The Parallel Parliament

by Glen Pearson

Tag: employment

Middle-Out

120618024302-brazile-obama-middle-class-story-top

“AMERICA’S PREMIER SELF-LOATHING PLUTOCRAT“ – no kidding, that’s what they call Nick Hanauer. He’s been in these blog posts before, where we spoke of his criticizing his peers for robbing the wealth of the United States instead of investing in productivity.

He’s now at it again, only this time championing a $15 minimum wage south of the border. Again, his peers and the corporate elite are irate with his position, and small business owners aren’t wild about it either, but his rationale, and the way he publicizes it, is carrying some momentum. In fact, the way he sees it, it’s not the labour leader or minimum wage employee who’s the best face of the effort, but his own. His rationale? “A guy like me – a very successful capitalist – is the best face for the message of reforming capitalism, right? I’m the one who can say, ‘It doesn’t have to be that way.’“

Hanaeur made his billions primarily through shrewd investments in businesses like Amazon, but somewhere along the way he came to understand that a wealth that is moving ever-upward would result in a nation spinning ever-downward. He puts it plainly:

“The other side thinks that growth produces a thriving middle class. That’s wrong and backwards. When they say (his peers) that the better profits are, the better it will be for everybody, I’m the one who can say ‘That’s a lie.’ A thriving middle class is the source of growth in a technological, capitalist economy.  Investing in the middle class is the most pro-business thing you can do.”

He finds politicians uninspiring and his fellow plutocrats unimaginative. And so he set about to battle for the $15 minimum in the public arena, and its picking up steam. It began when he made a presentation on the subject to the Democracy Alliance in 2012. What was ironic wasn’t just that he was a plutocrat, but that, while labour leaders were promoting a $10 minimum wage, Hanaeur came in $5 higher. Soon enough striking fast-food workers across the country rallied to his call. When he centered his efforts shortly afterwards in Sea Tac, Washington, that community became the country’s first $15 an hour minimum wage community. Soon enough Seattle followed, as did Los Angeles and San Francisco. Now the concept is under serious consideration in many states and cities across America.

We have all heard the arguments from the other side, about how raising minimum wage will put downward pressure on business and result in increasing job loss, but Hanaeur counters that it will lead to more jobs for the simple reason that workers will have more money and create demand for more products and services. He calls it “a positive feedback loop of prosperity.” Some supporting economists call it “middle-out economics.”

This odd notion that if poor people start doing better it’s bad for the economy is increasingly wearing thin, and the way that the next generation is taking to the message of Bernie Sanders on this point is likely a sign that the time for change in financial policy is now possible. “Trickle down” is slowly yielding to “middle-out.”

The fact that Hanaeur’s efforts are building increasing support from capitalists and economists means that the old divide between labour and business is slowly dissolving, leaving the field open for a new kind of economic policy based on the engine of average people with a bit of capital to spend. In a political season like no other that America has witnessed, “middle-out” just might stand a chance.

Needing More Than Good Wages

Second-Act-Career-Workshop-Finding-the-Me-in-Meaningful-WorkFOR TWO DECADES THE SUBJECT OF JOBS, or the lack of them, has come to dominate more and more of the public and political space. The conversation runs the range from no jobs, minimum wage jobs, to intriguing new discussions on living wage opportunities. The gold standard that everyone would prefer is employment with good wages – a depleting reality at present.

There has been some movement on the issue, perhaps the most notable being Walmart’s raising wages for some of its lowest-paid employees in the U.S. It has been surmised that the retail giant made the move following the release of the book, The Good Jobs, by MIT professor Zeynep Ton 18 months ago. But rather than being encouraged by such initiatives taken by companies in recent months, Zeynep remains troubled.

She acknowledges that the changes in Walmart’s compensation of its employees reflect an improvement, one that has resulted in a lower turnover rate among its workers. The main premise of her book, however, is that raising wages doesn’t go far enough unless employees themselves become investors. Speaking to the Atlantic recently, she observed that,

“A good job is more than just higher wages. A good job is also a productive job … If their jobs are designed in a way that doesn’t allow them to contribute that much, even hard work isn’t going to help very much. If you ask an employee to have a say in the selection and quality of a product, that person can contribute so much more. If you design a job so that a person can contribute more, you’ll need highly motivated, capable employees, and you can pay them a lot more.”

