What really drives job growth?

August 15, 2016

I would like to start out by saying this is not going to be a political post, but much of what I intend to talk about is political. States vary wildly between the progressive or conservative nature of their employment laws, and each are ready to argue that their methods create the most job growth. California is often derided by the business owners I speak to as the worst place to do business. Many legislators from more conservative states bemoan the legal minefield there as what will eventually cause an economic blight there. Kansas made a lot of headlines by slashing business taxes and making the work environment much more employer-friendly, and Governor Sam Brownback touted it as the next job boom. Can they both be right? Can two drastically different ways of doing things really accomplish the same thing?

 

A fascinating map from the Brookings Institute has just come out, and I'd like to take a look at that now:

 

 

This map reflects the growth or decline of jobs in advanced industries in the recent past. Advanced industries include what the Institute describes as "a group of 50 R&D [research and development] and STEM (science-technology-engineering-mathematics) - worker intensive industries." The three most progressive states, when speaking of labor laws particularly - California, New York and Massachusetts - have experienced healthy growth in this area. California, in fact, is in the highest bracket of this graph. While it would be spurious to say that its laws created this situation, we can reasonably infer that, at the very least, they weren't the hindrance that many feared.

 

Let's look at one more graph:

 

 

This map shows productivity levels in these countries. The study that pairs with it, by British company Expert Payroll Services, has demonstrated that the countries with the biggest circles (the most productive), are also the ones with the shortest average workday.

 

Why do I bring all of this up? I believe it highlights something that many HR practitioners already know, but business owners and leaders have not completely signed on to in the United States. What we've been told about progressive employee laws and policies isn't holding water. I have spoken about how employers can loosen the reigns on employees and not only not see a drop in work, but indeed a gain. Let your employees telecommute from time to time if it helps them balance their wok and life. Go ahead and try that unlimited vacation time policy (with a few caveats - but you'll have to read my book for more on that). Keeping a tight grip on people feels like control, but it really isn't.

 

So the next time you hear about another employee-friendly law about to be passed, skip the mourning period and move straight on to how you'll not only comply, but use it as a strategic advantage for your business.

 

 

 

 

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