MONEY temps

Why Your Colleague Has the Same Boss, but a Different Employer

Temp nameplate
Jeffrey Coolidge—Corbis

As the economy recovers, companies are hiring more "temporary" workers who aren't all that temporary.

When Americans get back into the office after Labor Day weekend, they’ll probably see fewer empty cubicles than they have in recent years. New jobless claims have been falling, and as of May there are more people working than there were in early 2008, before the downturn.

But some of those people sitting next to you, or chatting with you by the coffee machine, might be working for a different company.

According to the Bureau of Labor Statistics, an estimated 2.9 million Americans work in the “temporary help services industry.” That means that while they show up at the office of one employer, they really work for the staffing agency that signed their contract.

Of course, “temps” are nothing new. Companies—especially in white-collar industries—have been hiring temporary workers since the 1950s, often for specialized tasks for a short period of time. But today, some “temporary” employees do the exact same tasks as permanent employees, and they stick around for a lot longer.

“‘Temp’ is kind of a misnomer,” says Catherine Ruckelshaus, general counsel and program director at the National Employment Law Project, a liberal advocacy group. “Staffing companies are acting like human resource departments. They’re placing permanent slots, if not permanent workers.”

The number of temp jobs really began to balloon in the early 1990s. And since temps are easy to hire and easy to fire, they’ve borne the brunt of the booms and busts of the last 25 years. Temps were hit particularly hard during the recession of the early 2000s. “More than 25 percent of all jobs lost during that period were in temporary help services, despite their accounting for less than 2 percent of total employment,” according to the BLS.

“Whenever there’s a recession, temp and staffing trails off early and picks up in the beginning as the jobs start to come back,” Ruckelshaus says. “Oftentimes employers start to fill up their payroll with temp and staffing jobs as opposed to permanent positions.”

temporary help

That’s exactly what has happened since late 2009. “It’s a little bit early to tell if that’s a long-term trend or if that’s a normal bubble,” Ruckelshaus adds.

Increasingly, blue collar industries like janitorial services, warehouse and logistics, and home care have started to make use of contract workers. So have white collar industries like legal services, accounting, records processing, and media. (Some journalists at Time Inc., which publishes this site, are employed by an outside staffing company.)

What’s in it for companies? They like the flexibility—which is another way of saying easy-to-hire, easy-to-fire. Research suggests that temps are generally paid less, get fewer benefits and face more health and safety violations than direct hires.

In a new case before the National Labor Relations Board, a union argues that a subcontractor relationship has weakened its collective bargaining power. Browning-Ferris Industries gets some of its workers at a recycling facility though Leadpoint, a temporary staffing company. The union wants both companies to be considered those workers’ employers. The case could change the way NLRB evaluates “joint-employer” relationships, the Wall Street Journal reports.

Even so, it’s unlikely to mean that employers will stop using outside staffing—at least not until the job market is strong enough for potential employees to demand a less “flexible” arrangement.

Related:
If Jobs Are Back, Where’s My Raise?
If You’re Looking for Work, the Outlook Is Brightening
5 Ways to Speed Up Your Job Search This Fall

MONEY Workplace

What Labor’s Win at Market Basket Means for Your Job Security

140829_RET_Market_1
Elise Amendola/AP

The victory at a New England grocery chain might seem like a fluke. But economic trends show that workers may be finally getting some leverage.

You don’t often hear about it, but every day, in countless workplaces, people make difficult choices to do the right thing by standing up for co-workers—often at great risk to their careers. These workers are the true heroes of this and any other Labor Day. Which is why what happened recently at Market Basket is so unusual: labor won a major victory, and it got a lot of press.

For those who don’t live in the Northeast, Market Basket is a family-owned New England grocery chain. A bitter family feud led to the ouster of the revered CEO, Arthur T. Demoulas. Market Basket’s workers backed his reinstatement with protests and rallies, which ratcheted up after the company threatened to fire some of them. Public opinion was heavily in the workers’ favor. Today the majority owners of the company announced their decision to sell their shares to Demoulas, who not only gets his job back but control of the company to boot.

It’s not everyday that you see relatively low-paid supermarket workers demonstrating on behalf of their CEO. But what’s really unusual here is the display of an all-too-rare commodity in an American workplace: trust between workers and management.

