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The Anti-Minimum Wage Con Job Argument

March 3, 2014

Fast Food Worker This is not a post about leadership, or at least directly. It’s about people who work their butts off but who have become the disenfranchised, the contemporary version of 19th Century France when abused workers revolted.

I’ve been a loyal reader of The Economist for three decades. The oldest newspaper in the world (magazine format for some time, along with an excellent online web site), its analysis, prose and subtle humor make for very worthwhile reading. However, as a retired labor economist, who spent 30 years in the public sector in Canada and who also worked on science, technology and innovation issues, I have a bone to pick with The Economist, and more broadly the neo-right wing of unenlightened commentators.

What’s my beef? The minimum wage as it’s currently administered in the United States and, in my own country, Canada.

Plenty has been written on the need for economics to get with it, to drag itself out of the 1800s into the 21st Century. The models and concepts articulated at the time by progressive thinkers such as David Ricardo (the opportunity cost of free trade, or what most incorrectly call comparative advantage) were wonderful in an age of much greater simplicity, in terms of the later politicization of international trade.

The topic of the minimum wage, notably in America, was on the front burner for much of 2013. Fast food workers launched a series of protests that captured the media’s attention, and undoubtedly however fleetingly, the hearts of middle class Americans. And being a Canadian, we, too, got caught up in the emotion, given our proximity to the United States.

In its December 14 issue, The Economist ran a few articles on the minimum wage, noting that in a number of Western countries the minimum wage is set based on a percentage of a country’s median income. For example, in the U.S. it’s 38% of median income; in contrast, it’s 47% in Great Britain and just over 60% in France. Since 2009, the federal minimum wage in the U.S. is a whopping $7.25 per hour. In contrast, in typical fashion in Canada where the 10 provincial governments have specified constitutional powers there is no precise federal minimum wage. Each province, similar to the 50 states, has its own minimum wage. For nationally regulated companies in Canada, workers must be paid no lower than the minimum wage in a certain province.

I digress.

To return to the calculation of minimum wages across countries, there’s the proverbial BUT.

While France has a very high minimum wage, it also has very high youth unemployment.

And so goes the argument against raising the minimum wage. The conventional argument has been that it’s youth, who are still in school, who have no dependents and who are much less productive, who deserve a low wage.

Here’s the second BUT.

Bull Thanks to globalization and technology, along with other factors such as demographics, more older people are working in what I’ll call the minimum wage ghetto. Yours truly has been in that space for the past two years on a part-time basis. Granted, I’m retired from the federal government and pick up some contract writing work; however, I’m not alone. Current and former minimum wage co-workers include retired high-tech managers, administrators and police officers. We, as ageing Baby Boomers, want to be kept busy and generate some added income.

So the dynamics of the minimum wage sector has changed dramatically. The Economist and others have yet to catch up.

The truly pressing dimension is working poor parents who put in 40-plus hours a week at fast food restaurants, retail stores or grocery stores listening to whiney Gen X and Baby Boomer customers. The disconnect is palpable.

Yes, the minimum wage at both the U.S. federal and provincial/state levels should increase. It’s the right thing to do from an economic aggregate demand perspective (consumer spending drives over 65% of America’s economy, and similarly for Canada) and from an ethical viewpoint.

President Obama’s suggestion that $10.10 per hour is the desired federal minimum wage jives more or less with what many labor economists agree. However, economists, in usual form, disagree on the effects of a significant rise in the minimum wage. The Congressional Budget Office produced a study in early 2014 which stated that up to half a million jobs would be lost. However, it would also lift 900,000 Americans out of poverty.

A study done at the University of California at Berkley, along with other studies such as at the London School of Economics, found that raising the minimum had no negative effect on employment. Indeed, one can argue that it spurs aggregate demand, the driver of any economy.

Here’s the third BUT.

Fast Food I’ve always been somewhat surprised that in North America the restaurant industry has not been more aggressive in introducing automation, especially in fast food establishments. My heart and mind goes out to those fast food workers who protested valiantly in New York City and beyond for a $15 per hour wage. Yes, you deserve that. No question in my mind. However, understand that any significant increase in the minimum wage will likely prove to be the catalyst to not just the paring of labor costs (aka laying off employees) but the introduction of automation.

