ECONOMIC LESSONS OF THE DISPLACED MAJORITY

We must take the time to instill a proper understanding of the economic uncertainty placed upon families here within the Indo-Pacific region. To correctly outline the uncertainty, we must first define the scope and impact of both micro and macroeconomics on each family. To do this, we must first explain the differentiating factors that every family has to contend with from a human level. Our parameters include job availability, consumer spending (buying) power, and overall well-being. This article will lay out some of the restrictions the current SOFA agreement places upon American workers, creating an even more challenging situation for families within the region. In addition to the limitations, this article will present appropriate responses that will support and strengthen the home situation and address actions that will create tangible results to relieve economic pressures placed upon families stationed within the region. The information provided will also help to enhance the support for families and help to create a continuity of understanding of the economic situation families find themselves in within the Indo-Pacific Region.

FAMILY INCOME STRUCTURE

Compared to other regions, families in the Indo-Pacific Region must contend not only with unfavorable income structures but with an income structure that is reduced by well over 50% from what families managed back in the United States. Today's average family requires dual-income wage earners with two steady income streams to produce enough income for families' short-term and long-term sustainability. This also allows families to overcome economic pressures and adjust to the rise and fall of the cost of living. Even though the argument can be made that government housing alleviates the stresses of not paying for home costs such as rent, utilities, and general maintenance, this only reduces some of the expenses that would naturally dwindle income streams within a home. Recurring maintenance on vehicles, weekly and monthly consumables, and daily spending still need to be considered. The Cost of Living Adjustment, or COLA, here within the Indo-Pacific region also fails to consider the rise and fall of consumer prices on the goods offered among the different military installations.

To complicate matters, rank plays a significant factor. Families with a higher rank receive more than families of a lower rank. This adds to the divisive nature that naturally occurs from the dual standards of allocating different resources amongst different ranks and Pay Grades. For example, a Captain (O3) with no children would receive more than an MSG with children.

Different income streams also add to the effects of varying levels of financial security. Family members with spouses already within the government system can obtain work much easier and secure a substantial income stream well before others within the Indo-Pacific region. Families not currently on track to enter the government workforce are forced out by this model of preferential treatment. Even if an external employee seeks to now find safety underneath the government umbrella, the preference they can utilize does not deter preferential treatment for workers already in the government system.

Families with one parent working in the government or the military bringing in a comfortable income, combined with mom, tend to bring in on average $47,189 and $141,568, according to a recent Gallup Poll (Scripps News, 2023). Suppose we look at BLS data; as of May, the average hourly earnings for U.S. workers is currently at $32.80. We could drill down data to different industries utilizing the data provided. But in most cases, this could be very lengthy. However, it would be worthwhile to institute an economic survey of this region to understand how jobs are allocated here within the region properly. The survey could also provide greater insight into the specific demographical data required for policymakers to be more aware of the lack of resources within the Indo-Pacific.

DEMOGRAPHICAL INFORMATION

It is necessary to probe the demographical information for the impact of economic pressures on the family unit. Below is an exert from the Bureau of Labor and Statistics (BLS). To properly understand, we must have a unified set of metrics to frame this information. We rely on the information readily available through the BLS to do this.

In 2021, median weekly earnings were $912 for all women aged 16 and older. For men aged 16 and older, median weekly earnings were $1,097. Women's weekly earnings were highest for ages 45 to 54, with $1,012. Women aged 35 to 44 and 55 to 64 had slightly lower earnings - $992 and $976, respectively. For men, earnings were also highest for those ages 45 to 54, with $1,295. Men aged 35 to 44 and 55 to 64 had slightly lower earnings, at $1,241 and $1,256. Young women and men ages 16 to 24 had the lowest earnings ($605 and $650, respectively). (BLS, 2023)

The BLS breaks down the information we need by race, ethnicity, and educational attainment. As most spouses are female, this information becomes essential when deciding how best to make policy fair and equitable. According to the CPS data for the 1st Quarter for the median usual weekly earnings of full-time wage and salary workers by sex, quarterly averages, and seasonally adjusted gives us the following information:

If we break this information down further for those working in the government sector, we get the following:

Considering all this data, we can conclude some basic assumptions about the impact of economic decisions on our displaced population.

ECONOMIC RESULTS

According to a recent poll completed by the researchers at Statista, there were 76,123 residents from North America living in Japan from 2000-2019. That comes out to about 1.9% of the Japanese population who were North Americans living in Japan. From recent data, approximately 2000 residents, specifically, are related to military and government service serving on the mainland of Japan. It is quite a small percentage within the last survey data provided by Statista. Information from within the organization also provides a necessary story to tell. The percentage of workers required to be held by foreign nationals due to the SOFA Agreement is 70%. That leaves the remaining 30% to be staffed by American workers. A good portion of that remaining 30% starts with preferential hires from those within the government sector who are given higher priority when transferred from within the system. If we apply the rule of thirds to the equation, then 10% of that remaining 30% is already utilized. That results in every applicant fighting to apply for the remaining 20% of positions available!