The Great Recession should have been dramatic evidence to those who manage and staff the nation’s workplaces that we’re all in this together. But, of course, it wasn’t. Employers cut payrolls and benefits—remember defined benefit pensions?—some of which perhaps was unavoidable. They also outsourced jobs and even entire operations to lower-cost markets, creating armies of freelancers who work without full salaries or even a 401(k) plan. Yet many companies, if not most, continued to provide upper-management lavish pay packages and perks that further distanced them from the people whose labor was essential to their long-term success.

Some people feel workers will never recover the ground they’ve lost. But there are encouraging signs that labor may be gaining some leverage.

Like an economist who has correctly predicted nine of the past two recessions, I have repeatedly stressed that the U.S. economy is running out of workers. Even though many Baby Boomers are continuing to work past traditional retirement age, the numbers of boomers who have retired exceeds the flow of new entrants into the labor force.

Up till now labor shortages were masked by steep employment declines during the recession. But the recovery has slowly reduced unemployment. The Congressional Budget Office just forecast improved economic growth rates over the next few years. And the Wall Street Journal, among others, recently reported that shortages of unskilled labor are forcing up wage rates in some parts of the economy. And other indicators show that the job picture is brightening for those looking for work.

No question, this recovery remains very disappointing. We haven’t recovered enough lost jobs. Real wage gains remain elusive. There are few if any signs that the economic gap between rich and poor is narrowing. But even abysmal growth will, over time, lead to spot labor shortages. And with immigration reform stalled, boosting the nation’s labor supply with more newcomers is not going to happen anytime soon, which will give workers more bargaining power.

Employers may already be responding. Gallup reports that 58% of workers—both full- and part-time—are “completely satisfied” with their job security. That’s a new high, which exceeds levels just before the recession and even the levels during the dot-com euphoria of the late ’90s. Gallup also found that 71% of workers were completely satisfied with their relations with co-workers, 63% with the flexibility of their working hours, and even 60% with their boss or immediate supervisor.

Confident employees are more likely to push back against their bosses and to seek other jobs if current employers fail to meet their needs. If today’s attitudes do translate into more employee assertiveness, we can expect to see not only higher wages and improved retirement benefits, but also increased demands for restructuring jobs and job responsibilities. This would mean jobs with more flexibility, jobs that use technology to allow teams to work together from different locales, and jobs that measure outputs and judge workers on results, not the number of hours they worked or time spent at meetings in the office.

Achieving such results will stretch both managers and employees. And it will require major efforts to rebuild trust. For now, I will just wish you a happy Labor Day, with a special shout-out to the folks at Market Basket.

Philip Moeller is an expert on retirement, aging, and health. He is an award-winning business journalist and a research fellow at the Sloan Center on Aging & Work at Boston College. Reach him at moeller.philip@gmail.com or @PhilMoeller on Twitter.

MONEY The Economy

If You’re Looking for Work, the Outlook is Brightening

open plan office
Mark Bowden—iStock

While the number of Americans in the labor pool is still at worrisome lows, the outlook for those who are employed or are still looking is improving

While there’s great debate about why so many Americans have dropped out of the workforce, there is new hope for those who have stuck it out in the labor pool.

The government reported on Thursday that the number of workers filing first-time claims for unemployment benefits dropped to 298,000 in the week ended Aug. 23, another sign that the job market is stabilizing.

This marked the second straight week of declines in initial claims. More importantly, the four-week average claims figure itself is now just below the 300,000 mark — at 299,750 — putting the job market back where it was before the global financial crisis began in 2007.

US Initial Claims for Unemployment Insurance Chart

US Initial Claims for Unemployment Insurance data by YCharts

To be sure, pessimists (and market bears) will point out that the overall unemployment rate, which stands at 6.2%, still has a ways to go before improving to pre-crisis levels:

US Unemployment Rate Chart

US Unemployment Rate data by YCharts

And as economist Ed Yardeni, head of Yardeni Research, points out, Federal Reserve chair Janet Yellen and other policy makers don’t look at just this one measure of the job market. In fact, she looks at 19.

