found hers in Helpr, a new, fast-growing service that allows parents to screen and book sitters in their area for last-minute care through an app. Parents can also add their own existing sitters — siblings, parents, friends — to the database and help them get paid for all the care they would typically perform for free. The service is paid for by parents’ employers, who partner with Helpr to subsidize the care as a work benefit. In the last year, Helpr has tripled its growth, now reaching nearly 100,000 workers through partnerships at about 30 companies, including Snapchat parent Snap. It’s also influencing the first piece of legislation in the country, out of California, that seeks to mandate that large employers offer backup care.

Edington recently got access to Helpr through her employer, Clorox, which offers 60 subsidized hours through the app. She taps into it once or twice a month, when her schedule overlaps with her husband’s, and pays her sitter about $8 an hour. Clorox pays the rest. (Workers on the app get paid the area’s living wage.)

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For Edington, accessing the aid was transformational. In rural Arkansas, her options for affordable, quality care are slim. Her only choice was often a friend who lives three hours away.

“It fills a big gap that we have because we don’t have anyone else,” said Edington, 25, who is expecting her second child in November. Without options, she said she would “rather miss work than leave my kid with someone I don’t know” and don’t trust.

Having accessible child care is crucial to the financial and economic stability of parents, especially mothers, who are most likely to take time off to do care work. About six percent of unemployed people, most of whom are women, are not working because they are caring for a child who is not in school or daycare. That’s 6.3 million people, according to the most recent survey from the U.S. Census Bureau.

The disruption of child care has contributed to an exodus of hundreds of thousands of women from the workforce in the past year. A survey by the Federal Reserve Bank of Philadelphia in August found that nearly half of manufacturers in that region said child care challenges made it difficult to bring back furloughed workers or hire new ones, a problem that was affecting assembly lines. And in recent months, child care access has been framed by President Joe Biden’s administration as critical to parents returning to work.

It’s the moment Helpr co-founders Kasey Edwards and Becka Klauber Richter have been working toward in the five years since they launched the app after working in the child care industry themselves. They created Helpr with the idea that access to backup child care could help parents fully participate in the workforce and keep them employed. Now the moment is meeting them, the pandemic making the case they’ve been trying to make for years: Offering this benefit is essential, not tangential.

“We envision a future where … child care should sit alongside [employment benefits like] vision and dental,” Edwards said. “It shouldn’t sit alongside the perks program. We’re not talking about discounted tickets to the Lakers game or whatever.”

The undervaluation of care work is reflected in how it’s paid — and how it’s not.

The median hourly pay for a child care worker in the United States was $12.24 in May 2020, according to the most recent data from the Bureau of Labor Statistics, making it one of the lowest paid occupations in the country. Child care workers earn less, on average, than retail sales workers, who earn a median wage of $13.02; housekeepers, who earn $12.61; parking attendants, who earn $13.02; and telemarketers, who earn $13.42.

Low pay and few benefits also contribute to high turnover and low retention rates in the child care industry — as high as 40 percent in some states. This makes it hard to find quality care for families that are already paying exorbitant rates to access it, annually costing parents more than in-state tuition at a four-year college in some states.

The care work that isn’t paid — the work often performed in homes by women — is estimated to be worth trillions of dollars a year. One estimate found that the unpaid work women do is worth at least $1.5 trillion a year in the United States if those women were paid minimum wage. On a global scale, that’s $10.9 trillion.

To help address that, Helpr ensures professional sitters are paid about $25 an hour on average, but must have at least two years of child care experience. The app is in most major cities, about 20 in the United States, plus internationally in Mexico, Canada, China, Argentina, Australia and others. Wages are adjusted based on the living wage in each location.

Helpr is also hoping to change another practice: expecting family and friends who typically do care as a favor for parents to not get paid at all. The service launched a new feature for onboarding family and friends in 2019, and it has since become fully integrated into the Helpr app. It’s the most popular option for families, Edwards said. About 700 family and friend sitters have been uploaded so far. The app also offers about 1,000 of its own professional sitters.

“Everybody has some sort of village that they lean into, and we try to help those folks see that you can stop asking your sister-in-law for favors and you can put some money behind the transaction and formalize that relationship around that caregiving need,” Edwards said. “That way it’s more reliable, it’s more punctuated and it’s more helpful to both parties in the transaction.”

