A Salute to America’s Working People

Labor Day, the second bookend of the traditional summer season, is a national holiday that celebrates America’s workforce, the people whose blood and sweat have helped to build our country into a great nation. Holiday parades will feature members of organized labor marching down city streets to be recognized and applauded.

Today, the value of unions is increasingly being called into question, including by college professors in the classroom. Unions are seen as out of date and unnecessary; by some they are characterized as the source of all evil and the reason for every problem in the business world. Why are unions seen in such a negative light? The answer is complex. It is important for business students to understand the issue from both sides. On the one hand, unions have historically provided positive outcomes to members through collective bargaining agreements. Members earn higher wages and better benefits than similar nonunion workers. In the public sector, however, these superior union-negotiated health and retirement benefits can threaten the government’s fiscal health. This is being seen across the country as governments grapple with soaring pension liabilities and declining credit ratings. Additionally, union contracts include grievance procedures that reduce management’s ability to treat workers arbitrarily – such as firing someone without just cause.

Given the opportunity to enhance your wages, benefits, and job security through a union, one would think the normal sentiment of people to be, “Where do I sign up?” But that is not the case in the United States. Union membership has plummeted from its peak of 35 percent of the workforce in the 1950s, to today’s unionization level of about 11 percent. Employers, including leading business associations such as the U.S. Chamber of Commerce, have opposed unions and many companies have adopted policies intended to forestall unionization. Various interest groups have attacked unions and encouraged states to roll back public employee bargaining rights or to pass “Right-to-Work” laws, which prohibit collective bargaining agreements from requiring workers to pay union dues.

It is not unusual for faculty in business schools and other university programs, such as economics and hospitality management, to suggest  that unions are “bad,” and give such reasons as unions reduce efficiency, inhibit change, restrict employers’ ability to manage the workforce, and even that unions are sometimes connected with organized crime (references to Jimmy Hoffa’s demise sometimes follow).

Union supporters point out that in recent years, ordinary workers have faced wage stagnation, while company bosses have received generous salaries and a growing list of perks unavailable to subordinates. Thomas Piketty’s book – Capital in the Twenty-First Century – has ignited a firestorm by suggesting that increasing inequality threatens society. Despite the growing inequality, unions have failed to generate political support to change labor laws in ways that would help workers and promote more equality. I’ve always found this interesting. I believe that it is connected with the general desire of Americans to support entrepreneurship and innovation. But why do workers support a theoretical view over a pragmatic approach that would put more money in their pockets?

My purpose in this entry is not to answer the question. There are hundreds of studies that have looked at the issues associated with unions and their effects. Many show that outcomes vary across public and private sectors and nations. In coming years, more studies will be cited as governments, politicians, and activists continue to debate ways to reduce costs in the public sector. The question will continue to be complex and controversial.

Instead, on this Labor Day holiday, I humbly ask readers to reflect on the collective efforts of working people across the nation to build our country, to create profits and successful projects for their employers, and to earn a decent living. Indeed, I believe that across the world, in every nation, people show a willingness to work in order to earn a decent living. In other blog entries, I’ve mentioned the necessity of business school’s to excel in their job placement efforts. We must emphasize placement because an education is irrelevant if it does not provide an opportunity to earn a living. This view is received positively by parents and students, and, at my school, it is driven by our overriding concern to make future generations better off. Carrying out this value provides what our students require – and what people desire around the world.

This brings me to a quote from legendary Pittsburgh Steelers coach Chuck Noll, which I believe is relevant to business students and schools on Labor Day. “Champions are champions,” he said, “not because they do extraordinary things but because they do the ordinary things better than anyone else.” This speaks to the value of taking pride in hard work and having the will to succeed — two values that were shared by the workers whose labors helped mold the United States into a world power. 

As much as the news media seeks to point out instances in which working people have failed or fallen short, time and again I have seen the good created by hard-working people. They don’t seek glory or recognition beyond knowing they have done commendable work. They display values that some say have vanished. The lesson is that business schools must ensure students get a dose of those values so that they will practice them and understand that most workers strive to do the same.

Thank you to all the workers, yesterday and today, who have contributed to the greatness of our nation.

