Free traders, privatizers and devoted deregulators everywhere know job losses in manufacturing make up bad news, which is why they forecast new investment and expansion into sectors with higher productivity and more jobs for the future. They talk vaguely of new high tech jobs, always careful to mention computers and computer technology. They warn these new jobs require technical knowledge or college degrees and so they advise, “Get some training.”
Holding out training and education as the path to better jobs shifts the responsibility for failure, or a menial job with low pay, on to the individual and away from business and government policy. Alan Greenspan, the former Federal Reserve Chairman, was very clever doing that. When he would testify on Capital Hill an inquiring committee member would ask why America has so many low paid jobs. He would answer people need to prepare themselves for today’s new high tech economy. Today’s jobs require high skills, he would say. In other words, people could have better jobs if they would take the initiative to get that training, which means Mr. Greenspan cannot be held to blame for those low paid jobs. Committee members would usually stop their questions following his “Get some training” answer. I cannot recall any time when anyone asked him to provide a count of these high tech jobs, or some data, to go with his optimistic answer. It is time to make a count.
Over the years the inquiring minds at the Bureau of Labor Statistics started to wonder what skills and what training go with what jobs? They decided it was an important topic because they assigned many of their staff to study skill levels for the more than 700 United States standard occupations. They interviewed employers and employees to find out what someone has to know and do to qualify for employment in each occupation. They went to colleges and universities to learn about the curriculum for degree training. They studied state regulations to know licensing or certification requirements.
Categorizing education and skills training for occupations is on going work, but the BLS skills taxonomy reflects the current education and training associated with data reported within its occupational categories. This taxonomy appears in the Table below. The first six BLS categories give the minimum of formal college degree education that is required for entry and work in an occupation.
List – BLS Educational Training and Skills Categories
1. First Professional Degree-Entry into a job in this skill category requires 2 to 4 years of degree study beyond a baccalaureate degree. Almost all professionals must pass state licensing exams or private board certification exams to enter practice. Physicians, veterinarians, dentists, lawyers, pharmacists are all examples. Ministers are generally included here although there is not ordinarily board or state certification.
2. Doctorate Degree-Entry into a job in this skill category requires a doctorate following completion of a baccalaureate degree as minimum education for entry. College teaching at four year colleges is an example. A doctorate is also required for many science and medical research positions. Many require licenses and board exams. Medical and biological researchers, physicists, and astronomers are other examples because employment is mostly in research and these require doctorates.
3. Master's Degree-Entry into a job in this skill category typically requires license, certification, credentials or registry in a specialized skill area that requires work beyond a BA degree, leading to a master's degree. Health care professions such as physical therapists, speech-language audiology or pathology, counseling are examples. Librarians are now also included.
4. Master's or Bachelor's degree combined with previous experience-Entry into a job in this skill category requires formal education, but these jobs are usually not accessible without experienced practice in the field at an entry job. Health Services managers usually have experience working in health care in addition to degrees and credentials. Some businesses now require work experience and an MBA before jobs are accessible for entry. Almost all of these jobs have manager in the SOC title.
5. Bachelor's Degree-Entry into a job in this skill category requires a BA or BS degree. In some cases a BA degree in any field is satisfactory to establish reading and computational skills necessary to begin a job. Other jobs need a BA in a particular major to establish skills, credentials or obtain a license.
6. Associate Degree-Entry into a job in this skill category usually requires some formal education such as an educational internship, or co-op program, but leading to an associate's degree. Some employers require graduation from an accredited two year community or junior college program in order to take required licensing exams. Health technician occupations are examples. Some skill types have professional associations with certification or accreditation to help establish skill levels for job entrants. Dental hygienists, licensed practical nursing are examples.
7. Post-secondary vocational training-Entry into a job in this skill category requires pre-employment skill training and often a license from a state agency. Barbers, hairstylists, office machine repairers, computer repair specialists and technicians are examples. Employers may provide some on-the-training but entrants must arrive with the skills and certification to do their job.
8. Work Experience in a Related Occupation-Entry into these jobs usually requires that applicants show a high level of skills. These skills can be acquired through degree training, but long term practice, and specialized talents acquired as part of a career in the field are necessary. It is a separate category because degrees and training do not assure entry into these occupations. First line supervisors, police detectives and investigators, adult education instructors are examples.
9. Long-term on the Job Training-Entry into a job in this skill category typically requires skills acquired from work experience that takes longer than one year. The additional skills needed for the job are taught on the job, through an apprenticeship or employer sponsored classroom instruction or training, and the skills required take a long time or a lot of effort to learn with training of over a year. Actors, athletes, dancers, electricians, carpenters and mechanics are examples. Entry into these jobs are not open to those leaving a degree program or skills training. Prior job relevant skills are necessary for advancement into these positions. For many of these positions a high school degree maybe sufficient but entry is not available to high school graduates. Entry skills are high school plus on the job skills and experience.