Grace Johnston, a tech worker in California, has onboarded her sister and sister-in-law into the Helpr app to help with care for her daughter, who was born in May 2020, when Johnston and her husband transitioned to working from home.

“I realized within a few days that it was unrealistic for us to both work full time and watch our baby. That is when we started relying on Helpr,” Johnston said. “Having someone for just a few hours a day has made a massive difference and has made it feel totally sustainable to both keep working from home with the baby.”

For family and friend sitters, parents provide a name and email, and Helpr handles the onboarding process. Johnston uses the app several times a week and pays $6 an hour. Her employer, a tech company in Silicon Valley, pays the rest. Because she can rely on sitters she already trusts, Johnston said she feels more comfortable using care services more frequently, calling it the single thing that has had the “biggest impact on my journey to become a working mom.”

But there are still barriers to adoption, both for parents and companies, Edwards said. About 42 percent of parents are afraid using the child care benefits provided through their employer could put their job at risk, according to a survey by Catalyst, a nonprofit that does research on working women.

“We’re going to continue to face challenges on user adoption,” Edwards said. “There’s still a lot of guilt for a lot of moms and parents who don’t want to feel like they’re over overstepping or leaving their kids alone.”

What’s encouraging, in the face of the pandemic, is that more companies are looking to normalize access to child care benefits as an economic imperative that improves retention. The recession has also created the space to even have the conversation about solutions.

“We’re really excited about this being a new language to say, ‘The bottom line of any company is highly supported by this network of people who are taking care of everyone’s kids,’” Edwards said.

This story was supported by the Solutions Journalism Network, a nonprofit organization dedicated to rigorous and compelling reporting about responses to social problems. It is part of SJN’s SoJo Exchange.

The post Grandparents Watching the Kids? Your Job Could Be Paying Them appeared first on Reasons to be Cheerful.

Notifications Off! The Distraction-Free Benefits of Five-Hour Work Days

Published by Anonymous (not verified) on Mon, 28/06/2021 - 6:00pm in

At first, the employees at Digital Enabler in Bielefeld, Germany, thought their boss, Lasse Rheingans, was joking. “Would you like to work 40 percent less at full pay?” he asked when he stepped in front of them in November 2017.

His proposal sounded too good to be true. But Rheingans was serious. 

The 40-year-old CEO now heads up the first company in Germany to have implemented a five-hour workday. The idea is simple: Employees at the tech agency arrive at 8 a.m., work with a minimum of interruptions, and leave at 1 p.m. after a five-hour burst of condensed, optimized productivity. The rest of the day is theirs to use as they choose: they can spend time with family, pursue creative projects, hit the soccer field or just check things off their personal to-do list. Perhaps surprisingly, after three and a half years, both the employees at Digital Enabler and the company leadership consider the new work model a resounding success. 

“None of our people want to return to the old model,” Rheingans says. “If we measure our success in client satisfaction, we have proven that we deliver great results for our clients in less time.”

Rheingans got the idea from working in other countries, like Australia, where he encountered more flexible work models than the 8-to-5 shifts in his native Germany. When he returned, he regularly worked 12- to 15-hour days leading various tech agencies. “The expectation was that I always had to be available,” he says. “When you are a social person like I am, have two kids as I do, and you also want to make time for sports, the load quickly becomes unsustainable. It is inhumane.”

lasse rheingansLasse Rheingans

According to some studies, 80 percent of full-time workers report being chronically stressed. Rheingans was one of them. He felt burnt out and began researching other work models, including those of UC Berkeley professor Morten Hansen, who analyzed the work habits of 5,000 managers and employees and concluded: “Being busy is not an accomplishment!” 

“People mistake the number of meetings, task forces, committees, customer calls, customer visits, business trips and miles flown for accomplishments,” Hansen writes, “even if in reality all these activities may not add value.” 

Rheingans reevaluated his tasks, streamlined his schedule and announced to his colleagues matter-of-factly, “Two days a week, I’ll leave after lunch.” Not surprisingly, they weren’t exactly supportive. “I had to renounce part of my paycheck because they were still stuck in the old thinking: x hours of work equal x amount of pay,” Rheingans remembers. His approach caused friction, and eventually he left to buy Digital Enabler, now renamed Rheingans, an agency for online marketing strategies.

