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The Direction Right To Work Laws Seem To Be Taking The Nation

February 7, 2012

A new casino is trying a new idea: “term limits” for workers. Every four to six years, the workers will have to reapply for their job. The idea seems to be something other employers are now considering. It is seen as a way to make sure employers get the “most” out of their workers. Watch this discussion from Fox:

Now, Steve Forbes seems to suggest this is one of the good things which comes out of right to work laws. Employers now have the option to fire much easier with little to no responsibility to the workers. Indeed, what is not brought up here is the ramification of this: employers will be free to tell employees they will not be rehired unless they take a cut in their wages. Don’t think that won’t happen: if you are reapplying for a job it suggests other applicants will be considered alongside you. Indeed, it might be required. So if you want to keep your job (and health benefits) you must accept lower wages.

It’s been said right to work wages are about breaking unions and making sure there is no protection for employees. Those supporting “term limits for workers” act like there are no other ways to encourage laborers to work for success. If the company doesn’t give merit based raises, perhaps that is true — but is that not a better way to motivate them than to make their very livelihood always at risk?  If someone is really bad, are not annual reviews good enough without having to make someone reapply for their job (and take pay cuts to keep it)? How can you expect loyalty and a desire for the good of one’s employer if there is no sense of loyalty to the worker?

Hopefully this idea will not take off. I fear it will. If it does, we will be one step closer to the servile state.

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41 Comments
  1. Darwin permalink
    February 7, 2012 9:20 am

    For what it’s worth:

    This sounds like a management gimmick that would not work well in most companies and would not widely catch on. Reasons for this would include:

    - In a lot of work places, 4-6 years is longer than an employee would tend to be in the same role anyway.
    - Hiring for a position is a massive pain and takes up a lot of time, so going through the process when you’ve already got a good person in place would come to grate very quickly.
    - As you say, basing pay on merit would be a far better way to “keep people sharp” than this kind of circus.

    The biggest potential danger for workers is probably in what are perceived to be lower skill occupations, in which management might assume (correctly or incorrectly) that if they drop someone with higher pay for someone with lower pay (but less experience) this would help profitability without hurting efficiency.

    The biggest potential benefit for workers would be that you do sometimes get someone not-hugely-competent but not bad enough to actively get himself fired who sticks in some fairly desirable job in a company and just never moves on. This cuts down on opportunity for lower paid workers who want to advance but have no where to advance to if there are too many dog-in-the-manger long tenure employees taking up the good slots. Typically the solution to this is just to go look for a job at another company, but theoretically a practice like this might serve to keep things moving and thus allow other workers a chance for advancement.

  2. Mark Gordon permalink
    February 7, 2012 9:50 am

    Here’s a “right to work” story and a good example of how the anti-union movement is anti-family and pro-poverty. I’ve been a St. Vincent dePaul member for 14 years. Last Christmas I was given a case to manage. It was a young husband and father of two – I’ll call him Bob – who had recently been given an offer he couldn’t refuse by his employer, Home Depot.

    Bob has worked for Home Depot for seven years, since graduation from high school. He married at 20, hoping for a career with the company. Bob and his wife Cindy have had two children and planned on more. He started at Home Depot as a general employee and eventually developed an expertise in a key department within the store. Two years ago Bob was accepted into the Home Depot management training program and made assistant manager of his specialty department. Then, last summer, his boss was fired and Bob was promoted to manager of the department.

    Despite managing an important profit center within the store, and despite having given seven years of his life to the company, Bob was only getting paid $13 an hour by last summer, hardly a living wage. But he believed that hard work and loyalty to Home Depot would pay off, and so he stuck it out. Cindy had long worked a second shift job as a certified nursing assistant, which allowed the couple to pay the bills, and they were getting by … barely.