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In Honor of Kendall Youngblood Simon

The entry below is the text of a letter that was read on my behalf at a memorial service for Kendall Simon on August 29, 2014.  Kendall was an excellent student and outstanding member of the Katz School community.  I believe it is important to share these reflections with the entire Katz community.  

 

On Tuesday July 15, 2014, the Katz community suffered a tragic loss when Kendall Simon died unexpectedly. Although we live at a time when senseless deaths are reported in the media each day, none of us was prepared for the loss of our sister Kendall. Her death hit us hard.  Perhaps it was because she was outgoing, pretty, successful, and a natural leader.  Perhaps it was because she was an important part of our community. Perhaps it was because of the great things we knew she would accomplish in the coming year. Whatever it was, there is no doubt that she was special. Her qualities were evident to everyone who knew her. She had a serious, yet quiet approach (at least with me) and she was absolutely dependable. We will miss her greatly.

Today, we are gathered to celebrate Kendall, both to recognize her and to overcome our loss. While the words we hear will offer consolation, the actions we take in response to this gathering are much more important to our community and Kendall. She was a woman of action.  I am deeply sorry not to be with you at this memorial service for it is important for our community to stand together at times such as this. Please know that I am standing with you in spirit and my calendar is marked to offer a moment of reflection for Kendall as this letter is being read.

There are no easy words that will allow us to understand Kendall’s death or how to react to it. In struggling to prepare these words, I found help in insights from my college roommate, Fr. Tom Scirghi, now a Jesuit theologian at Fordham University. Tom noted that our gathering today is really a “reorientation for people shaken by a death” and he observed that “the reality of death and suffering – its grief, sadness and the heartbreak it causes – makes us wonder whether life is meaningless.”

“How could this happen? Why?  The paradox is that we all know death is certain, but not now, not yet, and not to this person whom we knew and loved so much.”  And death is final in that it “forces us to confront the pain of nonbeing,” disappearing, fading away, and edging towards nonexistence, which raises questions about everything and reinforces our powerlessness.  Today we have more questions than answers.

The late Joseph Cardinal Bernardin, who was Archbishop of Chicago, wrote a book called Gift of Peace, which chronicled his battle with cancer. In it, he noted:  “Perhaps the ultimate burden is death itself. It is often preceded by pain and suffering, sometimes extreme hardships.”

Yet, we are the ones who are suffering as a result of Kendall’s death. Her loss has created pain, questions and a void.  And while people of faith will take some solace in God’s grace, individually we must accept the pain and fill the void.  We will discover answers only by embracing Kendall and uniting in the effort of achieving what she stood for. As a community we must dissipate our grief by advancing a greater good – something that makes a difference.  Although we could honor Kendall in many ways – through a scholarship, competition, or annual event at Katz in her name, it might not be enough. We must do something that captures her spirit, energy, and determination or future generations will not understand why Kendall meant so much to us.

To honor Kendall appropriately, we need to decide as a community on an action that will be carried out in testament to her memory. It must be consistent with what she stood for and be something she’d be proud of.  It needs to be something you could see her doing. This is our task to complete. We will overcome our loss by doing what Kendall would do – knowing that in this activity we are always standing beside her – speaking for her given she can no longer speak for herself.

The Gospel of St. Matthew (5:4) tells us: “Blessed are those who mourn for they shall be comforted.” May today’s gathering bring comfort to our community and Kendall’s family.  In her short time at Katz, Kendall made a difference here that none of us will forget.  We love you Kendall.

 

 

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Will the Echo Boomer Generation Save Graduate Business Education?

In recent years, graduate business programs have received little good news and even less praise. Fewer American students are taking the GMAT test, competition for MBA students is increasing, people are questioning the value of business education, entrepreneurs are aggressively promoting their online solutions to the problems and educational costs continue to rise. Some observers predict that scores of schools — and even entire universities — will go out of business in the coming decade. As the very large baby boomer generation nears retirement, advances in technology, the globalization of markets and economies and government concerns about measuring learning could bring to an end the golden age of American higher education.

