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Taking the High Road: Not Everyone Feels a Need to Squeeze

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My previous posts this week have focused on the difficulties and injustices faced by millions of American workers--wage stagnation, growing income inequality, managers treating their employees in shockingly callous ways. (It's all part of the systematic squeeze that I describe in my new book, The Big Squeeze: Tough Times for the American Worker. See stevengreenhouse.com)

It's July Fourth--and I'm feeling patriotic--so today I will focus on some of what's good in America. Some corporations do not just a good job, but a great job, in how they treat those workers, and I want to focus on some of these stellar employers because we can all learn from them and because they should serve as models for all of corporate America.

The casino-hotels of Las Vegas sponsor an amazing, no-tuition training program in which a $22,000-a-year busboy can train to become a $50,000 a year waiter and even a $75,000 a year sommelier. Each year Patagonia, the outdoors apparel company, gives 40 employees two-month paid leaves to work for the environmental organization of their choice. With its headquarters 150 yards from the Pacific, Patagonia happily allows its employees to go surfing for two-and-a-half hours at lunch time, so long as they get the job done.

In my chapter, "Taking the High Road," I also describe Costco and how its workers earn $46,500 a year after four-and-a-half years on the job, including the company's 401(k) contributions. That's nearly twice what Costco's archrival, Wal-Mart, pays workers after four-and-a-half years on the job.

In an indication of how little Costco workers have to complain about, one survey found that its employees' biggest complaint was that the company wouldn't let them wear shorts to work certain months. (Costco, responding to employee concerns, now lets wear shorts year-round.) No, I'm not saying that Costco is perfect--I'm sure that some of its workers have serious complaints--but imagine if not being able to wear shorts year-round were the biggest complaint that every American worker had about his or her job. America would be workplace heaven.

I was especially impressed with what Ernst & Young, the giant accounting firm, has done to make itself a better, more family-friendly workplace. Ernst & Young has lots to teach other white-collar employers.

E&Y's former chairman, Phil Laskawy, told me that when he was growing up in the Bronx, the smartest kids in high school were girls. He added that when he first joined Ernst & Young, the top performers among new hires were women. But he was dismayed that only 5 percent of the firm's partners were female.

It was the mid-1990's, and Laskawy saw that many women were leaving Ernst & Young because they thought the demands of their job were incompatible with the demands of being a good mother. It was not unusual for junior accountants to work 24 hours straight, shower in the office, and then soldier on the next day.

"Part of our retention problem was that people were feeling too stressed out and working too many hours," Laskawy said. "We saw we were letting our best people go."

So Ernst & Young overhauled its corporate culture. It created an unusually flexible set of flexible work arrangements, allowing people to work four days a week, work three days a week, work fulltime in the months before April 15 and then switch to three-day weeks, or work 60 hours a week in the traditional busy season and then take the summer off.

Ernst & Young has 24,000 U.S. employees, and one-tenth of them--2,000 women and 400 men--are on flexible work arrangements. (Yes, men also want to spend more time with the kids.) So as not to discourage employees from taking flexible arrangements, E&Y provides full health coverage to anyone who works at least 20 hours a week.

Laskawy's successor as chairman, Jim Turley, says these flexible policies don't reduce the firm's productivity because they help it retain talented employees. "If we have 80 percent of a person's talents and focus," Turley said, "80 percent of anything is a lot better than zero percent."

By promoting many women who have been on flexible arrangements, E&Y has convinced its female employees that opting for a flexible work arrangement does not impede their chances of becoming a partner. Today more than 15 percent of the firm's partners are women, and one in three newly named partners is female--still not as high as the firm's leaders would like.

To reduce stress, managers have been told to place far less emphasis on face time. The important thing, they are told, is to make sure the work gets done and clients are satisfied. It's fine if a worker goes home at 3 p.m. to attend Janie or Johnnie's soccer game and then works for three hours at home afterward--so long as the employee gets the job done. "We tell managers, 'Don't take attendance to measure results,' " said Maryella Gockel, who oversees the firm's flexibility programs.