“Among her favorite labor market indicators is wage inflation,” he said, “which remains too low, in her opinion.” Money‘s Pat Regnier has more about that here.

US Real Average Hourly Earnings Chart

US Real Average Hourly Earnings data by YCharts

But Yardeni points out that wages and salaries on a per-payroll employee basis — in other words, measuring folks who have a job —are nonetheless up 8% over the past 10 years.

So it just goes to reinforce the divide: If you’re employed or in the work force, things are probably looking up. If you’ve dropped out, on the other hand, the picture may not be so bright.

MONEY Raises

7 Reasons It’s a Great Time to Ask for a Raise

John Gillmoure—Corbis

The sluggish job market is finally kicking into high gear, and that's good news if you are itching for a decent raise this year.

Stocks have been on a bull run since 2009, corporate earnings are soaring, and the housing market is surging. Now the latest economic reports show that the sluggish job market is finally catching up to the rest of the economy.

If you’ve been thinking about making your pitch for a raise, here are seven reasons why now might be the right time.

1. Job openings are highest in more than a decade. After rising for five straight months, the number of available jobs hit 4.7 million, the highest since February 2001, according to the Bureau of Labor Statistics’ Job Openings and Labor Turnover Survey, out Tuesday.

2. Competition for jobs is less stiff. There are two unemployed workers per job opening, down from three in the fall and seven during the height of the financial crisis.

3. The number of people quitting jobs—a sign that workers are more confident in landing a new one—is at 2.5 million, the highest since June 2008.

4. The number of jobs being created rose by more than 200,000 for the sixth straight month in July, the longest string of gains since 1997. Meanwhile, unemployment is the lowest since 2008, at 6.2%.

5. Raises are bigger. According to Mercer’s 2014/2015 US Compensation Planning Survey, the average raise in base pay is expected to be 3.0% in 2015, up slightly from 2.9% in 2014, 2.8% in 2013, and 2.7% in 2012. Workers rated above average, a group that accounts for 36% of the workforce, will get salary increases between 3.7% and 4.8% this year, according to Mercer.

6. Temp jobs are turning into full-time gigs. Conversions (giving full-time jobs to temporary workers) are at a three-year high, according to staffing agency Manpower.

7. Employers are really worried about losing talented workers. Turnover is up dramatically: 51% of employers are seeing workers leave, vs. 30% in 2012, according to OI Partners. Nearly three-quarters of employers say they are worried about losing highly skilled workers.

Of course, some of the optimism depends on what industry you’re in. For example, the average raise in the energy sector is projected to be 3.5%, vs. 2.8% for people who work in consumer goods, according to Mercer.

And while the picture is brightening for the long-term unemployed—the number of people without a job for six months or longer fell to 3.16 million in July, vs. 4.25 million a year earlier—it remains twice the number it was before the recession in 2007.

Still, economists are optimistic that salary increases, absent from the rebound in the job market, will finally kick in.

Wage growth is likely be “one of the big stories over the next 12 months,” says Capita Economics chief U.S. economist Paul Ashworth in his latest research note. Among positive signs: a sharp increase in the proportion of small businesses saying that they are planning to raise compensation. And a rising proportion of households in the Conference Board’s consumer confidence survey saying that they expect their incomes to rise, while fewer are saying they expect their incomes to fall.

Tomorrow: We’ll tell you the right moves to make to land a raise as the job market improves.

TIME real estate

You’re Not the Only One Who’s Having Trouble Paying Rent

Condo Towers Rise From Boston to Los Angeles in U.S. Rebound
The EVO condominium building stands in downtown Los Angeles on June 23, 2014. Patrick T. Fallon—Bloomberg/Getty Images

Average rents in big cities rose more than 5% in the 12-month period ending in June 2013, while wages rose a measly 1%

Rent prices are going up in cities across the country even as wages stagnate, making it ever harder to afford to live in big cities.

In the 25 largest rental markets in the country, rents rose faster than wages, according to the latest data published by the real estate website Trulia.

Miami, New York, Dallas and Phoenix and 21 other big cities saw average rent increases of 5.5% in June compared with the same month last year. Meanwhile, annual average wages increased nationwide just 1.0% in 2013 compared with 2012, according to the Bureau of Labor Statistics.