As its new CEO, Rheingans wanted to see if he could shape the company according to the work ideas he had read about, especially the book The Five Hour Workday by the Californian CEO Stephan Aarstol, whose company produces paddleboards and pioneered the five-hour workday in 2015. “I’m not a boss who’s too prescriptive,” Rheingans says. “I opened up a playing field and asked the employees for their ideas.” 

The transition came with challenges. “The five-hour workday revealed weaknesses we had to address, for instance, in our communication process and the distribution of responsibilities,” he says. The company reassigned roles according to team members’ strengths using Gallup’s Clifton Strengths tool. Distractions were minimized.  “We turned off all notifications, and we only check emails twice a day.” Hour-long meetings were reduced to fifteen minutes, with a clear agenda.

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What immediately strikes visitors as unusual in the bullpen of Rheingans’ company is the stillness. The usually buzzing atmosphere at a tech agency is replaced by a sense of utter concentration. No cell phones vibrate, no notifications beep. “I prefer five hours with motivated team members who are happy and twice as productive,” Rheingans says. 

More efficiency, fewer hours

The World Health Organization (WHO) just published a global study showing a nearly 30 percent increase in loss of life associated with longer working hours between 2000 and 2016. To combat this trend, shorter work days and work weeks are catching on in a range of countries and industries. Spain recently became the first country to trial a four-day work week and other countries want to follow suit. 

Rheingans had specific reasons for not choosing a four-day work week. “The four-day work week means going back to the eight-hour work day, and no one can concentrate for that long. You lose at least two hours through the lunch slog, and even more through small talk and inefficient workflow,” he says. “Nobody works efficiently for more than five hours.” Rheingans references a Stanford study and a 2016 U.K. study in which almost 2,000 workers reported that they could only concentrate for a little under three hours at a time. Rheingans believes that 1 p.m. is the perfect time to go for lunch with friends, take out the mountain bike or to ponder creative work solutions in a more inspired setting. “We have some of our best ideas when we’re out in nature or on the beach.”

five hour work dayWhat immediately strikes visitors to Rheingans’s company is the stillness –– the usually buzzing atmosphere at a tech agency is replaced by a sense of utter concentration. Photo courtesy Rheingans

He also makes two convincing arguments why he didn’t simply opt for more flexible work hours: the convenience of quick decision making when every team member is present, and, perhaps even more pertinent, employees at companies with flexible work hours often ended up working more because all boundaries are gone. “I know of a company that re-introduced the time stamp clock — not to make sure that the employees work enough hours, but that they don’t work too much.”

Most of Rheingans’s employees use their extra free time to fulfill passions. For instance, one project manager started taking piano lessons, fulfilling a dream she had since childhood. Others devote more time to sports or their family. In particular, the model works well for parents. Nearly half of Rheingans’s 15 employees are women, an unusually even split for a tech company. 

The limitations of less hours

Shorter work days are being piloted in industries that run the gamut from farming to health care.

Norway’s largest dairy producer, Tine, introduced a six-hour-work day, which includes a half-hour lunch break, at full pay in 2006 because of a high sick rate (10 to 13 percent) at their cheese factory in Trondheim. After the change, the sick rate was halved while productivity rose by 30 percent. But the positive effects petered out over the years, and the company recently returned to eight-hour work days. A spokesman says it’s too soon to say how the switch back affects sick rates and performance.

For similar reasons, a care home in Gothenburg, Sweden, tried six-hour work days for two years between 2015 and 2017. The staff loved it — they reported spending more quality time with the residents, the sick rate dropped by ten percent and overall staff health improved by 50 percent, according to surveys. But since nursing patients require round-the-clock care, the home had to hire 15 new employees, which meant a 22 percent increase in costs, and thus returned to the eight-hour work day after two years. 

Ultimately, work is about more than efficiently churning out an end product. Building relationships and networking factor into workplace satisfaction, too. This is one reason Stephan Aarstol, the founder of Tower Paddle Boards, reinstates the eight-hour workday in winter for team-building purposes while keeping the five-hour workday in summer so his employees can go surfing. Rheingans, too, recognized the need for social interaction and regularly organized company events before the pandemic. Twice a week, the team held a “cooking club” where everybody cooked and ate together after work. “Participation was voluntary,” Rheingans explains, “but everybody showed up.” 

What Rheingans hadn’t expected was that the switch to the five-hour work day would change the entire company mission. Interest from other companies prompted him to expand its portfolio to include workplace strategizing. He hired a psychologist to assess the culture and satisfaction at both his own and his clients’ companies.

“We see a momentum that started years ago with new work models and now assumes new importance through the pandemic,” Rheingans says. “Many people refuse to return to the same old practices as before.” He quotes a recent study that surveyed more than 2,000 workers in Germany, Austria and Switzerland — due to the pandemic, nearly 50 percent of them were questioning their old work structure. “I still believe motivated employees will do the best job,” he says. “Instead of counting work hours, we now count good work.”

The post Notifications Off! The Distraction-Free Benefits of Five-Hour Work Days appeared first on Reasons to be Cheerful.

Job Seekers’ Beliefs and the Causes of Long-Term Unemployment

Published by Anonymous (not verified) on Thu, 17/06/2021 - 12:41am in

Andreas I. Mueller, Johannes Spinnewijn, and Giorgio Topa

LSE_2021_job-finding_topa 920_x_576

In addition to its terrible human toll, the COVID-19 pandemic has also caused massive disruption in labor markets. In the United States alone, more than 25 million people lost their jobs during the first wave of the pandemic. While many have returned to work since then, a large number have remained unemployed for a prolonged period of time. The number of long-term unemployed (defined as those jobless for twenty-seven weeks or longer) has surged from 1.1 million to almost 4 million. An important concern is that the long-term unemployed face worse employment prospects, but prior work has provided no consensus on what drives this decline in employment prospects. This post discusses new findings using data on elicited beliefs of unemployed job seekers to uncover the forces driving long-term unemployment.

The long-term unemployed face significantly worse employment prospects

A robust finding in labor economics is that the chances of finding a job decline significantly the longer a person is unemployed (see, for example, Machin and Manning [1999]). This empirical regularity is referred to as “negative duration dependence.” A long-standing question is the extent to which this phenomenon reflects an actual worsening in job-seekers’ job prospects—for instance because one’s skills deteriorate over time—or rather the shifting composition of the pool of unemployed (see, for example, Lancaster [1979], Heckman and Singer [1984]): if the unemployed are heterogeneous in their propensity to find a job, those with a higher underlying job-finding rate exit unemployment sooner, while those with a lower job-finding rate make up a progressively larger and larger share of the unemployed. We refer to the former as “true” duration dependence and to the latter as “dynamic selection” or heterogeneity in job-finding. While separating the two effects is empirically challenging, the two competing explanations have different implications for labor market policy. True duration dependence may require timely job search incentives or re-training programs, while heterogeneity would call for the targeting of re-employment efforts.

A novel way of disentangling these effects is to jointly use data on job-seekers’ subjective perceptions of their chances of finding a job, together with actual job-finding rates at different unemployment durations. As we show in Mueller et al. (2021), the covariance between perceptions and actual job finding helps uncover the extent of ex ante heterogeneity in underlying job-finding probabilities. The remaining duration dependence can then be attributed to a “true” decline in one’s employment prospects.

Here we use data from two novel sources, namely the New York Fed’s Survey of Consumer Expectations (SCE; see Armantier et al. [2017]) and the Survey of Unemployed Workers in New Jersey (NJUI; see Krueger and Mueller [2011]). Both surveys follow the same respondents over time, enabling us to trace how the same individuals update their perceptions as their unemployment spells progress and when they find employment. The SCE is a monthly online survey of a rotating panel of household heads in the United States that started in June 2013, whereas the NJUI is a weekly survey of unemployed workers sampled among recipients of unemployment insurance benefits in New Jersey in the fall of 2009. In the SCE, unemployed job seekers report the probability that they expect to find a job within the next three months. In the NJUI, job seekers report the probability that they expect to be re-employed within the next four weeks. The beliefs are elicited up to twelve times in the SCE, and up to five times in the NJUI, for job seekers who remain unemployed.