This tiny percentage of work provided for families exactly causes the issues surrounding the disgruntled and displaced American workforce. Especially for those outside the government sector where this reality can feel like an insurmountable obstacle to finding and obtaining work commiserate with what they had in the United States. Let's observe how this applies using the information we have found.

We have Spouse A working outside the government sector, making the average from above, which results in $56,940 per year. Combined with Spouse B, an Active-Duty E-7 who brings in around $50,936 per year (not counting any additional allowances). This would generate $107,876 annually for Family A. Family B has the same spouse pay from above, but we have Spouse B as the Active-Duty Captain (O3). Spouse B would generate $81,364 per year. This results in $138,304 for the year for Family B. No additional allowances are considered. Here is what these two families look like side by side.

Every family situation is different, and it is hard to apply standardized measures to every family situation. However, to make sense of this example rationally, we must have a unified set of parameters. According to a 2021 Demographic report, there are 2,556,237 DoD Force family members, and 36.9% of those are spouses, for a total of 944,329. That number is further broken down by ages below.

The report provides us with demographic data for children as well. The total DoD Force for Children is 1,602,261. The breakdown by age and percentage is shown below.

Combining these areas, we can safely assume a few things about our two-family examples, provided we add one final piece to the puzzle. A quick Google search provides us with the average age adults typically have children, which results in 26.4 years of age. With this information, we can safely assume that our two-family examples may have children in the equation, which also puts economic strain on a family's financial situation.

All things being equal, it is paramount that the economic situation be appropriately studied, quantified, and understood by all policymakers across the board. A dual-income family accustomed to a particular lifestyle should not be left to consider additional options, a severe drop in income level, and their perishable skills being left to suffer across the years of deployment.

USAJOBS – IMPACT ON TOP TALENT

The United States government system has created a "de jure" monopoly or a “regulated monopoly” on jobs within the Indo-Pacific region. This means that the Supply of available jobs is extremely low, but the consumer demand is incredibly high. Due to the control of available jobs through USAJobs, the remaining 20% of people we discussed before are forced only to utilize this system to acquire work. The limitations of USAJobs to confidently select competent individuals within the total population force organizations to lose out on the talent available within that population. Because most applicants are not getting through the system to the interview stage, this slows down the hiring process and fails to adequately capture the true number of potential applicants available for staff positions.

EMPLOYEE TIMELINE – AND BARGAINING POWER

This also creates additional gaps for employees and their families. Below is a timeline for employees transitioning from the States to the Indo-Pacific. The timeline identifies the wait times from applying for positions and between different points in the employees' journey from applicant to employee.

This timeline also characterizes several different journeys that an employee may travel. Everyone begins by applying for available positions while they exit their current positions in the United States. Because remote work is unfavorable, this further complicates the career of at least one of the spouses in the home. Ultimately, one spouse must drop everything, sacrifice everything, and reset every time their family moves because they may be unable to remain in their current positions due to time zone differences.

As employees transition from their old jobs to USA Jobs, there is a lengthy waiting period as they potentially hear back from those jobs they have applied for. Three months represents the hopeful optimist; typically, five to eight months is more often the case.

Finally, employees are again held in a waiting game as they transition through the background screening process. Typically, this process is also five to eight months long. This means that an organization that needs qualified bodies is also stuck in a waiting timeframe for almost a year for that position to be staffed accordingly. Without a steady flow of applicants to interview and screen, the organization must sit and wait to hear back on that single entity that made it through the screening process. This works against the organization as institutional knowledge is lost, and talent moves on before the new hire is in position.

???????????The nature of the economic environment here in the Indo-Pacific also creates a loss of employee bargaining power, making it harder for qualified employees to transition smoothly. With excess demand and a low supply of jobs, employees are forced to take what “crumbs” they get and make do. This behavior seeks to ostracize and divide families within the home, increasing pressure on both spouses. The only winner and profiter in this scenario are the Federal Government as they win out on controlling both the supply of jobs, but also on wages within the job market. Consumers cannot pressure the marketplace into a more competitive environment as there are no competitors to work for. The SOFA Agreement forces U.S. workers to choose only from whatever is available, and workers who desire to work in the economy face even more troubling obstacles. Not only must a US worker renounce the SOFA Agreement, which removes their ability to tap into resources through the base, but they must also obtain a work VISA. That is only if the company within the community allows the worker to gain employment. Ultimately, this means that you are stuck waiting for positions to be open that fit your career path for upwards of a year or more. There is also the chance that a job that fits your career may never open either.