10. Moderate-term on the job Training-Entry into these jobs usually requires basic reading and language skills learned in high school or a GED program, but additional on-the-job training is usually necessary. Additional skills can be learned quickly, but 1 to 12 months can be needed to acquire additional skills. Medical assistants, dental assistants, social and human resource assistants are examples.
11. Short-term on the job Training-Entry into these jobs usually requires basic reading and language skills learned in high school or a GED program. Work that can be learned from written or verbal instructions, or carried out successfully after a demonstration are classified as high school skills. Additional skills can be learned quickly, typically a month or less of on-the-job experience or instruction. High school degree skills can also be thought of as general skills employment.
The term required has a broad use. In some occupations the degree is absolutely necessary and a candidate will not be considered without the required degree. These include occupations where licensing is required by the state or by a private association empowered by the state. Registered nurses must have at least an associate's degree from an approved nursing program to be able to take required state exams. Without this credential entry is blocked.
In other occupations, a college degree is not strictly required but the skills needed before entry are such that a degree is strongly preferred by employers and candidates without a degree are much less likely to be considered, much less employed. Categories emphasize the sources and length of training preferred by employers. Training might be post-secondary vocational, college, postgraduate or professional education. The duration of training could range from a week or two to many years.
Prior experience and on the job training are part of the skills taxonomy. Category four is work experience plus a bachelor's or higher degree, an MBA degree for example. Someone with an MBA in finance will probably be expected to have employment experience before being considered for a managerial position. The bachelor degree plus work experience skill category amounts to a managerial skill category. Add up all management jobs at all establishments across the whole economy, and be sure to include management analysts, business agents and managers of artists, performers and athletes, producers and directors of artists, performers and musicians, judges and magistrates and the total comes to 97 percent of jobs requiring a bachelor degree plus work experience in the skills taxonomy.
The people at BLS who study jobs and skills and maintain the skills taxonomy appear to have a general consensus that managers should have work experience before they become managers. They nearly agree that a BA degree is required. I say nearly because a few managerial types – lodging manager, gaming manager, food service manager – fall in skill category 8, which is work experience in related occupation. A BA degree is not considered necessary for management in these industries.
Categories eight and nine describe skills learned through long-term on-the-job training, or work experience in a similar or related occupation. These jobs do not require a degree beyond high school, but are generally not entry-level jobs. For example, a first line supervisor of retail sales workers, or a supervisor of construction workers will need experience in retail sales or construction to be eligible for a job as a supervisor. These jobs require long term on the job training, meaning more than 12 months of experience. Therefore, entry level skills are a high school degree plus skills learned in another job or lower level job.
Categories 10 and 11 are moderate term and short-term on-the-job training. Moderate term on the job training is classified as skills which take 1 to 12 months to learn on the job while short term on the job training is classified as skills which take up to 1 month, but might be less. Moderate term and short term on the job training skills can be classified as general workforce employment. Therefore, entry-level skills into these occupations are a high school degree.
In the government’s Standard Occupational Classifications professional employment is separate from managerial employment. A civil engineer does professional work in a professional career but a manager of civil engineers has managerial employment and not professional employment, at least if we use the terms and definitions applied at BLS.
Despite the official terminology, we have to expect civil engineers who are managers of civil engineers will think of themselves as professionals. Suppose we asked a civil engineer working as a manager of civil engineers, “What is your profession?” He or she would be likely to say they are engineers rather than managers. If we ask the same person, “What is your job?” they would be likely say they are managers of a department of civil engineers. Their profession is engineer; their job is manager.
Lots of managerial jobs are filled with people moving up from professional jobs. Not always and American does have career managers, but moving up from below is an important way to enter the management ranks. The more managers promoted from the professions, the more professional openings there will be for entry positions in the professions: engineering, architecture, law and so on. As graduates from America’s colleges enter the workforce they will want to find jobs using their degree skills. If all or most of those with professional skills and experience stay in their jobs until retirement it would be harder than it already is for new college graduates in the professions to start a career. Openings come sooner when older professionals move into management ranks.
Almost all of America’s jobs that use college degree skills are in the professions or management. If we total all of the jobs where a four year college degree or master’s, doctorate or professional degree are required in the BLS skills taxonomy, the total comes to 25.3 million, which is 19.4 percent of the May 2005 Occupational Employment Survey total of over 130 million jobs. If we subtract all the managerial jobs that require college degree skills so that we have non-managerial jobs needing college degrees the total is 20 million, which is 15.4 percent of the May 2005 Occupational Employment Survey total.
Suppose we add up jobs for a list of professions. Take a list with teachers, professors, lawyers, engineers, architects including landscape architects, doctors including physicians and surgeons, dentists, pharmacists, and optometrists. Lets not forget accountants and auditors jobs that need CPA’s and all the professional counseling and social work jobs that require master’s degrees. Add all the professional computer jobs that require BA or higher degree skills. These are software engineer and hardware engineer, database manager jobs and a few others. All of these together total 12.5 million jobs. The total is a count of jobs, not people. Lawyers working as managers or politicians, or retired are not counted in the total of lawyers, just lawyers working at jobs that require lawyer skills. Neither is it a count of all the people who can rightfully call themselves engineers or architects because they have an engineering or architect degree. It includes only engineering jobs that require the skills of an engineer or architect.