The two data sets reflect slightly different time periods, but the trend is clear, said Jed Kolko, chief economist at Trulia: affordability is worsening.

“Wage data is up one percent,” said Kolko. “Rent is rising at a pace much faster than that.”

San Francisco had the highest median rent for 2-bedroom apartments, at $3,550, according to Trulia, while Miami residents paid the highest percentage of their wages on rent for an average 2-bedroom, or 62% of wages. New Yorkers paid 56% of their wages on rent, while on the other and of the spectrum, St. Louis residents forked out just 24%.

Rents are soaring in smaller cities like Denver (10.8% increase) and Atlanta (8.6% increase) as well.

San Francisco saw the highest increase in rents in June compared with last year at 13.8%.

MONEY inflation

Why the Fed Won’t Care About Higher Prices Until You Get a Real Raise

Stacks of food in bar graph
Tim Macpherson—Getty Images

Why rates are staying low even though your grocery bill is up.

Inflation is the buzz on Wall Street this week. The consumer price index recently topped 2% for the first time since late 2012. To be clear, that’s still very low. If you are a middle-aged American like me, inflation is lower than it’s been for most for your entire life.

Fed chair Janet Yellen says she’s not concerned about inflation yet—she calls the data “noisy.” Money’s Paul Lim has a deeper dive into that data and why the Fed isn’t raising rates here.

But maybe you are scratching your head about Yellen’s calm. You can certainly feel a pinch on regular shopping trips. Meat prices are through the roof. And now there’s even news that Starbucks will be charging more for your morning caffeine fix.

Part of the issue is that we probably notice what’s gone up more than what’s down. (The news media sure does.) There’s always something on the consumer price index spiking up. But then there’s usually stuff getting cheaper, too. The past year has seen a decline in the prices of bread, peanut butter and bananas. Furniture and appliances are cheaper. And men’s clothes cost less (but not women’s, oddly). Kids’ toys, televisions, and computers are bargains compared to last year. No, you can’t live just munching on PB&B sandwiches in front your new laptop (you shouldn’t, anyway)—even so, add all those little items up and they do count as important part of your cost of living.

More important, though, is that the Fed keeps its eye not just on prices but on what’s driving them. If coffee prices shoot up because of a drought in Brazil, you may feel a squeeze in your budget, but that’s not the broad inflation the Fed worries about. The classic driver of broadly rising prices is higher wages.

When you and I are able to get more pay, we spend more. That increase in demand makes it possible for companies to raise their prices. Then workers start looking for even higher pay to catch up to rising prices, and so on. As economist and Fed watcher Tim Duy notes in his takedown of “inflation hysteria” here, “If inflation accelerates while wage growth remains stagnant, demand will soften and so too will any incipient price pressures.”

And how is wage growth looking? Better, but not exactly on fire.

image(27)
SOURCE: St. Louis Fed

Workers are just about staying ahead of prices, a little, and their real wages aren’t keeping up with productivity gains. And that’s for the ones with jobs: Unemployment remains on the high side, with lots of people missing from the labor force too.

The Fed will start worrying about price spikes, in short, when wages start moving too. That the Fed will wait to quash higher prices until you’re getting paid more sounds a little perverse. But the alternative—jacking up interest rates and throwing people out of work every time hamburger gets more expensive—would be a lot nastier.

TIME Business

8 Companies That Seriously Owe Their Employees a Raise

Pile of money
B.A.E. Inc.—Alamy

Should companies with higher profit margins pay employees better?

247-LogoVersions-114x57
This post is in partnership with 24/7Wall Street. The article below was originally published on 247wallst.com.

With the stock market reaching new heights daily, companies’ profit margins at multi-decade highs, and falling unemployment, many Americans may be wondering when they will start to see the benefits of the U.S. economic recovery. For many workers, wages have remained stagnant even as the economy is making positive strides.

A number of America’s most successful companies employ large numbers of low-wage workers. These workers are hired to staff stores, call centers, and restaurants. These workers are typically paid hourly, and oftentimes earn little above the federal minimum wage of $7.25 per hour. Oftentimes, these employees serve as the face of their companies and spend most of their workday interacting with consumers.

