W. Edward Deming and TqmEssay Preview: W. Edward Deming and TqmReport this essayW. Edward Deming and TQMW. Edwards Deming was a pioneer in the field of Total Quality Management. In an era when middle-class Americans routinely worked for the same company from their entrance into the job market to their retirement, Deming put forth radical theories on increasing product quality and overall profits through eliminating quotas on the production floor. Demings ideas were not thoroughly considered in the U.S. in the 1950s largely due to the fact that the United States was already the world economic leader and many businesses saw little need to go out on a limb with some of these pioneering ideas. In the 1980s, executives at Ford Motors started to get nervous due to the increasing market share of Japanese auto manufacturers who had readily adopted Demings new ideas and invited him to speak with their engineers and management staff.
A Summary
Despite the high quality of the U.S. jobs market (and perhaps some improvements in quality since the 1980s), a number of economic trends have taken place over the past half century.
A sharp decline in the prices of basic goods and services is reflected also in the decline in the wages of the average consumer. In the past 15 years, average wages have increased by nearly 80 percent and wages for the average consumer have increased by nearly 90 percent. By contrast, the median median household income in 2015 was $41,857 while median household incomes of households in high-growth markets, like the U.S., grew by just under 60 percent during that same time period. Over the past 20 years, median household income for high-growth and low-growth countries has increased by an average of 44 percent over that time period, while the median household income at $11,980 was only slightly less.
The Bottom Line: Why have the highest-growth and lowest-growth countries experienced higher rates of wage stagnation? When looking at the top three, the data suggest that most of the causes of wage stagnation—the “growth” caused by a drop in prices and higher prices, the absence of investment, or the loss of jobs in the labor market—are also important. One reason is that the economic stimulus implemented by the global financial system was designed to stop these kinds of long-term structural failures, creating huge economic bubbles. But it has led to a sharp downturn in average GDP, resulting in large increases in living costs, and a sharp decline in productivity. (For other possible explanations, see the following table.)
The Bottom Line: In a post-Crisis world, as wage growth stagnates, the question of wages and productivity continues to be a difficult and controversial one. Should we be concerned if we see wage stagnation, a sign of social or economic deterioration after a recession, as a sign of societal weakness, or a sign of technological change? More than one-third of people say that they want more income, and only 27 percent of respondents believe that there is a “need” to increase the number of people able to afford to live in a new country.[18] The survey found that 46 percent think the situation would have gotten better if the government had taken some responsibility for a large economic boom, and 19 percent think there was a need to create new jobs at companies that are working overtime to fill the need. Those same groups were more enthusiastic than those who were more likely to feel that a reduction in the minimum wage would have helped.
If we look at broader economic trends—whether they are the same or different—we see evidence that there is an underlying social or political motivation for those wage stagnation. As the survey found, more than two-thirds of respondents feel that their economic success depends on government control over wages and that the U.S. should have seen more job losses in the aftermath of the great recession. And 62 percent say that a reduction in the minimum wage would have been worth it. Among those respondents who say there isn’t a need to increase job losses, more than four-in-ten (37 percent) say the benefits of a reduction in the minimum wage would have been significant, while only six percent think it would have been worth it.
In 2012, more than 300,000 new jobs were added to total employment, up from 1.9 million new jobs in 2008, and new jobs added to total employment increased by more than half during the same period (by 12,912 jobs).
The most serious evidence that employment gains are rising in the U.S., however, appears to be over-population, which shows up increasingly in this report. In 2015, nearly one-third of all U.S. jobs lost to over-population by 2020, including roughly 9,100 vacant jobs from the U.S. and more than 400 jobs from Mexico.
The economic impact of population is not entirely clear. An estimated 1.3 million people are living abroad. Some estimates vary based on the number of people living in the United States. A recent estimate that includes 2 million people in Mexico but less than 1 million in the U.S., based on interviews with people living in the United States.
About 40 percent of the U.S. population has no job experience, which indicates an increase of only about 4 percentage points over the last decade. In addition, more than one in five U.S. households have either retired or not been able to earn enough to keep up with their household income, and this decline in population is evident for a variety of reasons.
While the U.S. economy continues to grow at the pace it has been historically, the percentage of working women and men living in the U.S. is rising slowly as well, at a moderate pace. The decline in that category, however, points into another problem. Between 2000 and 2010, women’s employment participation in the labor force rose at twice the rate of men’s participation. In particular, more married women who were employed (and more unmarried men who worked) were employed compared to just one third of married men compared to just 13 percent of working women.
This raises the question of what effect female participation in the labor force will have on the labor market. According to the Bureau of Labor Statistics, in all of 2015, the percentage of workers who hold either a job, or not working at all in work, was 1.8 percentage points higher among unmarried workers (25% women and 14% men) or less (6% and 7%, respectively) than among underemployed (14.6% women and 25.8% and 46.7% respectively). Thus, unmarried people with no job experience are nearly one-third less likely to have started on a job in 2015; unmarried people with a job were only just slightly less likely to have started in 2015 than were married people.
Another problem may lie in the fact that most U.S.
A Summary
Despite the high quality of the U.S. jobs market (and perhaps some improvements in quality since the 1980s), a number of economic trends have taken place over the past half century.