It’s an investment by the employer, she reasons. Provide your workers with more responsibility and a healthier work environment is created and your employees take on more value. Zeynep defines herself as an optimist and confesses she is hoping for a better future for companies, their investors, and their employees. She has been approached by numerous companies, intrigued as they are by her propositions, but she has yet to see them take her ideas seriously enough to alter the corporate landscape.

On the other hand, she finds that startups and smaller businesses are implementing these concepts at a healthy rate. As with any other type of environment, changing the historic culture can be an ominous task, made all the more difficult by the refusal of companies to change what has proved successful in the past. Smaller companies, and those just beginning, don’t have to fight through all those weeds and can establish their working principles on a clean slate.

Zeynep believes that the key to transforming the work culture is the direct attention of the CEO’s. “There needs to be a committed leader at the top of the organization … willing to believe that this is a long-term strategy that isn’t just based on some kind of quick return.”

She then makes an intriguing observation: “One of the bigger obstacles is that a lot of companies are still making a lot of money through mediocrity. They offer bad service and bad jobs, yet they are still making money.” She believes that excellence is a lot harder to achieve in such a context.

The only way to change that, naturally enough, is to treat your employees as well-paid investors, who will then provide better service. Her background isn’t in labour studies but in supply-chain management, so she carries a lot of authority in her outlook and words. She came to understand that if businesses continue with the mentality that labour is just a cost that they should attempt to minimize, then they have already lost their ability to connect with their customers. “A vicious cycle,” she calls it.

With all the talk about worker compensation, along with the intriguing work being developed around the “living wage” concept, we are entering an era where a growing understanding of the costs of low wages is registering with the business community. As necessary as that is, if it isn’t matched with the belief that employees are also “investors” in the final product, then the business reformation will pass businesses by.

“It is not that we have so little time but that we lose so much. The life we receive is not short but we make it so; we are not ill-provided but use what we have wastefully,” noted the philosopher Seneca. That is the true efficiency problem in the modern world of capitalism. To waste opportunity is a serious thing in the modern business world. To waste an employee is many times worse.

Working Without Meaning

disappearing-jobs

INCREASINGLY AT THE LONDON FOOD BANK WE ARE encountering those recently without work or holding down one or two minimum wage jobs as they seek to make ends meet for their families. It’s an endlessly disillusioning process – one showing no sign of abatement.

But this is the new world, the new economy, the new reality of employment. Millions are facing it, and despite training and education they are witnessing that link between work and wealth disappear in real-time and with real fallout. We see what happens when democracy stumbles along through cycles of low voter turnout and the dysfunction that inevitably follows. Suddenly power migrates upward, with citizens cut off from it in ever-increasing ways. Well, it’s now like that with employment. Wealthy owners and shareholders move farther off into the world elite as workers watch them disappear over the horizon in an endlessly globalized world. Unless corrected, this de-linking will result in the ultimate separation between democracy and wealth.

Aristotle used to say that “pleasure in the job puts perfection in the work.” Well, not so much anymore. Surveys continue to point to the disillusionment and dissatisfaction experienced by workers as their direct association with wealth creation and production disappears.

As we proceed down this path, we are confronted with a developing world of ironies and opposites. Employability replaces employment. There are people without jobs and jobs without people. Part-time jobs are easily outnumbering full-time ones. Employment numbers go down as people giving up looking for work increases. A growing number of people are working with declining benefits, or none at all, as employment legislation comes under the gun. Rapidly disappearing are the pensions, occupation safety initiatives, employment insurance, and meaningful work environment so necessary to healthy productivity.

Futurists like Jeremy Rifkin talk about the likelihood of “a near workerless information society.” For all intents and purposes, he believes that employment reached its peak years ago and a steady decline is now sinking in.

Then we get those confusing declarations about how it isn’t government that creates jobs, but the free market. But with capitalism enjoying more freedoms that ever in history, we are left to wonder: where are the jobs if this declaration is true? The real answer, naturally enough, is that consumers provide the incentives for job creation. Yet what happens when consumers, or all those people on minimum wage or no wage at all, have little disposal income to utilize? If work is still the way people earn their livings, how can any future be productive if people can’t find the jobs required to sustain such a construct? If wealth can be increasingly generated by investing in more wealth, why would investors, or companies, show any real interests in making their profits in the historic fashion by hiring workers?