    All that changed last October. In order to maintain a corporate imposed profit margin for the store, management fired two part-time employees in Bob’s department. Worse, Bob was told that he had to accept a “variable” schedule, which meant that week to week – even day to day – he could no longer count on working first shift, Tuesday through Saturday, but would have to take whatever hours were scheduled for him from 6:00 am through 10:00 pm, seven days a week. The problem was that Cindy was locked into the second shift at her nursing home and there would be no one to watch the kids if both parents’ hours overlapped on the second shift.

    Bob pleaded with his bosses. He explained that if he couldn’t get back to a regular schedule, Cindy would have to quit work and they wouldn’t be able to survive. Management’s response? Bob could go back to a set schedule, but only as a part-time floor employee. At $9.00 an hour. So, they tried to make it work for a while, but the lack of a set schedule soon caught up to them. The first time there was a conflict, Cindy called in sick to stay with the kids. The second time it happened, less than a week later, she was fired. By December they were calling St. Vincent dePaul for help with rent, a bag of groceries, information on how to file for food stamps, and to get their kids on the Christmas giving tree at our parish.

    Fifty years ago, we had strong unions, strong manufacturers, a booming economy, and families that were able to buy a home and send kids to college on one income. Today, after the thirty year war against unions and the American worker, we don’t make things, social mobility and income inequality are approaching Third World status, and families are destitute. You do the math. If you can’t, my friend Bob will be happy to help.

    • Darwin permalink
      February 7, 2012 10:39 am

      While I’d have a number of differences with the specific policies you gesture at in your last paragraph (more unionization — though the US never had the majority of private sector workers in unions — might help Bob’s particular case if he were lucky enough to be in a union, but the other effects of a 50s style economy re-enacted in the modern world might end up making things worse for him) the way Bob was treated by Home Depot is clearly unfair.

      I would assume that someone in St. VdP has also helped Bob get a good resume together and look for potential other jobs? With seven years of solid experience at Home Depot, including promotion and management experience, he should be able to get a job elsewhere that pays a bit more doesn’t make these stupid demands in regards to schedule, even in this economy. This sounds like a badly run store, and they deserve to learn that by seeing their best employees leave.

      • Mark Gordon permalink
        February 7, 2012 11:18 am

        Darwin, I appreciate your comments. I really do. But once you start working with the working poor, as I do on a weekly basis, both in SVDP and as a board member for our local shelter and soup kitchen, you come to understand that Bob’s story is not an anomaly. It is the norm. The exploitation of workers in the service economy is ubiquitous, and it manifests itself in all sectors, from construction and food service to sporting goods and healthcare. And I don’t write as an academic socialist or armchair capitalist. I’ve been an entrepreneur for 25 years and I have never seen anything like the current obsession with short-term returns, maximizing profit and hoarding cash.

      • Pentimento permalink
        February 7, 2012 11:44 am

        Darwin, it seems ironic to leave it up to a religious charity to help Bob hone his résumé-writing skills. And I don’t know on what you’re basing the assumption that Bob will be able to get another, let alone a better, job.

      • Darwin permalink
        February 7, 2012 11:54 am

        I agree, the kind of problems Bob has are, in my experience, really common among the working poor. My point in bringing up resume and job search assistance (which I had a chance to help with a bit in the past and am hoping I can find somewhere to help with again through our new parish) is simply that while these problems are really common, it is often possible to help one person at a time. From your capsule description, Bob sounds like he would be a great hire for Lowes or Costco or some more local company that would give him better pay and a little more respect. That’s at least an better case than some.

        Responding to the below as well: Believe me, being stuck on a $13/hr job that isn’t enough to pay the bills does not sound like an abstraction to me. Ten years back I was the guy making $14/hr and my wife was pregnant with our first and desperately needed to quit her job because she had to be on her feet all the time and work nights (she worked retail part time and stage managed part time). Plus we had rent going up and a car that wouldn’t pass inspection. $2 to $4/hr would have helped a hell of a lot.

        So I’m distinctly grateful to the people who gave me advice and encouragement as I struggled (and eventually succeeded) in finding a better job. It may not have the comprehensive feeling of calling for sweeping social change, but for the person in question a better job helps a lot.