Job-finding perceptions and actual labor market transitions

The chart below shows the average realized job-finding rate at the three-month horizon for different sets of job seekers, grouped by the length of their elicited three-month job-finding perceptions. The positive relationship reveals the strong predictive nature of the elicited beliefs: on average, those who report a higher perceived chance of finding a job over the next three months are more likely to find a job within that time frame. A related finding (not shown here) is that job-finding perceptions are also highly predictive of actual job-finding rates over the subsequent three months—that is, between months four and six from the time the belief was elicited. This indicates the persistence of potential differences in job finding.

LSE_2021_job-finding_topa chart-01

While highly predictive, the subjective perceptions in our data also display an optimistic bias overall, confirming prior evidence in Spinnewijn (2015). The next chart shows averages of the elicited three-month job-finding perception and realized three-month job-finding rate for different ranges of unemployment duration. The chart confirms the strong negative duration dependence in actual job-finding rates. Perceived job-finding probabilities also decline but at a slower pace. Indeed, while perceptions are roughly in line with realizations at the start of a spell, a gap emerges as the spell continues, with elicited beliefs on average higher than actual job-finding rates—indicating a widening optimistic bias at longer durations. Moreover, we find that job seekers do not revise their beliefs downward as they remain unemployed, so the observed decline in perceived job finding is fully driven by dynamic selection.

LSE_2021_job-finding_topa chart-02

True duration dependence or heterogeneity?

As mentioned above, to disentangle the roles of dynamic selection and “true” duration dependence in explaining the observed decline in actual job finding, we exploit the availability of data on both the individual perceptions and realizations of job-finding, together with the ability to follow the same individuals over time. As detailed in Mueller et al. (2021), we do so both in a “model-free” way, looking for a lower bound of the contribution of heterogeneity, and in a statistical model that allows for biases in perceptions and for transitory as well as persistent differences in job finding across job seekers. We find that about 85 percent of the decline in job-finding rates by duration is due to heterogeneity in job-finding “types,” suggesting a limited scope for actual deterioration in one’s employment prospects over the course of an unemployment spell. The chart below illustrates this graphically: at an unemployment duration of zero months, the distribution of underlying job-finding probabilities is very dispersed, reflecting the large heterogeneity in types. At higher durations (six or twelve months), the distribution becomes more and more compressed toward lower job-finding propensities, reflecting the effects of dynamic selection in the unemployment pool.

LSE_2021_job-finding_topa chart-03

Biased beliefs and long-term unemployment

Our analysis underlines the importance of the heterogeneity in unemployed job seekers’ employment prospects. But job seekers underestimate these differences. Those with low underlying employment prospects tend to be overly optimistic and vice versa. The corresponding dynamic selection drives the optimistic bias among the long-term unemployed. Importantly, the under-response of beliefs can itself induce a higher incidence of long-term unemployment. Job seekers with worse employment prospects discard too many potential job offers, as they hold out for the possibility of a better offer in the future. Workers with better prospects do the opposite. The differences in re-employment thus get magnified through job-search behavior. Incorporating such biases in beliefs into a model of job-search behavior, we find that they may raise the incidence of long-term unemployment by 10 percent—a significant amount.

Overall, these findings suggest that the design of unemployment policies should take the heterogeneity across workers losing their jobs seriously due to the resulting selection into long-term unemployment. Improving job seekers’ information about their employment prospects may further help to lower the high incidence of costly long-term unemployment.


Armantier, Olivier, Giorgio Topa, Wilbert van der Klaauw, and Basit Zafar, “An Overview of the Survey of Consumer Expectations,” Economic Policy Review, 2017, 23 (2), 51-72.

Heckman, James J. and B. Singer, “The Identifiability of the Proportional Hazard Model,” The Review of Economic Studies, 1984, 51 (2), 231-241.

Krueger, Alan B. and Andreas I. Mueller, “Job Search, Emotional Well-Being, and Job Finding in a Period of Mass Unemployment: Evidence from High-Frequency Longitudinal Data,” Brookings Papers on Economic Activity, Spring 2011, 1 (1), 1-70.

Lancaster, Tony, “Econometric Methods for the Duration of Unemployment,” Econometrica, 1979, 47 (4), 939-56.

Machin, Stephen and Alan Manning, “The Causes and Consequences of Longterm Unemployment in Europe,” in Orley C. Ashenfelter and David Card, eds., Handbook of Labor Economics, Vol. 3, Part C of Handbook of Labor Economics, Elsevier, 1999, pp. 3085-3139.

Mueller, Andreas I., Johannes Spinnewijn, and Giorgio Topa, “Job Seekers’ Perceptions and Employment Prospects: Heterogeneity, Duration Dependence, and Bias.” American Economic Review, 2021, 111 (1), 324-63.

Spinnewijn, Johannes, “Unemployed but Optimistic: Optimal Insurance Design with Biased Beliefs,” Journal of the European Economic Association, 2015, 13 (1), 130-167.

Andreas I. Mueller is an associate professor of economics at the University of Texas at Austin.

Johannes Spinnewijn is an associate professor of economics at the London School of Economics.

Giorgio Topa is a vice president in the Federal Reserve Bank of New York’s Research and Statistics Group.

How to cite this post:

Andreas I. Mueller, Johannes Spinnewijn, and Giorgio Topa, “Job Seekers’ Beliefs and the Causes of Long-Term Unemployment,” Federal Reserve Bank of New York Liberty Street Economics, January 29, 2021,


The views expressed in this post are those of the author and do not necessarily reflect the position of the Federal Reserve Bank of New York or the Federal Reserve System. Any errors or omissions are the responsibility of the author.

Britain Is Pioneering the Menopause-Friendly Workplace

Published by Anonymous (not verified) on Fri, 21/05/2021 - 6:00pm in

“I’m now like the woman I was when I was 25,” says 51-year-old mother of four Katie Taylor. “I’ve got the energy of someone half my age. I’m raring to go.”

Taylor has come a long way from the anxiety, depression and fatigue she was plunged into at age 43, which four years of medical consultations and exams finally diagnosed as symptoms of menopause. The toll it took on her mental and physical well being forced her to resign from her job as a charity marketing manager. “If I’d had the right diagnosis, treatment and support from day one, I would probably have had another 20 years of my career where I could have really gone for it,” she says. 

Taylor is exactly the type of person that London Mayor Sadiq Khan was hoping to reach last week when he announced his city’s “world-leading” policy on menopause. The policy, now being negotiated with the city’s unions, could offer training for managers, awareness raising and even paid time off to thousands of working women across all municipal agencies, from transport to parks to policing. 

While groundbreaking, the announcement didn’t come out of thin air. In recent years, the U.K. has become a pioneer in public policies and corporate cultures that support working women with menopause. “Women of all ages deserve to feel welcomed and accepted at work,” said Mayor Khan, “and I want to lead by example in encouraging businesses, public sector organizations and our government — which too often fails them — to do all they can to ensure this.”

A condition that scuttles careers 

Katie Taylor is far from alone. According to surveys, 59 percent of working women in the U.K. between 45 and 55 with menopause symptoms say it negatively impacts them at work. Menopause causes 25 percent of U.K. women to consider leaving their jobs and 11 percent not to pursue promotion opportunities. There’s a cruel irony to this: women over 50 are Britain’s fastest growing workforce demographic. And the average age for menopause transition is 51.  

This problem impacts employees and companies alike, which is why the growing movement to do something about it is being pushed, in part, by employers. Big companies such as Vodafone, British broadcaster Channel 4, bank HSBC and car sales website Auto Trader have adopted policies that include paid leave and menopause training. Women affected can apply for the leave to cover time off for medical support or to deal with symptoms. At Channel 4, the menopause policy is administered and overseen by 4Women, its gender equality staff network group, which runs awareness-driving panel events for all staff, while HSBC has trained “menopause advocates” to improve understanding and offer support to other staff. Auto Trader is among a growing number of companies offering sessions for affected staff — both women and men — to help them recognize the symptoms and direct them to the right resources. 

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The policies appear to be popular. Channel 4, which launched its policy in 2019, recently published data from a company survey showing that 10 percent of female employees have used or plan to use the menopause support on offer, and 78 percent of staff feel better about the company as a place to work. 