We’re in a bind and it’s becoming increasingly clear that the vital connection between work and meaning is imploding. Having a job used to mean holding status in a community. One provided for her or his family. Skills were important, and applying them with diligence was highly regarded.

Our political parties, and the great structure of bureaucracy around them, know all this to be true, but instead they talk about jobs as though everything is normal. Fair enough; we’ve been hearing that for decades. The real question, however, is how can they get all this new wealth and fragile employment in the same room? Or will they even try?

Can we envision a different kind of economy, where work among the elderly, education, those in need of mental health support, the sick, homeless, poor, in libraries and culture, those requiring work training, those in research, or in community and international development take on greater importance? Of course we can, but that would mean partnering with the wealth generators within capitalism to produce a healthy consumer context and better quality of life for everyone. We wait in vain for a political or a free market commitment to that kind of venture. But should it not happen, then both capitalism and democracy will continue on the parallel slide they are already experiencing, and nothing but an agitated and alarmed citizenship can save them.

On October 2, 2015, the London Poverty Research Centre at King’s University College, London, will hold a special economic conference where two economists – Mike Moffatt from the Ivey Business School and the Mowat Centre, and Armine Yalnizyan, from the Canadian Policy of Policy Alternatives – help us to consider the nature of modern employment and what must be done to put meaning back into it and into our communities.

 

 

 

 

 

 

 

 

The Real Creator of Jobs

consumers-620x400

IN RESPONDING TO NICK HANAUEER’S observation that “the pitchforks are coming,” one of the .01% noted that the democracy has successfully “tamed” the masses, to the point where violent responses to growing economic inequality are no longer likely.

One wonders what that person must think of the millions marching in the streets of Paris in response to a brutal attack on Charlie Hebdo, or the hundreds of thousands marching in streets across the world seeking change in the world’s financial system. These demonstrators might not carry rudimentary weapons like pitchforks, it’s true, but on the other hand, armed with smartphones, websites, petitions, cameras, and powerful texting abilities has meant that they can actually enter into the consciousness of the world in ways never seen before.

Hanauer understands the distinction, saying forcefully that modern revolutions come gradually, then suddenly. He believes his financial peers just don’t get it, despite all their supposed acquired intelligence.

But his greatest frustration is reserved for just how unnecessary it all will be.

“If we, the elites, do something about it, if we adjust our policies in the way, say, Franklin D. Roosevelt did during the Great Depression – so that we help the 99% and preempt the revolutionaries and cries – that will be the best thing possible for us rich folks, too. It’s not that we’ll escape with our lives; it’s that we’ll most certainly get even richer … My suggestion to you is: Let’s do it all over again. We’ve got to try something. These idiotic trickle-down policies are destroying my customer base. And yours too.”

It was when he realized this that Hanauer decided he wanted to try changing the conversation. He calls it “middle-out economics,” and it’s compelling stuff. It simply asserts that if workers have better jobs and more money, businesses have more customers.

In this he hits on a great truth that has been overlooked. The financial elite is fond of saying that governments don’t create jobs. Well, if recent years are any indication, neither do corporations. It is, in fact, middle-class consumers, not rich businesspeople, that are the true job creators. When businesses have more customers, they require more workers to fill the demand. It is a thriving middle-class that created the rich, not the other way around. Endanger that middle-class and it’s inevitable that fabulous wealth will prove fleeting.

Hanauer is compellingly effective when exposing the underlying fallacies of elite assumptions. For those calling for smaller government, it will never happen, he claims, if so many people keep falling through the cracks. “You have to reduce the demand for government and that hasn’t happened under conservative Republican leadership – in each case, the size of government and debt has mushroomed under their watch.” He isn’t trying to be partisan, he maintains, but it should be obvious to all sides of the political spectrum that the more people out of work or facing financial insecurity, the greater will be the call and need for government intervention and support. It’s inevitable.

Governments are in the crosshairs of the 1% not because they are big or small, but because they can legislate regulatory control and nothing scares the wealthy class more. And so the assault on government continues. Yet despite this reality, Hanauer believes that both the right and left sides of the great political divide are slowly finding common ground on the need for a common approach to save capitalism from itself. “Perhaps that’s one reason the right is beginning, inexorably, to wake up to this reality as well,” he says. If he’s right, then unbridled capitalism doesn’t have much time left. In the next post we’ll examine if politics can actually begin to formulate a plan to pull it all back from the brink.

