|in my own words|
--by Mike Murray
It doesn’t have to be this way. There is enough in our “land of plenty” to go around. Really, there is.
But, despite an economy that is doing quite well in the macro sense, people everywhere are worried. Because at the micro level – the one at which we as individuals live and work – there is real trouble.
From entry-level workers at the very bottom, to skilled labors a little higher up, to white-collar middle-management types, fear is rampant. Employees of all stripes are daily stressed by the potential loss of employment that comes from mergers, downsizings, and plant closings.
Who’s to blame? In a word: everyone.
Not quite everyone, of course. But millions have had a hand in creating the mess that currently plagues American industry. Managers, laborers, and investors have all played detrimental roles.
When I was still in my teens, I worked briefly at a Cleveland steel mill. (It was called Republic Steel back then. I’m sure it goes by a different name today – probably a foreign one – if it continues to exist at all.)
My job was to inspect rolled slabs. If I found air gaps (pipe), I cut off slices from the ends until I reached good, solid steel. Here’s what was involved: I laid track across a slab, placed a four-wheeled torch onto it, lit and adjusted the flame, and then – waited.
That’s it. Just set the torch into position, fire it up, and watch as it worked its way across the slab. Upon completion, I’d check to see if the end was now suitably solid, or if another slice needed to be sheared off.
Easy duty, for sure. But it got even easier. As a member of the night shift, I worked 11 p.m. to 7 a.m.. In addition to two mini-breaks of fifteen minutes each, we also got time off for lunch. And get this: after eating, we’d all lie down on benches in the break room and nap. The foreman would turn off the lights, and then we’d all rest until he awoke. No alarm was set. Naptime could last 30 minutes, or it could last an hour or more. No one was permitted to rise and return to work until our shift boss did.
Fresh out of high school, I was making big bucks to pretty much stand around, eat, and sleep. That was strange enough. But it got even stranger.
I was warned a few days into my employment that I was working too fast! Old-timers would periodically stop by my station and caution me that if I didn’t slow down, I’d regret it. I wondered, “How could I work any slower?” All I did was set a device into motion and then hang around and daydream. How much less could a body do?
I never did figure that one out. But I did soon find myself punished. I was reassigned to the labor gang, which involved significantly harder duty. I was placed at a variety of job sites in subsequent weeks – ones that required greater exertion, expended under the unfriendly supervision of foremen who had been warned about me.
A few years later, after returning from a stint in the Army, I was enrolled in college. I took a job one summer at a Cleveland-area auto assembly plant. My employment was indirect; I was in fact hired by a temporary-employment agency. That means that, while the overall pay was good (exceptional, by any normal standard for semi-skilled labor), I only received a fraction of it. Kelly Services got the bulk of the compensation.
I was assigned to the payroll department. My specific duty was to add up the hours (regular and overtime) on hourly employees’ time cards and then calculate pay-period compensation. My timekeeper duties involved gathering up cards from clock locations around the plant and then taking them back to the office for computation.
On my trips through the plant, I frequently observed things that seemed odd. It was not uncommon to find a worker relaxing idly beside a machine, reading the sports page or – get this – sleeping on a cot. I’d occasionally engage those who were awake in conversation. Once I asked: “So, how is it that some are working and others are not? Are you on staggered break schedules?”
Replies varied. The most fascinating one: “Ed’s sleeping because his machine is down.” When I asked why he wasn’t, in that case, otherwise laboring (you know, making himself useful, earning his pay in some other way), Ed’s shift-mates laughed and looked at me like I’d just arrived from Mars.
“Look, kid. Union rules state that no one has to do any work that he’s not specifically assigned to. He doesn’t have to do anything below his qualification. When a guy’s machine’s not working, he doesn’t have to, either. So long as he’s here and punched in, they gotta pay him.”
Another member of the “brotherhood” threw this in for good measure, “And if you had any sense, you’d quit school and apply to work here full-time. I make more than most of you idiots who go to college, and I bet I don’t work half as hard.”
Amen to that. But was it really a good thing, something to brag about?
In heavy-industry cities throughout the Midwest during the 1960s and 1970s, people fresh out of high school were drawing high pay and living large. In my neighborhood, you knew who the steel- and auto-workers were. They were the ones who could afford to buy their own homes, purchase boats and recreational vehicles, and take their families on nice vacations – many while still in their twenties.