The teaching and education professions have the largest number of U.S. professional jobs requiring college degree training. Add just the professional staffs, and total college professors, primary and secondary public, private and parochial school teachers, nearly 390 thousand educational administrators, more than 200 thousand counselors and 90 thousand school librarians. The total comes to 6.2 million. No industry or profession has anything close to the number of professional jobs in education, but the 6.2 million is out of over 130 million jobs.
Get some training makes terrific advice for you, your brother and your uncle Dwight. At current rates of college enrollment, college degrees will pay. Just hope that not too many of the 20 million working in jobs with 90th percentile annual wages less than $30,000 get the same idea. It might not be good either if large numbers of the 16 million working as cashiers, security guards, fast food cooks, servers, waiters, waitresses, dishwashers, janitors, maids, landscapers, grounds keepers, child care workers, tellers, receptionists, and parking lot attendants decide to up grade their skills along with you. Get some training. Now you know.
Thursday, May 17, 2007
Saturday, May 12, 2007
Customer Service Representative
Customer Service Representatives revised 7/5/2016
Standard Occupational Classification #43-4051 Customer Service Representatives
SOC Definition #43-4051 Customer Service Representatives -- Interact with customers to provide information in response to inquiries about products and services and to handle and resolve complaints. Exclude individuals whose duties are primarily sales or repair. Also known as: Complaint Adjuster; Passenger Relations Representative; Telephone Service Adviser
Customer Service Representatives are classified as office and administrative support occupations with the biggest share working in the finance and insurance industry. Among the 21.4 percent in finance and insurance 11.7 percent work in insurance and related activities, 8.6 percent at credit intermediaries and related activities, really banks. Wholesale trade employs 8.2 percent and retail trade 12.1 percent. Otherwise 9.8 percent work in business support services, primarily telephone call centers and through temporary help centers, and another 4.6 percent are scattered in segments of the health care industry. Small percents work for utilities with others scattered among many industries.
Customer Service Representatives work will vary some depending on the industry. In finance they may access a computer to look up account or loan information or resolve customer complaints. In insurance, they may help with policy applications, or answer questions about policy coverage and reporting claims. At utilities they mostly explain and handle service accounts. Automated computerized voice mail systems do some of the routine customer service work, but not enough to decrease employment because the number of jobs keeps growing.
National employment as Customer Service Representatives was 2,595,990 in 2015, which is the sixth largest occupation of 829 Standard Occupational Classifications. Jobs are up since 2000 when jobs were 1,907,890. The annual average job increase equals 45,873 per year since 2000 at a growth rate of 2.07 percent. The Bureau of Labor Statistics is forecasting job growth for Customer Service Representatives at 25,290 per year through 2024 at a growth rate of .98 percent a year.
Job openings make a better measure of new hiring than job growth. Job openings are job growth and the number of net replacements. Net replacements are people who permanently leave an occupation for another occupation or retirement and must be replaced before there can be job growth. Job openings for customer service representatives are forecast to be 88,900 a year through 2024.
Customer Service Representative jobs do not require college degree training, but they are not walk on jobs like a cashier. For starters, people in these jobs need to speak clearly and grammatically. They have to explain many varied service options and service plans that are increasingly complex and the job requires computer skills since they routinely access computer database information. The skills required help keep the pay higher than most office-based employment.
The recently updated BLS Education and Training Classification assignments lists high school degree or equivalent as necessary for entry into jobs as customer service representatives. However, percentages from survey data are published for Customer Service Representatives showing an educational distribution where 21.2 percent have a BA degree, 3.9 percent have advanced degrees, 32.5 percent some college, but no degree, and 11.2 percent have an associate’s degree. High school degree skills were sufficient for 27.0 percent who work here and 4.0 percent have less than a high school degree. Previous experience is considered unnecessary, but short-term on-the-job training is expected to be necessary for new hires.
Unlike autoworkers, who have to be at the auto plant to do their work, Customer Service Representatives can be anywhere they have a computer and a telephone. Working from home saves commuter costs and space on already clogged highways. Telecommuting saves business the expense of providing office space, which gives incentive to increase their staff working at home at least some of the time.
In addition, office space for Customer Service Representatives could be moved to low rent small towns, rural areas or abroad to work, but as of 2015 over 90 percent of Customer Service Jobs are in metropolitan areas. The claim is made that business is transferring Customer Service jobs abroad, but it is unlikely their numbers would be steadily increasing if many of these jobs were being moved abroad. Given the complexity of America’s many service plans in loans, credit cards, telecommunications, health care and other areas Customer Service work will not be decreasing anytime soon.
