Take This Job and Love It

We are awash in employment, unemployment and underemployment statistics here at home and abroad, but only less scientific surveys shed light on how well people enjoy their work. Even less is known about what helps people enjoy their jobs, or how a happy workplace might also be a healthier workplace.

A Danish researcher, author and workplace expert sheds some helpful insights into cultural differences that lead to Danish workers being far happier on the job than their American counterparts. In an article for Co.Exist, Alexander Kjerulf offered five differences between the two cultures that should give both American company managers and lawmakers reasons to rethink practices and labor policies.

A good starting point is “reasonable working hours.” Kjerulf noted that Organization for Economic Cooperation and Development (OECD) research finds the Danes work an average of 1,540 hours per year while the American workers puts in an average of 1,790 hours on the job. These data are a combination of both full and part-time employment records kept by government agencies.

We will go farther than Kjerulf. The OECD data he cites make abundantly clear that dogged hours on the job contribute little to a nation’s collective wealth, health and standard of living. Compare the vast differences in the partial table shown below.

Chart: Average Annual Hours Worked Per Worker

Kjerulf’s other four points of difference has more to do with what goes on at the workplace than it does hours spent on the job.

A key difference is a sociological measure called “low power distance” developed by the Dutch. Power distance is the gap between bosses and workers. Indicative of the gap between our two countries, Kjerulf noted that Danish law requires companies with 35 or more employees to open seats on their boards of directors for the workers.

Other factors that lead Danish workers to be happier on the job are differences in unemployment benefits, the latter that can destroy family and household finances in America. This might be changing, he concedes, with the Affordable Care Act—Obamacare—releasing unhappy workers to seek other opportunities when no longer trapped in jobs by health benefits.

“Constant training,” dating back to the mid-1800s in Denmark, and a “focus on happiness” are the two other cultural differences that produce happy workers in northern Europe.

The Danes and other Scandinavians have a word arbejdsglaede that means “happiness at work.” No such word exists in the English language. In contrast, Kjerulf wrote, the Japanese have a word karoshi that means “death from overwork.” That word doesn’t appear in English, either; but most Minnesotans have witnessed it at their workplaces and recognize the counterproductive symptoms.

Posted in Economic Development | Related Topics: Job Growth 

Sharing like a Capitalist

The sharing economy has received lots of media adoration over the last couple of years. A closer look reveals a more troubling truth. There are various types of companies in this new economy, but the ride-sharing companies like Uber and Lyft provide a useful example. In a recent article, Avi Asher-Schapiro details the effects of this model on the workers.

Uber entered cities with great fanfare. They said that they had a ridesharing system that would be cheaper for the consumer and better for the drivers. At the beginning, Uber charged costumers a fare of $2.75 per mile (with an additional 60 cents per minute under eleven mph). With drivers keeping 80 percent of the fare, it was possible to work full time and make a $15-$20 an hour. This is what prompted the media to declare ride-sharing a success; workers were making a living wage and it was cheaper for the riders. This did not last.

Within the last year, rates have been cut to less than half of the earlier ones. With the drivers having no control over the fare price, Uber slashed rates to $1.10 per mile, plus 21 cents a minute. This has left the drivers with significantly less cash for the same amount of work. Now drivers struggle to barely make minimum wage.

Drivers are fighting back. Working with Teamsters locals, the drivers have started their own drivers associations. Because Uber treats each driver as a “partner-driver” the drivers are independent contractors. This makes forging unity among the workers more difficult. Nonetheless, strikes and protests have happened in Los Angeles, Seattle, New York City, and others. It is not going to be easy; Uber has raised $1.5 billion from tech investors in Silicon Valley and they want to make a lot of money.

Asher-Schapiro’s conclusion of the new sharing economy is damning:

[U]nder the guise of innovation and progress, companies are stripping away worker protections, pushing down wages, and flouting government regulations. At its core, the sharing economy is a scheme to shift risk from companies to workers, discourage labor organizing, and ensure that capitalists can reap huge profits with low fixed costs.
There’s nothing innovative or new about this business model. Uber is just capitalism, in its most naked form.

New technology and the economies it creates can be a force for bettering people’s lives. As progressives we need to raise our voice to ensure that it works for everyone.

Posted in Economic Development | Related Topics: Workers' Rights  Automobiles 

Border to Border Connections

In order to forge a more economically diverse future, rural Minnesota needs to embrace the ever-evolving landscape of technology. In this regard, the Iron Range is no different. If the infrastructure of a region cannot support a changing economic landscape, how can it begin to plant the seeds of future growth? This very issue exists in relation to high-speed internet access in Northeastern Minnesota.

