Topic Category: Labor

With Michigan becoming the 24th state to adopt a right-to-work law, the hand writing is on the wall: if you want to attract investment and create jobs, unions are a barrier not a benefit.

Understanding why Michigan chose the right-to-work path isn’t difficult to analyze when you consider the state has an unemployment rate of 9.1 percent. In Detroit, the state’s largest city, 34.5 percent of its citizens are on food stamps, 45.7 percent aren’t in the workforce and 99,702 of the city’s 363,000 homes stand vacant.

With the season of graduation parties in full swing, I am reminded of my own high school graduation decades ago. This year, my third child recently walked across the stage in cap and gown to receive her diploma. The world she enters is a very different place than what I have experienced.

To gain a competitive edge, companies in the United States and around the world are increasingly specializing in their core competencies and outsourcing non-core functions. To succeed, this requires more knowledgeable workers with deeper skill sets and the means to manipulate sophisticated new technologies.

A thorny aspect of business ethics emerges when we examine the outsourcing of work by American companies. Earlier in January 2012, an in-depth piece in The New York Times examined the subject especially as it applies to electronics manufacturing. Apple was the centerpiece of the well-researched and balanced story.

In today’s volatile post-recession era, emerging trends are forcing companies to redesign business models and enhance value propositions. At the same time, access to talent, which is in short supply, is becoming just as critical as access to capital.

For at least the past three years, general managers of China-based manufacturing operations have been sharply aware of tightening labor supply and rapidly increasing labor costs. Indeed, qualified labor availability and sharply increasing wage levels have risen to the top of the list of operating challenges across a wide range of industries and sectors.

Barely a month into his presidency, Barak Obama signed an executive order creating the White House Council on Women and Girls. “I want to be clear that issues like equal pay... are not just women’s issues,” affirmed the President in remarks. “Our progress in these areas is an important measure of whether we are truly fulfilling the promise of our democracy for all our people.”

Manufacturing employment has fallen by one-third over the past decade. Some Members of Congress contend that foreign trade has allowed American employers to offshore these jobs. In fact, technology has driven down manufacturing employment and computers have made manufacturers more productive by automating many routine tasks.

American manufacturers now employ fewer workers to produce more goods. This means less expensive goods, more manufacturing jobs for highly skilled workers, and the elimination of millions of low-skill assembly line positions. These same forces have reduced manufacturing employment around the world. Increased productivity led Chinese employers to eliminate millions of manufacturing jobs in the late 1990s.

For both domestic and foreign companies, hiring and retaining good employees in China is difficult. In fact, this may be the biggest hurdle facing most operations there. Adding to the challenge is the entry into the workforce of China’s “Generation Y” or “80 hou,” those born in the 1980s and raised in an era of relative affluence.

With the economy once again booming and labor market conditions relatively tight, 20-somethings with just a few years of work experience are in strong demand. What is the best way to attract and hire this new breed of Chinese employee?