Just read this article in the newspaper that made an interesting comparison between 'european' and 'american' economies.
It was an opinion piece so there were no sources quoted and I can not therefor verify the accuracy. The writer had no reason to lie over the figures he presented but may have been a bit selective. In which figures were used.

The percentage of managers in the workforce in europe, depending on country averages between 2 to 4 pct. The Netherlands is one of the worst with almost 6pct. By contrast in the USA this is over 11pct and in Canada it is 13.5pct.
His explanation for this vast difference was that in countries that adopted a more 'american' organisation of their economy workers are hired and fired easily. While this theoretically makes it so that companies can cut cost by not having excess workers employed, it also reduces worker loyalty. This means that companies need to supervise and control their workers. This in turn means that there is less trust between company and worker and that likely the work is prescribed in far greater detail, leading to less work satisfaction on average and even more supervision to ensure that the workers actually work.
I am not sure I entirely agree with the viewpoint but it certainly gives food for thought.

The author also said that worker productivity growth in the USA has been consistently low the last 3 decades compared to both Europe and Asia. Effectively the USA is no longer capable of competing in manufacturing, and part of the 7pct trade deficit can be attributed to that (not sure I agree with him here). He especially pointed out that Germany, the country with one of the most rigid employment laws in the world, is still one of the biggest exporters of high quality manufactured goods. According to the author that is not despite but because of the rigid protection of workers. Worker loyalty is especially important in processes where a lot of detailed knowledge is required to maintain and improve quality. Economies where workers are habitually fired to pacify the shareholders can not keep this expertise employed within one company long enough, leading to lower overall quality and loss of manufacturing to other countries that are either cheaper or produce to a higher standard of quality.
The author pointed out that worker productivity in the USA had mainly increased in the ICT branches and typically only in those companies exploring and opening up new markets, but that in companies operating in established markets both innovation and productivity was diminishing (as capable workers prefered to start their own company rather than improve the product of the company they were working for).

In closing (and this is another conclusion I am not sure I entirely agree with) the author suggested that to a large extent the growth of BNP of the USA was not caused by american workers working smarter but simply by them working longer, and that there was a limit to how much that could sustain economic growth. (I thought that was where an anti-american bias by the author showed through, though I am inclined to believe it is a bias against the american economic system rather than against the country itself).


Eri

What does ICT and BNP stand for? And where was this published (what publication)?

I don't know which article you've read, but I've seen similar conclusions. If you divide out GNP per capita by average hours worked, American workers are less efficient than certain European workers. But this simplistic linear calculation is flawed, because you'd find rapidly diminishing returns as you increase the number of hours worked, i.e., the marginal increase in productivity decreases with each additional hour. So, if you cut American hours by 30% to match Scandinavian hours, you'd likely see a lot less than 30% productivity loss.

The point about managers is interesting, but I wonder how the author defines "manager". In the U.S., you can be called a "manager" but still have mostly substantive work to do.

As for American employee loyalty, you'd get little argument that there is none. American companies are loyal to their shareholders and profit margin.

What does ICT and BNP stand for? And where was this published (what publication)?

ICT is the local abbreviation that stands for 'Information technology, Computer technology and Telecommunication technology'.

BNP is the abbreviation of the Dutch term for the total amount of money generated by a national income. I think the American term is Gross National Product but I am not entirely certain about that.

The publication was an opinion piece in a local Dutch newspaper. Main author is a professor in economy, which is why I figured his figures were accurate. I am sorry I can not provide a link to it. Even if I could, you more likely than not would not be able to read it anyway.


Eri

I don't know which article you've read, but I've seen similar conclusions. If you divide out GNP per capita by average hours worked, American workers are less efficient than certain European workers. But this simplistic linear calculation is flawed, because you'd find rapidly diminishing returns as you increase the number of hours worked, i.e., the marginal increase in productivity decreases with each additional hour. So, if you cut American hours by 30% to match Scandinavian hours, you'd likely see a lot less than 30% productivity loss.

You most likely are correct, but the article was not so much an in depth study of economic difference as well as how they affected organisations. The argument was that with lack of loyalty towards the company the company had to find other ways to ensure that their workers actually worked. Thus the larger number of workers and thus work that is far more prescribed in detail than it would be in most European countries (leading to less job satisfaction and even more supervision). Even if you can certainly argue the numbers, I think the author has a good point in saying that a certain protection of workers may have benefits that most economists and advisors tend to ignore.


