The Cold Sweeping Hand
My first exposure to the devastating affect that infinite profitability has on those that supply the labor for those profits aka the employees came during the three year financial restructuring at United Airlines which was my first corporate job. There were pay cuts and employee benefit reductions that also resulted in paying more for your insurance. The combination of the cuts resulted in an average of a 15% reduction in Net Pay. Eventually the pension system was dissolved and replaced with the now standard 401K; which if you knew the history of it would realize what a joke it is as it was never designed for the purpose that its used for today. Then there were reductions in the number of people to perform certain roles which then forced them all to re-interview for the same job they may have done for years. I saw people with 10, 20, and 30 years of service to the company basically being told “Thank you for your service” which was absolutely devastating to these people who believed they had a “Permanent Job”. These very same people had many times over the length of their careers taken one for “Team United Airlines” that had some level of financial impact on them all under the guise of permanence. Some were forced into early retirement. Others were simply pushed out as Corporate Politics played out using the phrase “moved on to other opportunities in the company”. I heard a lot of inside information during this time which was jaw dropping for me being such a novice in the ways of Corporate Life. Other than the politics, it was all primarily based on cold, hard calculations because plain and simply The Corporate will survive, even if it’s at the devastation of many of their devoted employees. As a result of these observations I came up with this phrase, “The Cold Sweeping Hand of The Corporate” as I watched it sweep across divisions throughout the company with some never knowing it was coming much less what hit them when it happened. When you’ve worked at a company for so long, starting over can have a devastating impact on your personal financials regardless of the severance pay that was given. This was the worst I witnessed because it was the only company I’ve worked for that went through this deep of a financial restructuring. Yet other restructurings had many similarities so I’ve been through this a number of times in various guises.
Infinite Profits > Life
Depending on to what degree you may have researched what I refer to as “Corporate Shenanigans”, what I’m about to say may come as a surprise if not shocking. I’m an Info Junkie and Truth Seeker in conjunction with having a fascination about everything so I’m always seeking truth and understanding in its various guises. It’s not that all corporations are involved with this but unfortunately more that you may realize because the face they put on to the public can sometimes be more marketing than reality. This all derives from the previous section discussing the drive for infinite profits and how they can actually get to the level of what I refer to as “psychopathic”. I first came across this perspective when stumbling upon a documentary many years ago called “The Yes Men”. It was about these two guys who punk various elements of Corporate America exposing many of its ludicrous behaviors. It wasn’t these actions that took me by surprise but an element in the opening sequence that was demonstrating why they did these things. Someone is filming a middle aged man sitting on a chair in a suit whose tie had been slightly loosened. It had the air of being some kind of seminar. You hear the man behind the camera say something to the effect of (paraphrased), “So what you’re telling me is that it’s okay if some people die as long as there’s enough profits?” The man looks squarely at him and responds (paraphrased), “Yeah, pretty much so.” (From The Yes Men Wikipedia: “They espouse the belief that corporations and governmental organizations often act in dehumanizing ways toward the public.“) Then over the years I’ve discovered numerous examples of corporations knowing full well that some element of their product has some detriment to either the environment and/or human health including eventual records that have come out proving this, yet that product and many more continue to be made raking in millions if not billions of dollars of profit. It’s from that snippet and way too many examples that I came up with the phrase that “Corporate Profits supersede the Sanctity and Sovereignty of Life”. At its worst, I also refer to it as “Psychopathic Profits”. As crazy as it sounds, it’s happened and is happening more often than the General Public is aware of including loads of various forms of manipulations, er, uh, Public Relations to keep that info from the public.
Real world example told as a fable which was told to me by a friend about a friend of his who knew this person; Once upon a time there was a company whose product was beginning to be known to have a detrimental health affect. The CEO of this company forbade any member of his family to have anything to remotely do with anything containing this product indicating he was well aware of the health effects yet continued with his executive pay and eventual Golden Parachute.
The Race to the Bottom
From my research, visionary marketing guru Seth Godin appears to have termed the phrase “race to the bottom” as early as April 14, 2005 in his short blog post titled, “Race for the top, race to the bottom” yet his most poignant remarks on this concept are in his book “Linchpin: Are You Indispensable?”, a television appearance in early January 2012 and then on his blog in August of the same year. I’ll use his words to describe this oncoming and apparently unstoppable phenomenon that is creating the race to the bottom. As in all races there are winners and losers. In this case the losers are primarily the employees and sometimes the customer.