While such corporate-reported results are encouraging, only independent evaluation can ensure that these companies are living up to their promises and obligations. To that end, last month saw the launch of a nationwide Menopause Friendly Accreditation initiative to train and certify menopause-supportive U.K. companies. The scheme, which has 50 companies on board so far, awards a badge to those who meet the criteria, which include policies, training, engagement and impact. Companies that join are encouraged to run regular all-staff surveys to measure awareness, understanding and uptake of their menopause policies, as well as understand their effects on factors like well being and inclusivity.

“Evaluation is absolutely key. Some organizations say they’re menopause-friendly, but they haven’t changed their culture,” says Deborah Garlick, director of Menopause in the Workplace, a corporate training provider. Garlick says this is what makes the accreditation process vital. “Then if you can say a policy has reduced sickness, or increased inclusivity by a certain percent, that makes it so much more tangible.” 

Despite this, data and accountability across the business landscape is generally lacking, says Garlick. And 90 percent of U.K. businesses still don’t offer any specific support for employees with menopause.

Taylor believes that needs to change to keep women in the workforce for as long as they want to be. Once she was correctly diagnosed, she embarked on “life transforming” hormone replacement therapy that eased her symptoms. Her recovery inspired her to launch The Latte Lounge, an online lifestyle network for women over 40, which now offers businesses advice on how to support its employees with menopause. 

Today, her services are in demand across the U.K. She hosts talks, runs company-based clinics with specialists, and drafts corporate guidelines and policies. She also shares tips for business leaders: offer symptom checklists, access to medical experts, remote and flexible working policies, cool and quiet office workspaces, and easy access to desk fans and drinking water.

“I’m doing this to help women stay in their jobs. Eventually, I hope it’ll just become a matter of course, like parental leave. If you’re being helped at work and understood, then you’ll get on top of the problem a lot quicker,” she says. “If you feel supported and not made to feel embarrassed, you’re going to stay with that company.”

The post Britain Is Pioneering the Menopause-Friendly Workplace appeared first on Reasons to be Cheerful.

When One City Gave People Cash, They Went Out and Got Jobs

Published by Anonymous (not verified) on Tue, 11/05/2021 - 6:00pm in

Stockton, California has gotten a lot of press for its experiment in providing a basic income to its residents, but it wasn’t until a recent study looked at the first year of results that we saw proven evidence of what impacts the experimental program was having. 

Besides feeling less pain and anxiety about their lives and their financial situations, a surprising percentage of the program’s recipients got jobs. By the end of the first year of the study (2019, before the pandemic began) full-time employment in the recipient group had risen from 28 percent to 40 percent — double the increase found among folks who didn’t receive the money. 

This runs counter to some conventional wisdom, which says that free money disincentivizes work. Rather, the report, along with anecdotal evidence, seems to say the opposite: it is the uncertainty that low-income folks live with that makes it harder for them to find the jobs they desire. Providing this modest monetary cushion allows folks to realize their potential, which benefits the entire community.

How does it work?

This project in Stockton was an experiment to see how low-income folks’ lives would be affected if they received $500 a month with no strings attached. Called the Stockton Economic Empowerment Demonstration (SEED), the initiative was privately funded — by, among others, Facebook co-founder Chris Hughes — so taxpayers couldn’t complain about their tax money being sent to strangers. (They actually did complain, not realizing this.)

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It was launched in 2019 by former Stockton Mayor Michael Tubbs (there’s an HBO documentary about Tubbs’s various efforts to bring Stockton back — highly recommended — what a story!) 4,200 letters were sent to randomly chosen folks who lived in neighborhoods where the average income was below the local $46,000 yearly average. 

The letters invited their recipients to participate in the SEED experiment, but it seems a lot of folks either didn’t believe the offer or never opened the letters. This might skew the “random sample” to folks who open their mail, but okay.