The basic wage data from the BLS occupational employment survey includes a wage distribution. Averages are not used much in wage data. A few high wages pull up the average and make it unrepresentative. Instead a distribution range of wages is published with the 10th, 25th, median, 75th, and 90th percentiles of wages. A 10th percentile wage means 10 percent working in this job have wages equal to or less than the 10th percentile wage and so on. Annual wages are converted to hourly wages by dividing annual wages by 2080
The entry wage for the national market in the 10th percentile for Customer Service Representatives is reported as $20,250 in 2015. The 25th percentile wage equals $25,040. The median wage is $31,720, the 75th percentile wage equals $40,830 and the 90th percentile wage is $53,030.
The wages of Customer Service Representatives have not kept up with inflation for the last decade. For example, to have the buying power of the 2008 median wage of $29,860 in 2015, the Customer Service Representatives wage would need to be $32,871.17. In stead it was $31,720.00, a 3.5 percent decrease in the real wage for those seven years.
Like so many office occupations beginning salaries are low with 22 states reporting 10th percentile wages less than $20,000 for May 2015. The beginning salaries are only slightly higher than jobs as receptionists where 45 states have a 10th percentile wage less than $20,000. However, successful work as a Customer Service Representative assures advancement. Salaries for in the 90th percentile rise into the high forties and 25 states report 90th percentile wages above $50,000.
Standard Occupational Classification #43-4051 Customer Service Representatives
SOC Definition #43-4051 Customer Service Representatives -- Interact with customers to provide information in response to inquiries about products and services and to handle and resolve complaints. Exclude individuals whose duties are primarily sales or repair. Also known as: Complaint Adjuster; Passenger Relations Representative; Telephone Service Adviser
Customer Service Representatives are classified as office and administrative support occupations with the biggest share working in the finance and insurance industry. Among the 21.4 percent in finance and insurance 11.7 percent work in insurance and related activities, 8.6 percent at credit intermediaries and related activities, really banks. Wholesale trade employs 8.2 percent and retail trade 12.1 percent. Otherwise 9.8 percent work in business support services, primarily telephone call centers and through temporary help centers, and another 4.6 percent are scattered in segments of the health care industry. Small percents work for utilities with others scattered among many industries.
Customer Service Representatives work will vary some depending on the industry. In finance they may access a computer to look up account or loan information or resolve customer complaints. In insurance, they may help with policy applications, or answer questions about policy coverage and reporting claims. At utilities they mostly explain and handle service accounts. Automated computerized voice mail systems do some of the routine customer service work, but not enough to decrease employment because the number of jobs keeps growing.
National employment as Customer Service Representatives was 2,595,990 in 2015, which is the sixth largest occupation of 829 Standard Occupational Classifications. Jobs are up since 2000 when jobs were 1,907,890. The annual average job increase equals 45,873 per year since 2000 at a growth rate of 2.07 percent. The Bureau of Labor Statistics is forecasting job growth for Customer Service Representatives at 25,290 per year through 2024 at a growth rate of .98 percent a year.
Job openings make a better measure of new hiring than job growth. Job openings are job growth and the number of net replacements. Net replacements are people who permanently leave an occupation for another occupation or retirement and must be replaced before there can be job growth. Job openings for customer service representatives are forecast to be 88,900 a year through 2024.
Customer Service Representative jobs do not require college degree training, but they are not walk on jobs like a cashier. For starters, people in these jobs need to speak clearly and grammatically. They have to explain many varied service options and service plans that are increasingly complex and the job requires computer skills since they routinely access computer database information. The skills required help keep the pay higher than most office-based employment.
The recently updated BLS Education and Training Classification assignments lists high school degree or equivalent as necessary for entry into jobs as customer service representatives. However, percentages from survey data are published for Customer Service Representatives showing an educational distribution where 21.2 percent have a BA degree, 3.9 percent have advanced degrees, 32.5 percent some college, but no degree, and 11.2 percent have an associate’s degree. High school degree skills were sufficient for 27.0 percent who work here and 4.0 percent have less than a high school degree. Previous experience is considered unnecessary, but short-term on-the-job training is expected to be necessary for new hires.
Unlike autoworkers, who have to be at the auto plant to do their work, Customer Service Representatives can be anywhere they have a computer and a telephone. Working from home saves commuter costs and space on already clogged highways. Telecommuting saves business the expense of providing office space, which gives incentive to increase their staff working at home at least some of the time.
In addition, office space for Customer Service Representatives could be moved to low rent small towns, rural areas or abroad to work, but as of 2015 over 90 percent of Customer Service Jobs are in metropolitan areas. The claim is made that business is transferring Customer Service jobs abroad, but it is unlikely their numbers would be steadily increasing if many of these jobs were being moved abroad. Given the complexity of America’s many service plans in loans, credit cards, telecommunications, health care and other areas Customer Service work will not be decreasing anytime soon.