Kellogg’s – We’re Not Done Yet

Screen Shot 2013-05-02 at 6.14.36 PMI LOOKED UP SO SEE FOUR PEOPLE coming down our driveway.  They introduced themselves, but it’s what they said next that set the tone: “We’re from Kellogg’s.”

They were insecure but had lots to say about wanting me back in politics, about the corporate agenda, about what this community has meant to them.  And then, sadly: “Glen, how do we get help from the food bank when the time comes?”

This is rapidly becoming the state of modern community life – people who helped arrange food drives at Kellogg’s were now going to require some of that very food themselves.  This is no way to run a society, and nor is it any way to treat people who built our cities and regions.  Sadly, my morning wasn’t done.

I headed to a local coffee shop and encountered another Kellogg’s employee who wanted to thank me for my blog post the day before and to say how much it meant to the workers.  Yet the sadness on his face said it all.  At that moment, a former Conservative MP – a good friend – walked in the door with his wife.  He reminded us that in 1984, the Mulroney government had granted $223 million to Kellogg’s in London for an expansion project that would make the local plant one of the most technologically advanced manufacturing facilities in the entire company – 1,140,000 square feet. 

“Glen, I was there when the Prime Minister came to down to announce the funds and we were assured by the company that this would make for a prosperous future. What happened?” he asked. 

Simple math would tell us that the our funds were used to assist a company to build a more solid future in London not quite 30 years ago.  Now that company is leaving, having used our investment to make their fortune, and leaving hundreds of devastated families in their wake.  What happened indeed!  We feel like a community undone.

Work seemed to really matter in our community.  But that was before the evolution of the new economy, where elites could move anywhere around the globe in search of cheaper labour; where they would press governments, foreign and domestic, for ever lower taxes and the diminishing of labour and environmental standards, and where the ultimate goal was treating labour as a commodity rather than a standard of dignity or a necessity to community.  Only a generation ago we believed that wealth would increase in dramatic terms and that jobs would be available for everybody.  The first part has become the reality while the second lies in ruins.  In a period of a generation, work has gone from edifying the soul by giving it value to undermining it by forcing it into banality.  Where we once hoped for a better world, driven by equity and progress, we now face the real chance of massive global unemployment and the spread of poverty.  We are entering an era of cheap people and very expensive machines.  As the world hurtles along this path, directed by a global financial juggernaut of the few, the link between labour and prosperity will be a part of our past, not our future.

We must find a way to dignify work once more and enable wealth to work for the many. A bleak future is never inevitable in a world where citizens still possess the opportunity to turn their countries around.

So let’s start with some easy steps.  Here are two ideas.

This morning I spoke with my friend, Andrew Lockie, director of the United Way in London, and proposed that our two organizations hold a community reception for Kellogg’s employees in the spring.  Both the United Way and the London Food Bank have been huge beneficiaries of funds and food from these employees.  And that is just what we will do, drawing in other community partners like labour groups, businesses, civil society groups, and citizens aplenty.  We will celebrate and honour those among us who didn’t just live here, but actually built our community.  We are in the process of putting that event together and we trust everyone will be there.

And, then, let’s begin a larger conversation on the future of work.  It was in the 1930s that things seemed so inevitable and that the capitalist barons owned not only their companies and wealth, but the future.  But at some point, citizens and their politicians came together and reversed a trend that seemed inevitable.  The boom that resulted for those moments of daring created the great middle-class.  Of course, we live in a globalized world now and bringing companies back to the community table won’t prove easy.  But if a global consensus can be reached, it can be done.  Capitalism will hang itself if it proceeds down this course. Let’s think of ways we can further that conversation and start talking about the new and valuable work of tomorrow, a more ethical capitalism, living wages, and the important and dignity of work for all of us.

The employees of Kellogg’s, and even the company itself for a time, remind us what is possible when investment in a community matters.  London has some remarkable citizens from Kellogg’s to celebrate, and then we must turn our attention to a future where citizenship – corporate and individual – begins the process of building renewed communities.  We’re not done yet.

%d bloggers like this: