Large publicly owned companies, whose officers and managers see their main responsibility as trying to produce the largest possible financial return on shareholder investment — perhaps as well as to generate the largest possible end-of-the-year executive bonuses — have a vision of what an ideal company would look like. In such a company every worker below the level of vice-president would be a robot. It would be summoned to life by means of a simple on-off switch and would thus be instantly ready to adapt itself to variable staffing requirements. It would need only a minimum of initial training (possibly even accomplished through artificially intelligent self-programming) and perhaps a little oil from time to time. That would spell end to all the annoyances of such things as wages, merit increases, motivation, unions, sick time, sexual harassment, favoritism, or contentious perks like health insurance, pensions, 401(k)s, or labor negotiations. Capitalist Heaven.
By contrast, in Workers Heaven employees would to be offered full-time jobs, portable union membership, and a guaranteed and a living wage. They would be provided with health insurance, long-term job security and a fixed-income retirement plan at the conclusion of their working lives, independent of the booms and busts of the stock market for the security of their ‘golden’ years. Workers would also get some federally mandated and insured protection against tactical bankruptcies of the kind routinely practiced by our current White House major domo.
When I was starting out in business 65 years ago this second version was regarded as the Japanese model and its quick demise was confidently predicted by nearly all western economists, although it had been successful in Japan for several generations. New entrants into the Nipponese job market were careful about whom they chose to work for, in the expectation that they would remain employed by ‘their’ company for their entire working lives. In return for this fidelity workers expected reciprocity. The company was a second family. In good times and bad the workers and the company were assumed to be in it together. Here in America the conventional wisdom was that this paternal model was doomed from the start, since the burden of so many benefits was sure to overwhelm the ability of the company to make a profit.
And so in fact in time it came to pass. The Japanese economy eventually did tank and the economic gurus of the ‘dismal science’ shook their heads and said, “I told you so” and went back to their pews in the Church of the Invisible Hand. But lo and behold! It also came to pass soon afterwards that the American, and then all the capitalist world economies also tanked in their turns, and the economic gurus had to admit that their science, while it may have been dismal all right, was not science at all but just the usual dreaming and guessing and wishful thinking. What the unions had worked so hard to achieve was left for government regulation to defend. And so it was up to the New Deal to recognize that the welfare state model was going to be the future shape of the industrial world, and act accordingly.
Today we see the pendulum swinging back the other way, as kleptocrats and billionaires once again gain the upper hand and try to dismantle worker protections again, under the sheepskin camouflage of ‘flextime’ and the ‘gig’ economy. These fancy terms are nothing more than euphemistic labels for the never-diminishing Republican drives to privatize Social Security and discredit universal health care, while outlawing access to the courts for relief.
It would seem to me a safe bet that after a certain amount of damage is done and a certain amount of pain has been inflicted on the blue-collar classes the spirits of Eugene Debs and the Reuther Brothers will arise from their graves and re-ignite the flame of collective resistance, and we will have to give unionism another try.
Not such a radical idea when you think of it. The old feudal concept of noblesse oblige was a powerful idea. Yes, the serf owed allegiance to his liege, but this also operated in reverse : the serf could rely on his liege for support. He was obliged to contribute his efforts when planting and harvesting and construction time came, even soldiering if his liege let his temper get out of hand. But in return he got face-to-face adjudication of his complaints, assistance with his personal problems, defense of the few rights he could claim, and such health care as there was available in those days.
So sixty years ago in 1951 when I started my little company unions were stronger and employees seemed to have achieved some significant portion of their wishes, but then the country did a sudden and surprising conservative turnaround in favor of shareholders, bonus-rich managers, and cooperative Supreme Court Justices. The legal and political professions, in conjunction with super-rich donors, have demonstrated since how fragile social gains can be in a democracy. Everything is always for sale. Capitalism means everything has a price. Unfortunately this includes many congressmen and senators, who are mainly concerned with rubberizing the rungs on their chosen career ladders. It’s all about negotiating the strike price.
At this juncture it begins to look as though a major player in this latest act of the drama is fated to be the Internal Revenue Service, which, through its rulings, has the tricky job of making a legal distinction between two classes of workers : employees, who have established rights, and subcontractors, who essentially have none. Companies are by law obligated to their employees in many ways, hammered out over the years in much enmity and even bloodshed. These gradual accomplishments are generally viewed — by intelligent politicians, non-partisan social commentators, sincere labor-business negotiators, and the majority of economists of the world’s advanced countries — as developments in the direction of more stable global relations, ones that are more likely to help the planet survive as its reserves of natural resources dwindle and its population relentlessly increases. Where they are often not viewed as advances is in the boardrooms of many major United States corporations and 19th-hole perpetual happy-hour watering holes, where government regulations, and the taxation that supports them, are viewed as unjustified impediments to ever increasing profits and eternal growth : the twin handmaidens of the God Mammon. I don’t have to point out that this is also the view of today’s tenant of the White House and his persistently entrepreneurial family.
The question for the IRS then becomes, in this Age of Uber and Airbnb and your next week’s hamburger-flipping schedule arriving on your cell phone on Sunday evening, who is a subcontractor versus who is an employee. The Right wants to go back to the freebooter days of Andrew Carnegie and Henry Ford and John D. Rockefeller. Uber and Airbnb and McDonald’s would like to rebuild the economy on the backs of ‘independent’ workers in a dog-eat-dog market where the invisible hand determines how little the boss can get away with paying his workers and how much security workers are willing to surrender in order to eat more or less regularly. Workers will for the foreseeable future have to rely on their elected government for the protections they once got from their union contracts. It is easy to see that both sides can’t have their druthers. It is harder to see what the resolution of the differences of opinion will be, but it is clear that the IRS is going to have a major role in determining it.
On the outside chance that my fifty-years of experience as a small business owner might possibly offer something of value to anyone seriously thinking today about starting up a business, I offer some thoughts here, not as a model (all businesses, large or small, are different) but as a reference. I don’t think it will be of any interest to the Harvard Business School as a Case History. No would-be Master of the Universe will amass billions following my lead, but what worked for me then might still work for you if you want to be a success and still sleep with a clear conscience.
I started my small business in 1951, by accident. I had just been fired for trying to hold a union election where I then worked. I was fortunate in having had no formal management or business training. No MBA and no stockholders. Just a desire to eat regularly and pay the rent. I was therefore free to experiment. I started by stealing my boss’s secretary and ended up 50 years later by retiring from a successful company with 50 employees. (Fifty seems to have been my lucky number.) We were selling the hours of skilled workers, the way law firms do, except that we had to do all their training ourselves since there were no trade schools to do it for us. An experienced employee was thus our most precious asset, and it was important to us to retain the people in whom we had invested a both time and expense. (We were in the scientific typesetting business, and we had some patented equipment that had to be mastered.) By the end of our tenth year we had worked out our house rules, which we printed up as a little pamphlet. New hires started on probation, full-time, in the shop, with no benefits for three months. At the end of three months recruits were promised they would either be hired on one of three to plans or let go.
Choice Number 1. Full-time status. Health care coverage (no deductibles), paid vacation and sick leave, regular seniority raises, overtime after 37½ hours, full-coverage health insurance and a $5,000 life insurance policy. (That was 1961 don’t forget. In today’s money that policy would be $40,000.) Disability and unemployment insurance coverage were already mandated by state and federal law. Ours were generous terms for 1961. They were also self-serving. What we were seeking of course was as little turnover as possible.
Choice Number 2. Part-time employment, on a schedule negotiable two weeks in advance, a minimum of 20 hours a week, performed on the premises. No benefits except paid sick leave and ten vacation days a year.
Choice Number 3. Subcontract status on a piecework basis (we called it freelancing), with special tools provided by us (some were modified and not available on the market. Subcontractors agreed not to use any of those if they did work for anyone else.) Piecework rates, quality standards, and deadlines were established by us, but working hours and conditions were left up to the freelancer. We did not consider that these people were employees under IRS definitions. That was never challenged, although our accountant warned us that one day it might be, since the IRS was alert for scammers aiming at avoiding Social Security and unemployment and disability insurance payments.
In all 3 categories, we made payday loans available (at no interest) to any employee, up to his or her current date or status of deliveries or hours worked, with no questions asked.
As owners, we would of course have preferred that everybody chose Number One. This would have given us a dependable full-time labor force, with attendant simplifications of scheduling, training, innovation, and motivation, but we realized this would not be possible in a small company that could not offer a promotion ladder or a pension. But the hours our bookkeeper and office manager spent juggling workflow to match the varying needs of our jobs and our employees were repaid by essentially zero job turnover. (We had occasion to fire only one employee during 50 years. He was hired as a salesman — on a salary, because we regarded commissions as invitations to corruption — and it turned out that he was holding down another full-time job elsewhere.)
We employed many college students, actors between roles, and a number of single mothers, as well as some memorable weirdos who were whizzes at math typesetting provided no one distracted or annoyed them, to whom we gave keys to the shop so they could come in and work in the middle of the night if the spirit moved them.
The company gained a reputation with several to scientific book and journal publishers, even as they recognized our oddball nature. (One of our customers once characterized our shop as ‘The Port of Missing Men’, a reference to the number of gays who found our conditions congenial to their lifestyles.) We also took pride in providing opportunities to some people whose personal situations made it difficult for them to find work. This was particularly helpful to single mothers and to students. An example was a convict who needed a guaranteed job to get out of jail, also a man with Tourette Syndrome. (His hiring took some politicking, but the other employees eventually gave a majority thumbs-up despite his sometimes frightening involuntary outbursts. He did his job.) We also took on two immigrants from India who had overstayed their visitors’ visas (deliberately) and had no green cards, a breach of the law we simply chose to ignore.
We also chose to ignore some of the prevailing prejudices among New York’s blue-collar working populations. I don’t have records, but I remember approximately equal numbers of blacks and whites, a lot of Latinos and Latinas, as well as a talented Taiwanese lady who later started her own business in competition with me, and several Asian keyboarders who could type rings around me with their flying fingers (and I was no slouch in that department, something I enjoyed demonstrating when challenged). In addition to the two Indians who ran our Xerox department and delivery services, we had proofreading expertise from a Columbia student of Sanskrit who later went on to a distinguished career as university professor, and a Mormon student preparing for his two-year stint abroad (who induced me to read the Book of Mormon all the way through, from Moroni and the story of the Golden Plates to Brigham Young’s vision). One young Puerto Rican teenager who never finished high school ended up being in charge of our computer night-shift, keeping the mag tape drives spinning with all the dexterity of a rave D.J. I was especially proud of him, but my favorite was a forty-something-year-old lady who played a wicked slide trombone in an all-girl jazz band. She always checked in with us between gigs.
You can accuse me of tooting my own horn. You would be right. I am tooting it because I am proud of what we accomplished. But more importantly there is a hint here of what can result if an employer starts with the notion that happy employees are as important to him as a healthy bottom line. The bottom line will not be harmed if the environment is humane. Our bottom line did very well. Evolving technology eventually did us in, replacing our skills with algorithms and electronic equipment, but we had a good ride. Buggy whips were once a big business, too.
Uber and its siblings seem to have started out exploring the same path. I have great sympathy for the Pakistani cab drivers who have mortgaged their worldly goods and maybe even those of some of their friends and family members to buy New York Taxi Commission medallions, but a monopoly is a monopoly no matter what you choose to call it and those medallions are like the bar examination — their purpose is to prevent competition. Doctors can tell you all about that, and plumbers and electricians — and even university professors — as well.
From a broader perspective there are broader questions. One is the question of what is the relative importance of paid work in a just society? How many of us would be doing what we do every day if we didn’t need the paycheck? I don’t know the answer, but I suspect those who truly enjoy their work are in a fortunate minority. There is always the possibility of personal fulfillment in any form of group activity (even war), but its likelihood decreases with the assembly-line organization that characterizes so much of our ordinary working life. (“Cubicle world”, a friend calls it.)
In that connection I can add that in order to be flexible and meet our deadlines, we made it a point to train everyone (who was willing to learn; not all were) in every one of all our job categories. This sometimes made it harder for production managers to assign only the most qualified people to a project, and sometimes undoubtedly decreased day-by-day efficiency, but it was by choice. Our competitors mostly relied on specialists — copy-markers, proofreaders, keyboarders, layout and paste-up people, illustrators, checkers — to the point where no individual fingerprints were visible on the books or journals they produced, and hence no one could feel much pride in the result. We had an Ego Shelf where we prominently posted samples of finished publications, along with the names of those who had worked on them. We felt that the benefits of as much personal identification as possible with a finished product and a resulting sense of personal achievement were important.
Workers these days in some industries (as varied as Silicon Valley and Uber) are increasingly being treated as partners (on the German workers’ council model), but they are still mostly in the minority. For most big companies ‘Labor’ is just an impersonal budget-line category to be kept as low as possible so that the ‘Dividends’ and ‘Stock Price’ (and perhaps ‘Bonuses’?) lines can be kept high.
But what about peoples’ individual lives? There are 24 hours in a day. The doctors say eight of them should be spent sleeping. That leaves 16. One of those remaining, the personal trainers say, should be for exercise. Two more, spread over three meals and coffee breaks, must be devoted to nourishment. So we now have 13 left. Presently-accepted employment norms prescribe eight for working, plus a probable average of one or two for commuting and/or ‘preparation’, such as getting into and out of uniforms or work clothes. We are now down to three or four remaining for the satisfaction of all our personal passions, if we have any energy left and any identifiable passions — children, maybe, or do-it-yourself home improvement, studying, writing, watching TV, or checking Twitter for the latest idiocy from Trump. Considering that an individual lifetime is a one-shot proposition, of highly uncertain duration, it seems to me that the prevailing ‘normal’ division of our allotted span might at least be considered debatable. How does the ABC Company’s profit and the nation’s GDP stack up against one’s right to a modicum of just plain individual satisfaction?
I got fired in 1951 for declining to work overtime. I told the boss his money entitled him to control over me for eight hours a day but no more. He first offered me a raise, then offered to make me a manager (salaried; no overtime), and then when I declined that he fired me. I don’t know whether or not he regretted it afterward; but it turned out to be a good deal for me. I set myself up as his competitor and (of course) wound up working personal 12- and 16-hour days to keep my customers satisfied. But I made it a point never to exert any pressure on any of my employees to work overtime. I put in the extra hours myself when it was necessary (and skipped dinners and soccer games and school orchestra recitals) but willingly, because I remembered.
Has this somewhat rambling excursion through the world of employer-labor relations clarified anything? Probably not, but it may have prompted you to consider alternatives to the ‘standard’ 8-hour day and the 5-day week as somehow having been handed down with Moses’ tablets. They were hardly the norm in the pyramid-building years in Egypt, or in Dickens’s time when workhouse hours were more likely to be 16/7. Workers have over the years fought for more humane schedules and established them as ‘normal’. At least unless you are a Filipina working in New York City for an Arab sheik with a condo in Trump Tower and your passport locked in his safe. It is a collaboration of employers and workers who have assigned 9 to 5 as normal, and they should be subject to re-negotiation when conditions change. When most work was farm work, determined by the weather and the needs of crops and animals we did manage to change, gradually in minor ways (milking machines, mechanized harvesters), if not without stress. Now that robots promise to offer us respite from some of the more onerous jobs we were once unable to avoid, we need to ask afresh how much of their waking lives those who actually have to work for a living should be expected to devote to lining the pockets of the world’s parasites : the rentiers — those who make their living just playing with their investments (their inheritances, their buildings, their portfolios, their constantly cited rewards for their largely mythical ‘risk taking’) — and how much of their lives can be reclaimed for them for activities of their own choosing.
At least we should talk about it.
What else, if anything, can be gleaned from this somewhat disjointed and rambling account? I can think of only one lesson — my little start-up survived on the basis of two simple presumptions : One, you have to produce something that fills a real need (not create a fleeting need that will require your product only so long as the fad lasts). And two, you have to treat your employees as individuals — respect them as people, not just as producers of x widgets an hour.
The first presumption, lasting need for your product, will insure you against becoming last year’s success. In the end I failed at that, as computer typesetting programs replaced our workhorse typewriters (which had in their turn earlier replaced the printing industry’s lead type) and anyone with a PC and the patience to learn a bit of programming could generate professional-looking pages right at his or her desk.
At the second presumption I was more successful. We weathered the vicissitudes of eleven U.S. presidential administrations and their different approaches to what forms of encouragement and discouragement would work best for the national economy. As each new national strategy was announced, hyped, installed, and found more or less wanting, we managed to keep our feet because people wanted and needed books and scientific journals. They still do, although the means of delivery may be shifting toward the monitor screen (this is not yet sure) and the formerly skilled work of translating ideas to readable and preservable form has devolved more on the original author than on an editor-publisher-typesetter-printer chain of assistance. The world no longer needs (or fancies it needs) a trained keyboarder to know whether to hyphenate the word as ‘rec-ord’ or ‘re-cord’ at the end of the line. A computerized hyphenation dictionary does as good a job as my trained keyboarders did. My little company is out of business. This would have happened regardless of whether Truman or Bush 2 had been in charge, because the real changes in the world are driven by clever people in Palo Alto garages, not by ambitious showboats in the White House or the Kremlin. We might take some comfort in that realization, watching the Orange-Haired One do his best to destroy what 250 years of serious politics have labored to create, or Victorious Vlad try to revive the glories of the tsars. They will undoubtedly produce enormous disruption, but — with luck and a sincere effort — we will be able to regain the lost ground after their bellowing and smirking have passed from the stage. The real advantages of treating everyone by the same rules, respecting everyone’s individuality and right to a decent life, will still remain to be honored by new leaders armed with brains instead of bombs and bombast.
At least we can hope so.
Vance Weaver 