Lab-to-OS Publish Pipeline

Experiment in labor constraint space by Reeves Manufacturing.

Experiment in labor constraint space by Hargrove Logistics.

In Pivot Lab #1, a family-owned Michigan manufacturer discovered that its $22/hr production wage — which it believed was 'competitive' — placed it at the 22nd percentile for state manufacturing. 55% of its workers qualified for public assistance. The company had externalized $2.1M annually in workforce welfare costs onto Michigan taxpayers. But the externality wasn't free: 28% annual turnover at $45K per replacement meant the company was spending $5.7M/year to maintain the status quo. A $5/hr floor increase to cross the benefits cliff would cost $4.4M but was projected to save $5.7M in reduced turnover, improved quality, and lower absenteeism. The externality was costing more to maintain than to internalize. This pattern repeated across all three companies in the cohort — and may represent a general principle: the hidden cost of externalization exceeds the visible cost of internalization.

In Pivot Lab #1, a family-owned manufacturer reported a 90+ day vacancy for skilled machinists, attributing the problem to labor supply. BLS data revealed the company's wages were at the 28th percentile — well below the regional median of $30.33/hr. When this assumption was surfaced in the Lab's stress test, the CEO immediately proposed a compensation experiment. Early results pending.