        As for pointing out what spreading Home Depot’s profits across all its employees would accomplish: I think it’s important to be clear how big a benefit to real people we’re talking about when we talk about excessive profits. I agree with you that (out of some combination of fear about the economy and greed) companies have been cutting corners, taking short term approaches, and hoarding cash. At the same time, it’s easy to say, “Look at that billion dollars” and not be clear what that actually looks like when spread across all the people concerned.

        I think Home Depot would be a better company (and would probably even sell more stuff) if they took a big chunk of that $3.3B they made in profits last year and invested it in paying and treating their staff better. At the same time, it’s important to be clear what “better” would look like.

        (And yeah, since what I deal with all the time in my current job is the details of price, I guess I feel the need to point out how small fluctuations work out in the real world. It’s amazing how much time it takes to explain to management that you can often raise your price “just $0.20″ and actually end up with lower total sales revenue than you have now.)

      • Darwin permalink
        February 7, 2012 12:17 pm

        Pentimento,

        Obviously, I don’t know all the details of the guy’s situation, region, etc. But Mark’s description highlights a couple a very good signs:

        - He’s got seven years of experience
        - He’s still comparatively young
        - He has a track record of being promoted
        - He has low level management experience
        - He has shown a lot of company loyalty and dedication

        In retail and customer service, those can be moderately hard to find. If someone with more experience could help coach him a little on how to describe his experience when filling out applications, and how to talk about his experience and his needs when interviewing, that might help him stand out even more. In a lousy economy, it can still take a while to find a break, but his situation sounds like a good one to start looking for a new job, and then quit his current one when he finds one.

        Now yeah, maybe that’s a somewhat odd thing for a religious charity to be working on (though our parish back in Texas did have a “jobs ministry” which pair people looking for work up with people who could help coach and encourage) but his basic story sounds so promising it seems like it would be something worth trying.

      • Kurt permalink
        February 7, 2012 1:25 pm

        the other effects of a 50s style economy re-enacted in the modern world might end up making things worse for him

        With seven years of solid experience at Home Depot, including promotion and management experience, he should be able to get a job elsewhere that pays a bit more doesn’t make these stupid demands in regards to schedule, even in this economy. This sounds like a badly run store, and they deserve to learn that by seeing their best employees leave.

        Darwin, I think this shows that even smart and compassion people like yourself can be out of touch as to working class life today. Lack of set shifts have become common in non-union working class jobs. This is not something of a rare employer or a badly run store, but increasingly normative.

        And the impact on family life has been horrific. Whole strata of the labor force have no hope of ever having a steady shift.

      • Darwin permalink
        February 8, 2012 9:25 am

        Kurt,

        It’s true, my experience is far more restricted than yours is as a union organizer — and we also have opposite natural assumptions based on our experiences and political/professional loyalties.

        My remark that this sounds like a badly run store was based on:
        - The experience my wife and I had when working retail ten years ago
        - What I’ve heard from friends and relatives who still work retail (at places like Wal-Mart, Starbucks and In’n’Out)
        - What I’ve heard from the in-store people I know at the company I work for, which operates 1200 retail locations around the country

        Obviously, that’s not a comprehensive or scientific knowledge by any stretch. However, in that experience, giving employees so chaotic a schedule that their spouses get fired is not the sign of a well run store. Certainly, a manufacturing style first shift, second shift, third shift system is not common in retail, and usually someone key like a department manager is expected to do some nights and at least one full weekend day. However, it’s not unreasonable to expect that schedule to be consistent enough week to week that an employee can organize his life. If you can keep your turnover low and you have good projections of when you’ll have customers coming in to your stores, it is not that hard to give people consistent schedules.

