I had my interest piqued the other day by a notice I received on AHCA — it was a notification from the Department of Health and Human Services on the development of standards for the Affordable Insurance Exchanges (45 CFR Parts 155 and 157 for you geeky types).  These are the state run exchanges which “will provide competitive marketplaces for individuals and small employers to directly compare available private health insurance options on the basis of price, quality, and other factors.”

I don’t know what I was thinking (or was I?), but I started reading the 35 pages of details in the Federal Register — and rapidly determined that the Exchanges (as they are known) are going to make Homeland Security seem like a micro agency.  The scope of detail which will be monitored and regulated by the Exchanges is very broad and will necessitate a very large bureaucracy.  The exchanges will be responsible to make sure that individuals have valid social security numbers; that they qualify for appropriate discounts (which means they’ll have to interface with the IRS and/or employers);  coordinate with Medicare/Medicaid/CHIP to ensure that the individuals don’t qualify for those plans — and these rules didn’t even mention how the Exchanges are going to work with insurance carriers to make sure that the coverage is “affordable.”

I’m amazed at how our government has determined that the “initial” cost of the exchanges will be expensive, but long term costs will be reduced because of the “use of efficient systems.”  Hmm.  Government and efficient systems — another oxymoron.  In my opinion, this solution is not going to be affordable — in the short-run or long-run.  But it sounds like a pretty creative way to reduce unemployment.

What this rule does is wave a red flag to every dis-gruntled individual who thinks management has done him/her wrong.  Of bigger concern to me, is that the vast majority of our industry (and small businesses) don’t understand the archaic rules of the NLRB.  One inadvertent mis-step by a supervisor during a union organization drive can be disastrous — resulting in the company fighting the government as well as a union.

The Administration is talking about the need to create jobs, while at the same time supporting regulations which provide dis-incentives for business.   To quote Yakov Smirnoff, “What a country!”

It was led by David Danforth with Eastfield Community College and Dr. Rick Lumadue with Texas A&M – Commerce.  These college professors, who are both Gen X-ers (born between 1964 and 1980), were very entertaining and candid with their observations.  These were not guys who are consultants or doctorial candidates writing research papers.  Every day they are seeing the new generation (Millennials) in the classroom, and they are also interfacing with the Boomers (administrators).

The key to this program was the observation that the upcoming Millennials (born between 1980 and 2000) are motivated very differently than the Boomers or Gen X-ers.  They communicate differently—via blogs IMs and text messaging rather than phone or face-to-face preferred by the older generation, who are frequently their supervisors.  They are heavily influenced by their parents and peers and are very team oriented.  Where Gen X-ers were highly independent and self-motivated, the Millennials need structure and very focused leadership. Millennials are multi-taskers and are not use to having lines of authority – they ask “why.”

Given that our industry’s workforce composition is beginning to change, managers and supervisors need to understand the dynamics of the groups they manage and how their own biases can affect their leadership. The more we can learn about ourselves and our workforce, the better leaders we become.  If you would like a copy of the PowerPoint presentation used by Danforth and Lumadue, please contact me.

What’s being hidden in all of this rhetoric is the fact that collective bargaining has created situations which are now becoming financially un-supportable.  With over 50% of unionized employees working for the government, this also creates some crucial issues for taxpayers – who tend to be supportive of collective bargaining for government employees (although I mistrust how the survey questions are designed).  The electorate doesn’t really have a clue what it’s going to cost them.  There continues to be the idea that the “government can afford it.”

Collective bargaining may have had its place in past years, but over the decades both sides (management/employees) have acted like high school football players at an all-you-can-eat buffet, and are now paying for their over indulgence.   Or should I say we’re going to pay for it.

Whether or not Governor Scott Walker and his Republican supporters are able to pass any legislation which in affect “busts” the unions is really moot.  What is fascinating is that a politician is willing to take on a massive labor issue which could be the end of his political career.

This issue of life-time benefits with no caps, if left alone in our governments (local, state, federal) will create tremendous imbalances in our economy.  The idea of being able to provide benefits with no caps (and that’s what we’ve been doing for years) is problematic for our society.  It’s a lesson many have learned in the print industry.  If a business is not able to grow and stay profitable, how can you even think of “guaranteeing” future benefits. This is the sad story we’ve just seen play out in Kansas City as Greystone Graphics is in the process of being liquidated.

We can not just blame the unions (Greystone was a union shop) for its demise, in fairness there were probably  many other reasons, but one thing I find interesting was the rumor that several firms were looking at acquiring the business but all walked away because of the unfunded liability of the employee’s pension plan.  What does this say for the hundreds of unionized firms in our industry?

Elizabeth Warren, who leads the congressional panel overseeing the Troubled Asset Relief Program, said U.S. taxpayer bailouts helped Wall Street and not small banks.  TARP “worked really well for the Wall Street banks, but it didn’t work well for the rest of the banks in the system,” she recently said on Bloomberg Television’s “In the Loop with Betty Liu.”

I hate to say it, but I think that our financial system is out of sync.

Meanwhile, the folks who make this country great, our blue collar workers and small business men and women are getting the short end of the stick.   Our politicians are not willing to find creative ways to help businesses and people, get off the sidelines.  There’s talk of more money for education, job creation, and small business lending.  Why not just stop writing laws for a while and let the system move forward.  Get creative with finding ways to support small and medium size businesses to get the money they need to start producing and hiring — and don’t expect it to happen overnight!  Too many folks in our country don’t understand that business (and consumers) won’t start hiring/spending until they know what’s going to happen over the next 12-18 months.  As long as the Administration and Congress keep talking about more laws and more deficit spending, more the reason folks will stop, wait and see.  Not a good way to kick-start an economy.

I was recently part of an ad hoc committee discussing the closing of all the printing vocational programs in Kansas by 2012.  Closing programs in our region is “old” news.  Typically the closures were the result of funding problem at the local level, but what I learned in Kansas makes me more and more a believer that we don’t want the federal government involved in education.

I’ll try to summarize what it took R. J. Dake from the Kansas Department of Education (KDOE) nearly two hours to explain.  As we all know, approximately 4-6 years ago we were losing many high-tech jobs overseas.  Thus, there was an outcry by high-tech companies (well voiced by Microsoft’s Bill Gates) with the result being the Federal government passed legislation which would fund high school career and technology programs (a.k.a. vocational education) which targeted certain careers.  These career paths were based on the Bureau of Labor’s Standard Occupational Classification (SOC Code). Funding would go to programs which would provide opportunities in careers/jobs where those jobs were growing in excess of 20% a year or had a high skill level involved or had a minimum starting salary of $13.15 per hour.  Thus, the KDOE has begun the process of closing programs down that do not meet the guidelines for funding and totally restructuring their technology & career programs.   Given funding shortfalls for education and that the feds would fund programs which would hopefully employ Kansas students, the decision was not that difficult.

What really concerned me and the other individuals in the room, who represented graphic designers, photographers, as well as a broad range of print and journalism, was that the decisions were based on bureaucratic criteria totally out of date.  When an industry like ours brought it to the Department of Labor’s (DOL) attention that the SOC codes were woefully out of date, the bureaucrats dragged their feet.  It was 2004 when the PIA office in Denver brought this issue up, and as of January 2010, the DOL had yet to publish new codes which recognize that our industry no longer employs photoengravers and plate mounters.  We can argue all day about printing being or not being a valid program.  That is a topic for another day. 

This issue is further further complicated by “No Child Left Behind,” which in concept sounds great, but making it work is another issue.  Ask any teacher (not someone from administration) and they’ll tell you about the frustration they have when being required to teach to the test. Ask any career and technology administrator and they’ll tell you about having to close certain programs because funds having to be re-directed to “No Child Left Behind.”  Someone in Washington, Austin, Topeka, etc. established guidelines, which sounded great in an election sound bite, but when implemented, is harming our children’s education.

I left the meeting very frustrated.  R.J. Dake was very candid.  They want to work with industry – but can not go against what has been dictated by the federal government regarding career and technical education – if they want to receive funding.  So the bureaucracy will continue and our children’s education will suffer, and we’ll wonder why our business innovators will go overseas.

Maybe it’s time we start demanding that education become more of a local community issue rather than a “government” one.  I find it fascinating that many parents in our country feel that education is the government’s responsibility rather than theirs.  I still believe that public education is a good thing, but we are just delegating too much to the federal government and the bureaucracies which are the results of “well-meaning” legislation.  So, is it time to talk about health care?

The major one being that over the past decade, high school programs have focused on academic learning and don’t have the want, structure, fortitude or dollars to deal with technology training for our industry – or for that matter — many manufacturing industries.  Although we are seeing some movement toward “career” training, the structure and focus will be very different from the vocational educational model prevalent in the last century.

During my twenty+ year tenure with PIA, I’ve seen a variety of ideas regarding career awareness and industry training. My predecessor, Nolan Moore during his nearly 30-year career serving the industry helped develop a variety of programs (and films) regarding career awareness.  The films/videos were great pieces and made many feel good – but they never lived up to their potential.  Why?  Lack of continuous passion and commitment. 

Every time a program was started, it was because a handful of leaders had a passion to recruit for the industry.  They needed employees, or they were passionate about the need for education.  When the programs finally started spinning up – normally months to years later, guess what happened?  Those passionate leaders no longer needed employees. There were other pressing issues and recruiting employees was not one of them.

Now that I’ve thrown extremely cold water on this whole topic, what do I believe?

We do need people and training.  But the recruiting and training has to be done by the individuals and organization who are close to the action.  It’s not the bailiwick of the academic institutions.  Institutions move in a very stately fashion.  There are committees to be created – because the folks running the institution don’t really understand the problem – or they just see one facet.  The committees which get created only see the problem from their VERY narrow view.  And when you have an extremely large and fragmented industry like ours – only a small handful of firms will like the solution – and too often, there is not enough critical mass for the program, created by an industry subset, to succeed.

So, am I ready to throw in the towel.  Nope.

We need to realize that we have to go back to the good ‘ol days.  How did someone become a printer?  They apprenticed.  They learned on the job.  That’s the way individuals were taught their craft.  We also have to realize that in today’s high-tech world it no longer takes four to five years to become a “journeyman.”  It may only be a matter of months.  Thus, we will have to rethink our compensation methodology; otherwise, the bright individuals we need for the backbone of our industry will find employment somewhere else.

Is there a role for institutions?  Yes, and we are starting to see some glimmers in academia that technology/vocational programs are considered viable for students, but don’t expect to see printing programs blossoming and trained craftsman coming from these programs. As is being witnessed in Kansas, the students will be taught visual media (my phrase), which will include design, photography, web development and yes, print.  The job of our secondary programs will be to expose young people to potential opportunities in the visual media field – it’s up to us to provide them job opportunities and training.

Printing Industries of America has excellent publications and offers outstanding train-the-trainer programs.  There are and will be post-secondary print-centric programs, many which already exist, which will provide much more specific training for industry professionals,  but it’s the company, who needs those employees and training, who will have to implement the training.  Not the institutions.

Want to see success stories?  There out there.  Go to Lubbock, or Sedalia or Wichita. The printers in those areas don’t have a large base of skilled potential employees or educational programs to draw from — but they find workers, train them and succeed.  Why can’t everyone?

 So, let me tell you a story. 

 Once upon a time, a small state association (yes it was our predecessor — PIA Texas) ran a very successful self-insured health care plan.  Over ½ the membership had insurance through the program, which covered over 8,000 employees.  Premiums were very affordable, service was excellent, and the Association grew and the members were living happily ever after — until the government got involved.

In the early ’90′s, Texas adopted HMO reform in the state.  Thus, HMO’s were able to come in and offer “competitive” insurance rates foregoing the normal rate approval regulations.  In a word, they were able to set their rates below the market.  Second, the state determined it needed to regulate programs like ours (Multiple Employer Welfare Arrangements, which follow federal guidelines) which in turn generated additional operational costs.  At about the same time HIPAA (Health Insurance Portability and Accountability Act) was passed which increased the federal mandates. 

Costs went up because of mandates and the “competitors” did not have to charge rates which reflected their costs since they were in the process of developing market share.  What decision did the members make?  They went where the costs were lower – which makes economic sense.  Meanwhile, the program continued to support companies who could not find better rates (due to employees with medical conditions). Consequently rates had to increase, which in turn further drove out other companies.  The program found itself in the classic adverse selection mode, which all insurance providers fear, and the program was in a death spiral.  Fortunately, the Trustees realized this and closed the program down before it went bankrupt – which happened to other similar programs.

Here’s the moral of my story.  The stated purpose of this government insurance company will be to “drive costs down,” which means lower rates.  And when you are the federal government, you don’t have to keep shareholders happy or make a profit.  Subsequently, individuals looking for “affordable” insurance will vote with their pocketbook and voila!  All of a sudden adverse selection sets in for the rest of the insurance industry.  Not a pretty picture.

What is not being addressed in all of these issues is the fact that small business is being frozen out.  Yes, let’s take care of the un-insured – but a lot of these folks work for small businesses who are not willing, or can not afford to pay insurance.  How is the government going to help small businesses afford insurance for their employees?  Another issue is cost control.  How is the Administration going to do that, other than jawboning the AMA and the medical  industry?  An even bigger issue – how do we pay for all of this?

Yes, there is no easy answer – but telling the public that all that is needed is a federal government insurance program is a fairy tale.  It’s not being honest with the American people, or what could be worse, the folks in the Administration and the Democratic leadership don’t really understand how individuals and businesses behave – and that truly concerns me.