Increasing Your Value

We are living in an economic age for which most people are largely unprepared. Massive shifts in economic activities and incredible dislocations of businesses and industries are taking place all over the country. Being either an employer or an employee today is like being a long-tailed cat in a roomful of rocking chairs.

Your goal is to organize your life in such a way that you enjoy a good income, a high standard of living, and that you are the master of your economic destiny rather than a victim of changing economic times.

In 1945, at the end of World War II, America and Americans entered into a golden age that had never existed before and will never exist again. Those of us who grew up during this golden age developed a particular way of looking at the world that was greatly influenced by what was going on in America at the time. We developed certain assumptions about our lives and about business in general, and we have a hard time giving them up. But give them up we must if we are going to survive in the economy of the future.

At the end of World War II, America and American industry dominated the world. We had not only abundant natural resources but also advanced technology, an intact industrial base, most of the money in the world, an advanced educational system, millions of competent workers, and a fully integrated system of roads, schools, hospitals, cities, and farms. It was said that America got rich by coming late into two world wars, and it was certainly true in the late 40s and 50s.

Meanwhile, the rest of the industrialized world, in both Europe and the Far East, was bombed to rubble. Our industrial and economic competitors had been ravaged by war. For this reason, anything that American factories produced found a ready market, both nationally and internationally. The economy took off. There was good-paying work for everyone. The 50s became an age of expanding prosperity, tremendous job security, and opportunities for all.

In this economic environment, anyone could get a job. Not only that, but there were plenty of low-skill jobs that paid high salaries and benefits for average work. A working person in America could have a nice house, a car, maybe two cars and eventually a motor home, a boat, and all the other trappings of the good life.

After a few years of this robust, expanding economy with opportunities and jobs for all, Americans began to accept the good life as their birthright. People began to feel that because they were born in America, they were entitled to the good life, whether or not they worked hard. The Unions took full advantage of this mind-set and negotiated ever higher wages and benefits from American manufacturers. The increased costs of the products and services were simply passed on to the customers. Since the rest of the industrial world was still rebuilding, the only products to buy were American products. And since American consumers were also workers who were making good wages, as prices went up, sales also went up.

But by the ’60s, the world was already changing. Our industrial competitors, especially Germany and Japan, had begun to rebuild and to manufacture and export products. Competition for the good life began to emerge all over the world. The pace began to pick up, slowly. The average American wasnt aware of it, but the golden age was coming to an end.

In the ’70s, America began to be flooded with high-quality products from all over the world. American companies and American working people had become complacent with their captive markets and had let their quality deteriorate. Low-price, high-quality products coming in from Japan, Germany and other countries began to take sizable chunks of the market. The affected industries cried out to government for protection, which was just another way of selling higher-priced goods to captive customers. And it didnt work. By the ’80’s, we were in a real race. Everyone in the world wanted to enjoy the same living standards Americans had. And people were willing to work long hours and produce high-quality goods and services in order to achieve those living standards.

We lost our advantage in natural resources. We lost our edge in technology. And we lost our edge in capital. Today, any change in economic policy anywhere, in any country, instantly causes capital to flow in or out of the affected areas. Countries can not even control the value of their currencies.

The one edge that America maintained is that we have the most productive workforce in the world. America and Americans produce more goods and services per capita than any other country. But there is a race on, and we are in it, and if you want to be employed in a good job for the indefinite future, you must get in and start competing as you have never done before.

Your job is an opportunity to contribute a value to your company in excess of your cost. In its simplest terms, your job is as secure as your ability to render value in excess of what it costs to keep you on the payroll.

If you want to earn more money at your current job, you have to increase your value, your contribution to the enterprise. If you want to get a new job, you have to find a way to contribute value to that enterprise. If you want any kind of job security, you must continually work at maintaining and increasing your value in the competitive marketplace.

And here’s a key point. Your education, knowledge, skills and experience all are investments in your ability to contribute a value for which you can be paid. But they are like any other investments. They are highly speculative.

Once you have learned a subject or developed a skill, it is a sunk cost. It is time and money spent that you cannot get back. No employer in the marketplace has any obligation to pay you for it, unless he can use your skill to produce a product or service that people are ready to buy, today.

Whatever job you are doing, you should be preparing for your next job. And the key question is always: Where are the customers? Which businesses and industries are growing in this economy, and which ones are declining?

I continually meet people who ask me how they can increase their income when their entire industry is shrinking. I tell them that there are jobs with futures and there are jobs without futures, and they need to get into a field that is expanding, not contracting. There are three forms of unemployment in America: voluntary, non-voluntary, and frictional. Voluntary employment exists when a person decides not to work for a certain period of time, or not to accept a particular type of job, hoping that something better will come along. Non-voluntary unemployment exists when a person is willing and able to work but cannot find a job anywhere. Frictional unemployment is the natural level; this includes the approximately 4 or 5 percent of the working population who are between jobs at any given time.

However, there are always jobs for the creative minority. You never have to be unemployed if you will do one of three things: change the work that you are offering to do, change the place where you are offering to work, or change the amount that you are asking for your services.

If there is no demand for your particular skills and experience, you will have to learn to do something else and provide skills that are in demand at the time. Employers don’t care about your past. They care only about your future and your ability to contribute value to their customers.

You can change your location. Sometimes you will have to move from one part of the country to another, from where there are few jobs to where there are more jobs. Many people transform their entire lives by moving from an area of high unemployment to an area of low unemployment.

The third thing you can do to get back into the work force is to lower your demands. Remember, because your labor is a commodity, it is subject to the laws of supply and demand. If you ask too much, people will not hire you, because customers will not pay your demands in the price of the product or service that your organization produces. It is not the employer who is forcing this downward revision in wage requirements; it is the customer, through his or her buying behavior.

There is a small, creative minority in America who are never unemployed. No matter what happens, they always have a job, sometimes two jobs. If they lose a particular position in one place, they find another position doing the same thing, or something else, somewhere else. They are fast on their feet. They move quickly and they don’t accept unemployment as an option. And they always have jobs. There are always jobs to be done. Even in the worst economy, there are always problems to be solved and consumer needs to be met. For this reason, all long-term unemployment is ultimately voluntary.