That’s the bad news. On the other hand, as a business school dean, I wonder whether another baby boom has given us opportunity. The echo boomer generation — children of the baby boomers — is now completing college and entering the workforce. Soon, there will be many more people with several years of job experience under their belts and a desire to improve their circumstances. This echo boomer generation, also known as Gen-Y or Millennials, was born between 1982 and 1995 and numbers nearly 80 million. According to the U.S. Census Bureau, there were more 22-year-olds last year than any other age group in the United States, followed by 23-year-olds and 21-year-olds. These young adults are either in college, headed to graduate school or poised to enter the working world. Graduate business schools need to plan accordingly.

As college administrators, we need to prepare for an influx of echo boomers in the classroom, as this enormous cohort means larger applicant pools and some measure of relief from higher education’s environment of hyper-competition. Enrolling these students in large numbers will require changes. Institutions will need to balance intergenerational differences between students and professors, facilitate productive communication at speeds expected by a generation that has grown up texting, and address issues of concern to echo boomers, such as fair treatment of adjunct faculty and teaching assistants.

Echo boomers are different from their parents and have different expectations. According to survey research, echo boomers are more interested in doing work that helps others than they are in making money. They demand mentorship and expect a high-tech fast-moving workplace. They desire flexibility and fair treatment. Compared with their parents, echo boomers have been exposed to more technology-enhanced learning, have experienced a greater emphasis on standardized tests, face more pressure to build the right resume and are more attentive to high-quality brands.

At the same time, echo boomers seem to be competitive and impatient. Maybe this is because they’ve grown up in an era when long careers at the same company have disappeared as quickly as company-funded pensions. This has fueled interest in entrepreneurship, as younger workers seek to offset the uncertainty caused by job switching and shorter careers. It has also fueled a decline in trust of corporations, business leaders, and colleagues.

Given such views, the echo boomer generation will expect graduate business programs to give more attention to corporate social responsibility (CSR), namely discussion of ethics in applied forms as it relates to wage policies and societal inequality, corporate responses to climate change, LGBT rights and corporate political action. These issues will need attention alongside and within traditional coursework, such as accounting, finance and marketing. This generation will be interested in interdisciplinary approaches to issues relevant to its ideas and goals. The manner in which echo boomers have been educated will create a conflict for graduate business programs.

Not surprisingly, echo boomers expect large doses of technology to be present in their graduate programs. Schools must incorporate mobile and digital media in the learning process outside of the classroom to meet this generation’s expectations. Because of both exposure to technology and the emphasis on building the right resume, this generation must have many opportunities outside the classroom to practice concepts. This means exposure to internships, real-world projects, social entrepreneurship opportunities and public-goods projects is necessary for a school to attract these students. Business education must be more applied in the future to prepare these students for their careers.   

If graduate business programs can meet the desires of the echo boomers, one might ask how students will pay for their degrees.  As many observers have noted, one of the most significant statistics differentiating echo boomers from baby boomers is the amount of student loan debt these young adults carry at graduation. With declining returns on investment, prospective students will likely think hard about the value of a $120,000 MBA education. 

If enacted and maintained, President Obama’s loan forgiveness program could provide some help to students (and business schools).  It aims to ease financial burdens for students and graduate students using federal loans, freeing them of their debt as soon as possible so they can focus on their studies rather than on looming payments. The plan considers income and family size and those who qualify may have their monthly loan repayments limited to 10 percent of their income. Participants who have made timely, regular payments for more than 20 years will have their outstanding debts cleared, and those who work in government departments will have their debts cleared after 10 years. As with many government solutions, however, this will likely bring more oversight to educational programs and additional emphasis on learning outcomes.

The cost of higher education and resulting student loan crisis has a direct effect on the future of the echo boomers. Nine out of 10 echo boomers say they eventually want to own a place of their own, but what will happen when an echo boomer goes to buy a house, buy a car or pay for their own child’s education while balancing their own college debts? We should not expect the nation — taxpayers — to pay for this.

The best answer to the debt question is that business schools will have made the appropriate adjustments in curricula, experience-based learning opportunities and theory/practice mix in order to give students the skills needed to command higher compensation premiums at work. What today’s educators do for echo boomers will have a significant impact not only on the students, but also on the future of faculty and the educational system as a whole. Echo boomers are massive in number and have a lot to offer, but they will only save graduate business education if business schools change their programs to infuse technology, emphasize practice, and evaluate competencies rather than simply focus on time spent in the classroom.  

 

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