If you don’t believe me, check out what’s been taking place in Europe and Japan.

The subject of what should be the minimum wage is not a political one, as The Economist correctly observes. However, it’s not just one based on mechanical derivations of what should be its relationship to a country’s or state’s/province’s median income. This is a very difficult issue, with plenty of blow-back on workers if it is not done correctly.

For example in the Province of Ontario, where I live, the provincial government recently lifted the 2010 imposed minimum wage freeze. On June 1, the minimum wages rises from $10.25 to $11.00 per hour. The increase was based on the average inflation rate since 2010 (which ranged from 0.9 to 2.9%). This was the intelligent way to determine where to set the rate. Take the politics out of the minimum wage. Henceforth, the minimum wage in Ontario will increase each year based on the inflation rate. Employers will be given a four months heads-up notification. This is a smart approach.

Lastly, I’ll note that if the $15 per hour wage were ever to materialize for American fast food workers, as expressed during the demonstrations in late 2013, it would amount to only 50% of the country’s median income.

We’ll hear a lot more about the minimum wage issue in the months ahead. And economists will continue their polarized debate.

To be conscious that you are ignorant of the facts is a great step to knowledge.
Benjamin Disraeli

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Square Astronaut, Round Hole: Sweat the Small Stuff!

February 23, 2014

Hadfield 1 “Don’t sweat the small stuff.”

We’ve heard that expression a lot in the past and still occasionally today. It was made popular in the self-help and pseudo leadership literature in the nineties. Indeed, one compact book went by that title, written by Richard Carlson in 1997.

For some–perhaps many–it became the axiom with how we should lead our lives, including how we should approach work. But is this concept something we should embrace?

Given the laxity with how people often approach their work, whether in government, industry, personal services, retail sales or wherever in the job market, perhaps it’s time to step back and reflect on how we as a society have become so indifferent to attention and precision with how we fulfill our daily work responsibilities. The consequence, incidentally, has an impact on a nation’s productivity, and hence, global competitiveness.

Reflect on your personal experiences dealing with businesses, whether it’s a call center, retail store or doctor’s office. Think about the hard goods you’ve purchased, only to be frustrated when it broke or stopped working after only three months. Or what about the lack of precision in people’s vocabulary, where slang and misused words are the preferred method of communicating. (One of my pet peeves is people converting nouns to verbs.)

It wasn’t until I read an excellent book that I stepped back a little more to reflect on what is happening in society with what I’ll call a don’t sweat the small stuff mindset.

Meet Chris Hadfield, Canada’s most esteemed astronaut who retired in the summer of 2013 after completing a six month mission as commander of the International Space Station. Widely respected around the world, Hadfield established a huge following on social media as he shared his experiences while on the space station. He brought science to young people, engaging them with live sessions where he showed experiments, demonstrated what it’s like to live and work in zero gravity, and explained such practical necessities as how astronauts pee while in space.

And before readers, especially those in the United States, chuckle about the idea of a Canadian astronaut, check out Chris Hadfield’s bio, which includes:
• Top graduate of the US Air Force Test Pilot School in 1988
• US Navy test pilot of the year in 1991.
• Chosen by the Canadian Space Agency in 1992
• CAPCOM for 25 Shuttle launches
• Director of NASA Operations Star City, Russia
• Chief of Robotics at the Johnson Space Center
• Chief of the International Space Station
• Commander of the International Space Station, where he conducted a record-setting number of scientific experiments and carried out an emergency spacewalk. His stunning photographs of Earth were shared around the world.

Not too shabby for a small town boy from Ontario, who at age nine decided he was going to become an astronaut.

Hadfield book In his new book An Astronaut’s Guide to Life on Earth, Hadfield talks about growing up on a farm (with four brothers and one sister) in western Ontario, his academic studies, his determination to become a test fighter pilot (seen as essential to becoming an astronaut), getting married, having children, frequent moves, being away from home for prolonged periods, and the setbacks he faced, which meant even more focus to achieve his dream.

