A Tale Of Two Jobs

The New York Times published an interesting story over the weekend that compared two jobs, and in the process provided some insight into how the economy is changing and what it means for workers trying to get ahead.

The two jobs were janitorial jobs:  one held by a woman working at Kodak in Rochester, New York in the 1980s, and the other by a woman currently working at the Apple headquarters in Cupertino, California.  The two women earned about the same amount, adjusted for inflation, and performed the same kinds of work.

mop-and-bucketThe Kodak worker, however, was a full-time employee of the company.  She received more than four weeks of paid vacation annually as well as a bonus payment, and the company also reimbursed some of the tuition she paid going to college part time.  When the building she was charged with cleaning closed down, the company found her a different job.  The janitor at Apple, on the other hand, doesn’t work for Apple at all; she works for a service that Apple contracts with to keep its buildings clean.  She can’t afford to take a vacation because she can’t afford any lost pay, and there are no opportunities for bonuses or transfers to different work at Apple.

Although the Times article veers off into the unusual story of the Kodak worker — who ended up taking computer classes, getting transferred to a professional job in information technology, and ultimately becoming the chief technology officer at Kodak — the more interesting point is the macroeconomic lesson.  As the Times describes it, American companies have “flocked to a new management theory:  Focus on core competence and outsource the rest.”  The Times article notes that the outsourcing approach has made companies “more nimble and more productive, and delivered huge profits for shareholders,” but “has also fueled inequality and helps explain why many working-class Americans are struggling even in an ostensibly healthy economy.”

There’s no doubt that outsourcing has been a huge trend in the American economy.  But what the Times presents as a kind of optional management theory designed to reap windfall profits for shareholders while shortchanging working-class Americans seems to me to be more of the inevitable consequence of the cold hard reality of global competition.  The business world has changed, and companies that want to compete with low-cost providers overseas have to keep their intellectual capital while cutting costs wherever they can.  Outsourcing is one result of that reality; the disappearance of company-funded health care benefits and pensions, the rise of employee-funded retirement plans, and movements of company headquarters to the states and cities that offer the most favorable tax abatement schemes are some of the others.

The proof of the cold hard reality is in the outcome:  Apple is thriving, while Kodak — which once was one of the most successful, innovative companies in America — has gone through bankruptcy, laid off thousands of workers, and repurposed itself into a much smaller concern.  Kodak may have paid a price for its generosity.  And for workers, the lesson is clear:  do what you can to become one of those intellectual capital assets that companies want to keep around.

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Mysterious Object 

We’ve been doing some cleaning today, and I ran across this unknown metal object.  I put a buckeye next to it to give an idea of its size.

I have no idea of its function, but it’s nicely made and appears to be pretty old.  Anybody have an idea what this object is?  It’s destined to become a desk toy at my office.

Managing That Workplace “Vibe”

The New York Post reports that some companies and hotels are looking to hire people for a new kind of job with an evocative title:  “Vibe Manager.”

That would look pretty good on an office door sign, wouldn’t it?

img_6247-2“Vibe Managers” apparently are generally responsible for making employees feel good about the “vibe” at their workplace.  They’re supposed to plan parties and activities like scavenger hunts and other events for the workers, make playlists for office soundtracks, assist in recruiting “talent,” make sure everybody’s birthday is properly recognized, and consider whether the company should offer benefits like lunch-hour yoga and chair massages.  The position also might involve more mundane activities, like making sure that the office kitchen and coffee stations are stocked with healthy snacks.

Why, after decades of muddling through without them, do companies suddenly need a “Vibe Manager”?  Because surveys apparently show that 70 percent of American workers are not focused on their work and aren’t feeling “engaged.”  It’s interesting, too, that the solution to the lack of “focus” and “engagement” is to create a new job designed to make sure that the employer offers non-work activities that some naysayers might consider to be nothing more than frivolous window dressing.  Seriously, is a scavenger hunt really going to materially change a disgruntled employee’s perspective on his or her workplace?  If so, what does that say about the worker in the first place?

A workplace “vibe” seems to be a lot different from a workplace “culture.”  Many of the most successful companies in the history of capitalism have thrived because they established a culture that incorporated core concepts like excellence, teamwork, loyalty, pride, innovation, and quality — all concepts that, unlike a “vibe,” were directly related to, and directly supported, the company’s business activities.  Employees embraced and bought into the strong cultures of these successful companies and, so long as they were fairly compensated and evaluated, were satisfied and happy in their work because they felt that they were part of something larger that was doing something worthwhile.  It wasn’t office birthday parties that made the difference.

Any company that is worried about something superficial, like its “vibe,” probably isn’t sufficiently attentive to more fundamental issues like culture.  And that’s probably going to undercut the efforts to have a cool “vibe” down the road.  Anybody who’s ever experienced the “vibe” of a company that is going down the tubes knows what I mean.