The basic wage data from the BLS occupational employment survey includes a wage distribution. Averages are not used much in wage data. A few high wages pull up the average and make it unrepresentative. Instead a distribution range of wages is published with the 10th, 25th, median, 75th, and 90th percentiles of wages. A 10th percentile wage means 10 percent working in this job have wages equal to or less than the 10th percentile wage and so on. Annual wages are converted to hourly wages by dividing annual wages by 2080
The entry wage for the national market in the 10th percentile for Customer Service Representatives is reported as $20,250 in 2015. The 25th percentile wage equals $25,040. The median wage is $31,720, the 75th percentile wage equals $40,830 and the 90th percentile wage is $53,030.
The wages of Customer Service Representatives have not kept up with inflation for the last decade. For example, to have the buying power of the 2008 median wage of $29,860 in 2015, the Customer Service Representatives wage would need to be $32,871.17. In stead it was $31,720.00, a 3.5 percent decrease in the real wage for those seven years.
Like so many office occupations beginning salaries are low with 22 states reporting 10th percentile wages less than $20,000 for May 2015. The beginning salaries are only slightly higher than jobs as receptionists where 45 states have a 10th percentile wage less than $20,000. However, successful work as a Customer Service Representative assures advancement. Salaries for in the 90th percentile rise into the high forties and 25 states report 90th percentile wages above $50,000.
Tuesday, May 8, 2007
Circuit City Jobs
The caption on the Washington Post article from March 29, 2007 reads “Circuit City Cuts 3,400 ‘Overpaid’ Workers.” Job cuts came out of 40,000 in store jobs, or 9 percent of the company’s in store workforce. The firings were not related to job performance, the company announced, but came as part of an effort to cut costs and improve the bottom line.
We learn later in the article that the chief executive officer of Circuit City earns a salary just over $1.4 million dollars, and one of 11 “overpaid” employees fired without notice at the Ashville, North Carolina store was overpaid at $11.59 an hour. Adults with jobs often have experience with a particular type of supervisor, manager or boss, who always manages to act like they are doing employees a favor by handing out some jobs. They act like your job is their personal gift to you. Never mind the work you do.
The wage disparity together with the firings implies that Mr. CEO regards selling merchandise on the floor as a marginal activity compared to the worth of one who hires and fires. He should have called me. I could tell him a few things about retail jobs.
Retail Jobs – a few things to know
Retail jobs in 2006 came to 15.3 million of America’s jobs at firms and businesses, 11.2 percent of total establishment jobs. Combine retail with wholesale and the total comes to 21.2 million jobs, more than any other sector except the government, which has even more, but that is another story.
Both wholesale and retail trade have growing employment but at growth rates so low that wholesale and retail jobs have a decreasing percentage of total employment. Retail was over 12 percent of employment in 1990, but now it is 11.2 percent. Using computer technology in trade, especially for barcodes and inventory management increases labor productivity. Retail and wholesale sales volumes per work hour are up and sometimes at rates comparable to productivity in manufacturing. Higher productivity in trade limits job growth, but so far not enough to decrease employment, only the rate of increase.
Employment data by state or metropolitan area tells the same story. The percent of retail jobs by state cluster tightly around the 11 percent range and the percent variation above and below is the smallest of any sector employment, usually less than a percent above or below. Because retail jobs remain at roughly the same percentage of total employment the only way to have more retailing jobs is to have a bigger population to serve. For anyone in local government or a chamber of commerce who wants to boast local employment by luring in a big national retailer, the plan will not work. Before much time goes by the new retailer displaces existing retail jobs and its back to 11 or 12 percent.
Circuit City is part of retail trade in a sector titled Electronics and Appliance Stores. It is one of 12 retail sub sectors, but definitely one where sales depend on salesmanship. Other retail sectors include gasoline stations and grocery stores, but salesmanship is not important for their products compared to Circuit City. Jobs at gasoline stations have fallen continuously since 1990. Grocery store employment is down since the late 1990’s and about the same as employment in 1990. However, Circuit City buyers may need to learn about available products and how they work before they make up their mind. Retail Salespersons do selling, which means explaining the product, answering questions, and knowing warranty terms or other product information. Explaining and selling take time and so more retail sales jobs are needed at electronic and appliance stores than gasoline stations or grocery stores. The need for salesmanship also helps increase employment at clothing stores, home stores, garden centers, sports, hobby and music stores, but especially at electronics and appliance stores. While these differences might appear obvious to many, they apparently were not to the management at Circuit City.
Retail Occupations
We can help Circuit City management if we look at the two occupations that dominate retail trade: retail salesperson and cashier. Retail Salesperson has more jobs than any other job in the United States; 4.3 million and over 90 percent of them are in trade. Another 1.1 million are area sales managers who manage sales workers most of their jobs in trade. There are a few retail sales jobs scattered around in other sectors: a hospital may have a gift shop, schools have book stores that sell sweat suits and teddy bears, but roughly speaking retail salesperson jobs are in trade.
For the second biggest job in the United States, we have Cashier with 3.5 million jobs and over 80 percent of those in trade. Cashiers jobs are not the same as retail salespersons. Cashiers run a cash register, take money and make change but they seldom do selling as the term describes the work of Retail Salesperson.