“Square astronaut, round hole” is how he explains his life story, drawing the metaphor from his first spacewalk when he had to maneuver his square frame with astronaut suit through a round hole. As he states: “It’s the story of my life, really: trying to figure out how to get where I want to go when just getting out the door seems impossible….I wasn’t destined to be an astronaut. I had to turn myself into one.”

He recounts the experience he had as a 14 year-old on the family farm in western Ontario. Hadfield and his family had spent the day harvesting corn and had just sat down to supper. His father, who had been in the barn, came into the house to announce that he needed everyone to help him. He had checked the temperature of the corn in the storage bins to discover that it was starting to ferment. To avoid losing the summer’s crop, the family began shoveling the corn to turn it so that it could aerate. The family worked through the night, and as Hadfield sums up: “There was no question of stopping.”

We like to think that if we don’t sweat the small stuff that our stress is reduced. Not so according to Hadfield, who states:
“We’re trained to look on the dark side and to imagine the worst things that could possibly happen….We also learn that acting like an astronaut means helping one another’s families at launch–by taking food orders, running their errands, holding their purses and dashing out to buy diapers….Every astronaut can fix a busted toilet…and we all know how to pack meticulously….The upshot of all of this is that we become competent, which is the most important quality to have if you’re an astronaut, or frankly, anyone, anywhere, who is striving to succeed at anything at all.”

Note the last three words: “…anything at all.”

Hadfield 3 It shouldn’t be rocket science (to use a bad pun in the context of this post) that anyone in whatever job would disagree that he or she should not try to do their best in their current vocation. It doesn’t have to involve life or death decisions, such as on the International Space Station or the Space Shuttle. Each of us needs to take pride in our respective work, because as a collective at a nation’s level it actually means something.

If you’re a police officer, then you conduct yourself at the highest level of ethics and the law, while balancing the daily need to ensure your safety and that of your colleagues.

If you’re a nurse or a paramedic you provide compassionate care, while remaining vigilant of the hazards of your profession and the pressing need to always keep learning.

If you’re a public servant (like I was for three decades) you must always keep at the forefront why you have a job: no, it’s not the political master but rather the public.

If you’re the manager of a retail store, you must remain on the ball, paying exquisite attention to detail in a highly competitive space, while working daily to keep your staff motivated.

And if you work in a manufacturing facility, you must always keep in mind that your work and company can be outsourced to a distant country in a nano-second.

Pride, Precision, Persistence are critical to how we approach our respective work.

For a closing treat, watch this YouTube clip with Chris Hadfield playing his guitar in the International Space Station in concert with the Barenaked Ladies (“Is Somebody Singing”).

UNIVERSITY OF WATERLOO - University of Waterloo to Host Live Spa If you start thinking that only your biggest and shiniest moments count, you’re setting yourself up to feel like a failure most of the time.

– Chris Hadfield

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Decency, Humility and Personal Leadership

February 17, 2014

Orr 1 I moved a lot as a kid.

Born in Winnipeg, Manitoba in 1955, I was still chortling and babbling when we moved to Montreal where we lived for a few years before heading to Battlecreek, Michigan for two years (where I started school). Then it was back to Montreal for many years, when suddenly at the end of grade eight my dad, a senior mechanical engineer with Canadian National Railways, was transferred to Toronto for a brief stint. Finally it was back to Montreal, where I completed high school.

I tell you this because there was a common thread through these family moves: hockey.

Hockey is Canada’s national sport, traditionally an activity that kids of all ages and abilities played. I was mediocre as a hockey player. When the snow was gone it was ball hockey, whether on tennis courts or on suburban streets. It was a blast, and I have wonderful memories of freezing my feet on outdoor ice rinks and stick handling down a paved street to drop one in the net.

Up until I attended university I followed hockey devoutly. And the big bonus for me was that my dad frequently was given free box seats to Montreal Canadien games at the former Montreal Forum. What an absolute thrill it was to sit behind the Canadiens’ bench, closely watching the players. My all-time hockey hero is Gordie Howe, dubbed Mr. Hockey, who played for the Detroit Red Wings. Man, could he ever skate, stick handle, shoot and cream any player who got in his face.