        Though really, I think a lot of what we’re running into here is the divide that exists between how conservatives think about these kind of issues and how liberals do. Conservative reaction is, “This sounds like a really solid worker, not that much different from me a while back. If he gets a hand and some good advice, he could do well as I’ve done well. After all, I’d value having a hard working, conscientious employee like that, so why shouldn’t a halfway decent store manager?” The liberal reaction is, “Corporate power will grind everyone into dust out of sheer greed if they don’t have regulations and unions to protect them. Chances are, this guy couldn’t get another job if he tried, and other employers would be just as bad anyway. Our only hope is to return to 50s levels of unionization.”

      • Kurt permalink
        February 8, 2012 11:18 am

        Darwin,

        I appreciate your response. And I agree that it is reasonable and not hard to give people consistent schedules. But I think we have a realtiy that too many employer use a business model that does what is unreasonable even though they could use a different business model without excessive difficulty ( at least of we could get them to move in concert with their competitors).

        On top of that, a frequent element of this business model is that it accepts high turnover rather than take any action to retain experienced employees.

        And it is a business model that expands on itself. Workers have no set shift so they need to do their shopping at odd hours, thereby resulting in more employers staying open at odd hours and having their staff work these hours. It is one of the most tragic developments in our society because of its impact on family life.

    • Dan permalink
      February 7, 2012 3:23 pm

      You think it’s bad now? Wait until you’re competing with the Chinese for these jobs. Not only will you never get set shifts, you’ll be damn lucky if you aren’t expected to live “on campus” for your working period.

    • MikeR permalink
      February 7, 2012 6:48 pm

      My state, Indiana, just became the latest “Right to work” state and our bishops decided to sit out the debate because unions tend to support Democrats and Democrats tend to support abortion rights.

      • Thales permalink
        February 7, 2012 10:06 pm

        Honest question: what’s the Catholic social teaching argument against “Right to work”? I see value in unions, but I don’t see the terribleness of giving workers freedom to choose or reject unionization.

      • Kurt permalink
        February 8, 2012 11:22 am

        Thales,

        Workers do get to vote if they want a union or not. The issue in Right-to-work is that should workers be allowed to take the benefits of unionization without paying dues.

      • Thales permalink
        February 9, 2012 9:28 am

        Workers do get to vote if they want a union or not.
        I understand that they can when the decision is first made to unionize or not. But what about much later, when a new employee or existing employee no longer wants to be in the union, or doesn’t want the benefits of unionization, or doesn’t see any benefits in unionization, or even thinks that the union is a detriment to himself?

    • Darwin permalink
      February 8, 2012 9:50 am

      As a side note: If we’re going to be nostalgic about the 50s unionization rates, it’s also worth noting that a key aspect of the 50s economy was that married women were strongly encouraged not to work (to the point of many employers declining to hire women because they were married or only offering married women only very marginal jobs.) Married men with families were seen as especially good prospective employees because it was assumed they would have dedication to the company resulting from being the sole bread winner.

      Making it on a single income in our modern economy is doubly hard because you’re going against the stream — voluntarily making half what most families at your salary level are making. However, it does give the one spouse working the flexibility to deal with company demands. Since I’m a single income, I’ve often found myself filling in at the office when other people have to rush off to pick up the kids at daycare on time.

      Even unions don’t necessarily negate this advantage. My dad worked union, but his job still didn’t pay enough to support the family (though the benefits were good). However, since my mom was at home full time with us kids, he was able to work 1-3 part time jobs on the side, which had far more unpredictable hours but allowed them to make ends meet.

      The problem is, as the Two Income Trap people point out, once a family gets on to two incomes (which is really, really hard to avoid when you’re starting out and you can’t make much) it’s really hard to get off, because all the expenses you’ve committed to are based on your combined income.

      • Kurt permalink
        February 8, 2012 11:26 am

        Darwin,

        I think you have a point that the economy in the past was structured to that even for non-college educated workers there were stable jobs with set schedules and decent benefits for family breadwinners, while employers who needed great flexibility could fill that need with the spouses of breadiwnners working part time, seasonally, without benefits and varying shifts. Sadly what we have now is that for non-college couples, they find that only jobs in the later catagory are available to them.