???????????To further complicate this scenario, let's say an employee finally receives notification that they have been tentatively selected for a position and will hear back for an interview. That employee has already waited three to six months to reach this point. The employee then must accept, deny, or bargain against that tentative offer. This process will also take three to six months to complete before the final stage of the employee's journey. What makes this nightmare worse from a consumer perspective is that you are entering the conversation already with a loss as you can neither search elsewhere nor have been worn down to the point that negotiating is hardly on your mind. For families with strapped financial situations, this isn't ideal. You are rushed to accept more crumbs to "get your foot in the door." Let’s say that the employee chose to negotiate. They are pretty much explained that you won't “get far” in the negotiation process from the beginning and that the "experience" that you bring to the table is negligible, invalid, and not "specific" enough to fit what is desired within the government window. Even if you could prove you deserve more, the regulated monopoly would stop you midway and tell you as an employee to "take it or leave it," At this point (six+ months in), you are forced to accept a job well below what you are worth.

???????????However, your journey does not end here. Once you have been worn down to this point of accepting an offer well below your means and capabilities, you have to wait another three to eight months for an extensive background and security check process to complete. This becomes even more waiting time for the organization that needs bodies and you as the future employee. If we apply the law of averages to this scenario, an employee's journey from start to finish takes, on average, 15.5 months to complete if everything was just average at each stage. If you were hopeful and everything hit the times they were supposed to at its quickest pace, the fastest an employee could complete their journey would be nine months! For most families who are coming to Japan and expecting to be here for a regular duty rotation, that rotation lasts only three years. That means, at the quickest pace, you, as an employee, would be out of work for almost an entire year before potentially being offered a position well below what you would have been making back in the United States.

CONCLUSION

???????????It stands to reason that much needs to be done for employees, and much-needed research is necessary to support families within the region confidently. The situation requiring families to sacrifice their time, talent, treasure, and abilities at the expense of working within the region is grossly unsustainable for families with careers for both parents. The overall transition from corporate to government is not smooth and offers little to alleviate the stress and pressures placed upon employees. If parents are dual-income wage earners, then the pressure to gain work speedily is reduced to a snail's pace with little comfort. With the fastest jobs to be hired within the food court, Top-Tier employees will not sacrifice the blood, sweat, and tears they earned grinding to where they were for $9.00-$10.00 per hour.

???????????For decision-makers who are not affected by this, it can be hard to relate to those who are in this predicament. Due to the varying degrees of impact and the level of comfort for high-wage-earning managers already in the system, this argument may fall flat. However, it is a heavy reality for most displaced American workers who have sacrificed everything to be with their families. There is a saying within the military that "If the (insert branch name here) wanted you to have a family, they would have issued you one." What is disturbing about this mindset is that it comes across as more accurate than false. The family unit is almost a secondary concern for those making policies for families within this region. Forcing families to conduct a "dog fight" like you would see in a coliseum for the weakest of paychecks well below their ability and capacity, all because the “bones” thrown (job supply) is horrendously low. The SOFA agreement mandates that foreign nationals must staff the majority of the available workforce before taking care of their own speaks volumes for most American workers who fail to obtain work while here for three years.

How does this protect the solidarity of the American workforce committed to excellence in the skillset that they have grown and earned? If remote work is an option, and USAJobs offers work that states "anywhere in the world," then why are these positions not publicized in the region as viable options? These are just a few of the questions that demand answers from those of us here who are stuck feeling alone and devastated that by the time we return to the United States; we will be both out of practice for our fields or suffer severe setbacks brought upon us by nothing more than the desire to maintain the family bonds we have to ensure a happy and stable home.

References

Dan. (2020, July 27).?Buyer bargaining power (one of Porter's Five Forces). The Strategic CFO?.?https://strategiccfo.com/articles/financial-leadership/buyer-bargaining-power-one-of-porters-five-forces/

Scripps News. (2023, February 11).?Here’s what income range is considered middle class in 20 U.S. cities. https://www.10news.com/.?https://www.10news.com/what-income-is-considered-middle-class-20-us-cities#:~:text=Middle%20Class%20Defined%20by%20Region,the%20Pew%20Research%20Center's%20definition

Statista Research Department. (2021, March 2).?Japan: North American residents. Statista.?https://www.statista.com/statistics/608935/japan-north-american-residents/#:~:text=In%202019%2C%20the%20number%20of,to%20approximately%2076%20thousand%20people

U.S. BUREAU OF LABOR STATISTICS. (2023).?Demographic Characteristics (CPS). U.S. Bureau of Labor Statistics.?https://www.bls.gov/cps/demographics.htm