Women at Ernst & Young receive twelve weeks' paid leave when they give birth, and the firm lets them take another ten weeks of unpaid leave under the Family and Medical Leave Act. Most employees get four weeks and two days of vacation after five years on the job.

E&Y's employees do work hard when they are at work, and to help de-stress them and give them more time with their families, the firm gives everyone four-day weekends for Memorial Day, July Fourth and Labor Day. With the firm shut down, workers know there is no need to check their voice mail or email because nobody at the firm is supposed to be working.

Ernst & Young has another important--and unusual--strategy to help make sure that partners don't push their subordinates too hard. Employees get to write performance reviews of their bosses. One senior partner told me, "If partners are setting a tone whereby there's not a work-life balance and you're just expected to work like a dog, they get negative reviews." To prevent bosses from retaliating against their critics down below, "it's all anonymous so the staff can write whatever they want--this guy's a real hard ass, and he makes us work all the time." If a partner receives bad ratings, the partner takes a hit in annual pay.

I loved what Rob Johnson, the head of Ernst & Young Cleveland office, told me. "We want people to stay," he said. "The firm has come to a realization that we have to do a better job accommodating a person's personal life because this can't be just a meat factory where we grind up people, where people come in and stay two or three years and they work their butts off and leave."

Amen. If other companies followed Ernst & Young's far-sighted policies, then maybe we all wouldn't feel so stressed and squeezed.


61 Comments

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An interesting article. Too politically correct for my tastes but I think the direction is right; find firms which treat their employees well and compare them to firms which don't and see what can be learned about management and profitability from the comparison.
Some of the great tech firms are well-known for their excellent treatment of their employees. Many of the latter have become extremely rich by accepting pay in stock during the early years. You should say something about them. These tech firms specialize in very highly educated, very smart employees...as does Ernst & Young. Employees like that have been sought after by everyone, and were highly paid. How have they fared in the new globally competitive marketplace. How are their employers reacting to the increasing stresses of a down market?
Your real focus should be on the low end where foreign competition is a terrible problem, where employees are as interchangeable as nuts and bolts, where constant supervision is required.
I don't think you're right in making Costco and Walmart arch-rivals. There's no Costco near me so my first-hand experience with them is quite limited but what I do remember is that they had a lot more big ticket items than Walmart, and their clientele were far more middle than low class (comparable to Home Depot). Walmart, like K-Mart, seems to serve people who live in areas where even decent markets like Von's can't succeed. By the way, you ought to look at Home Depot. Their employees can wear shorts...and they are assigned to specific specialities where they can exercise a degree of initiative and creativity.

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offensivetoyou says:

"Your real focus should be on the low end where foreign competition is a terrible problem, where employees are as interchangeable as nuts and bolts, where constant supervision is required."

Why don't you write a column about it?

@ JohnW

If you and I had a sympathetic relationship I would take that as a compliment and strongly consider it. But we don't...so what's your point?

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offensivetoyou says:

@ JohnW

"If you and I had a sympathetic relationship I would take that as a compliment and strongly consider it. But we don't...so what's your point?"

Your paranoia is showing again. Sometimes a cigar is just a cigar. Write the column.

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The bit about casinos training busboys to be sommeliers reminded me of two other corporate training approaches that worked exceptionally well.

When I was in high school, my first job was at the local hospital, as a nursing assistant. There I met some women who had become nurses twenty-five years earlier, during World War II. Not so unusual, except for the WAY they had become nurses. During the war, with nurses needed for the war effort, hospitals went short-staffed and depended heavily on local volunteer groups to pick up the slack of doing patient care. To incentivize these volunteer nursing assistants, the hospital established a training program leading to "waiver" licensure of Licensed Practical Nurses.