From his book, “Linchpin: Are You Indispensable?” published in 2010: “I grew up in a world where people did what they were told, followed instructions, found a job, and made a living, and that was that. Now we live in a world where all the joy and profit have been squeezed out of following the rules. Outsourcing and automation and the new marketing punish anyone who is merely good, merely obedient, and merely reliable…The factory – that system where organized labor meets patient capital, productivity-improvising devices, and leverage – has fallen apart…just as the factories of the service industries have crumbled as well. Worse still, the type of low-risk, high stability jobs that three-quarters of us crave have turned into dead-end traps of dissatisfaction and unfair risk. The essence of the problem: The working middle class is suffering. Wages are stagnant; job security is, for many people, a fading memory; and stress is skyrocketing. Nowhere to run, and apparently, nowhere to hide. The cause of the suffering is the desire of organizations to turn employees into replaceable cogs in a vast machine. The easier people are to replace, the less they need to be paid. And so far, workers have been complicit in this commoditization.”
From a television interview posted on YouTube with the title “Seth Godin on why you need a Home Based Business” (circa January 2012):
- “It’s the end of the Industrial Age. It lasted for 80 years. You gotta job, you did what you were told and you retired and good people could make above average pay for average work and it ended. And so 2012 is not going to be more of the same, it’s going to be worse than the same in that the Industrial Age is going away and a new thing is going to take its place. [People] are totally unprepared absolutely because our schools, our systems, our retirement things, our taxes are built around this notion of doing what you’re told. And now we don’t know what to do because it’s a revolution.“
- “There’s this race to the bottom. And if you say I’m an average guy doing average work, we’ll find someone cheaper than you.“
- “The race to the bottom is how do we get cheaper? How does everything get cheaper? More Walmarts, more Targets, more stuff made by people getting paid ever less from cheaper materials, cheaper services, whatever. The problem with the race to the bottom is you might win.“
- “Understand 20,000 guys, mostly men, at Ford Motor Company lost their job on one day. All of them had done everything they were told and they all lost their job. So don’t tell me that stability is stable cuz it’s not.“
Quotes of the same type that appeared in a Business Insider article titled, “Seth Godin: If You’re an Average Worker, You’re Going Straight to the Bottom” by Vivian Giang published on January 19, 2012.
- “For 80 years, you got a job, you did what you were told and you retired,” says the former vice president of direct marketing at Yahoo! People are raised on this idea that if they pay their taxes and do what they’re told, there’s some kind of safety net, or pension plan that’s waiting for them. But the days when people were able to get above average pay for average work are over.
- If you’re the average person out there doing average work, there’s going to be someone else out there doing the exact same thing as you, but cheaper. Now that the industrial economy is over, you should forget about doing things just because it’s assigned to you, or “never mind the race to the top, you’ll be racing to the bottom.“
From Seth’s Blog: “The race to the bottom” published on August 20, 2012: “We know that industrialists seek to squeeze every penny out of every market. We know that competitors want to drive their costs to zero so that they will be the obvious commodity choice. And we know that many that seek to unearth natural resources want all of it, fast and cheap and now. We can eliminate rules protecting clean water or consumer safety. We can extort workers to show up and work harder for less, in order to underbid a competitor. We can take advantage of less sophisticated consumers and trick them into consuming items for short-term satisfaction and long-term pain…In our connected world, commodity producers are under intense pressure…That means that there’s an argument made by big corporations for each country to charge corporations the lowest possible tax rate, to loosen environmental regulations down to zero, and to eliminate employee protections. All so that a country’s commodity producers can be the cheapest ones…You might make a few more bucks for now, but not for long and not with pride. Someone will always find a way to be cheaper or more brutal than you.”
The Race to the Bottom is in full swing and here to stay. It’s been around longer than you may imagine. How long ago did you first see that smiling face in Walmart commercials hitting up against a price knocking it down? That was contrasted with a PBS documentary I saw many years ago that showed how Walmart commanded prices basically telling the manufacturers what they were going to pay. It also highlighted a well-known American brand I grew up with that had to either comply or lose the business which eventually forced some level of their labor to cheaper places overseas. Cash is King; Infinite Profits Rule. Therefore in order to compete, this forced other businesses to source their goods from cheaper and cheaper sources. Eventually the internet got into the game when Amazon et al came online followed by others launching the race to the bottom into full swing. When Free Trade began, the buzz was that we would see it in lower prices and to some degree that did occur yet the long term impact on American jobs slowly began to arise where more jobs were created overseas or wages here had to lower in America in order to compete.
Part 3 explores the impact and resulting fallout that the Good, the Bad, and the Ugly aspects of Corporate America is having on the Gig Economy now but most importantly as it continues to develop over the next couple of decades. Stay tuned…