The difference in retail salespersons and cashier shows up clearly in the staffing of the different retail sub sectors. At gasoline stations more than 60 percent of jobs are cashier, but virtually no retail salespersons. At Electronics and Appliance Stores retail salespersons and retail supervisors make up over 40 percent of the jobs. Customers do not need sales help for a tank of gas, but they do want sales information for electronics. At grocery stores right around 33.3 percent of jobs are cashier, but only 3 percent are retail salespersons. At clothing stores nearly 75 percent of jobs are retail salespersons or retail supervisor, but only 8 percent are cashier.
The Washington Post correctly reported the average annual nationwide wage for retail salespersons at $11.14 an hour for the May 2005 Occupational Employment Survey. However, the amount is misleading and does not reflect the true circumstance of Circuit City or retail sales work. Selling skills have value reflected in the pay patterns of cashier and retail salespersons.
The Bureau of Labor Statistics publishes a percentile wage range within their Standard Occupational Classifications. For both cashier and retail salespersons they report wages for the 10th, 25th, median, 75th and 90th percentiles for the national economy, but also all the states and metropolitan areas.
The 10th percentile wage for cashier is $5.98 an hour from the May 2005 Occupational Employment Survey. The 10th percentile wage for retail salesperson is $6.54. In other words 10 percent of those with jobs in these occupations work for less than the 10th percentile wage and 90 percent earn more. The retail salesperson only earns about 9 percent more than a cashier at the low end of the wage scale. If we look at the 90th percentile wage for cashiers it is $11.20, but the 90th percentile wage for retail salespersons is $17.91, which is 60 percent more cashiers at the top of the pay scale.
The difference of the wage structure for the two jobs reflects the different possibilities for advancement where on-the-job experience can significantly increase the value of an employee. A cashier has little room to improve job performance because taking money and making change is the same today as it is tomorrow. Effective selling on the floor of Circuit City or elsewhere takes some time and effort to learn, which is reflected in the national 90th percentile wage of $17.91 an hour for retail salespersons.
The Washington Post article cited above informed us that Circuit City put a cap on pay for its sales staff, reported at $15.50 for computers. Anyone above the cap was regarded as overpaid and among the 3,400 dismissed as overpaid. So not only did Circuit City stupidly throw away its most effective employees doing harm to itself and its stockholders, it failed to understand who or how many are overpaid. There appears to be only one. Now you know.
We learn later in the article that the chief executive officer of Circuit City earns a salary just over $1.4 million dollars, and one of 11 “overpaid” employees fired without notice at the Ashville, North Carolina store was overpaid at $11.59 an hour. Adults with jobs often have experience with a particular type of supervisor, manager or boss, who always manages to act like they are doing employees a favor by handing out some jobs. They act like your job is their personal gift to you. Never mind the work you do.
The wage disparity together with the firings implies that Mr. CEO regards selling merchandise on the floor as a marginal activity compared to the worth of one who hires and fires. He should have called me. I could tell him a few things about retail jobs.
Retail Jobs – a few things to know
Retail jobs in 2006 came to 15.3 million of America’s jobs at firms and businesses, 11.2 percent of total establishment jobs. Combine retail with wholesale and the total comes to 21.2 million jobs, more than any other sector except the government, which has even more, but that is another story.
Both wholesale and retail trade have growing employment but at growth rates so low that wholesale and retail jobs have a decreasing percentage of total employment. Retail was over 12 percent of employment in 1990, but now it is 11.2 percent. Using computer technology in trade, especially for barcodes and inventory management increases labor productivity. Retail and wholesale sales volumes per work hour are up and sometimes at rates comparable to productivity in manufacturing. Higher productivity in trade limits job growth, but so far not enough to decrease employment, only the rate of increase.
Employment data by state or metropolitan area tells the same story. The percent of retail jobs by state cluster tightly around the 11 percent range and the percent variation above and below is the smallest of any sector employment, usually less than a percent above or below. Because retail jobs remain at roughly the same percentage of total employment the only way to have more retailing jobs is to have a bigger population to serve. For anyone in local government or a chamber of commerce who wants to boast local employment by luring in a big national retailer, the plan will not work. Before much time goes by the new retailer displaces existing retail jobs and its back to 11 or 12 percent.
Circuit City is part of retail trade in a sector titled Electronics and Appliance Stores. It is one of 12 retail sub sectors, but definitely one where sales depend on salesmanship. Other retail sectors include gasoline stations and grocery stores, but salesmanship is not important for their products compared to Circuit City. Jobs at gasoline stations have fallen continuously since 1990. Grocery store employment is down since the late 1990’s and about the same as employment in 1990. However, Circuit City buyers may need to learn about available products and how they work before they make up their mind. Retail Salespersons do selling, which means explaining the product, answering questions, and knowing warranty terms or other product information. Explaining and selling take time and so more retail sales jobs are needed at electronic and appliance stores than gasoline stations or grocery stores. The need for salesmanship also helps increase employment at clothing stores, home stores, garden centers, sports, hobby and music stores, but especially at electronics and appliance stores. While these differences might appear obvious to many, they apparently were not to the management at Circuit City.