They had to take courses, pass tests, and put in something like 2,500 hours of volunteer service at the hospital, and then they became LPNs. Not only did the program support patient care during the war emergency, it created a loyal and experienced workforce of nurses who served the community for over 30 years afterward.

The other example is quite a bit more politically sensitive, but I think it's another good example of corporate "doing the right thing because it's the right thing to do."

I'm not sure of the details, but it is my recollection that when the Affirmative Action debate started really heating up during Reagan, there was some very positive comment in the press about how Xerox had handled it. Instead of taking a bean-counter approach, hiring based on the basis of a 'quota,' Xerox realized that to support the spirit of the law, they needed to change the culture of the company. So they took the name of the law literally. They took action affirmatively.

They went about identifying and nurturing an intentionally diverse group of promising low-level employees and putting them through leadership and management training, and then promoting them. As expected, when blacks and latinos worked their way through the ranks into middle- and upper-management, hiring race-blind became simply an expectation at Xerox, not an act of grudging compliance with an intrusive law. No one whose boss's boss is a black man would ever get the message that the company only hires from the minorities to fulfill the letter of the law and go no further than that.

If every company had taken that approach two generations ago, maybe Barack Obama's rise to the Democratic nomination would not seem so surprising, even for the Twenty-First Century.

Xerox 1968 memo

Read the memo. I don't know whether it's genuine but if it is, it then things were far less rosy than you painted them to be. Also what is the result? Are blacks and latinos now proportionately represented? Do they measure up to standards or are special set asides still necessary to employ them in numbers? I don't know but I'm attempting to find out.
I don't know anyone who works for Xerox but I have many friends in high tech and they tell me that blacks are a rarity, that Indians, Israelis, Irish are not, that Japanese do not make good programmers, on and on like that. In other words ethnicity does seem important in skill distribution.

I tend, sometimes, for work, to be in situations I would not normally be expected at, or even admitted to, and at one, some years ago, I heard the CEO of a Fortune 500 company tell a simple truth: Your frontline employees will treat your customers pretty much the same as they're treated.

Being good to your staff - and contractors, let's not forget them! - is just good business. The real shame is that the managers who got to their positions by being jerks (and we all know them) really only know how to be jerks to everyone outside their circles. Decent employers do tend to do better even in hard times than crappy employers, and it's not too difficult to see why.

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The Old Grouch says;

"The real shame is that the managers who got to their positions by being jerks (and we all know them) really only know how to be jerks to everyone outside their circles."

Republicans all look like the guy that fired my father. (humor)

@ JohnW1141

What Grouch and you both miss is that people generally deserve each other; poor managers attract poor employees AND vice versa...AND lousy customers attract lousy companies.
Good people usually have a choice or can make one.
Sure there are exceptions and aberrations but that old proverb "You get what you pay for" holds true.

"...poor managers attract poor employees..."

Riiiiiight. No poor manager has ever been moved into a spot where the employees were already in place and had to somehow deal with an incompetent jerk, whose only talent is being a first-rate asskisser. That just wouldn't happen.

You really are a blithering idiot. The bits of your initial reply to the post reminded me that stopped clocks are right twice a day - through no agency of their own.

@ Old Grouch

On this thread none of my comments were personal or insulting.
My comment to Greenhouse was actually quite complimentary, suggesting areas of focus and further research.
My comments to John were, initially, simply questioning of his meanings and intentions.
And my comment to both you and John, the one to which you replied, was simply a statement of difference of position. And what was your response? Sarcasm and

You really are a blithering idiot.

