The rise of stay-or-pay hiring

Make Me Smart November 20, 2023 Transcript

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Kai Ryssdal 

Now I’m ready. Now I’m ready. I’m ready now. Now is when I would be ready.

Kimberly Adams 

You were ready before me it’s fine. All right. Hello, everyone. I’m Kimberly Adams. Welcome back to Make Me Smart, where we make today make sense.

Kai Ryssdal 

Monday 28th of November. I’m Kai Ryssdal. Thanks for downloading the pod.

Kimberly Adams 

Yes, thank you. It’s a basic Monday. So we’re gonna do some news and also some smiles. So Kai, what caught your attention today or over the weekend? Sure.

Kai Ryssdal

Oh, we oh, wait we can do over the weekend news too?

Kimberly Adams 

Of course, I guess you wanna talk about OpenAI.

Kai Ryssdal

I thought it was only day of news. No I don’t want to talk about OpenAI. OpenAI is everywhere. I just wanted to, I misunderstood the rules. I didn’t know that Mondays were okay with the whole weekend.

Kimberly Adams 

We make the rules Kai.

Kai Ryssdal 

You know, I get in trouble when I say that. So, so mine. Yeah, that’s a whole different thing. There’s a cute little bit, not a cute little piece. Interesting piece in Bloomberg today about the Federal Reserve and how it gathers information. So most of the data that the Federal Reserve gets comes out monthly, right? I mean, yes, they get some weekly data, but it’s really volatile and not really helpful. But you know, you get jobs monthly, you get GDP updates monthly, or revisions, monthly, and then the final number quarterly, all that kind of stuff. So what the Fed has started doing and we did a piece on this, actually on the show about a year ago, has started using what’s called high frequency data also sometimes anecdotal data literally as Raphael Bostic, the president of the Atlanta Fed has said on this program many times, I go and talk to people and I ask them how they’re feeling. And I think it’s really interesting that the Fed now understands that it’s gotta get out and talk to people. Because as we say on Marketplace all the time, not to name drop my own program twice in 30 seconds. But look, if the headline, economic and the headline, economic indicators can be whatever they are, they can be great. They can be terrible, whatever. But what really matters in how the economy goes, is how people are feeling in their economic day to day I’m sure some of you saw the piece in The New York Times this weekend about Kyla Scanlon and the vibecession. That’s right. It’s all about how people feel also, for the record to name drop my program three times in 45 seconds. I had Kyla on Marketplace, like a 10 months ago, talking about the vibes. So follow that New York Times. Anyway, just it’s about how Fed gets his data. Good little piece. That’s it

Kimberly Adams 

Okay. Cool. So the Federal Reserve economists are becoming journalists.

Kai Ryssdal 

Little bit, little bit. That’s that’s actually a really good analogy. Really good analogy. Right.

Kimberly Adams 

I’ll take it. So well, since we said, take that New York Times, though, I’ll give them this one instead, which was a interesting piece. They have in the New York Times Magazine, about employers who are trying to well not that are trying to that are and the increase in what are called stay or pay clauses, which are basically when you get a job, and employer sort of gets you up and running, you decide you don’t want the job. And they’re like, fine, you can quit, but you have to pay us back for your training. And they apparently have really increased in number, it’s hard to track because a lot of these employment contracts are private. But there are more and more lawsuits coming up with people saying I shouldn’t have to pay you if I want to quit. And employers are saying, No, we spent all of this money to recruit you to hire you to train you and give you the skills you owe us money back. And we’re not talking about like giving back a signing bonus or something like that in the case. In some of these examples that they’re giving, they’re talking about, like home health care aides, and pilots and things like that, where you kind of bring your own skill set. One paragraph here says, “Though it’s hard to trace the spread… a 2022 letter from the National Employment Law Project points the finger at private-equity firms. Private-equity firms not only tend to replicate contract terms across their suite of businesses, but they have increasingly purchased companies that provide employee training, giving them an added incentive to use TRAPs. Not a month goes by that I don’t hear about a new training repayment agreement provisions” AKA a TRAP, which stipulates the cost of the on the job training will be borne by the employee. And this article also lays out something that was kind of interesting, which is that there used to be a division in the cost of hiring in that employers would eat some of that cost. Labor unions would eat some of that cost in terms of, you know, helping funnel people into the pipeline and keeping their skills up. And, you know, the federal government would own some of that or state government would take on some of that cost by providing you know, free education or college courses or, you know, technical training and through the government, but now employers themselves kind of bear the cost of all of the training for employees in some cases, not all obviously. Anyhow, it’s an interesting thing I had not known was becoming a bigger thing. And it makes sense because it’s really hard to track but it’s, uh, you know, some of these companies are asking, you know, thousands of dollars just for somebody to quit and suing people for them. And, you know, obviously, it’s often targeted at lower income workers. So, according to this, these contract terms have been applied to bank workers, salespeople, dog groomers, police officer estheticians firefighters, mechanics, nurses, federal employees, electricians, roofers, social workers, paramedics, truckers, mortgage brokers, teachers and metal polishers. Legal experts believe stay or pay clauses may now, might now be in industries that employ a third of all Americans.