Retail Occupations
We can help Circuit City management if we look at the two occupations that dominate retail trade: retail salesperson and cashier. Retail Salesperson has more jobs than any other job in the United States; 4.3 million and over 90 percent of them are in trade. Another 1.1 million are area sales managers who manage sales workers most of their jobs in trade. There are a few retail sales jobs scattered around in other sectors: a hospital may have a gift shop, schools have book stores that sell sweat suits and teddy bears, but roughly speaking retail salesperson jobs are in trade.
For the second biggest job in the United States, we have Cashier with 3.5 million jobs and over 80 percent of those in trade. Cashiers jobs are not the same as retail salespersons. Cashiers run a cash register, take money and make change but they seldom do selling as the term describes the work of Retail Salesperson.
The difference in retail salespersons and cashier shows up clearly in the staffing of the different retail sub sectors. At gasoline stations more than 60 percent of jobs are cashier, but virtually no retail salespersons. At Electronics and Appliance Stores retail salespersons and retail supervisors make up over 40 percent of the jobs. Customers do not need sales help for a tank of gas, but they do want sales information for electronics. At grocery stores right around 33.3 percent of jobs are cashier, but only 3 percent are retail salespersons. At clothing stores nearly 75 percent of jobs are retail salespersons or retail supervisor, but only 8 percent are cashier.
The Washington Post correctly reported the average annual nationwide wage for retail salespersons at $11.14 an hour for the May 2005 Occupational Employment Survey. However, the amount is misleading and does not reflect the true circumstance of Circuit City or retail sales work. Selling skills have value reflected in the pay patterns of cashier and retail salespersons.
The Bureau of Labor Statistics publishes a percentile wage range within their Standard Occupational Classifications. For both cashier and retail salespersons they report wages for the 10th, 25th, median, 75th and 90th percentiles for the national economy, but also all the states and metropolitan areas.
The 10th percentile wage for cashier is $5.98 an hour from the May 2005 Occupational Employment Survey. The 10th percentile wage for retail salesperson is $6.54. In other words 10 percent of those with jobs in these occupations work for less than the 10th percentile wage and 90 percent earn more. The retail salesperson only earns about 9 percent more than a cashier at the low end of the wage scale. If we look at the 90th percentile wage for cashiers it is $11.20, but the 90th percentile wage for retail salespersons is $17.91, which is 60 percent more cashiers at the top of the pay scale.
The difference of the wage structure for the two jobs reflects the different possibilities for advancement where on-the-job experience can significantly increase the value of an employee. A cashier has little room to improve job performance because taking money and making change is the same today as it is tomorrow. Effective selling on the floor of Circuit City or elsewhere takes some time and effort to learn, which is reflected in the national 90th percentile wage of $17.91 an hour for retail salespersons.
The Washington Post article cited above informed us that Circuit City put a cap on pay for its sales staff, reported at $15.50 for computers. Anyone above the cap was regarded as overpaid and among the 3,400 dismissed as overpaid. So not only did Circuit City stupidly throw away its most effective employees doing harm to itself and its stockholders, it failed to understand who or how many are overpaid. There appears to be only one. Now you know.
Tuesday, May 1, 2007
White Collar Rules
The Bush administration decided to make a change in America’s work rules intended to harm managerial employment and lower business employment costs. They decided to abolish over time for management or managerial employees. “The exemptions do not apply to manual laborers or other “blue collar” workers who perform work involving repetitive operations with their hands, physical skill and energy.”
The Federal Government already gets right in the middle of the wage and effort bargain with the Fair Labor Standards Act, which for many years required pay at time and a half for work over 40 hours a week. Probably managers have always put in some uncompensated overtime, but the Bush cabal decided to change the rules here so the Department of Labor drafted “White Collar Rules” governing over time. The term White Collar Rules is not my term. It comes from the BLS web site.
These new rules abolish overtime pay for executive managers who manage an enterprise or customarily manage a department or division of at least 2 or more full time employees. To be in the executive category a manager must customarily and regularly direct work and have authority to hire and fire other employees.
The rules above are for executive managers, but to give the rules broad application, other types of managers are also defined and described. Some other categories like administrative employees, learned professionals, creative professionals, computer employees, and outside sales employees were included in the “White Collar Rules.” Administrative manager rules specify that employees only need to be paid on a salary basis of $455 or more a week with work that is office work or non-manual work. Their work only needs to include “the exercise of discretion and independent judgment with respect to matters of significance.”
In the learned professional category employees only need to compensated on a salaried basis at $455 a week or more and have “advanced knowledge defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment.” There are a few more categories but you get the idea. We can only speculate what work Bush appointees might argue fits these definitions.
