The Economist - USA (2019-07-20)

The EconomistJuly 20th 2019 Business 53

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riffs on $325bn of Chinese imports. Accord-

ing to JP Morgan Chase, the new levies

could tip the economy into a contraction.

A survey of companies by the Institute

for Supply Management (ism) echoes such

worries. A manager at a chemicals firm told

ism that the levies were increasing costs.

Another at a metals company worried they

would weaken global demand for its pro-

ducts. Trade frictions are “wreaking havoc

with supply chains and costs”, according to

an executive at electronics manufacturer.

“The situation is crazy.”

The second reason for falling profits—

rising labour costs—is good for workers

but worrying for firms and investors. Ama-

zon raised wages to $15 an hour in late 2018,

as the labour market tightened. Costco and

other retailers are doing the same. If pork

tariffs weren’t enough, Mr Herring also

reckons that farms and packing plants may

shut down for lack of workers. Michael Mc-

Donald, president of the Sewn Products

Equipment & Suppliers of the Americas, a

trade group, says that clothesmakers face a

“sizeable labour shortage”.

David Kostin of Goldman Sachs, an in-

vestment bank, calculates that total com-

pensation, which includes wages and all

benefits, represents 13% of sales for a typi-

cal American firm. Wages and benefits are

now rising at roughly 3% a year, up from 2%

in 2018 and just 1% earlier in the business

cycle. Michael Wilson of Morgan Stanley,

another investment bank, reckons the offi-

cial figures conceal much higher rises in

such industries as retail, hotels and com-

mercial services.

The final explanation for the earnings

crunch has to do with technology compa-

nies. Patrick Palfrey of Credit Suisse, one

more investment bank, notes that the list

Bartleby Academy rewards

Economist.com/blogs/bartleby

C

hris jenkinsonhas posters of wres-

tling stars on his walls, likes to cook

burgers and is about to start work in the

kitchens of a Hilton hotel in Surrey,

England. Emily Martin likes to cook

Victoria sponge, is doing work experi-

ence at the Hinkley Point nuclear station,

and eventually wants to work in a “front

of house” role in hospitality. 

These may look like typical life ambi-

tions. What makes them remarkable is

that Chris has Down’s syndrome and

Emily has learning difficulties. Only 6%

of the 1.5m British adults with learning

disabilities are in paid employment.

Chris and Emily are students at the Foxes

Academy in the seaside resort of Mine-

head, which specialises in helping young

people with these conditions.

In recent years, eight out of ten gradu-

ates from the academy have taken jobs in

hospitality. Students take a three-year

course which allows them to learn how

to live independently and develop the

skills needed to hold down a job. Bartleby

was given a tour of the facilities by Cam-

eron Corrick, a student who has cerebral

palsy and is starting as a commis chef

(doing food preparation work) in Devon

in August. The academy has its own

hotel, as well as a teaching centre and a

number of hostels in the town centre.

Early teaching focuses on basic skills.

Cameron took Bartleby to a session on

communication, where students learned

the conversation skills that will be neces-

sary when dealing with the public. In a

hostel three girls were learning how to

prepare a shopping list, buy the ingredi-

ents from a local supermarket and then

cook it for lunch. They had just returned

from their trip and were planning on

making pasta carbonara and stuffed

tacos. The students have rotas for shop-

ping, washing and cleaning. Eventually,

they will learn how to use PowerPoint to

make a presentation, understand the

food-hygiene laws (meat, vegetables, etc,

are prepared on chopping boards in differ-

ent colours) and pass exams known as

national vocational qualifications. 

The students start off by doing two

shifts a week at the hotel. Later on they do

work experience in the local community.

Fifty businesses offer placements that

involve up to 16 hours a week. Other job

placements occur by happenstance. J.J.

Goodman, a founder of the London Cock-

tail Club chain, gave a talk at the academy.

That inspired Tom Hawkins, a 22-year-old

with Down’s syndrome, to ask Mr Good-

man to help him pursue his dream of being

a barman. Tom has been undergoing train-

ing and the chain hopes to offer him a

permanent job, where he will be mixing

piña coladas with the best of them. 

The education offered by the academy

clearly has enormous benefits for the

students themselves. Emily says she was

bullied at school but found lots of friends

when she came to the academy, and gained

much confidence as a result. It was easy to

see how excited the students were at the

prospect of having a job. 

Employers benefit, too. One of the

academy’s main supporters is the Hilton

group, which has offered 21 work place-

ments and hired nine staff. Through its

charitable foundation, it has recently

invested $40,000 to improve the acad-

emy’s training facilities. Steve Cassidy,

Hilton’s managing director in Britain and

Ireland says the scheme has gone ex-

tremely well, with benefits for the stu-

dents in terms of training, and benefits

for the culture and environment of the

hotels themselves. He hopes the group’s

hotels in other parts of the world will

follow Britain’s lead.

Lastly, getting the likes of Chris, Emily

and Tom into work rather than resi-

dential care, where they would otherwise

end up, saves the government a lot of

money. Foxes cites estimates from Brit-

ain’s Department of Education which

shows that the cumulative cost of sup-

porting a person with a moderate learn-

ing disability throughout their adult life

(from 16 to 64) is up to £3m ($3.8m).

Teaching them the skills to live semi-

independently and take a job reduces the

bill by around a third.

Those savings require some upfront

investment. Each student is funded by

their local council but local-authority

budgets have been squeezed under the

austerity programme of the current

Conservative government. Clare Walsh,

the academy’s marketing manager, says

that councils are finding it more and

more of a struggle to send students.

That is a shame. Anyone who visits

the academy is bound to be inspired and

impressed. Chris, Emily and Cameron

deserve all the support they can get.

Helping people with learning disabilities into jobs