Ultimately, 125 recipients signed up to participate and got a debit card loaded with $500. Every month, another $500 was added. They could spend it any way they wanted. Not all of this spending was tracked, but some of it was — folks spent almost 40 percent of the money on food (this went up to 46 percent during the pandemic), and about two percent on “recreation.” Less than one percent was spent on tobacco and booze. People used the money to get out of debt, open checking accounts, buy clothes for job interviews and take out loans for classes and job training. This was not party time — this was money for getting one’s life on track.

stockton californiaThe Stockton basic income experiment was launched in 2019 by former Mayor Michael Tubbs and open to folks who lived in neighborhoods where the average income was below $46,000. Credit: HBO / “Stockton on My Mind” (Screen shot taken by David Byrne)

Previous experiments

The idea of providing a basic income is not new. In 1796 the political writer Thomas Paine proposed a “national fund” from which everyone would get a lump sum when they turned 21, and folks over 50 would get a payout every year. Lyndon Johnson’s advisors proposed a “basic income support system,” though Johnson ended up opting for programs that emphasized work skills and education instead. Richard Nixon’s “negative income tax” was tried in a number of U.S. states. (It was Milton Friedman’s idea — not exactly a socialist!) The employment impacts of the negative income tax were less than definitive, but a lot of younger recipients went back to school. 

Then the political tide turned. Reaganomics took hold, “welfare” became a dirty word and basic income experiments all but dried up in the United States. Until Stockton. 

To be clear, the Stockton experiment is not true universal basic income — the “universal” part of UBI stipulates that everyone, regardless of income, rich or poor, gets a check. The Stockton program is only for people living in low-income neighborhoods. So, in that sense, it’s not “universal” — rather, it aims to focus on where it can do the most good.

stocktonIt has often been argued that free money disincentivizes work. But the Stockton experiment seems to say the opposite: it is uncertainty that makes it harder for people to find the jobs they desire. Credit: HBO / “Stockton on My Mind” (Screen shot taken by David Byrne)

What’s next

Ex-Mayor Tubbs did not get re-elected, but he didn’t give up on the idea — he wants other cities to try similar projects, so he founded Mayors for a Guaranteed Income in June 2020 and now over 40 mayors have signed on. Though the coalition is an advocacy group, it is attracting funding — for example, from Jack Dorsey, CEO of Twitter, who promised $15 million to the project. (It does seem tech bros are enamored of this approach, perhaps because they foresee a day when we’ve all lost our jobs to robots and the pitchforks will come out — Elon Musk thinks it’s inevitable.) 

Other cities have now begun their own pilot programs, such as St. Paul, Minnesota and Compton, California. There’s a $24 million program in the current L.A. mayor’s budget proposal — the largest city to try this so far. Oakland has begun a pilot disbursing privately funded $500 monthly payments to residents who are Black, Indigenous or of color (they must also have a child under 18) because in Oakland these folks’ incomes average about one-third that of whites. Oakland was where the Black Panther Party was founded in the ‘60s, and that group had proposed a similar program. Now it is being tried.

Even knowing it works, how to pay for it?

Though the Stockton study shows that the “financial vaccine,” as the authors refer to it, does indeed give folks a means to rise up and find steady employment (after which they presumably won’t need the financial cushion) it has, as noted, been paid for by philanthropists and private money. Could anything like this become policy? Could it be sustainable? How would it be paid for?

Obviously, increasing taxes would help pay for such policies, but that’s not an easy sell. The existing and successful earned income tax credit could be expanded — this is a program that gives working low-income folks a significant break on their taxes. But it’s not cash in hand and it only applies to folks who already have a job. The assumption in designing it was that giving a boost to folks without a job discourages working. The Stockton study seems to say that assumption is not true.

For those who view these things through a purely financial cost/benefit lens, the cost of doing universal basic income on a national level — even just for low-income folks — might seem too high. In my opinion, however, that kind of purely financial analysis doesn’t take everything into account. For one thing, reducing poverty and unemployment reduces the need for social services. For another, not all in our lives can be reduced to dollars and cents. A Canadian trial in the ‘70s found that there was a drop in crime, hospital attendance and mental illness as well as poverty. The cost savings of all of that must count as a benefit.

So while the answer to how we would pay for this isn’t right in front of us, knowing that, if done right, people will sort themselves out and often get jobs is significant. The idea that people might know what’s best for themselves is radical, but these results seem to support that. That is encouraging, and it’s good news about us as humans. 

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‘Do What You Love’ Mantra Makes People Feel Like Failures

Published by Anonymous (not verified) on Mon, 19/10/2015 - 10:25am in



New Tools for Retrenched Workers

Published by Anonymous (not verified) on Mon, 07/09/2015 - 11:31am in


employment, Jobs