But there was another player for whom I’ve had ever lasting respect and admiration, someone just five years older than I. His name?

Orr 4 Bobby Orr.

Orr played for the Boston Bruins from 1966 to 1976, and then with the Chicago Blackhawks until 1979 before his devastated knees gave out. His awards and records set during his shortened tenure with the Bruins are incredible. Here are just a few of his records and awards:

• Most points in one season (1970-71) by a defenseman (139), and most assists (102)
• Youngest player to win the Calder Memorial Trophy (rookie of the year) in 1967
• Named when he was a rookie to the NHL Second All-Star Team in 1966-67
• Named to the First All-Star Team from 1968 to 1975

• Awarded the James Norris Trophy for best defenseman eight times from 1968 to 1975
• Voted second greatest hockey player off all time by an expert committee in 1997 by Hockey News. (Wayne Gretzky was voted number one and Gordie How number three.)
• Named best defenseman of all time by Hockey News
• Youngest inductee to the Hockey Hall of Fame at age 31

I’ve been away from the hockey scene for almost four decades. I lost interest in pro hockey when the NHL expanded to over (now) 30 teams, where games are often exceedingly boring to watch. What snapped me back to reflection was Orr’s new autobiography, which was given to me for Christmas by one of my daughters. Accompanied by numerous radio and TV interviews with Bobby Orr during the book’s release, I began to reflect on this Canadian hero who not only outshone everyone else on the ice but who is a profoundly decent man. His humbleness, along with a surprising level of shyness, makes him that all more respected.

An easy but illuminating read, Orr: My Story contains many personal leadership lessons. I learned more about Orr’s upbringing and why he turned out to be both a stellar hockey player and a leader in his own right. Growing up in Parry Sound in rural Ontario (north of Toronto), he learned to skate and play hockey on outdoor rinks and rivers, where pick-up games were initiated by and ruled by kids. Adults stayed out of the way.

Orr’s hard work and focus to build on his natural abilities exemplify what it means to dedicate oneself to a calling. Here’s the youth who to improve his stick handling and shooting skills hollowed out hockey pucks, filling them with lead. He opened the garage door and the back door, firing puck after puck at the granite hill behind their modest house. And as he put it in his book, he never was able to leave a dent in the hill.

Orr 2 Orr’s parents were highly supportive of their son, but unlike many of today’s hyperactive hockey parents they never pressured him. In reading his autobiography, it’s clear that he loves his parents dearly and holds them in the highest regard. And it led me to reflect on what leadership lessons Bobby Orr could teach us.

Here are 10 lessons that I drew from Bobby Orr’s autobiography:

1. Honor your parents for their devotion to helping you grow.
2. Realize that you’re never at the end of your learning journey; there’s always much more to learn.
3. Maintain a strong sense of humbleness, for there are always people better than you at your profession.
4. Practice, practice, practice – then practice some more.
5. Keep your head up when stick handling through difficult times.
6. Precision is a lost art–regardless of your profession, don’t throw the puck away.
7. Stay out of the penalty box.
8. Beware of people who try to take advantage of your good nature.
9. Always keep smiling, no matter how bad it gets.
10. Courtesy gets you a long way with people.

Whether or not you’re a hockey fan, we can learn a lot from Bobby Orr. And be sure to check out his book.

The love and passion I had for the game was my key. I never had that taken out of me by my parents or a silly coach.

– Bobby Orr

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An Entrepreneur with Soul

February 9, 2014

Lori Patterson Lori Patterson was once part of the corporate rat race, working long hours as a manager for large companies, watching senior leaders constantly change priorities and objectives, moving the proverbial goal posts that much farther out.

Finally she had enough. She quit her job, re-focusing her attention on her family, all the while reflecting on what she was going to do next.

One of five excellent female leaders profiled in my Leadership 2013: An All-Star Female Line Up!, Patterson’s story is inspiring. When she came to the realization that she no longer wanted to work in the corporate world as an employee, having to continually adapt to a corporate culture increasingly based on the bottom line, she adopted a new frame of reference. Patterson stepped out, paused to re-center herself, focused her personal mission and values, and then stepped back into the business world–but this time as the senior leader of her company.