If smaller, rural areas are going to compete in the marketplace, they need stronger internet infrastructure. To contrast how big the divide actually is between metropolitan areas and rural, The Greater Minnesota Partnership released data in 2014 for all counties in the state in regard to households that have internet connectivity at 25 mbps or greater. While Hennepin County residents enjoy more than 98 percent access to high-speed internet, only a little more than 8 percent of St. Louis County residents have the same internet speeds.

This year, Governor Dayton and the Legislature worked together to promote border-to-border high-speed internet access to underserved areas of the state. The proposal was to invest 100 million dollars in grant funding to build a stronger network throughout the state to begin to chip away at the estimated 3.2 billion dollars it will cost to bring high-speed access to all Minnesotans.

The impact of internet access for rural Minnesota cannot be taken for granted if areas are serious about diversifying their economic portfolios. A report released this year by Strategic Networks Group, Inc (SNG) that was commissioned by the The Blandin Foundation studied two Minnesota counties to project the economic impact high-speed internet infrastructure and increased utilization initiative investments would have on their economies. The counties chosen were Lac qui Parle County, which enjoyed 100 percent broadband access, and Kanabec County, which had a 27 percent high-speed internet access rate. In Lac qui Parle County, an investment of around 120 thousand dollars would create an estimated 1.3 million dollar economic return. Kanabec County, with larger infrastructure needs, would require an investment of 11.3 million dollars to add access within its borders, but would generate an economic return of almost 20.4 million dollars from the investment.

If the Iron Range is going to prioritize its economic diversification in the future to prepare for a day when mining is no longer a present industry, embracing technology needs to be at the center of its initiatives. Building infrastructure is an expensive enterprise and most certainly will require a public-private partnership. It would be a wise investment to build those partnerships sooner rather than later.

Posted in Economic Development | Related Topics: Rural Minnesota  Iron Range  Rural Access  Technology 

Recalling Cooperative Roots for Building Communities

For Mary Alice Smalls, the struggles black families faced in America are well known from stories handed down from generation to generation. Far less is known, she said, about what people of color did to combat and overcome barriers to markets and opportunities.

That is changing. Jessica Gordon Nembhard, a professor of political economics at John Jay College of the City University of New York (CUNY), is coming to Minneapolis on Sept. 29 to discuss her book Collective Courage: A History of African American Cooperative Economic Thought and Practice.

“I wasn’t at all aware of this long history,” said Smalls, a board member for Seward Community Co-op in south Minneapolis who has been involved with worker co-ops and housing co-ops for more than 30 years. “I was shocked when I started reading her book.”

In Minnesota, Smalls added, “you hear about European experiences” and what those immigrants did to overcome problems. Until now, there hasn’t been available material showing African American use the same market-correcting tools.

“So much of our history has been about exclusion. Cooperatives are all about inclusion,” she said. For Pakou Hang, executive director of the Hmong American Farmers Association (HAFA) that operates a cooperative farm in Dakota County, black and white history with co-ops is important for newcomers to Minnesota. “Cooperative principles are embedded in the Hmong culture, but we’ve had different names, or words, for it,” she said.

Hmong, other Asians, and immigrants from all over the world “can learn from this wonderful history because cooperative action works today,” Hang added.

Gordon Nembhard traces black cooperatives back to 1780 but said during a recent interview that she was surprised by the extent to which African Americans started and joined cooperative businesses when they were excluded from participating in area markets. That led to 15 years of research leading to her writing Collective Courage.

She will discuss her book and engage in a community discussion billed as African American Cooperatives and the Struggles for Economic Justice with a panel of co-op people at the Capri Theater, 2027 W. Broadway in Minneapolis. The event is open to the public but people should reserve seats at CoMinnesota.coop.

Smalls and Hang will join Collie Graddick from Community Table Co-op and the Minnesota Department of Agriculture on the panel with the author. LaDonna Sanders-Redmond, the Seward co-op’s education and outreach coordinator, will moderate the discussion.

Earlier that day, the author will also participate in a brown bag discussion at the University of Minnesota’s Humphrey School, 12:30 to 2 p.m., hosted by Dr. Rose Brewer of the Department of African and African American Studies. Reservations for the free event can made here. 
 

Posted in Economic Development | Related Topics: Agriculture  Co-ops  Economic Inequality 

Hubert Humphrey 2.0?