No confusion then about who began the insults. You've never forgiven me for putting you down, have you, you small-minded prick? So let me explain my position in terms which even a bigoted, close-minded fool like you can understand.
Managers, employees, and customers all come in as many varieties as there are among the human species (except that managers tend to be better selected with regard to qualities which their position favors).
That means that sometimes - even often - people who don't like each other will be forced to rub against each other. Those with a choice will usually look for, and find, a more favorable situation. Choices are somewhat strongly correlated with abilities.
Get it? Probably not.
No doubt you'll rush to find the counter examples - which are numerous enough - or point out the obvious - that those with wealth and power have more and better choices than those who don't. But you'll never notice how often my position is true for even the poor and powerless. Xerox didn't just hire any black and latino, did they? They SELECTED among the numerous eligible candidates. Selected how? According to perceived ability and personality. That's how the world works.
No doubt both you and John have been among the unselected too many times and can't come to terms with it. That's why you're here and not on some Republican platform. I'll bet, though, that you both could be easily purchased. Cheap.

Actually, just to clarify, I rather enjoy insulting you. You're remarkably thin-skinned, often wrong, and rarely if ever quiet about it.

If I bug you so much, reach into your pocket, find two quarters, take them to the nearest pay phone, and call someone who cares.

Got it?

@ TheOldGrouch

Not as much as I enjoy insulting you, although I do tire of both you and John. Such second rate mentalities.
You already used that lame kiss-off once. Not enough room in that noggin for two "witticisms"?
And John - heh, heh, heh, heh, heh, heh, paranoia, paranoia, paranoia.
Retarded children, both of you.

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offensivetoyou says:

"No doubt both you and John have been among the unselected too many times and can't come to terms with it."

Well, gee, the Army selected me once, as did my wife. And so did a number of others who used the services of my company, the one I built and retired from in 1990 and turned over to my three sons.

This little world you created for yourself, its almost like the womb, isn't it? All who aren't you, are cookie cuttered, then put in a box until its time for you to denigrate them.

You obviously have such a low opinion of yourself, that in order to feel good, you need to put others down lower than you see yourself.

Paranoid and psychologically insecure, yep, you need that womb you built for yourself.

I shall not address you on this thread again.

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Damn, I forgot I wasn't supposed to post to that person again on this thread. RATS!

Not to intrude on the repartee but:

No poor manager has ever been moved (voted?) into a spot where the employees were already in place and had to somehow deal with an incompetent jerk, whose only talent is being a first-rate asskisser. That just wouldn't happen.

The Bush administration comes to mind. 'The employees' not only had to deal with the number one jerk but also many additional ass kissing incompetent jerks, some got fired (Shinseki)while many Americans paid with their lives.

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The Old Grouch says;

"The real shame is that the managers who got to their positions by being jerks (and we all know them) really only know how to be jerks to everyone outside their circles."

Someone once said to me; Republicans all look like the guy that fired my father.

@ JohnW1141

Is that your response to me? The format makes me unsure but its position and substitution of "Someone once said to me;" for "(humor)" indicates that it is.

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offensivetoyou says:

"@ JohnW1141

Is that your response to me? The format makes me unsure but its position and substitution of "Someone once said to me;" for "(humor)" indicates that it is."

Christ, you're hopeless. I unintentionally posted twice, meaning only to post the latter which was more accurate. Didn't you see that double before you thought I was referring to you?

I shall refrain from posting to you again on this thread.

@ JohnW

Of course I saw the double...only it wasn't a double. You altered it and I commented on the differences. Why do you think I asked you about your intentions? I can't read your mind.

Nor do I take your protestations at face value. Writing a serious column on any subject is a great effort, an enormous commitment of time and energy, and an assumption of ability and focus.
Greenhouse has done all those things, so its fair to comment on his efforts...That's what any author wants asks for, hopes for.
You, on the other hand, were not commenting on his efforts, but on mine, and what you were saying was "Hey, if you don't like his work let's see you do better."
I now add dishonesty to your list of faults.

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Damn, breaking my word again.

offensivetoyou says:

"Of course I saw the double...only it wasn't a double. You altered it and I commented on the differences. Why do you think I asked you about your intentions?"

You're lying.

Just look at the time of the two posts I said were doubles; both register at 11:14 am.