The point about managers is interesting, but I wonder how the author defines "manager". In the U.S., you can be called a "manager" but still have mostly substantive work to do.


I have no idea either and I am not sure that the author has any more than we do. That is always the problem with comparing numbers from such widely differing economic systems.


As for American employee loyalty, you'd get little argument that there is none. American companies are loyal to their shareholders and profit margin.

This is increasingly the case with European companies as well, though it is interesting to note that companies are starting to fight back. Last year one company bought back its stock and delisted itself from the stock exchange because they no longer wanted the shareholder pressure on their policy which they felt was detrimental to the long term health of the company. Two other companies fought shareholders in the court room and one such case is still going. In all these cases the company wanted to limit the amount of control the shareholders (typically american investment bankers or similar companies) had over the company policy. The case that is being fought is especially interesting because I think that the Dutch government should step in as the plan is to split a company into one profitable branch and one in which all inprofitable activities will be combined. The expected survival of that second branch is expected to be a matter of weeks, at which point the Dutch government is going to pick up the bill of lost taxes, unpaid social security and unemployment benefit for thousands of people. The investment bankers sell the profitable part of the company at a huge profit (effectively what the Dutch government must pay for the other half). The problem is that the entire company is currently profitable and there is no reason for this split other than a desire to make a couple of hundred million dollars. The profitable part also will have lost all of its research and development branches and in the long term will either have to hire that externally (at a premium) or the long term survivability of the company will be damaged by this. At any rate a lot of expertise at making special equipment will get lost and I do not think that even if it is legal, this is desirable socially nor economically.


Eri

As recently as two generations ago there were plenty of stories of people who have worked for a single employer for thirty or more years; the gold watch, the early retirement due to years of accrued vacation - the stories were more common than rare.

Now however, five years at a single employer is considered a long time. If you’ve been at a company for three years, you’re probably considered a senior. Been there a year? You’ve probably lasted longer than half of the people hired at the same time as you.

I used to think this type of half-life was only common to the technical field, but stories like this seem more and more like the norm. Personally when I look for a job I look at the stability of the company in addition to the fiscal attributes. Mentally I want to be able to stay at a company like my parents did, for years and years and years. However as I accrue experience and my resume keeps getting better and better, as the economy recovers, the pay scale for my field keeps rising. It is very hard to say no to an immediate 15% pay increase, especially if you know that the company you’re currently at will not be giving out any merit increases anywhere near that level.

When I first got my mobile phone, my carrier gave me discount upon discount to the point where I got a $350 phone for free. After serving out my 2yr contract the only incentive they give me is a $100 discount on a new phone. The only thing keeping me at this carrier is my own laziness at not wanting to jump through the hoops to get a new carrier. The phone company offered a big shiny package in order to get me through the door, but offers me little to no reason to stay. It can be said that the cellular market in many ways mirrors business practices in the job market.

The only job that I can remember wanting to stay at was Microsoft. Microsoft’s approach was what we referred to as the “Golden Handcuffs.” When you started at Microsoft, you understood that the company only paid what would be considered the median range of your field pay scale. However in addition to your monetary compensation, the company would tack on several hundred to thousands of shares of stock options. Your options would begin to vest after 6mo of employment and you would be fully vested after four years. Year after year, you would see the pay scale for your field rise, however your salary at Microsoft would probably stay in the medium to low range of that hike. No matter how good the money got outside of Microsoft, very few people left – mostly because of the golden handcuffs. Yes, Microsoft has some of the best health benefits around, and don’t get me wrong, that played a huge part in many family oriented workers, but health benefits will only get you so much loyalty. Microsoft kept you at Microsoft by increasing your net worth with the options. You’ll notice that you didn’t really hear of a lot of people leaving Microsoft until the stock started tanking and they stopped giving out as many options (I think they still offer them as part of the bonus structure, but I’m not sure).

Other than Microsoft, I have been with no other company that offered any type of growing incentive to stay loyal. The closest thing I can think of are companies that offer extra vacation time after you’ve been there for a certain number of years, but really, is four weeks of vacation versus three after five years of service worth it? Probably not to most people. Honestly, the only reason to work hard is so that you don’t burn your bridges and you get a good recommendation for your next job.