Prompted by last week’s Tuesday Talk, I spent most of the last week attending “Twin Cities Startup Week” events, including the Tech Startup Crawl, MinneDemo (a kind of tech show and tell at the Riverview Theater), Twin Cities Startup Weekend, and the CURA-Tech Demo (which technically wasn’t part of “Startup Week”, but felt solidly aligned with the rest of the proceedings). I left energized, and excited to see this aspect of the Twin Cities community get to scale and realize more of its potential.

It was energizing to see entrepreneurs applying a different set of tools and approaches to solving social problems than what Minnesota 2020 and the rest of the nonprofit advocacy community do. While we identify opportunities to solve social problems through policy change, there are Minnesotans in garages (or more likely in CoCo’s relatively comfortable and networking-conducive co-working spaces), trying to solve the same problems with tech. There are times when the policy work we do is the best path to meaningful social change, but this week also showed me cases where policy advocacy feels like a dull, blunt instrument, and got me thinking about the situations where we’d move more efficiently toward social change goals by creating new tech.

That’s not to say the local tech startup community doesn’t have its own social problems to solve internally, or that it’s all progressive. The whiteness and maleness of the presenters and the audience at most of the events raised questions about startups’ potential role in a metro area attempting to close opportunity gaps and build a more inclusive economy. A great deal of external pressure prompts innovators and aspiring enterpreneurs to focus on their “revenue model” early and often, sometimes (at least it seemed to me) drawing focus and energy away from projects' problem-solving potential. The need to make projects sustainable is no trival matter, at for-profits and non-profits alike, but I couldn’t help but wonder if the relentless focus on revenue streams drew innovative energy away from social problems in search of solutions, or at least drew a brighter line than needed to be drawn between profit-focused “tech startups” and the kind of “civic tech” happening at CURA (which also featured a more race- and gender-diverse group of presenters and participants).

Still, the energy was infectious and the ideas being generated showed a lot of potential. One Startup Weekend team, Wee Mentor, created a set of tech tools to connect busy professionals with up-and-coming female tech talent to facilitate mentoring relationships and overcome the gender gap in tech. Another Startup Weekend team, Cash Cow, built a web app to help farmers track each field’s inputs and outputs and make better decisions about when to sell their crops in the volatile commodities market. Startup OMG Transit, featured in the Startup Crawl, is giving people real-time bus information, saving all of us who use public transit time waiting for buses in the Minnesota cold. At CURA-Tech, Duane Johnson presented Tuloko—a tech platform to help consumers and business purchasers support minority-owned businesses. To help the Minnesota 2020 audience see the connection, he framed Tuloko as “Hubert Humphrey 2.0,” citing the Minnesotan Vice President’s support for policies that encouraged black entrepreneurship in the 1960s. The team behind Our City demoed their tools for helping Minneapolis residents access city information online at both Startup Weekend and CURA-Tech, bridging the two events. There's a lot to take inspiration from on this list, and these are just a few of the highlights.

We’d do well to encourage this sector, and also to challenge it to focus on problems and solutions that can really change people’s lives. Public policy continues to play an important role in social change, and it should. So does the kind of direct action and public demonstration we've seen this week around civic engagement organizers' arrest in North Minneapolis. Especially for the toughest challenges facing our state, it's worth trying multiple approaches. Minneapolis is already seeking to solve issues of police and community trust at least partially with technology in the form of badge cameras. What else could tech do? We're lucky to have a vibrant startup community full of smart, creative people working to figure that out. 

Posted in Economic Development | Related Topics: Business Growth  Technology 

Remembering Ralph Hofstad: The Importance of Human Resources

Researchers and journalists meet people along the way who they admire for what they’ve done, and really like for personality reasons. It is precious when the admiring and liking come together in the same person.

I was reminded of that while researching a recent article that looked at the enormity of Minnesota’s food and agriculture industries, how that ties in with academia and builds a cluster of strength in our state economy, and how a Land O’Lakes investment in the University of Minnesota will keep building this strength.

Ralph Hofstad, a former president at Land O’Lakes and a charismatic farm leader for all of agriculture, died on Aug. 25 at age 90. Patrick Kennedy offered a particularly good obituary in the Star Tribune.

I have two especially fun memories of Ralph that should be shared. They reveal how interconnected our food and agriculture industries are, like the clustering of tech companies in Silicon Valley, and how dependent on academia we are for developing human resources, also like Silicon Valley.