Now look at the times registered in your two posts addressing me; 11:28 am and 12:25 pm.

BOTH of your posts occurred AFTER my double.

You jumped between the two posts and replied to the first post making the second seem like it occurred after your comment.

As to altering a post, since when can you do that?
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
And, WTF are you talking about here? None of your second paragraph addresses anything I said.

@ JohnW

"Of course I saw the double...only it wasn't a double. You altered it and I commented on the differences. Why do you think I asked you about your intentions? I can't read your mind.

Nor do I take your protestations at face value. Writing a serious column on any subject is a great effort, an enormous commitment of time and energy, and an assumption of ability and focus.
Greenhouse has done all those things, so its fair to comment on his efforts...That's what any author wants asks for, hopes for.
You, on the other hand, were not commenting on his efforts, but on mine, and what you were saying was "Hey, if you don't like his work let's see you do better."
I now add dishonesty to your list of faults."

You better get bet back on your meds.


@ JohnW

You f***ing idiot.

You've been posting to this site how long? And you still don't know about the idiosyncrasies of the architecture, the absurdities which occur because of the way the reply system is engineered.

I won't reply to you any more. You're not worth it. And you can be sure I won't break my word.

@

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heh, heh, heh.

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I'm as much a sucker for good-timey, happy-talk stories as the next guy or gal, but I'd caution all of us to make note of the fact that these two companies are oddities.

Ernst & Young is a privately owned company not subject to the Wall Street imposed "build shareholder value" ethos. Its culture is, as well, conservative (Laskawy, CEO 1994-2001, spent his entire 40 year career at E&Y and its lethargic predecessors; and E&Y sold its consulting business, its cutting edge unit, in 2000 and got out of that highly competitive, high margin business).

Costco, though public, is still run by its two founders -- Sinegal (Age 71) and Brotman (Age 65). And unlike other retailers Costco makes its money from member fees and real estate acquisitions. Its retail operating margins are less than 1%.

Nothing wrong with either business model; indeed, more power to them. But don't expect the usual public company to follow their leads.

@ Ellen

Good post. It's important to remember that companies are in business to make money.

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For once I wholeheartedly agree with you offensive.
And I have no qualms with companies doing their best to make money...but after that point we probably disagree.

By making money they are what drives our nation's economy by providing good paying jobs for workers who in turn use it to buy goods and services. But when some companies profit making ventures run afoul of the law (and I reject the notion that there should be no laws governing commerce), by engaging in collusionary price fixing for example, or run counter to the 'common good' by not paying their workers decent wages and therefore amassing too much of the wealth that is when government should step in and restore some balance in the wealth distribution. So either they reinvest in our economy by choice or need to be made to. Price controls, minimum wage laws, windfall profit taxes, etc...

@ libertine

Companies which violate the law should always be prosecuted. Current tax policy is wrong-headed and didn't work out. It was supposed to stimulate productive investment. It didn't and the reasons for its failure should be carefully explored. The Bush administration was also wrong on energy, on the environment, and in its prosecution of the war.

But that doesn't automatically mean that the progressive opposition has better answers. I don't think they do.

"Decent wages".
Globalization and technological advance pose enormous - and I think unsolvable - challenges to the lifestyle of the American worker, to our middle and lower classes. Because these same forces have resulted in vast improvements in the lives of huge numbers of Chinese, Indians, and other third world workers at the expense of our workers. Unavoidably so.
Our rich, our upper classes, are the ones who first saw the potentialities, first invented the means, and actually effected the changes which led to our current situation. That's how and why they've become so rich and why so little of those riches have filtered down to our less fortunate citizens.
I don't think any of that can or will be changed because it is in the interests of world order that it continue, because (barring environmental catastrophe and that is a very big caveat) the world is now a better, more egalitarian place than it was before these changes occurred.

