James R. Fisher, Jr., Ph.D.
© December 4, 2012
A READER WRITES:
Jim,
It has been happening here since the early 1980's. I sent you some data to think about in terms of redistribution of wealth. The after tax net profit of corporate America for this year is 11.4% of the national income (gross). Are you familiar with that number?
For the majority of people (notice I did not say Americans) that earn a paycheck in our society or are living on retirement income "are getting poorer every day." All we have to do is keep breathing to remain in the process.
..........D
D,
David Brooks has an interesting column in the Sunday edition of the Tampa Bay Times on "Think consumption tax" (December 2, 2012). I don't have the same problem with the rich that you do. The rich, much as they are maligned, are not the problem. We are rewarding consumption and punishing savings. I addressed the exorbitant pay of executives in "Corporate Sin," but not the rich who invest and save. Check out the University of Princeton’s David F. Bradford's so-called X tax. It is interesting. It is something like a value added tax in Europe, but still different, and it has protections for lower income consumers. I suggest you look it up on google to see how it resonates with you.
Be always well,
Jim
Jim
Distribution of wealth (process) is my concern in our society not the rich as such
......D
DR. FISHER RESPONDS:
The distribution of wealth is a distraction not the problem.
Marx didn't get it right. Adam Smith got it closer to right. We have been moving away from feudalism for at least five centuries now. Marx never anticipated the professional class that would preempt the status of management, which in turn would preempt the status of owners as operators who had preempted the guilds and then feudal lords and monarchs. We have been moving not towards the distribution of wealth but away from it through the auspices of one word, opportunity.
It is not a bad word or a sinful word. It is a word – once you get inside it – that says, get off your ass and take charge! Perhaps as many as 98 percent of us have that potential but closer to 2 percent use it to the fullest. The Occupy Wall Street Crowd focuses on that 2 percent, but apparently has little interest in the 98 percent, among which I would imagine it belongs.
Take out of motivation risk factors and initiative, the possibility of failure and therefore the potential for success and you have communism or socialism or stagnation, better known as forward inertia. Anxiety then rules.
When anxiety rules, it is as if we have our foot on the accelerator and brake at once burning up rubber and going nowhere. Incidentally, “going nowhere” is another word for utopia.
I have come through the whole gambit in my lifetime. My da enjoyed little distribution of wealth, but he never took risks. He instead complained constantly. He died bravely but was afraid of life. Many bleeding hearts want a larger share of the pie because they work for a living and contribute, but they don't want to take chances.
I’ve discovered in owning and running a business is a scary experience. When I hired consultants to work, consultants that had nothing to do with acquiring the business, they wanted a bigger share of the take "because they were experts."
A friend of mine had a consulting business employing some twelve or more people and it was feast or famine for him. His employees went home with paychecks every week no matter whether clients materialized or not. Some months he never paid himself a salary.
The distribution of wealth is the cry but I don't think a serious one. It is never going to happen. What I think is perhaps in the cards is that pay for workers – professionals and blue-collar workers alike – will have to fluctuate according to "on the ground" economic conditions for the established workplace.
When I was at Honeywell Avionics, Inc., Clearwater, Florida – I got into some trouble doing this – I conducted a mini survey of hourly employees – some thousand of a four thousand working population – and asked them this question:
Would you be willing to give up your hourly pay for salary compensation where there is no pay for overtime or for coming in on an occasional weekend, if given a 25 percent (on average) increase to your current weekly pay?
A stratified random sample to ensure statistical significance found more than 90 percent would prefer to stay with the current system. Later, I learned a large high-tech company in the northwest did the same with a much larger sample, and came up with the same results.
The way the current system works when a company is in financial trouble due to mismanagement or unanticipated contingencies there are layoffs, redundancy exercises, plant closings, mergers, reorganizations, or the operation goes into some kind of bankruptcy receivership.
Taking your idea of wealth as process, what would happen if employees, given the scenario presented here, making $35 an hour (including benefits) took a 20 percent pay cut to save the operation. Would they do it? I don’t think so.
The problem with this scenario is that employees are reluctant to give back what they fought so hard to attain because they believe, with some merit, it won’t be returned anytime soon. So, chances are because they don’t the operation bites the dust.
Now, you could say that there are instances where what I have postulated here have, indeed, happened with employees taken such cuts, but they are rare.
Workers once they became organized, unfortunately, leaned on unions as they had previously leaned on employers, translated, they never had to grow up.
John Strothmeyer wrote a powerful book that illustrates the problem, "Crisis in Bethlehem" (1986). The book was based on the "furlough program" instituted by Bethlehem Steel and Alcoa during the 1960s. I had an opportunity with a bleacher seat to see this program up close and personal as I handled several Alcoa accounts as a field chemical engineer for Nalco Chemical Company during that period.
Veteran employees were given a 13-week pay furlough every five years. Note this was during the boom period after WWII when Bethlehem Steel and Alcoa were running 24/7. The idea of the program was to show appreciation and to act as an incentive to workers in the trenches. It did just the opposite.
Strothmeyer shows that instead of going back to school learning new skills, taking luxurious vacations, working on the house, or getting better acquainted with other family members, nearly everyone of the furloughed workers got a second job.
Now with two incomes, then going back to work, many tried to continue working the two jobs as their standard of living had increased to necessitate the additional income. When their employers balked at this, many were incensed and became whiningly passive demotivated workers.
Strothmeyer writes that this senseless program "crippled the goose (the industry) that laid the golden age."
"Work Without Managers" (1991) suggests that Bethlehem Steel and Alcoa assumed that they were dealing with grown-ups when they were not. The book describes how welfare conditioning of American workers has become a plague of "learned helplessness" (i.e., workers undisciplined and unable to take charge) suspended in terminal adolescence as if obedient (not rebellious) twelve-year-olds in fifty-year-old bodies.
As I currently watch the high jinx in Washington, DC these days, I reflect on Bob Woodward's "The Price of Politics" (2012), which covers the fiscal cliff of 2011. It is like déjà vu once again demonstrating we as a nation have an inability to grow up.
The American people reelected Barak Obama, who thinks like you do, and in so doing is driving us into Third World territory.
I come from working class, lower working class, and I've seen it all, heard it all as well. Woe is me is part of the Irish lexicon. I was told from the time I was a little boy that they won't play you, Jimmy, they won't hire you, they won't promote you, they won't won't won't because you're Cath-o-lic, and it proved hogwash!
The greatest motivation in the world is self-interest. I'm not the easiest guy to like and I can be in your face so bad that you might want to forget about self-interest. That said I’ve always played, was always hired, always promoted (and fired, too), and sometimes I got the business because I wore my Irish Catholicism on my sleeve as well as a pretty good-sized wooden chip on my shoulder.
My books are being put on Kindle. One of my readers captured the essence of my philosophy when he quoted from "The Taboo Against Being Your Own Best Friend" (1996):
In an attempt to do for others what they best do for themselves is to weaken their resolve and diminish them as persons. The same holds true of ourselves.
The sad thing is that we have not perpetuated Adam Smith capitalism but a humanism that puts humanity in a cage, a prison of the mind where the 15 percent hard chargers are attacked by the 15 percent foot draggers, while the 70 percent in the middle watch the melee while expecting to be taken care of no matter what happens. Not a pretty sight.
Be always well,
Jim
No comments:
Post a Comment