Increase Employment: Structural Problems in USA Labor Force High
Healthcare Costs + Skills Mismatch + Labor Immobility
e Healthcare costs may be a barrier to hiring for employers
— Healthcare benefits = 8% of average total employee compensation; grew at 6.9% CAGR from 1998 to 2008 compared with 4.5% CAGR in salaries.
— Healthcare benefits are fixed costs as they are paid on an annual per-worker basis and do not vary with hours worked.
— As employers try to lower fixed costs to right-size to reduced revenue levels, layoffs are the only way to reduce fixed healthcare costs.
e Skills mismatch may be a barrier to hiring for employers — Alarge portion of the long-term unemployed may lack requisite skills.
— 14% of firms reported difficulty filling positions due to the lack of suitable talent, per 5/10 Manpower Research survey.
e Labor immobility resulting from the housing bust may be a barrier to hiring
— One in four homeowners are “trapped” because they owe more than their houses are worth, so they cannot move to take new jobs — until they sell or walk away.
KP Source: Richard Berner, “Why is US Employment So Weak” (7/23/10), Morgan Stanley Research. www.kpcb.com ne. at Might a Turnaround Expert Consider? B kpeb USA Inc. | What Might a T dE Consider? 387
Increase Employment: Immigration Does Not Take Away Jobs in USA;
It Improves Productivity + Boosts Income per Worker
e Immigration = Positive Impact on USA Productivity & Income per Worker
e Immigration = Neutral Impact on Employment for U.S.-Born Workers
% Change in USA Productivity / Income per Worker / Employment for U.S.-Based Workers In Response to an Inflow of Immigrants Equal to 1% of Employment
—— Productivity
—— Income per Worker
—— Employment for U.S.-Born Workers
Immigration's Impact as % of Employment / Income / Productivity Increase
Years After Immigration Source: Giovanni Peri, “The Effect of Immigrants on U.S. Employment and Productivity,” 8/30/2010 Federal Reserve Board of San Francisco (FRBSF) Economic Letter 2010-26. (@E) www.kpcb.com
USA Inc. | What Might a Turnaround Expert Consider? 388
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