Tourism Industry Jobs: Addressing the Quality Issue
By Don Holecek, Editor-in-Chief of Michigan Tourism Business
Have you ever wondered how the upper leaves in a 50 foot tree are able to draw enough moisture from the soil to survive? And, what could the answer to such a question have to do with tourism industry jobs? Let’s address the first question first.
It’s been quite a few decades since I took my last course in biology, so my recall of the force at work moving sap up to the top of a tall tree is surely a bit “rusty,” as well as dated. No, each leaf on a 50 foot tree isn’t attached to a long hollow straw which it uses to suck moisture up from its roots, although this answer is partially correct. The straw in this case is not hollow; rather it is a series of small individual cells with semi-permeable membranes between them. These membranes allow some substances such as water to pass while others are retained within the cell. When moisture is lost to the atmosphere from a leaf, the concentration of the other substances in the leaf increases. Moisture is drawn across the membrane from moisture rich to moisture poor adjacent cells. This cell to cell transfer of moisture extends in a domino effect down to the plants roots in contact with moisture in the soil. So, what moves moisture up to a plant’s leaves is basic chemistry; plant’s cells act to balance moisture concentration from one cell to the next across their permeable membranes.
The tendency towards balancing across cells that we observe in plant systems can also be observed in social systems, for example, wages earned across industries or from one country to another. In the case of a country, the supply of labor in one country versus another is akin to the concentration of other chemicals in a tree cell, and the equivalent of a cell’s permeable membrane is the set of laws and regulations that govern moving goods and services across borders between countries. Currently, the forces behind globalization are making the borders between the U.S. and other countries more permeable. As a result, work is flowing from high wage/labor poor countries (e.g. the U.S.) to low wage/labor rich countries (e.g. China).
This tendency to seek balance in wages also applies to industries. Identifying high versus low wage industries at any point in time is relatively simple. For example, auto industry jobs pay higher wages than most other industry jobs. Identifying the permeable membrane between industries is, however, not so simple. The membrane that exists between Michigan’s tourism industry and its auto industry consists of a maze of elements. I haven’t identified all of them, nor do I intend to pursue them in depth herein. But, a couple of elements do merit some mention here.
First, the membrane that has existed between Michigan’s auto industry and the global auto industry has become more permeable, as evidenced by the expanding “troubles” facing GM and Ford, and their employees. But, weakening of the membranes is not unique to the auto industry or to Michigan manufacturing. For example, at Caterpillar Corp., an economically healthy manufacturing firm, recent employees receive a substantially less attractive wage and benefit package than do more senior employees. Such tiered wage and benefit systems are becoming increasingly common across what were once “quality jobs” in other industries as well, including the airline industry.
Second, various government policies and regulations have been in place that have created institutional barriers between the Michigan tourism industry and other “preferred” industries. These range from tangible, easily seen barriers such as tax incentives that advantage industries such as auto manufacturing, to a less tangible and obvious tendency of governments to concentrate their economic development initiatives on these “preferred” industries. It is a reasonable goal of governments to want to employ their resources to grow “quality jobs” via investing in “preferred” industries. However, selecting those industries that have the capability of maintaining a long term competitive advantage in our increasingly global economy is problematic. Given that governments’ economic resources are scarce, choosing the best horses in the race is critical. I sense that the tendency of government has been to choose industries whose era of dominance has passed, in particular the manufacturing industry, or in the very same industries that just about every other state is pursuing.
Finally, there is evidence of some movement of tourism industry wage growth within the industry itself. It has recently been reported that efforts are underway to unionize the workforce employed in major hotel chains, including Hilton and Starwood. Unions are already a power to be reckoned with in the booming hospitality sector in Las Vegas. This trend is an indication of demand for tourism industry employees growing faster than the supply of qualified and willing workers. It is also tied to the limited ability to import labor to fill these jobs and export them to other countries. Should these trends continue, and I believe they will, wage and benefits paid to tourism industry employees will become more in line with those earned in other industries. Thus, the Michigan tourism industry is not only one of this state’s growth industries, but the jobs it has to offer are most likely to fit the “quality” standards sought in a “preferred” industry.
I believe that the most misunderstood dimension of the tourism industry in Michigan is job-related—the majority of people perceive tourism industry jobs as being low pay, low skill, and dead end. We need to develop credible research that addresses the quality of jobs issue and to mount an intensive and extensive educational campaign to begin to change prevailing perceptions. It will be difficult to “sell” investing in Michigan’s tourism industry if the negative perception of our jobs is not mitigated.
Note: After drafting this editorial, the Michigan Senate passed a bill to increase the minimum wage from $5.15 to $7.40 per hour by July 28.