Click here to see the companies that owe their employees a raise

Not all employees at these companies are paid modest salaries. While customer account executives at Comcast earn $13.26 per hour on average, according to Glassdoor.com figures, stars of the company’s NBC television network shows were paid hundreds of thousands if not millions of dollars a year. And while the average attractions cast member at Disney’s parks and resorts earned just $16.39 per hour, Disney also employs far higher-paid workers at its ABC and ESPN television networks.

Recently, a number of these companies have chosen to use their resources for massive deal making. In February, Comcast announced a deal to acquire Time Warner Cable for $45.2 billion in stock value. In May, AT&T agreed to acquire DirecTV for $48.5 billion. Regulators have yet to approve the deals. Last year, Verizon signed on to an even bigger deal when it bought out British telecom Vodafone’s 45% stake in Verizon Wireless for $130 billion.

Of course, companies may not necessarily have an obligation to pay their employees a higher wage. If the recent spate of mega deals is any indication, companies can spend huge amounts to help provide better returns to their shareholders.

However, many argue that companies still spend too much in executive compensation. Comcast chairman and CEO Brian Roberts earned more than $31 million last year in salary, stock options and awards, and other benefits. Bob Iger, CEO of Disney, received more than $100 million in total compensation from 2011 through 2013. Outsized salaries like these appear especially disproportionate when compared to low-wage workers.

Based on data provided by Capital IQ on S&P 500 companies, 24/7 Wall St. identified corporations with high operating income, high operating profit margins, and major one-year growth in operating income. In order to be considered, companies had to be in a customer-facing industry and have a large number of low-wage workers. We excluded financial companies, such as banks and thrifts, because the data we used to measure profitability is inadequate for judging the industry’s performance. Employee totals by company are from Yahoo! Finance. CEO pay is from filings submitted by public companies with the Securities and Exchange Commission. Figures on compensation are from Glassdoor.com and are self-reported by users to the website.

1. Time Warner Cable Inc. (NYSE: TWC)
> 1-yr. stock price change: 48.3%
> 5-yr. stock price change: 359.9%
> Total employees: 51,200
> Total CEO compensation: $14.2 million

ime Warner Cable is one of the nation’s largest telecom companies, with revenue of more than $22 billion and operating income of $4.6 billion last year. Although Time Warner Cable is not growing especially quickly, it continues to generate large amounts of cash from its operations and return profits to shareholders. The company’s stock has been one of the S&P 500′s better performers over the past twelve months, up 48.3% in that time. Some of the stock price rally is the result of the company’s deal with Comcast, which agreed in February to acquire Time Warner Cable. The merger will combine the nation’s two largest cable operators. But while shareholders reap the benefits of the deal, many employees may be left in the lurch as a result. Part of the deal’s appeal is an estimated $1.5 billion in savings from operating efficiencies, which may include job cuts. According to Glassdoor.com, the average customer service representative at Time Warner Cable makes just $11.85 an hour, and the average inbound sales representative earns just $11.41 an hour.

ALSO READ: The States With the Strongest and Weakest Unions

2. Public Storage (NYSE: PSA)
> 1-yr. stock price change: 12.7%
> 5-yr. stock price change: 156.7%
> Total employees: 5,200
> Total CEO compensation: $9.2 million

Public Storage owns more than 2,200 self-storage facilities across the U.S. and Europe. Because of its low-cost business model, Public Storage recorded a nearly 50% operating margin in its latest fiscal year, higher than nearly all other companies in the S&P 500. Its earnings were actually higher than its operating income because of the earnings it recorded from its investments in Shurgard Europe, a European storeage company, and PS Business Parks, a U.S. commercial real estate company. While highly profitable, Public Storage pays the average relief manager just $10.57 per hour, and the average property manager only $10.50 per hour, according to Glassdoor.com.

3. Michael Kors Holdings Limited (NASDAQ: KORS)
> 1-yr. stock price change: 49.7%
> 5-yr. stock price change: 290.3%
> Total employees: 9,184
> Total CEO compensation: $7.6 million

Michael Kors’ retail operations have grown rapidly in recent years, with comparable store sales up 26.2% last year, due largely to increased sales of accessories and watches.The company also added more than 100 new stores in most recent fiscal last year. Alongside the expansion, total operating expenses increased considerably during fiscal 2013 by about $331 million. As a percent of revenue, however, the company’s operating costs actually declined. While the overall dollaramount allocated to salaries increased from the previous fiscal year, Kors sales associates are paid an average of just $10.37 per hour, according to Glassdoor.com, although they can also earn commissions.