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But why do we as a nation, or for the sake of this discussion, feel that since Chinese and Indian workers, for example, are 'doing better' it validates that wages be driven down at home. Shouldn't the whole process be to lift the wages of all, to be more comparable to wages paid in the US, instead of dragging down wages being paid in the US to mirror what is being paid in the Third World? Are we trying to have more nations develop in 'First World' types of economies are trying to make the US economy more like a 'Third World' one?

That is my major beef with 'free trade'. We are encouraging worker exploitation by refusing to pay fair wages to workers (re: see lost US jobs) while making the products cheaper (re: see cheap Asian labor). Meanwhile the market prices for the finished goods remain the same (or sometimes increase) while the profit margins on the goods increase exponentially. And to be perfectly blunt, while Chinese and Indian workers have seen 'improvement' in their wages it is still far from just compensation for their work. When a worker gets little or nothing to begin with even a very modest increase will seem like a dramatic improvement.

The US has a history of government and corporations exploiting other countries resources and peoples for our own economic gain. And our plutocracy, if ever made to give an honest accounting, would probably have to admit, in that regard, things have never been better...

Challenges to the lifestyles of our low and middle class workers? All that is saying is 'to bad we found a way not to pay you a fair wage..deal with it'. That is what I am talking about when I say the 'common good' needs to be protected. Corporate profits should never be allowed to trump the country's 'common good'. Capitalism is neither moral or immoral...but capitalists themselves, if left alone with their money making devices, invariably become immoral. Marx said capitalism will inevitably lead to plutocracy. I don't agree with everything Marx espoused but on this observation he was right. And the economy needs to be strictly regulated for this reason.

Libertine. I agree with much of what you say. Hope you're not planning to travel abroad. Easy to make the no-list these days.

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LOL...I am sure Big Brother is watching me and I have probably made the list. The only thing worse, in their eyes, than denigrating Old Glory is defiling the Almighty and Holy Altar of Capitalism.

@ libertine

Well, if you can think of a way to make this a better world for all, more power to you. So far, attempts to do so have turned out to be utopian nightmares.

To begin with, you ought to cease trying to downplay the improvement in the lives of many, many Chinese. It's been quite dramatic.

Second, you ought to quit denigrating capitalism and capitalists and idealizing regulators. Regulators as a balance for individual excess are not a bad idea but regulators, too, must be regulated. Who's going to do that? How many layers of bureaucrats are you willing to tolerate before you finally realize that selfishness and greed cannot be eliminated? Capitalism has succeeded so well because its assessment of human nature has been so good.

Third, why should anyone accept you as the ultimate arbiter of fair? 200 million Chinese and countless others see a vast improvement in their lives and don't particularly need you to tell them how to run things.

Fourth. It's true that we as a nation should be more concerned about our own people than others but how to do it? We don't live in isolation and can't always have things our way. That was evident to everyone by 1918 and to intelligent and informed people long before that. Long, long before that.

But...

Since you prefer protectionism to free trade, let's hear the details, who will benefit and who will lose. Because, if you're honest, you will admit there will be both...as always.

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Well offensive...

First off I am not an academic so I don't want to debate these issues in that sense. I operate in the real world, not in an ivory tower. I practice capitalism not theorize about it.

Yes there will always be greed. And I am not a "Utopian" so I don't think that it'll ever be fully controlled. Nor am I a "protectionist". I do believe in free trade...just not what is being practiced and passed off as that. For example the corporations protect their 'for profit' interests but workers who try to band together to protect their rights are crushed. Maybe allowing workers from across borders to come together as a group to protect their interests? True 'international' unions where workers are allowed to bargain to improve their lots? Hell the markets are global and the corporations are 'multinational', why shouldn't workers be able to enjoy the same bargaining power?

Regulation won't solve all the problems, just as capitalism doesn't have all the answers to society's ills. But regulation is needed to prevent the greedy from running amok.

@ libertine

When workers are able to organize internationally they will be able to much better assert their interests. I'm all for it. That day is a ways off, however...and their interests are their own, no one else's, and just as corrupt and selfish as any interests.

You exaggerate the unity of corporate interests and their ability to protect them. They struggle too.

It would be great if there were no national, ethnic, religious, and racial interests. Eliminating them, and the endless wars fought in their name, is the point of international organizations and the spread of wealth and knowledge.

Meanwhile, however, in the real world...

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They struggle too

LMAO!!! Excuse me while I wipe the tears from my eyes from laughing so hard. The poor downtrodden multinationals? ROLF!!!!


And of course workers would want to make as much as they could...nothing anymore corrupt than corporations wanting to make as much as they can. Yet the multinationals rights are protected but not the workers. In fact the workers of different countries are played off of one another to keep wages lower than they should. 'Take what we are willing to give you or your job will be sent to______' (fill in the country of choice's name).

@ libertine

This is why I have so little sympathy for your position. You're so damned self-righteous, so filled with righteous self-pity. Disgusting.

Life's a struggle for almost everyone. Sure, some have it better than others but almost no one is secure. Corporations fail, corporate officers get fired. Stockholders and investors lose money. A few, a very few, might be said to be above the fray, so rich, so well-diversified, so clever that nothing can touch them. However, the history of the very wealthy and powerful does not provide much in the way of support for that claim.

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It had been a nice discussion, surprisingly, up to this point offensive. Now you seem to be reverting to your usual 'ad hominem' mode. Which usually seems to happen when the discussion doesn't go your way.

Ever see the movie Other People's Money? Very rarely do shareholders or corporate leaders suffer even when their company does bad. Righteous indignation? Self pity? I don't think so. Just the reality of how our economy operates.

@ libertine

LMAO!!! Excuse me while I wipe the tears from my eyes from laughing so hard. The poor downtrodden multinationals? ROLF!!!!

If you don't like ad-hominems don't engage in them. If you want to treat my arguments with open contempt don't expect me to accord you respect.

Those are the rules.

@ libertine

That's where you get your information? From Hollywood movies?

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No I generally don't get my info there. But in that specific case art really does imitate life.

"utopian nightmares" = Dystopias.

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Yes...exactly in that sense.

@ libertine

We are encouraging worker exploitation by refusing to pay fair wages to workers (re: see lost US jobs) while making the products cheaper (re: see cheap Asian labor). Meanwhile the market prices for the finished goods remain the same (or sometimes increase) while the profit margins on the goods increase exponentially.

What does this mean? I can't make any sense of it.

You seem to be saying that the cost of making goods is declining (exponentially) while the market price of them remains constant and that's why profits are so high.

That can only be due to enormous technological advance. It can't be due to ever declining wages since third world wages were already at rock bottom long ago...and have since risen enormously.

And how could such a situation ever be stable? If so much profit can be so easily obtained why haven't multiple competitors jumped in?

Sorry. This looks like the most pathetic form of conspiracy theory.

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It is very simple offensive. The decrease in wages being paid to US workers vis-a-vis 'offshoring of jobs' is not being fully offset by increases in wages paid to Chinese and Asian workers. Hence more profits being made while being shared less equally.

No 'conspiracy' theory. Just simple math.

@ libertine

Yes. But the math is not as simple as you portray.

Vast numbers of Chinese and Asian workers benefit enormously despite the fact that the organizers of the off-shoring, who are relatively few in number, have become filthy rich by taking a share of the profits.

I suspect that if you want to count beans, and are able to find some way of calculating the benefit to Asians and the losses to Americans, you'll find that the number of people who benefited, and the amount they have benefited, vastly exceeds the loss to Americans.

I also think the situation is far from stable. The richer the Asians become the less they'll need the middle-men. What will happen when that dynamic kicks in is for someone smarter than me to describe.

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I guess on this point we'll have to agree to disagree. I don't see it as an equitable trade-off.

I still see it as one group of workers being hurt more severely than the other group of workers are benefiting. And the difference is being pocketed...by someone.

