The San Mateo, California-based online polling company SurveyMonkey announced last week that it has been offering the independent contractors it employs a suite of “gold standard” medical, dental, and vision benefits, identical to those of its regular full-time employees, since January, Phil Albinus reports at Employee Benefit News:
Under the medical plan, 80% of claim costs are paid by its insurance carrier and the third-party employer pays 85% of employee premium and 50% of dependent premium. Contract and third-party employees are entitled to 80 hours of vacation and 40 hours of paid sick leave per year, including seven paid holidays, 12 weeks of paid parental leave per year and 12 weeks of paid medical leave per year. These workers can also receive a monthly subsidy of up to $260 for public transit expenses.
The divide between employees and contractors in Silicon Valley is vast: Whereas Facebook, for instance, reported a median employee salary of over $240,000 in its latest proxy filing with the Securities and Exchange Commission, that number does not include the army of contractors and subcontractors who provide security, custodial, catering, and other facilities management services for the social media giant. These contingent workers don’t enjoy anything resembling the plush benefits packages Facebook offers its full-time employees, and the impact of this inequality in the high-cost San Francisco Bay Area has drawn growing criticism toward the tech sector (Facebook is by no means unique in this regard).
In our age of HR as PR, benefits inequality has become an increasingly popular subject of scrutiny on the part of investors, the public, and the press. Starbucks expanded parental leave benefits for its hourly store employees earlier this year after activist investors began asking pointed questions about the disparity in leave benefits between hourly and salaried employees and whether this difference put the company at risk for claims of discrimination. Interestingly, in the case of SurveyMonkey, the impetus to equalize benefits for contractors came not from investors or the press, but rather from employees:
A recent report from the Organization for Economic Cooperation and Development finds that the number of jobs at risk of displacement due to automation in the coming years is probably smaller than previous forecasts have estimated. Nonetheless, the tens of millions of workers in developed countries are still at risk of having their jobs replaced or radically altered by AI and robotics. The Verge’s James Vincent summarizes the report’s findings:
The researchers found that only 14 percent of jobs in OECD countries … are “highly automatable,” meaning their probability of automation is 70 percent or higher. This forecast … is still significant, equating to around 66 million job losses.
In America alone, for example, the report suggests that 13 million jobs will be destroyed because of automation. “As job losses are unlikely to be distributed equally across the country, this would amount to several times the disruption in local economies caused by the 1950s decline of the car industry in Detroit where changes in technology and increased automation, among other factors, caused massive job losses,” the researchers write.
The analysis from the OECD, an inter-governmental organization representing the world’s 35 richest countries, is considerably less disconcerting than previous studies that have calculated the risk of automation at anywhere from 30 percent to fully half of all the work currently being performed globally. One difference between this study and previous ones, Vincent explains, is that it pays greater attention to details like whether a job can be fully or only partly automated and the variations among jobs that may have the same title but whose work differs substantially:
Most of the new jobs created in the US in the wake of the Great Recession have gone to workers with college degrees, and the wage premium Americans gain from holding a bachelor’s degree rather than just a high school diploma is higher than it has been in 40 years. Partly due to the higher number of college-educated candidates on the market, a bachelor’s degree has become a baseline requirement for most middle-class jobs. The decline of good jobs for less educated and lower-skilled workers is commonly understood to be a driver of inequality and social stratification in the US today.
A new report published on Tuesday by Harvard Business School, Accenture, and Grads of Life underlines the extent to which “degree inflation”—jobs for which a college degree was once optional and is now a requirement—is compounding this problem. According to the report, 6 million American jobs are at risk of degree inflation, as employers have “defaulted to using college degrees as a proxy for a candidate’s range and depth of skills.”
Axios’ Christopher Matthews discusses the report’s implications with one of its authors:
“This phenomenon is a major driver of income inequality,” Joe Fuller of Harvard Business School tells Axios. “We’re hollowing out middle-class jobs and driving everyone to the extremes of the income spectrum.” …
Starbucks has a reputation for taking good care of its store employees (or “partners” as it likes to call them), but it has nonetheless drawn some controversy this year regarding its paid parental leave program. Under a new policy announced earlier this year, new mothers who work at the coffee chain’s corporate offices are entitled to as much as 18 weeks of leave at full pay after giving birth, while fathers and adoptive parents get 12 weeks. Store employees working more than 20 hours a week and who have been with the company more than 90 days are allowed six weeks of paid medical leave upon giving birth, while those who adopt are eligible for a six-week adoption allowance, both at 100 percent of their average weekly pay.