In the one instance, former Pillsbury Co. executives William Spoor and Win Wallin called on Hotstad, offering an “expenses paid vacation” to the south of France. “You won’t need to pack a bathing suit,” Hofstad recalled being warned. “You will only be meeting with farmers.”

Pillsbury was exploring ways to introduce its Green Giant line of vegetables into Europe. A good-size vegetable cooperative in southern France was a logical partner and could start producing something new to most of Europe—sweet corn.

Hofstad went and met with local farmers and co-op officials. I remember Hofstad saying, “They were right. I didn’t get to the beach.”

This was a case of a major consumer food company accessing nearby talent from a dairy cooperative to explore a possible business tie that would have been in the interests of the Minnesota economy. That is precisely the interchange of knowledge and talent we constantly hear about in northern California.

A second memory is offered here for everyone involved with cooperatives or engaged with teaching at Minnesota business schools and schools of management.

Once when Land O’Lakes had an especially profitable year, a reporter from a major Wall Street business publication flew in and inquired if the cooperative was considering “going public.” During an interview for a book I was writing, Hofstad said he asked, “What do you mean by “going public?’ We are public. Our dairy farmers own us and they’ve invested a lot in us.”

Compounding the problem, the reporter then asked, “But what good are you if the public can’t invest in you?”

Here’s the lesson for business professors:

Hofstad said, “You know, Lee. You really need a good management team around you if you want to run a cooperative. I had a few there that day. They restrained me. I didn’t go up over the table and slug the guy.”

These memories explain why I really liked Ralph Hofstad. And why about 300,000 farmers did, too.

Posted in Economic Development | Related Topics: Agriculture  Co-ops 

An Agency for All Seasons

For a region like Minnesota's Iron Range, economic diversity has always been a challenge. In response to this reality, the state created an entity in 1941 to tackle the needs and economic issues of an area that is so tethered to one engine: The Iron Range Resources and Rehabilitation Board (IRRRB).

The current IRRRB Commissioner is Iron Range native, Tony Sertich. Commissioner Sertich, as the head of the IRRRB, is a member of the Governor’s Cabinet and oversees an agency whose sole purpose is to help promote an economic future for the region that is both sustainable and diversified.

As mentioned in my previous blog post, the IRRRB is funded by a portion of the taconite tonnage tax on ore taken out of the ground in the region. In 2013, the board approved a fiscal budget of $31.2 million dollars. While attracting larger employers of more sustainable industries is something the IRRRB actively works to achieve, the board also uses dollars for a myriad of other purposes.

One way it aids the region is through its Infrastructure Grant Program. Communities use these funds to maintain municipal water and sewer systems, demolish outdated and dilapidated properties to expand commercial and housing opportunities and to update the energy needs of the area through conservation and installation of renewable energy systems.

In 2011, Commissioner Sertich led the creation of the Local Business Loan Guarantee Program. The program is a new model that works to help local, small businesses gain access to capital through loans at local banks that are guaranteed with IRRRB funding. Businesses apply at their local financial institutions. The maximum amount for a loan is $75,000. As of June, the program has invested more than $1 million a month in loan support for local business and has made more than $44 million in business investments over the past two years.

For the Iron Range, the IRRRB truly is an agency for all seasons. Its reinvestment programs for local communities and businesses are invaluable for future bottom up growth. Even though attracting large employers is still a major concern for an area looking to find an identity to compliment mining, it is important that economic policy remain true to the vitality of local business. The IRRRB is successfully doing both.

Posted in Economic Development | Related Topics: mining  Rural Access 

The Economic Weight of Mining

Up in the beautiful realm of Northeastern Minnesota, there is a region aptly known as the Iron Range. The name comes from the ore that is abundantly in the ground: taconite. This precious rock is used to make steel, and on the Range, there not only is a lot of it, but it is an amazingly pure grade.

To call the mining industry the region’s most important economic sector would be vastly understating all that it does to make the lives of those who live there better. Taconite supports high wage union jobs, funds agencies that promote economic development through business grants, supports schools and higher education throughout the state, and aids residents in property tax relief. It facilitates all of this development through one simple tax.

In 1964, the Minnesota Legislature passed the Taconite Tax Act. The act created a statute that relieved the mining companies in the area of property tax obligations for the land they operate on in return for a tonnage tax paid for all ore taken out of the ground. In 2014, the amount of the tax was set at $2.56 per ton of ore. According to the Minnesota Department of Revenue, more than $102 million was collected in 2012. Out of that revenue, nearly $14 million went to cities and townships, nearly $16 million went to local school districts, over $14 million went counties, $16 million went to property tax relief, and $30 million went to the Iron Range Resource and Rehabilitation Board.