Kai Ryssdal 

Wow, wow, that’s so there’s 160 million people in the American workforce, unemployment’s low, so let’s say 150 million people. So that’s like 50 million people. Wow.

Kimberly Adams 

Right. And now I think they’re trying they being you know, the people who are against this are trying to sort of put this in the same bucket as non-compete clauses. That’s where that that’s where my money. Yeah. And so using those arguments to say that this is not fair, but it doesn’t seem like there’s consistent. You know, I’m reading here, the Federal Trade Commission has undertaken a recent public campaign to outlaw these contracts, the non-compete clauses, but as non-compete agreements fall out of favor, stay or pay clauses are poised to replace them. They work similarly by discharging quitting and they’re spreading in professions that once relied on non-compete provisions to limit worker mobility. So watch out y’all.

Kai Ryssdal 

Totally, interesting. All right, Charleton. All right. What do you got smile wise?

Kimberly Adams 

It was a chuckle. I, y’all should have seen it coming. We all should have seen it coming. No, Snoop Dogg did not really give up weed. So as many of us saw, he made an announcement last week, I guess it was that he was giving up smoke. And then he posted a couple more photos over the course of the week looking all like pensive and things and people really thought some people really thought that, you know, he was giving up weed, which was wild, because that’s like his whole brand. Not his whole brand. He’s obviously an extraordinarily talented music musician and businessman, but it’s part of it. And my take on it was either it’s a joke, or he’s got cancer, you know, those were the only two extremes okay, I could think, right? Because, like why else, but it was a joke. I’m very glad it was a joke. So he partnered in what I think is just some pristine, smart branding and strategy with this outdoor stove company that makes like patio stoves generate a lot of smoke. So in the in, I’m reading the CNN article here. He says, “I have an announcement. I’m giving up smoke. I know what you think Snoop smoke is kind of your whole thing. But I’m done with it. Done with the coughing and my clothes smelling all stickyicky. I’m going smokeless.” And then he reveals the stove and you know that they changed the game blah, blah, blah. And he’s like, and then he’s got a little marshmallow on a stick at the end. It’s cute. It made me smile. It made me chuckle I’m glad he doesn’t have cancer. There you go.

Kai Ryssdal 

I also am glad Snoop doesn’t have cancer.

Kimberly Adams

Things we never thought we’d say on this podcast. Yeah, right. Okay, super quick. Mine is a result of son number three coming home on Wednesday night for Thanksgiving. Which gets you to this piece in The Wall Street Journal today which gave me a nice little chuckle, headline is “No one should pick you up at the airport.” I will read you the first paragraph and a half. “Want to be here on this holiday season. Get yourself home from the airport. The airport pick up a sweet tradition we all remember from Diehard to has become a heavy obligation. Your parents say they don’t mind coming to get you but they planned Thanksgiving menu. They hold out the folding chairs. They peeled potatoes and procured the pumpkin pie. They have to brave the airport’s busiest days too?” Yes we do. Yes, we do. 7:45 Wednesday night. Sorry.

Kimberly Adams 

I love that it’s phrased here from the perspective of a mom and dad. Oh yeah. So you know this is a bitter parent writing. It’s not like you know someone waiting for their partner to come back after a long trip away. It’s not like Like, for what it’s worth, my good friend offers every year when I go back if I needed to pick up from the airport, but for what it’s worth my mother’s picking me up from the airport.

Kai Ryssdal

Oh snap. There we go. There we go.

Kimberly Adams 

I have consistently said I can get a ride home from the airport and she’s like, no, no, no, it’s no problem. I’ll pick you up after I pick up your niece from school and it’s gonna be a little bit late and I mean, I can get a car and Uber she moved out to the far boonies. And so now it’s a thing.

Kai Ryssdal 

You’re you know, you know. Right come on, I know. I know you’re a grown up person but but you’re baby girl and she’s just telling you.

Kimberly Adams 

Yeah. And that’s why you’re going to get your son.

Kai Ryssdal

That’s exactly why. That’s exactly why. 100%, absolutely.

Kimberly Adams 

I love it. Okay, that is it for us today. So please join us tomorrow for our weekly deep dive. And until then keep sending us your comments and your questions you can send those to makemesmart@marketplace.org or leave us a voicemail at 508-U-B-SMART.

Kai Ryssdal 

Make Me Smart is produced by Courtney Bergsieker. Today’s program was engineered by the one the only Charlton Thorp. Ellen Rolfes writes our newsletter. Our intern is Niloufar Shahbandi.

Kimberly Adams 

Marissa Cabrera is our senior producer. Bridget Bodnar is the director of podcasts and Francesca Levy is the executive director of Digital. And are you peeling any potatoes guy?

Kai Ryssdal 

No, we do a we do a roasted garlic, red potato thing that I’m in charge of there will be no peeling, a light boil and then straight into the oven at like a zillion degrees.