        And we wonder why the divorce rate, the abortion rate, the domestic violence rate, the substance abuse rate and J.D. rates are so high.

      • Darwin permalink
        February 8, 2012 3:35 pm

        [consolidating our two threads]

        We seem to be talking about two fairly different things here:

        - I’m talking about giving people a stable enough schedule that they can plan around it.
        - You seem to be talking about having people work a standard “shift” and not having retail businesses open for so many hours.

        The former seems to me like a basic necessity for keeping workers happy and making the economy livable. The latter is arguably something that even most workers don’t want, in the part of their lives when they go out of the place they work and become customers rather than workers.

        On the “good old days” when non-college-educated workers could count on getting breadwinner wages with good benefits — I guess what I’d question is whether that time ever actually existed outside of liberal mythology.

        If you look at Census data on family income, the cut by education only goes back to 1991, and that does indeed show slowly diminishing average incomes for those with only a high school diploma. To go back to the ’50s you have to make do with family data. What I’m seeing is that if you look at white families (I figured we should do that in order to remove any effects of discrimination back then as compared to now) the 20th percentile of families by earnings make 67% more now in inflation-adjusted dollars than it was in 1955. For the 40th percentile, real income is up 78% since 1955.

        So it’s not so much that people actually make less than they did in the 50s in inflation adjusted terms — unions or no unions — it’s that our expectations as Americans have increased such that living like it’s the 50s, or even living 50% above what people made in the 50s is not longer conceivable.

        This isn’t to say that people who are poor should be satisfied with their lot. As I said kicking off this whole discussion, I think the guy Mark was working with through StVdP was shabbily treated and would be able to do better elsewhere pretty easily. But people often talk as if things have gotten worse since the ’50s, and that’s just not the case. What is the case is that they haven’t got as much better as we’d like for most people. And for some people, things have gotten far, far better (to the extent that many question whether they deserve it.)

      • Kurt permalink
        February 8, 2012 5:14 pm

        Darwin,

        No, I am talking about giving people a stable enough schedule that they can plan around it. That needs to take into account that these people are not just single and childless. And when a critical mass of the labor force has stable work, they no long need to do their shopping at 3 am at the 7-11, paying high prices for poor nutrition. That in turn will have the obvious market effect.

        I’m not suggesting anything excessively rigid, but enough that a portion of the workforce would return to regular shifts (even second and third) with most blue collar and retail work at somewhat stable shifts and a lesser portion on wild schedules.

        And I am less interested in wages (though which should be fair and reflect productivity) but the terrible impact on family life of irregular work shifts and a business model that does not value worker retention but is simply designed with an expectation of high turnover.

        As a store manager told me, only being so candid because she is a relative, her store spends less on employee health and retirement benefits than it spends on employee loss prevention because of “the types we hire.”

  3. Mark Gordon permalink
    February 7, 2012 10:27 am

    Incidentally, regarding Bob’s story above, Home Depot reported nearly $1 Billion in net earnings (profit) during Q3 2011 and CEO Frank Blake’s compensation in 2010 was $10.5 million. Bob can do that math, too.

    • Darwin permalink
      February 7, 2012 10:48 am

      Yeah, that’s pretty stark math. If Home Depot became a non-profit and abolished their CEO’s salary, they could give every one of their 364,000 employees a $4.40/hr raise. This would make a pretty big difference in people’s lives, since for Bob it would be a 30% raise and for his coworkers who make $9 it would be 50%. (I suppose one would have to work out if everyone should get the same raise or if those who make less should get bigger raises.)

      Or even if they cut their profits down by 50% and turned that into higher wages, they could be paying Bob $15 and his coworkers $11.

      • Mark Gordon permalink
        February 7, 2012 11:22 am

        When the problems of real people are a mere abstraction it’s easy to poke fun at their plight.