The economic impact of the mining industry to the Iron Range beyond tax revenue also cannot be ignored. According to  the Labovitz School of Business and Economics at the University of Minnesota Duluth, mining accounts for more than 11,200 jobs directly and indirectly in the state and adds billions of dollars to the regional economy.

In a time for our state when nonferrous mining is such a divisive political issue, it is important to remember why so many people have trouble dismissing its expansion. The issue of precious metal mining is one of huge importance and carries with it some very real risks to the environment if not implemented safely. It's also wise for us to survey all that mining has done for our state so we can understand both sides of the debate more clearly. For Iron Rangers, mining isn’t simply a business sector, it puts food on their tables, promotes all types of business and funds all levels of education. In short, it is a way of life.

Posted in Economic Development | Related Topics: Job Growth  Rural Minnesota  Iron Range  mining 

Meeting Needs of an Aging Population Increases Access for All

Between now and 2045, the number of Minnesota adults aged 65 or older is expected to skyrocket. By 2030, more than 1 in 5 Minnesotans will be considered older adults, according to data from Minnesota Compass and the Wilder Foundation.

Minnesota's aging population: Prepare for lift off
Source: Minnesota Compass

This trend is not limited to the state. Nationwide, the number of adults aged 65-74 will nearly double from 21.7 million in 2010 to 38.6 million in 2030. And as the older adult population continues to grow, it also grows in political significance. Meeting the needs of aging adults offers Minnesota an opportunity to invest in transportation and housing solutions that will increase community access for all ages.

Median income levels of older households remain nearly $20,000 below the Minnesota average. In 2012, one third of adults aged 50+ paid more than 30 percent of their income for housing. The JCHS reports that older, severely-cost-burdened households spend 43 percent less on food and 59 percent less on healthcare than similar households who live in housing they can afford. And nationwide, 600,000 people ages 70 and over stop driving. A recent ranking by USA.com suggests that the Twin Cities region has the second lowest population density of the nation’s 25 metropolitan areas, which means people have to travel farther and longer to get what they need. Older adults are often more cost-burdened and isolated than any other age group, but local policy solutions can meet these needs. 

Offering more diverse and affordable housing options located near amenities—or near transportation to amenities—can lessen the cost burden older adults face. Many want to live in homes they already occupy, so providing subsidies for remodeling housing with disability accessibility features could be a crucial step. Expanded transportation options near these affordable homes would increase the mobility of older adults, making it easier for them to access health care, the grocery store, and their family. Easy transportation options could enable older adults to stay in the workforce, increasing their income and lessening their cost burden. 

Communities that meet the needs of older adults help everybody out. Housing and transportation are cost burdens that much of the population faces, regardless of whether they have grey hair. Rather than being a burden to society, accommodations for older adults can lead to innovative solutions to transforming the accessibility of Minnesota’s cities.    

Posted in Economic Development | Related Topics: Public Transportation  Rural Minnesota  Housing Market  Senior Issues 

Workers Share of Corporate Income Falls

Corporate income goes to either one of two places: employees or corporate owners. According to a new report from the Economic Policy Institute, workers’ share of corporate income in 2013 fell to its lowest point in over sixty years—a further indicator of mounting wage and income inequality.

The employee versus owner share of corporate income can swing significantly over short periods of time, with the owner share falling sharply during a recession and growing rapidly during a recovery; changes in tax law can also have a short-term effect. However, the overall trend in the employee share of corporate income since 2000 has been downward, falling from approximately 82 percent in 2000 to 73 percent in 2014.

The downward drift in the employee share of corporate income corresponds with the decline in median household income, which from 1999 to 2012 declined by 11.2 percent nationally and 9.3 percent in Minnesota after adjusting for inflation, based on data from Minnesota Compass. (Since 2010, Minnesota’s median household income has increased slightly, while national median household income has continued to decline.)

The declining share of corporate income going to workers is yet another indicator of a trend that continues to be the greatest economic challenge of modern times: growing income inequality and shrinking median income. These trends undermine the great engine of the state and national economies: consumer demand driven by the purchasing power of middle-income families. So long as the share of income accruing to working households continues to erode, robust and sustainable long-term job and economic growth will remain illusory.

Posted in Economic Development | Related Topics: Corporate Business  Workers' Rights 

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