I posted a story about one company that is getting a lot of loyalty from their employees by letting them work whatever hours they want. That sort of flexibility is something people really love and they're willing to work harder to keep.

To measure the US's economic clout by its manufacturing is a particularly outdated and foolish measure.

If 1st world nations want to remain 1st world nations...they have to leave manufacturing behind. America will never be able to compete with South America, Asia, or Africa in manufacturing again...by stint of simple difference in wages. So be it. Let Columbians slave in factories for 14 hours a day at 12 cents an hour. America is becoming a service and intel industry nation.

To suggest that the Germany economy is better than America because they still put out expensive erm...well, I don't know what high quality expensive items Germany still claims to make. Mercedes has gone down the crapper...the best camera's are Japanese...wtf does Germany make anymore? Regardless...let Germany try to maintain a modern lifestyle making expensive goods...it will not work.

To measure the US's economic clout by its manufacturing is a particularly outdated and foolish measure.

What'd I miss? Who did that?

So, someone decided that worker loyalty might actually be worth something?

What a novel concept. Yea, that's sarcasm.

If a worker is constantly wondering if he is going to continue to have a paycheck through no fault of his own, of course he's not going to be working to his fullest.

If workers are treated as a dime a dozen then you get dime a dozen work.

Loyalty goes both ways, however. If workers quit a lot to chase the bigger buck then companies don't need to be expected to think the next guy is going to be any more loyal. So, its mutual.

Yeah, every now and then those sorts of things are said in the US, then promptly ignored by everyone. :p

I remember something that Dilbert once said along the lines of "We only hire the best!" and Dilbert thinking, "Why do the best agree to work for so little money?".

A funny story. Funny strange, not haha.

My first "ethics" training session with my current job kind of covered this subject. Without giving away the details, the gist I got from the "lesson" was that the company demanded total loyalty to them but owed zero loyalty to the workers.

Don't get me wrong, I'm treated very well here but that one story was very strange.

The weird thing is is that if they looked at their policy of total loyalty objectively why would they except such a thing if they're not giving it in return?

I guess we should stop expecting to be treated as anything other than commodities. It'd end the disappointment.

I think it's been quite a noticable change over the last 30 years. It's not just affecting the workplace, job mobility is affecting familes and communities as well.

quote
wtf does Germany make anymore?

They still manufacture quite a bit, allittle over 1200 beer factories, and I am not kidding. I think the Audi is a German automobile. My company makes things for European automotives in Germany, but I know very little about who we supply over there. They still make quite a few things.

Back on subject, some of the problems now adays, is companies generally only want you for 5-10 years. The days of working a place for 30 years are pretty much over. One of the reasons being, pensions and things like that. Alot of companies just do not want to pay out for multiple employees with 30 years accrued pensions for several years until the employee dies. So, they nickel and dime it. Same with 401k plans where employers pick up some costs. They actually end up paying less than someone squirrelling away $3 k a year for 30 years or so, and some plans actually make money off of it with reduced payouts,ie 5 year plans before full benefits are paid back out.

So, with plants like mine that have been making car seats for Saturn for 18 years, another thing they are doing is, they come in build the seats, lose the contract to someone else, who, then in turn buys the facility and has a workforce already present to continue building. That is alot of the mobility right there, just bring in your own corporate types, you have a workforce already trained and in place. Just high priced corporate real estate, and in turn they do the same, and actually make more profits off selling the business location, than they do keeping it, as prices inflate.

Another thing is, corporations absolutly hate families. So, they are really cracking down on families by stricter attendance, rising health care costs being shared with group insurance, and on and on. Thus, forcing a more managable family structure for the most part, such as I believe adults are generally having 1.8 children per household now, and are expriencing more job turnovers.

Unionization, since the 80's, maybe late seventies, corporations have been strongly attacking unionization amongst employees. One of the things they like to point out is it raises the overall overheads for the business, higher wages, longer terms of employment, things of that nature. So, the demands on employees are far greater than before, higher quality expectations, more loyalty from employees by making sacrifices from personal lives for a career, and are expecting a higher profit margin in return.