Leaving out hourly rated manual laborers and “blue collar” workers from the regulations outlined above is not a concession. It gives the impression of a concession for political and public relations purposes, but employers can cut off individual hours before paying time and a half as overtime. Putting welfare mothers in the workforce as America does, the continued immigration of Mexican labor and the needs of adolescents and college students for part time work guarantees plenty of walk on applicants for part time jobs.
Encouraging overtime, paid or unpaid, assures more people will be looking for jobs. However, pressuring the managerial ranks to give up overtime compensation turns cost into profit since free work from managers makes it cheaper to employ someone. The 40-hour work has been the standard full time workweek for more than eighty years, but managers working 50 or 60 hours a week assures fewer people in the managerial ranks. Two managers working 60 hour weeks equals 3 managers working 40 hours a week. Rigging the rules to coerce people into unpaid over time assures a drop in managerial ranks.
Just in case you doubt the drop in the managerial ranks we can take a peek at the Occupational Employment Survey published by the Bureau of Labor Statistics. BLS reports a drop of 1.9 million establishment jobs for managerial occupations in its Occupational Employment Survey. That is 7.8 million in November 2000 but just under 6 million in May 2005. General and operations managers, administrative service managers, financial managers, food service manager, all down. The only categories with more managerial staff are education administrators and social and community service managers, both categories employed by government and often paid with tax dollars.
The totals above are for establishment employment, meaning they are job totals at firms, non-profit associations or government. Managerial employment has the highest wages of America’s occupational classifications. Even though the managerial ranks continue to decline, managerial wages go up and they go up faster than the rate of inflation. Some of the former managers move into self-employment as consultants or into consulting firms where they sell managerial advice on an as requested basis. Some move back into the professional occupations they started in before moving into management: engineering, law architecture, and so on. The decline in managerial ranks creates a surplus of older applicants for professional jobs requiring college degree skills and helps explain some of the difficulty college graduates are having moving into career employment.
The Federal Government already gets right in the middle of the wage and effort bargain with the Fair Labor Standards Act, which for many years required pay at time and a half for work over 40 hours a week. Probably managers have always put in some uncompensated overtime, but the Bush cabal decided to change the rules here so the Department of Labor drafted “White Collar Rules” governing over time. The term White Collar Rules is not my term. It comes from the BLS web site.
These new rules abolish overtime pay for executive managers who manage an enterprise or customarily manage a department or division of at least 2 or more full time employees. To be in the executive category a manager must customarily and regularly direct work and have authority to hire and fire other employees.
The rules above are for executive managers, but to give the rules broad application, other types of managers are also defined and described. Some other categories like administrative employees, learned professionals, creative professionals, computer employees, and outside sales employees were included in the “White Collar Rules.” Administrative manager rules specify that employees only need to be paid on a salary basis of $455 or more a week with work that is office work or non-manual work. Their work only needs to include “the exercise of discretion and independent judgment with respect to matters of significance.”
In the learned professional category employees only need to compensated on a salaried basis at $455 a week or more and have “advanced knowledge defined as work which is predominantly intellectual in character and which includes work requiring the consistent exercise of discretion and judgment.” There are a few more categories but you get the idea. We can only speculate what work Bush appointees might argue fits these definitions.
Leaving out hourly rated manual laborers and “blue collar” workers from the regulations outlined above is not a concession. It gives the impression of a concession for political and public relations purposes, but employers can cut off individual hours before paying time and a half as overtime. Putting welfare mothers in the workforce as America does, the continued immigration of Mexican labor and the needs of adolescents and college students for part time work guarantees plenty of walk on applicants for part time jobs.
Encouraging overtime, paid or unpaid, assures more people will be looking for jobs. However, pressuring the managerial ranks to give up overtime compensation turns cost into profit since free work from managers makes it cheaper to employ someone. The 40-hour work has been the standard full time workweek for more than eighty years, but managers working 50 or 60 hours a week assures fewer people in the managerial ranks. Two managers working 60 hour weeks equals 3 managers working 40 hours a week. Rigging the rules to coerce people into unpaid over time assures a drop in managerial ranks.
Just in case you doubt the drop in the managerial ranks we can take a peek at the Occupational Employment Survey published by the Bureau of Labor Statistics. BLS reports a drop of 1.9 million establishment jobs for managerial occupations in its Occupational Employment Survey. That is 7.8 million in November 2000 but just under 6 million in May 2005. General and operations managers, administrative service managers, financial managers, food service manager, all down. The only categories with more managerial staff are education administrators and social and community service managers, both categories employed by government and often paid with tax dollars.
The totals above are for establishment employment, meaning they are job totals at firms, non-profit associations or government. Managerial employment has the highest wages of America’s occupational classifications. Even though the managerial ranks continue to decline, managerial wages go up and they go up faster than the rate of inflation. Some of the former managers move into self-employment as consultants or into consulting firms where they sell managerial advice on an as requested basis. Some move back into the professional occupations they started in before moving into management: engineering, law architecture, and so on. The decline in managerial ranks creates a surplus of older applicants for professional jobs requiring college degree skills and helps explain some of the difficulty college graduates are having moving into career employment.
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