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The fatal kidnappings of Americans in Mexico last week refocused attention on the multiple State Department warnings about travel just as spring break arrives. These are just the direst warnings; there are a lot more of them:

(U.S. State Department)

Nathan Jones, a professor at Sam Houston State University who is an expert in Mexico studies, told KARE-11 TV that tourists traveling to Mexico should stay at their resort and avoid buying drugs and alcohol:

“It really matters the activities the individual engages in when they go to these places,” said Jones. “I can’t give a blanket answer as far as safety, but what I would say is some of those activities could potentially put someone in harm’s way if they went out to purchase illegal drugs or something like that.” He says your risk factor goes up even more if you have religious tattoos, flashy jewelry or are a man in your 20s and early 30s, who cartels often see as rivals.

What is medical tourism and why do people travel to Mexico to get medical care?

The kidnappings are refocusing attention on “medical tourism” to Mexico. The National Exterior Commerce Bank in Mexico says medical tourism was worth $5 billion a year to Mexico before the pandemic. It is less now. Still, about 1.2 million Americans per year travel to Mexico for medical procedures. The New York Times explains:

Many people cross the border for pharmaceuticals at greatly decreased prices from what you pay in the U.S. Others, especially Americans and Canadians in the past two decades, are traveling for surgeries or treatments. The Centers for Disease Control and Prevention says dental care, surgeries, fertility treatments, organ and tissue transplants and cancer treatment are the most common procedures for which people go abroad. Elective procedures are a major component of medical tourism, said Daniel Béland, a professor of political science at McGill University who has studied health policy.

Complex dental treatments like root canals, veneers and full mouth reconstructions are among the most popular procedures, Mr. Woodman said. Los Algodones, near the California-Arizona border, is known as “Molar City” because it caters to this market.

One study, which surveyed over 400 people near the U.S.–Mexico border about traveling to obtain health care, found that 92 percent cited lower costs in Mexico as guiding their decision. Andrea Miller, a clinical pharmacist in Arizona who led the study, was struck by just how widespread advertising, and infrastructure, for medical services was in a Mexican border town.

U.S. doctors warn that Mexican medical tourism is pretty much unregulated, so the safety record is dubious. Private Mexican hospitals do not report data to the government.

The ‘now you are a manager so forget about overtime’ scam

The National Bureau of Economic Research says employers have rapidly expanded the number of jobs they classify as “managers” to avoid paying workers overtime.

The Fair Labor Standards Act says unless employees are exempt, they must receive overtime pay at a rate of at least one and a half times their regular rate. The act defines exempt employees as people whose positions are salaried, rather than hourly; who are paid at least $455 per week; and who are in positions primarily involving executive, administrative or professional duties. All states follow these rules except for Alaska, Connecticut, California, New York and Maine, which impose their own thresholds for the salary test.

Researchers found that in 2019, “firms used managerial titles to avoid paying overtime wages on 151 million employee-hours, worth about $4 billion. For the average affected workers, this was equivalent to 13.5 percent of salary in lost overtime.”

Notice that in the graph below the largest group of “managers” are people who make just barely more than the federal minimum that makes them exempt. That means, the researchers say, the average mislabeled employee earns about $3,000 a year less than if they were hourly and making overtime.

(National Bureau of Economic Research)

The bureau summarized its findings in a no-holds-barred summary:

We find widespread evidence of firms appearing to avoid paying overtime wages by exploiting a federal law that allows them to do so for employees termed as “managers” and paid a salary above a pre-defined dollar threshold.

We show that listings for salaried positions with managerial titles exhibit an almost five-fold increase around the federal regulatory threshold, including the listing of managerial positions such as “Directors of First Impression,” whose jobs are otherwise equivalent to non-managerial employees (in this case, a front desk assistant).

Overtime avoidance is more pronounced when firms have stronger bargaining power and employees have weaker rights. Moreover, it is more pronounced for firms with financial constraints and when there are weaker labor outside options in the region.

We find stronger results for occupations in low-wage industries that are penalized more often for overtime violations. Our results suggest broad usage of overtime avoidance using job titles across locations and over time, persisting through the present day. Moreover, the wages avoided are substantial – we estimate that firms avoid roughly 13.5% in overtime expenses for each strategic “manager” hired during our sample period.