Possessing a huge amount of entrepreneurial drive and plenty of smarts, the mechanical engineering graduate from the University of Illinois co-founded Pixo in 1998. Pixo is a software firm whose designers and engineers create platforms for web and mobile apps, bringing to life the ideas of entrepreneurs. Originally named OJC Technologies, Patterson changed the company’s name to Pixo in September 2011. (“Pixo” is a derivation from a Portuguese expression meaning “giving voice”). As she facetiously notes, it was done to address the “distress” of employees who had difficulty remembering their firm’s name. Such is her open sense of humor.

Pixo may be a small company with only a few dozen employees. However, it has a one-year waiting list of corporate clients who want in with this customer-focused company, where employees work a 40 hour week and the workplace nurtures creativity and innovation. This contrasts sharply with the software world, characterized by excessively long hours and employees being treated as pawns who work marathon hours.

Patterson has lived and breathed entrepreneurship for the past 15 years, during which time she has also provided business consulting services to over 100 start-up companies. Her unique skill at serving as a catalyst to entrepreneurs to turn good ideas into profitable businesses helped her earn the Athena Award in 2011, and more recently the Woman on the Rise award from the Illinois State Treasurer’s Office.

Lori Paterson hasn’t looked back since leaving the rat race.

Life is either a daring adventure or nothing.

- Helen Keller

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As Tough, Articulate and Compassionate as They Come

February 2, 2014

SisterFarrell She worked with war refugees for some 15 years in El Salvador. She witnessed the horrors that the accompanying violence of war inflicts on civilians, unfortunately frequently children and the elderly. But her next battle would prove to be fierce and protracted.

Meet Sister Pat Farrell, Past President of the Leadership Conference of Women Religious (founded in 1956) and Vice President of the Sisters of St. Francis in Dubuque, Iowa. Sister Farrell went head-to-head with the Vatican on the role of nuns in the Catholic Church. Part of my Leadership 2013: An All-Star Female Line Up!, she represents some 57,000 nuns in the U.S. (there were 165,000 nuns in the U.S. in 1965). Sister Ferrell took on Cardinal William Levada, who in 2012 was accused of ignoring priests who have been guilty of pedophilia and who marched in protest in San Francisco that same year against gay marriage.

Change comes hard, especially so in long-established, male-dominated institutions.

At issue was the accusation from Cardinal Levada that the organization that Farrell lead–Leadership Conference of Women Religious–was promoting “radical feminism” and ignoring the Vatican’s hard line on gay marriage and abortion rights. Levada wanted to rewrite their statute and introduce programs to re-educate nuns. The Leadership Conference replied that the Vatican’s doctrinal assessment was founded on “unsubstantiated accusations” which could undermine the ability of nuns to “fulfill their mission.”

Americans protested the Cardinal’s actions and submitted a petition. However, nuns, who take vows of chastity and poverty, were placed in a tough position. The 65 year-old Sister Farrell’s effort to resist the Vatican’s desire to take control of this organization faced a huge challenge. Yet the nun from an Iowan farm, second oldest of six children whose ailing father died at only age 48, and who left home at 14 to attend a boarding school run by the Sisters of St. Francis, persevered. As a nun, she learned Spanish in Mexico, was sent to Peru to help the poor in a remote area, and then went on to Santiago, Chile. From there it was on to El Salvador in 1986, which was in the midst of a civil war, and where four nuns were raped, tortured and beaten in 1980.

In a March 2013 interview with National Public Radio, Sister Farrell reflected on the recent selection of Pope Francis and her hopes for the future direction of the Catholic Church on the issues of social justice, charity and the role of women. For an additional perspective on the new Pope’s challenges and Sister Farrell’s ongoing fight for fairness, take a moment to watch this CBS 60 Minutes segment.

The struggle goes on within the Catholic Church on the role of nuns, and more broadly that of women and their contributions. Fortunately, there are extraordinary leaders such as Sister Pat Farrell who are intelligent, articulate and steadfastly focused on what she sees as a vitally important mission.