Saturday To-Do

I’ve let some household chores accumulate for a while, and this weekend seems like a good time to tackle some of them.  One of the jobs was washing down and cleaning off our lawn chairs, and I decided to do that first, before the predicted rains come.  A little deft hose work, using the thumb-blocking-the-water-flow-power-wash method, a few well-calculated swipes with a rag from the rag bin, and the chairs look sparkling and bright.

It’s only 8 a.m., and already I’ve put my first check mark on the to-do list!  Why, the sense of deep personal accomplishment is almost overwhelming.

Restaurant Closing Time

Sometimes, notwithstanding our wishes and hopes, we just can’t change or escape the basic laws of economics.  California restaurants are learning this lesson — one that so many other businesses have learned in so many other settings for so many years.

A number of California communities, including San Francisco, have decided that they should legislate substantial increases to the minimum wage, so that the minimum wage will reach $15 — a number that was picked not through the guidance of the invisible hand of supply and demand, but because it sounds goods when politicians promise it.  Basic laws of economics will tell you that if you increase the costs for a business, the business has only a few options:  either absorb the increase by cutting costs in other areas (or accepting lower profits), or increase their prices to make up for the extra costs, or recognize that you just can’t make the economics of the business work and close your doors.  In California, a number of restaurants have decided that the latter route is the only viable option.

o-restaurant-worker-facebookIn the Bay Area, at least 60 restaurants have closed since September, and as a result a number of line cooks, car valets, dishwashers, table bussers, and waiters — the people who were supposed to be helped by the $15 minimum wage initiatives, incidentally — have lost their jobs.  These results in the San Francisco area, where wages for starting workers are higher than in less affluent parts of the state, are leaving some Californians who aren’t living in economic dreamland wondering what the effects will be when a statewide minimum wage takes effect and inland areas, which already have higher unemployment numbers and where starting pay is correspondingly lower, are affected.

This restaurant closing effect shouldn’t be a surprise.  Many restaurants run on very thin margins as it is, trying to find that magic balance between quality food and reasonable prices and cool ambiance that diners are looking for.  They don’t have big profit margins that can simply absorb higher wages.  If minimum-wage legislation substantially increases their costs, most restaurants just don’t have the option of jacking up their prices because they know they are going to lose their more cost-sensitive patrons.  And there really aren’t many other areas in which restaurants can make up for increased labor costs.  Tinker with the quality of the food, or the ingredients, or the portion size, and you’ll likely end up losing your more discriminating patrons — and many restauranteurs who are passionate about food probably wouldn’t want to change how they prepare dishes, anyway.  So the logical option, unfortunately, is closing.

In short, the five-star joints, where there is less price sensitivity and where the wages may already be higher, will survive, but many of the more basic restaurants will struggle and close.  The cause-and-effect relationship is so predictable that a recent academic study found that every $1 hike in the minimum wage brings a 14 percent increase in the likelihood that a 3.5-star restaurant on Yelp! will close its doors.

The people who are advocating for large increases in the minimum wage no doubt are well-intentioned, but their efforts ultimately are misguided because you simply cannot ignore, or legislate away, the laws of economics.   How many times do we have to see this play before people start getting the plot?

The Future In The Past

They opened a coal mine in Pennsylvania last week.  It’s the first new coal mine opened in the area in as long as people can remember.

The Corsa Coal Company decided to open the Acosta mine, located about 60 miles south of Pittsburgh, last August.  It made the decision to open the mine because demands for metallurgical coal used by the steel industry, and cuts in coal production in China, have caused the prices for such coal to skyrocket.  Metallurgical coal is a special kind of coal, distinct from coal used for other purposes, and represents about 5 to 10 percent of the coal industry.

1024x1024Even though the decision to open the mine came before the last presidential election, President Trump has touted the opening of the mine as reflective of the new approach taken to coal in his administration.  Corsa’s chief executive said that Trump’s election has made the whole coal industry more optimistic.  He said “The war on coal is over,” and added that “Easing the regulatory burden, lowering taxes, stimulating infrastructure spending, balancing out the interest of economic growth versus environmental policy — it’s very good for coal.”  Corsa believes that if it can keep its costs low, it can compete with any company in the world in coal production.

I view the opening of a new coal mine in Pennsylvania with mixed emotions.  The past practices of the coal industry have left real scars in Ohio, Pennsylvania, or West Virginia, both on the landscape and, in some instances, on people.  At the same time, I am happy for the people of rural western Pennsylvania who have been desperate to find work and some cause for optimism.  It’s no surprise that the new mine has been bombarded with hundreds of job applications for the 100 positions that will be created, and that the mine is being praised as a lifeline for the local economy.

It’s odd that, even though we have moved well into the 21st century, the American economy is still looking at things like coal mining — work that has been going on for centuries — as a element of future job production.  I just hope that the coal industry has learned from the past as it moves forward into the future.