While I’ve always bought American (with the exception of my first car – an old VW “bug”) out of a sense of loyalty, I’ve nevertheless chafed at the memories of my factory experiences. How much less could cars have cost over the past few decades if the steel that went into them, if the labor that manufactured and assembled them, had involved greater efficiencies?
And, had consumers been enticed by greater value, how many more American cars would have been sold to Americans? How many jobs could have saved by a less-greedy steel and auto workforce? How many more factories could have remained open? Would the term “rust belt” today exist?
But the UAW and the USW – and other powerful unions like them – aren’t solely responsible for our present woes.
Particularly when it comes to publicly held corporations, senior management is equally culpable. Simply put, people in top-floor, corner offices have tended to manage firms to their own advantage, not the employees’, not the consumers’ – and not even the stockholders’ for whom they supposedly work. They have made far too many decisions designed to do little more than feather their own nests.
Golden parachutes are only the tip of the iceberg, though they’re plenty irritating enough. When executives royally botch things, they are sometimes shown the door. But they seldom leave empty-handed. They typically need armies of toadies to help them carry all the sacks of cash and other parting gifts that they take with them.
Executive compensation is a sore subject with many. Apologists maintain that, gee, “We have to offer sufficient enticement to attract good help.” Sure. But how much is enough? Is any CEO really worth a thousand times more to his or her company than other employees toiling there? Do companies really need to offer tens of millions of dollars to attract competency? When boards of directors do so, are they faithfully reflecting shareholder intent?
Many don’t think so. Neither do they think that it makes sense for a CEO to close a plant, lay off thousands of workers, and then get rewarded with a huge bonus.
They just don’t get that whole shareholder-wealth thing. Such skeptics just don’t understand that lowering expenses (by slashing payroll) makes for a temporarily improved bottom line, thereby driving up the value of capital. Voila: instant benefit to stockholders.
Of course, a smaller workforce means lower production, reduced sales, and – ahem – probable hits to future quarters’ income statements. But those are matters for another day. Like Scarlet O’Hara in Gone With the Wind, many executives (and their all-too-compliant boards) put off thinking about what lies ahead.
Speaking of failure to plan for the future, investors themselves are as guilty as the rest. They are an impatient lot; far too many of them have their eyes firmly focused on the here and now. With their minute-by-minute speculator’s mentality, they punish poorly performing stocks by dumping them (which only serves to further depress prices, and to further reduce capital).
Conversely, they cheer announcements of worker layoffs, heralding as they do short-term boosts to profitability – and spikes in trading prices. Of course, they have no worries about what such actions might have on the long-term; they will have sold off their shares, they will have reaped the near-sighted gains that their temporary, speculative “ownership” provided.
On top of that, many stockholders also demand generous dividends. No need to plow money back into companies for research and development, or to provide adequate liquidity and flexibility, or to serve as a hedge against the unforeseen. Just grab all you can get, while the gettin’s good.
The pursuit of personal profit is – to be sure – a component critical to the success of capitalist economies such as ours. But we’ve gone well beyond that; outright greed has prevailed in American enterprise in recent decades. And we’re all (well, nearly all) paying the price.
From executives who’ve scored bloated compensations and separation packages, to workers who’ve leveraged collective bargaining to their ultimate peril, to stockholders who’ve operated with the crazed mentality of gold speculators, many have been complicit.
No knowledgeable person would argue that stockholders aren’t entitled to reasonable returns on their investments. Nor that effective CEOs, the ones who truly add value to their organizations, shouldn’t be compensated commensurately. Nor that labor shouldn’t organize and receive its fair share of the pie.
But it is the extent to which each group seeks benefit that is the problem. The poison is in the portion. CEOs who manage to their own interests (and who are rewarded in accordance with misguided performance criteria); a workforce that extorts every wage and benefit dollar it can immediately get – without regard to long-term impact; stock speculators who only care about daily price performance; all are economically toxic.
We Americans have seemed determined to snatch defeat from the jaws of economic victory. We are a nation of great natural and human resource. We are capable of providing for all, of succeeding in both macro- and microeconomic ways.
But we’ve been obsessed with the short-term and in satisfying individual appetites to obscene degrees. We’ve too-long worked against one another. We’ve seemed determined to kill the Golden Goose. We would do well to consider the words of Benjamin Franklin: “We can hang together or we will surely hang separately.”
Copyright © 2007 Michael F. Murray -- All rights reserved.