Go deeper:

• The New York Times: You’re Now a ‘Manager.’ Forget About Overtime Pay.
• National Bureau of Economic Research: Firms Inflate Job Titles to Avoid Paying Workers Overtime

10 million job openings

There are almost two open jobs in America for every unemployed person in the country and the gap is not narrowing. The government’s just-released January Job Openings and Labor Turnover data shows there are fewer job openings than a year ago but still way more than there were before the pandemic. The Bureau of Labor Statistics says In January, the largest decreases in job openings were in construction (-240,000), accommodation and food services (-204,000) and finance and insurance (-100,000). The number of job openings increased in transportation, warehousing, and utilities (+94,000) and in nondurable goods manufacturing (+50,000).

Most company execs say work-from-home will likely expand this year

Maybe this is related to the hot competition for workers I mentioned above. A new survey of 1,100 corporate executives shows the hype about big companies forcing workers back to the office does not reflect what most are planning. Forbes summarizes the survey from The Conference Board:

In short, it’s likely that 2023 will see a slight expansion of employees working remotely. These findings suggest that the majority of companies are finding their hybrid workplace policy to be a successful solution for their organization.

As the pandemic progressed, the company realized that remote work was not only effective, but also improved employee satisfaction. They therefore decided to adopt a hybrid workplace policy that allowed employees to work both remotely and in-office. This approach has allowed the company to continue operating effectively, while also supporting the unique needs of their employees.

One of the key benefits of the hybrid workplace policy is the increased flexibility it provides for employees and the lack of a commute, which helps boost productivity. For example, a survey by Mercer of 800 HR leaders reported that 94% found that the staff at their companies were more or equally productive working remotely compared to working in the office. A two-year survey by Great Place to Work of more than 800,000 employees showed that the shift to working remotely in the pandemic boosted worker productivity by 6% on average.

Workers in the U.S. are still working from home at rates that far exceed Europe and Asia. CNBC reports:

Even as people got vaccinated and Covid restrictions eased over the years, U.S. office occupancy remains stagnant around 40% to 60% of pre-pandemic levels, varying by month and by city, according to data from the commercial real estate firm JLL and reported by The Wall Street Journal.

Meanwhile, office attendance has returned to 70% to 90% in Europe and the Middle East, and around 80% to 110% in some Asian cities, meaning some workers are spending more time in the office now than pre-Covid.

CNBC says as long as the unemployment rate remains at such low levels, workers have the leverage they need to tell employers that they want to work from home and there is not a lot the employer can do about it.

A 50% average office attendance rate could become the new norm for American workers, says Owl Labs CEO Frank Weishaupt, though he expects it to fluctuate throughout 2023 if layoff announcements scare people into going into the office, he says.

One certainty: Americans will never view the purpose of the office in the same way, says John Gates, JLL CEO of Americas Markets. “Business leaders must now focus on delivering human-centric spaces designed to support and improve employee’s health and wellbeing, deliver peak experiences, and provide the latest in technology that fosters collaboration and creativity.”

Workers are more likely to return to the office if the office is fancy

The Real Estate Board of New York may have hit on a clue about how to get people to come back to the office: Make the office fancier. Overall, “average building visitations” are only about 60% of what they were before the pandemic. But in so-called Class A buildings, the really nice ones, visitation is significantly higher. In case you wondered, Class A buildings include things like:

• Concierge services
• Valet services
• Security
• Dining options
• Day care centers
• Covered parking
• Gyms
• Showers
• Lounges
• Bike storage
• Private outdoor space

Businesses that don’t need as much office space are turning it into housing

Axios takes the example of Washington, D.C., a town built around offices, and says with so many people working from home, the space is better used as apartments and condos. There are some keys to success, Axios found:

Gary Cohen, chair of the development firm Willco, is converting the former Peace Corps headquarters at 20th and L streets NW into the future Elle apartments. He shared some insight into the process — and its challenges.

• Each unit needs windows, so buildings with abundant natural light work best. Without that, developers will usually add a courtyard as a fix.
• Older buildings that need to be modernized and brought up to code can be more expensive.
• One-tenant buildings are usually easiest because there’s only one lease to deal with. Multiple tenants mean a developer has to wait out all the leases or buy some tenants out.
• Designing a conversion can take longer than designing a project from the ground up. But conversions take less time start-to-finish and are generally cheaper, despite the need to add plumbing and other necessities.