Rigid identities give rise to rigid organizations.

- Margaret Wheatley

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Helping Children Harmed by War: Meet Samantha Nutt, a Great Leader

January 27, 2014

Sam Nutt Samantha Nutt was only 25 years old when she visited Somalia in 1995. A new medical school grad, she witnessed the armed renegade gangs roaming at will, women holding dead babies, and over-worked volunteer workers. Her startling experience served as the catalyst to create Warchild whose mission is to help rebuild communities that have been devastated by war.

Dr. Nutt, one of five incredible leaders I profile in my Leadership 2013: An All-Star Female Line Up!, is a physician at the Women’s College Hospital in Toronto and Assistant Professor of Medicine at the University of Toronto. She’s sometimes part of CBC National’s panel discussions on policy and international development issues.

Nominated by the Globe & Mail as one of Canada’s 25 most influential people, she is highly articulate and knowledgeable on the desperate plight facing children living in war zones around the world. She was awarded the Order of Canada in 2010 and the Order of Ontario in 2011. Her acclaimed book Damned Nations: Greed, Guns, Armies and Aide examines the painful realities of exploited peoples due to internal civil wars and the huge policy challenges needed to overcome the inertia. Take a moment to watch this short video clip of an interview Dr. Nutt gave to Allan Greg on the topic of her book.

Dr. Nutt has experienced several lifetimes for someone just in her forties. The following quotation of one particular hair raising encounter is a poignant reminder of the inherent dangers of overseas work:

“Shortly afterwards, it sounded as if the rocket-propelled grenades (RPGs) were landing dangerously close – so close that I immediately dropped to the floor, prompting an unflinching Congolese man in the lobby, who’d obviously endured much worse, to jokingly say, ”I see you do not enjoy the beautiful music we play here in the Congo.” It is still one of the most reassuring things anyone has ever said to me in the midst of a crisis.”

When Dr. Nutt is interviewed or participating on panels on TV she comes across as reserved, articulate and humble. Yet she is steadfastly focused on her mission and has worked tirelessly for many years to improve the conditions that children affected by war face. She is a true Canadian leader.

Justice not charity, solidarity not pity, opportunity not handouts.

― Samantha Nutt

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Winning Over 1,000 Men at a Sports Match

January 20, 2014

sarobi1 Being a male politician in Afghanistan, a primitive country with a long history of foreign government interference and violence, is no easy gig. But try being a female politician in this male-dominated society, one where the Taliban is re-emerging as the coalition partners (led by the U.S.) have mostly drawn down. Courage is one word that quickly comes to mind.

Dr. Habiba Sarobi is one of my choices for my Leadership 2013: An All-Star Female Line Up!

A 57 year-old hematologist, she became governor of Bamyan Province in 2005, the first female governor in Afghanistan. She worked hard at instituting reforms in a post-Taliban environment. However, during the frightening period of Taliban rule pre-911, she and her children took refuge in Pakistan. Take a moment to watch this short video.

Dr. Sarobi’s work has been especially aimed at strengthening women’s rights. Consider that just four years before being appointed as governor by President Karzai, women were forbidden to wear lipstick or be educated. The burka was a common sight. However, she used the burka as a tool to sneak into Afghanistan during her self-imposed exile to see her husband (who stayed to care for his parents) and to open a network of underground schools for girls.

Rather than accept President Karzai’s offer to be an ambassador when she was minister for women’s affairs, she insisted to be appointed governor. Her first few months as governor were a little rocky, especially when a snowstorm prevented her from reaching Bamyan. Then some 300 males staged a noisy protest shortly after she arrived. However she got past those obstacles, and it wasn’t long until she won over the male contingent, notably when 1,000 men gave her a standing ovation at a sport match.

A pragmatist in contrast to ardent feminist, Dr. Sarobi gets things done. Recently, she has moved to national politics where she is one of five female candidates for vice-president in the April 2014 elections.

Stability is found in freedom — not in conformity and compliance.

Margaret Wheatley

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