Click here to see the rest of the list.

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MONEY The Economy

The Shrinking Role of Wages

Senior woman looking at Social Security check
A social security check arrives in the mail Donald Higgs—Getty Images

As the population ages and workers get displaced, a smaller portion of income is derived from actual work.

For Americans, work is becoming less and less important.

Today, wages and salaries make up only 50.5% of overall personal income, according to a new Wells Fargo Securities report. That’s down from almost 60% in 1980.

You can blame some of this on changing demographics, including the aging of the population and government programs that direct transfer payments to certain groups.

Take Medicare and Social Security. In the beginning of 2007, 80% of people between the prime working ages of 25 to 54 was employed. Today that number is down to 76%.

image (1)
Source: St. Louis Federal Reserve and the Labor Department

While the Great Recession lowered demand for workers, “the aging of the baby boomers and longer life expectancies have pushed the share of the population age 65 and older to a record high,” writes Wells Fargo economists John Silvia and Sarah House.

Almost one in seven Americans is 65, according to the U.S. Census, compared to 12.4% in 2000. More Americans over the age of 65 means more Americans receiving Social Security and Medicare.

Then there’s help for the disabled and poor. “Increased eligibility and use of social insurance programs such as disability insurance and food stamps have also prompted the rise in transfer payments,” note Silvia and House.

Right now there are more than 14 million Americans who are deemed disabled by the Social Security Administration.

Consider this from NPR’s Planet Money’s excellent series on disability:

Part of the rise in the number of people on disability is simply driven by the fact that the workforce is getting older, and older people tend to have more health problems.

But disability has also become a de facto welfare program for people without a lot of education or job skills. But it wasn’t supposed to serve this purpose; it’s not a retraining program designed to get people back onto their feet. Once people go onto disability, they almost never go back to work. Fewer than 1 percent of those who were on the federal program for disabled workers at the beginning of 2011 have returned to the workforce since then, one economist told me.

Or take food stamps. Since 1969, the number of people on food stamps has increased by a factor of 16.

The share of income derived from transfers has increased from 12.5% in 2000 to 17.3% today, according to Wells Fargo Securities.

A lousy job market in the aftermath of the recession has left millions without work — 36% of today’s unemployed have been without a job for over 27 weeks, compared to 12.1% in 2000. And that abundance of available labor, writes Silvia and House, “has kept wage growth muted, restraining labor income even as hiring has improved.”

image (2)
Sources: St. Louis Federal Reserve and the Labor Department

For the overall economy, “the general diversification of income sources adds to the stability of consumer spending over time,” House says. “In particular, transfer payments have becoming an increasingly important share of income and have helped to smooth income/spending throughout the business cycle and Americans’ life cycle.”

MONEY The Economy

Why Slacking Off Is Good for Your (Short-term) Job Security

140604_INV_StopProductivity_Workaholics_1
(left to right) Adam Devine, Blake Anderson, Anders Holm in Season 3 of "Workaholics" on Comedy Central. courtesy of Comedy Central

Productivity in the first quarter plummeted. As demand grows in this recovery, this should force companies to start hiring—at least in the short term.

If you’re reading this story while on coffee break, take your time. Take another sip. Linger over the words. Why be in a rush to get back to work?

A new government report released Wednesday showed that in the first quarter, overall productivity in the business sector fell by 3.2%, a much bigger drop than was initially thought. In fact, this marked the worst slide in productivity since the global financial crisis in 2008, when companies began laying off workers in droves, eventually doubling the nation’s unemployment rate.

This time, however, a collective slack off may be just what the job market needs — at least in the short run.

Actually, a substantial body of academic research shows that over long periods of time, rising productivity leads to job creation, not destruction. In fact, a McKinsey & Co. report found that in all but one 10-year rolling period since 1929, the U.S. economy witnessed both rising productivity and rising employment. This makes sense: Over time, rising productivity helps expand output and profits, which grows the economy, which creates more demand, which eventually leads to the need to higher more workers.

But there are times when this virtuous cycle gets broken. For instance, in the financial crisis. Since then, the recovery has been so slow to pick up that companies could get by without hiring and simply squeezing more work out of their existing employees. This explains why even in a soft economy, companies in the S&P 500 index are posting record high profits.

But demand in this economy, while still soft, has picked up lately, as seen here by the ISM Purchasing Managers Index, which captures (among other things) the pace of new orders:

ISM Purchasing Managers Index Chart

ISM Purchasing Managers Index data by YCharts

To meet this growing demand, companies have been boosting factory output, even as the average productivity of U.S. workers has slumped lately.

US Industrial Production Index Chart

US Industrial Production Index data by YCharts

The result: Employers have been forced to add to their payrolls, albeit incrementally, for fear of losing out on this new business.

US Change in Nonfarm Payrolls Chart

US Change in Nonfarm Payrolls data by YCharts

This reflects a nuance in the relationship between productivity and employment that was captured in a paper written a while back by economist Carl Walsh for the Federal Reserve Bank of San Francisco. In that report, titled The Productivity and Jobs Connection: The Long and the Short Run of It, Walsh writes that while higher productivity is correlated with job creation in the long run, the short run be an entirely different story:

If firms see the demand for their products rise, they respond by expanding production. And if labor productivity is unchanged, then typically they need to hire more workers to do this. But if labor productivity is increasing, then it has the potential to reduce employment growth, because the firm will be able to satisfy demand using fewer workers.

And right now, with productivity not just unchanged but falling, it looks like employers are going to need to start filling some empty cubicles to catch up.

MONEY Careers

What to Do When You Find Out You Earn Less Than Your Predecessor

140602_FF_MakeLess_Abramson_1
Some sources say that the recent firing of New York Times Executive Editor Jill Abramson—shown here with her predecessor, Bill Keller, in 2011—was owed in part to her complaints about earning less than Keller. FRED R CONRAD—The New York Times/Redux

How to tell whether you should march into your boss's office -- or just suck it up.

Q: I just found out my predecessor made more than me. My boss doesn’t know I know. What should I do?

A: Before you work yourself up into a fury, keep in mind that “it’s unusual for someone to come into a role and make the same exact salary as the previous person in the job,” says Lydia Frank, editorial director at compensation data provider PayScale.com. Also, there may be a good reason that you make less.

Many factors affect compensation. Employers typically stick within a general range for each position, and where you fall within that range depends a lot on what you bring to the table–your years of experience, your unique skill set and your education. Unless those attributes are identical to those of your predecessor, you shouldn’t necessarily expect to command the same salary. Additionally, as unfair as this may seem, the economy may play a role: The person you replaced may simply have been hired during more flush times at your company.

If after having weighed these factors you still see an imbalance, however, you should talk to your boss. But you’ll want to be careful about how you do it, as it can be a delicate dance to get your boss to see your side. (It’s been widely reported that one of the factors in the recent high-profile ouster of New York Times executive editor Jill Abramson was her complaints about earning less than the person she replaced.)

First, get some data behind you, since you want to avoid bringing up what you know about your predecessor’s pay. By mentioning that, “You’d be putting your boss on the defensive,” says Frank. “That’s not a conversation that’s likely to go well.”

There are several ways to find out what’s an appropriate income for your position. You can check salary sites, such as PayScale.com which crowd sources data on compensation, and Glassdoor.com, which posts company salary reports. You can also turn to your network and ask current or former colleagues for insight. (While it’s still taboo to talk about pay, it may be easier if you ask about a range.)

Then tell your manager that you’ve done some research on salaries in your position, and the data you’ve found indicates that you’re are at the low-end of the scale. From there, build your case about why you are a top performer and should earn more, using quantifiable examples of your successes and highlighting wins that align with your boss’s and the company’s goals. If your supervisor pushes back, ask what you can do to get to that next level: Get more training, add a particular skill or hit a sales target?

The bottom line: When it comes to your salary, what’s most relevant is whether you are making what you should based on the current market price for your position and your qualifications, not what the person before you earned.

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