Even though these benefits are much better than what most hourly retail and service employees in the US enjoy, the policy raised questions about why corporate employees were entitled to so much more. In August, the Guardian’s Molly Redden highlighted the impact of this disparity on store employees, noting that Starbucks is not alone among major US companies in offering more generous parental leave benefits to their corporate employees than to their front-line staff. Now, Redden reports, a group of investors led by Zevin Asset Management is pressuring Starbucks to tell its shareholders whether this discrepancy might constitute employment discrimination:
“Paid family leave is a huge factor in how well women can stay involved in the workforce after having a baby, or how much time out they have to take in their careers,” said Pat Tomaino, Zevin’s associate director of socially responsible investing. “Women and their families benefit from equal and generous paid family leave – but companies do too.”
Jillian Cain Photography/Shutterstock.com
At FiveThirtyEight, Michelle Cheng peruses some data from the US Department of Education and finds that while Americans who attend elite universities often major in more “academic” fields such as the arts, humanities, and social sciences, students at less prestigious institutions are much more likely to pursue career-focused courses of study that qualify them directly for particular jobs:
The most popular fields of study among students at the most selective schools are the social sciences, with 19 percent of degrees awarded in majors such as political science, economics and sociology. The next two most popular groups of majors are the biological and biomedical sciences and engineering. At less selective schools, the most common fields of study are related to business (the Education Department calls this category “business, management, marketing and related support services”), with 19 percent of degrees awarded in those majors. The next most popular group is “health professions and related programs.”
Career-focused majors — such as business, education and journalism — are more prevalent at less selective schools than at top-tier schools. Education ranks as the fifth most popular major at less selective schools but is the 21st most popular major at the most selective schools. Other vocation-specific majors such as law enforcement are also more popular at less selective schools. In total, more than half of students at less selective schools major in career-focused subjects; at elite schools, less than a quarter of students do so.
This career focus among attendees of less selective schools, Cheng explains, reflects the fact that their students tend to come from lower-income backgrounds: These students are highly motivated to see a financial payoff quickly after finishing their degrees, because they and their families have made bigger financial sacrifices to obtain them. At elite colleges, where students tend to be wealthier, the pressure to land a good job right out of college is less intense. Also, graduates of top-tier schools are much more likely to go on to graduate school, a choice that plays a greater role than their undergraduate major in defining their career:
Executive compensation, especially CEO pay, is naturally a politically-charged issue at a time when inequality looms large in the public consciousness—witness the debate over how much corporate leaders should be paid and who should get to decide, and the UK government’s pledge to put employee representatives on boards of directors and curb executive pay seen as excessive. It would come as no surprise, then, to find that a board’s political inclinations would influence how much it chooses to pay the CEO, with liberal-leaning boards paying less than those to their right. The Wall Street Journal’s John Simons looks at a recent study that found exactly that:
Corporate directors with left-leaning political views turn out to be conservative when it comes to paying the chief executive. That’s according to a new study of the connection between political views of board members and the pay packages of some 4,000 CEOs between 1998 and 2013.
Researchers from the University of Washington and the University of Notre Dame examined directors’ political contributions to determine whether a board was more liberal or conservative. They then looked into whether those leanings influenced CEO compensation. Conservative boards pay CEOs more than liberal boards do, and conservative boards tie recent firm performance more closely to pay, according to authors Abhinav Gupta of the University of Washington and Adam Wowak of the University of Notre Dame. …
Corporate boards are supposed to base their decisions on what is best for shareholders, filtering out personal biases. But research suggests that political preferences color much more than ballot choices. Liberals typically dislike basing rewards on outcomes when the link between outcome and effort is unclear, the authors write, meaning that liberal boards are less likely to pay for performance.
At Forbes, Adi Gaskell also highlighted this study earlier this month:
“Our main idea was that conservative- and liberal-leaning boards will differ in the importance they place in the CEO position, as prior research has shown that conservatives are, by and large, more likely to attribute outcomes to person-based factors as opposed to situational factors. To the extent that conservative boards perceive that CEOs are more important to firm success, they should pay them more,” [the authors] say.
A troubling new report from the Economic Policy Institute finds that the wage gap between black and white Americans is worse today than it was in 1979, “but the increase has not occurred along a straight line”:
During the early 1980s, rising unemployment, declining unionization, and policies such as the failure to raise the minimum wage and lax enforcement of anti-discrimination laws contributed to the growing black-white wage gap. During the late 1990s, the gap shrank due in part to tighter labor markets, which made discrimination more costly, and increases in the minimum wage. Since 2000 the gap has grown again. As of 2015, relative to the average hourly wages of white men with the same education, experience, metro status, and region of residence, black men make 22.0 percent less, and black women make 34.2 percent less. Black women earn 11.7 percent less than their white female counterparts. The widening gap has not affected everyone equally. Young black women (those with 0 to 10 years of experience) have been hardest hit since 2000.
The report attributes this growing gap to discrimination and growing earnings inequality in general. The EPI also finds that black women have suffered the most, as Valerie Wilson, director of the EPI’s program on race, ethnicity and the economy and one of the report’s authors, explains to the Guardian: