Top Labor Economist: "Change and Trust Now Are Key"

June 11, 2020
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Author: Glenn Hunter

Dr. Marianne Wanamaker Asked to name her main accomplishment as a top economist in the Trump White House two years ago, Dr. Marianne Wanamaker of the University of Tennessee’s Haslam College of Business doesn’t take long to reply. It was “probably the work we did on the education and retraining and reskilling” of America’s workforce, she says. Wanamaker, an associate professor of economics at the university, served as the chief labor economist and chief domestic economist for the President’s Council of Economic Advisors during the 2017-2018 academic year.

Now, in the wake of the coronavirus pandemic, the need for retraining and reskilling has been “accelerated” in some ways, she says. “The ability of the federal government to focus on it has been reduced, but the pace of change in American jobs has quickened since March,” says Wanamaker. “People are needing to transition to new employment more quickly now than at any point in my lifetime. You can see it in manufacturing and construction, where it’s becoming clear that automated processes can’t succumb to the virus, and so anything you can do in those fields to reduce human contact is getting deployed more quickly than it otherwise would.”

Today's environment requires businesses to be adaptable and innovative.

For example, Wanamaker says, she’s hearing “a lot of conversation” these days about the use of robots in the construction industry – especially for “interior work,” where COVID-19 is more likely to be transmitted than outdoors. “What is it humans are doing that we can automate?” she says. “That requires reskilling – both of the people whose jobs are going to be performed by a computer or a robot and of those people who know how to deploy those robots.

“It won’t necessarily mean a loss of jobs,” she adds. “But things will get reconfigured, and people are going to have to be flexible, really everywhere.”

Dr. Wanamaker joined Jay Denton, senior vice president of business intelligence and chief innovation officer for ThinkWhy, in presenting The Recovery Begins, a LaborIQ® by ThinkWhy® webinar on Tuesday, June 16, 2020. Wanamaker, who serves as a member of ThinkWhy’s executive advisory board, joined Denton in providing a detailed assessment of current labor market conditions as the U.S. economy showed signs of recovery.

In addition to her year-long stint at the White House, the UT economics professor currently is one of 25 U.S. business, government and education leaders who are members of the administration’s American Workforce Policy Advisory Board, which is co-chaired by Secretary of Commerce Wilbur Ross and Ivanka Trump, advisor to the president. The mission of the board, which includes CEOs like Tim Cook of Apple and Visa’s Al Kelly, is to “develop and implement a strategy to revamp the American workforce to better meet the challenges of the 21st century.”

Three Issues to Consider Right Now

To meet the most immediate challenge – the economic havoc wreaked in recent months by COVID-19 – Wanamaker points to several key issues affecting organizations now. Those issues include the organization’s bond with its employees, the shape of its business model over the next 12 months and the ramifications of the telecommuting trend.

employee-and-customer-satisfaction

Unlike many, Wanamaker says she is “really quite cautious” about the long-term benefits of the work-from-home movement, which has skyrocketed since stay-at-home orders were first issued in response to the pandemic. “What I don’t always see is people acknowledging that all those people you sent home to work used to be in the same building. So, they’ve had a history and rapport with each other that’s translated pretty well to home over the short term,” she says. However, “that doesn’t mean that over the long term it will translate well. And it certainly doesn’t mean that people you onboard who never come into the office for their first day are going to be able to build any sort of functional relationship from home with other people.”

What is clear about today’s workplace, Wanamaker goes on, is that the businesses that are best prepared to weather the downturn are those that “built a relationship of trust with their employees” prior to COVID-19. Workers at those organizations “aren’t just trying to save their jobs, but are functioning in a way that’s trying to make the company as resilient to the pandemic as they can,” she says. One example of a company with a strong “trust” quotient is Visa, which Wanamaker says promised its employees in March that none would lose their jobs this year because of the pandemic. “So, the employees said, ‘What can we do that’s good for the company?’” she says, adding that, in contrast, “at some other companies, labor and management are at odds with each other.”

Finally, Wanamaker advises organizations to consider what their business models will look like 12 months from now, because “it’s not going to look like it did in February. Very few businesses will go back to ‘business as usual’ anytime soon.” In the midst of so much uncertainty, she says, companies should ask whether they’re making the necessary structural changes that will allow them to thrive this time next year. “For some companies,” Wanamaker says, “that may mean saying, ‘Forget about functioning this summer. I’m not going to waste my resources trying to get up and running in this environment, because I know it’s going to take all my time and effort. Instead, I’m going to remain on life support until I can put together a business model that’s good for the long haul.’”

As for just “how long” the haul might be, Wanamaker believes only one thing is for sure. “I don’t think there’s any question but that we’re in for months of recovery,” she says. “This is not going to be done by Christmas. We’re going to be facing this through 2021.”

Marianne Wanamaker, PhD, is an associate professor of economics at the University of Tennessee and the former chief domestic economist and senior labor economist at the White House Council of Economic Advisors. She currently serves alongside Fortune 100 CEOs, governors, and non-profit leaders on the 25-member American Workforce Policy Advisory Board, tasked with advising Federal policy on workforce issues. She is also a member of the ThinkWhy Executive Advisory Board.

ThinkWhy continuously monitors and forecasts labor data at all levels, measuring impact to MSAs and businesses across the country. Stay current with us. We are here to support organizations and provide insights during the economic downturn as well as the recovery phase.