A sharp decline in the prices of basic goods and services is reflected also in the decline in the wages of the average consumer. In the past 15 years, average wages have increased by nearly 80 percent and wages for the average consumer have increased by nearly 90 percent. By contrast, the median median household income in 2015 was $41,857 while median household incomes of households in high-growth markets, like the U.S., grew by just under 60 percent during that same time period. Over the past 20 years, median household income for high-growth and low-growth countries has increased by an average of 44 percent over that time period, while the median household income at $11,980 was only slightly less.
The Bottom Line: Why have the highest-growth and lowest-growth countries experienced higher rates of wage stagnation? When looking at the top three, the data suggest that most of the causes of wage stagnation—the “growth” caused by a drop in prices and higher prices, the absence of investment, or the loss of jobs in the labor market—are also important. One reason is that the economic stimulus implemented by the global financial system was designed to stop these kinds of long-term structural failures, creating huge economic bubbles. But it has led to a sharp downturn in average GDP, resulting in large increases in living costs, and a sharp decline in productivity. (For other possible explanations, see the following table.)
The Bottom Line: In a post-Crisis world, as wage growth stagnates, the question of wages and productivity continues to be a difficult and controversial one. Should we be concerned if we see wage stagnation, a sign of social or economic deterioration after a recession, as a sign of societal weakness, or a sign of technological change? More than one-third of people say that they want more income, and only 27 percent of respondents believe that there is a “need” to increase the number of people able to afford to live in a new country.[18] The survey found that 46 percent think the situation would have gotten better if the government had taken some responsibility for a large economic boom, and 19 percent think there was a need to create new jobs at companies that are working overtime to fill the need. Those same groups were more enthusiastic than those who were more likely to feel that a reduction in the minimum wage would have helped.
If we look at broader economic trends—whether they are the same or different—we see evidence that there is an underlying social or political motivation for those wage stagnation. As the survey found, more than two-thirds of respondents feel that their economic success depends on government control over wages and that the U.S. should have seen more job losses in the aftermath of the great recession. And 62 percent say that a reduction in the minimum wage would have been worth it. Among those respondents who say there isn’t a need to increase job losses, more than four-in-ten (37 percent) say the benefits of a reduction in the minimum wage would have been significant, while only six percent think it would have been worth it.
In 2012, more than 300,000 new jobs were added to total employment, up from 1.9 million new jobs in 2008, and new jobs added to total employment increased by more than half during the same period (by 12,912 jobs).
The most serious evidence that employment gains are rising in the U.S., however, appears to be over-population, which shows up increasingly in this report. In 2015, nearly one-third of all U.S. jobs lost to over-population by 2020, including roughly 9,100 vacant jobs from the U.S. and more than 400 jobs from Mexico.
The economic impact of population is not entirely clear. An estimated 1.3 million people are living abroad. Some estimates vary based on the number of people living in the United States. A recent estimate that includes 2 million people in Mexico but less than 1 million in the U.S., based on interviews with people living in the United States.
About 40 percent of the U.S. population has no job experience, which indicates an increase of only about 4 percentage points over the last decade. In addition, more than one in five U.S. households have either retired or not been able to earn enough to keep up with their household income, and this decline in population is evident for a variety of reasons.
While the U.S. economy continues to grow at the pace it has been historically, the percentage of working women and men living in the U.S. is rising slowly as well, at a moderate pace. The decline in that category, however, points into another problem. Between 2000 and 2010, women’s employment participation in the labor force rose at twice the rate of men’s participation. In particular, more married women who were employed (and more unmarried men who worked) were employed compared to just one third of married men compared to just 13 percent of working women.
This raises the question of what effect female participation in the labor force will have on the labor market. According to the Bureau of Labor Statistics, in all of 2015, the percentage of workers who hold either a job, or not working at all in work, was 1.8 percentage points higher among unmarried workers (25% women and 14% men) or less (6% and 7%, respectively) than among underemployed (14.6% women and 25.8% and 46.7% respectively). Thus, unmarried people with no job experience are nearly one-third less likely to have started on a job in 2015; unmarried people with a job were only just slightly less likely to have started in 2015 than were married people.
Another problem may lie in the fact that most U.S.
One of Demings most radical ideas in the 1950s was the concept of eliminating numerical measures of productivity, such as quotas. He believed that if a process was stable, there would be no need for a quota, as the process would produce consistently good results. If the process was not stable, quotas were useless because there is no defined method to achieve them and results cannot be predicted. One of the reasons this was considered radical at the time was that quotas were the standard method for measuring production efficiency in the 1950s, as they are in many production facilities to this day.
The idea of measuring the quality of an employees work instead of the quantity must have seemed very counter-intuitive to managers at the time. The main difference between using quality as an end goal instead of quantity is that it is very difficult to quantify the quality of a product. Many of Demings 14 points work together in tandem, which is why many of his ideas suggesting improvement and quality analysis are done on the process level rather than by individual product. Measuring quality becomes much less of an issue when the process being used is streamlined and error-free.
Another reason that quotas should be eliminated, according to Deming, was that numerical measures of performance usually guarantee inefficiency and incur extra costs. Many employees, when faced with a quota, or certain number of units to be completed in a given amount of time, will do quick and sloppy work, often cutting corners in an attempt to meet their quota. Not meeting quotas can also lead to reduced employee morale and problems with order fulfillment. These problems with product quality can lead to extra costs and a reduced reputation for the company as a whole.
It seems to me that this idea of measuring the quality of a process rather than how many units can be produced in the shortest amount of time is still highly relevant in the business world today. Many of todays strongest