You speak of 'middle-men'. This is just another example of what is wrong 'free trade' in its present form. When different economies are each allowed to play by a different set of rules the system becomes fatally flawed.

@ libertine

What do you mean "allowed" to play by different rules? That's the starting point, the reality. No one "allowed" it. It what we have to work with, what we try to improve on.

I should never have used the term "middlemen" knowing your anti-capitalist proclivities. Someone had to invent the mechanisms by which international trade is conducted, to invent the technology of making and transporting goods in locations separated by vast distances and cultures, to figure out what could be marketed, to raise the capital and convince its owners that the rewards merited the risks. Those people didn't do all that for nothing. They expected high profits, very, very high profits. As was their right. As is their proper reward.

They happened to be mostly American, European, and Taiwanese. It's extremely unlikely that the host countries, the workers' countries, will allow that situation to continue when they get rich enough to do something about it. If the host culture is clever - as is the Chinese - their own entrepreneurs will find their place without any special rules or help. If not, the state will resort to nationalization - theft.

user-pic

I am not anti-capitalist offensive. But our system isn't a capitalist one. It is now corporatism. I am anti-corporatism though.

Again you put far too much 'faith' in the players to 'do the right thing'. It is not a self adjusting system in terms of equity as much as anyone would like to believe it is. It is not me, but you, who is the 'Utopian' if you believe the players in the markets will do anything but act in a totally self serving way.

BTW...I think China, and others, are operating within the 'free trade' system with nationalized industries. So I don't know how much leverage 'Chinese entrepreneurs' will ever have in that case.

@ libertine

I don't know what you're talking about.

Companies and individuals rise up from nothing all the time...and fall too. How can you deny that, with the tech world right in front of you? And American car companies as a perfect example of the latter?

And you don't know anything about the Chinese either. Find someone who's actually done business with them or, if you can't, read the very good article in last month's Atlantic Monthly.

Honestly, you are truly blinded by a ridiculous ideology.

user-pic

No I am not blinded by 'a ridiculous ideology' but I am surely not gonna accept your pro-business framing of the issues.

Nice talking though...

@ libertine

Fair enough. No reason you should.

Fourth of July. 2008. No national health care.

user-pic

Wow, this was such a long discussion. It was very interesting to read your opinions.

MikeCrabe

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I don't know how much longer you'll be visiting with us at the Cafe Mr. Greenhouse. But I would be remiss if I didn't say I've enjoyed reading all of your posts and thank you for sharing your thoughts with us.

I second that. Very important in all our lives.

What a great article for the 4th of July. It's good to hear about something good. It doesn't happen often enough! Thank You!!!

@libertine is a real downer. why do people keep talking to him?

karela: I think you mean "offensivetoyou." He's the rude one.

BTW - I love reading offensivetoyou's posts. Same with Ellen, even though I disagree with her on the issue of personal debt/Credit Card Co's malfeasance, you really have to contend with her thoughts. Makes you think. Lots of hard facts in her posts. Good stuff!

PS - Libertine's cool too. Nothing wrong with a card-carrying communist to hold down the fort and liven things up! :)

@ Wade

Thanks. Much appreciated. I would like to believe that I, too, make you think. That's the point of all this, isn't it?

By the way, rudeness is a strategy not a way of life. I'm still undecided about whether or not it is better than polite reason. Probably each has its use.

offensivetoyou: You make us think too, definitely. I think Ellen pissed me off last month about something related to Credit Cards (my biggest pet issue), so that's why I delved into her stuff more.

Anyway, I definitely like the strategy of rudeness sometimes for these message boards. Just don't get yourself banned now that Lila is going to be cracking down! (in re: "Free MassDem"). I remember one of your blow-ups with Andrew Golis. Lila probably won't stand for that; she'll just disable you... :)

user-pic

I was bored...in his/her defense the tone of our specific discussion was much better than it usually is.

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