      • February 8, 2012 2:15 pm

        Huh? $10.5 million divided by 364000 isn’t $4.40 an hour, but $28 a year.

      • Darwin permalink
        February 8, 2012 3:07 pm

        SB,

        The $4.40 an hour was if Home Depot became a non profit and distributed all its profits as wage increases to their employees. I threw the CEO’s salary in as well, because people always worry about that, but as you point out, it’s pretty much a rounding error. It has no impact on employees salaries.

        The high salary of the CEO of Home Depot is “hurting” the ordinary employees much less than the six figure income of the owner of a small business which employs 20 people. The there are just so many employees at Home Depot that raiding the salaries of the C-level executives get the ordinary folks nothing. (Though for some reason people still use the high salaries as a rallying cry.)

    • Dan permalink
      February 7, 2012 2:10 pm

      C’mon guys. You know better than to look at profits in isolation from expenses. Here’s what I see on their balance sheet:

      1) $4 billion per quarter in operating expenses
      2) $10 billion in current liabilities

      They only have $500M in cash on the books. Ignoring their very real moral and ethical responsibilities to pay their debts and their shareholders, what you’re proposing would essentially ensure that Bob and 364,000 other people would lose their jobs if sales fell short of expectations. Is Bob really better off if he makes an extra $800 per month, but doesn’t know if he’ll have a job in the next 30-60 days?

    • Dan permalink
      February 7, 2012 5:27 pm

      Also, regarding the salary discrepancy, if Frank screws up, a dozen companies go out of business and half a million people lose their jobs. If Bob screws up, someone buys the wrong length of copper wire.

      Do you really think the compensation discrepancy is so terribly inappropriate?

      • David Cruz-Uribe, SFO permalink*
        February 8, 2012 3:03 pm

        If Frank screws up and his company does badly, he still gets his multi-million dollar salary, or at worst a golden parachute worth millions even as thousands are laid off. If Bob screws up, he gets fired.

      • Dan permalink
        February 8, 2012 4:11 pm

        You’re missing the point. The pressure and responsibility of Frank’s job are so intense that it’s utterly incomparable to Bob’s job. Despite the frequent demonization of CEO’s by the mainstream public, chances are Frank is a real human being with feelings and actually has somewhat of a conscience. His golden parachute does not in any way alleviate the pressure of that kind of responsibility. Why would someone take that kind of position if the compensation were a marginal increase over Bob’s job? Not saying 10mm is an appropriate number by any stretch, but chances are his base salary is only 7x-8x of what Bob’s is. Being a CEO myself, I promise you that nobody in their right mind would ever, ever take a CEO’s job for the base salary alone. It is hell.

  4. Anne permalink
    February 7, 2012 11:42 am

    Ye gads, so all those *persons* and *people too* out there in Corporate America don’t think workers are worried enough about job security? Time to up the anxiety level a couple notches and keep salaries rock bottom to boot?

    I do hope the real people who make up the work force in this country find a way to surmount all the roadblocks corporate America’s friends in high places have constructed to protect their interests on election day. If so, the pink slips should start rolling in the proper direction…for a change.

  5. Bryce Laliberte permalink
    February 7, 2012 12:00 pm

    If a worker can be profitably hired, they ought to be. If a worker can be profitably fired, they ought to be (though maybe they just need a pay cut).

    Easier hiring and firing of employees (and making it harder to fire employees makes it harder to hire them) makes it easier for the economy to reach efficiency, which means the firm can more profitably allocate resources while the former employee can find a new area of work where they can be more useful. Making it harder to fire them makes it less likely that the employee will find a better line of work. Resources become more efficiently used and as a result there is more to go around for everyone.

    Of course, we could go the European route, with their perpetually high levels of unemployment. Those who get hired don’t mind it being difficult to be fired, but those who can’t get hired would. Ought we to diminish some in order to benefit some others?

    • February 7, 2012 12:18 pm

      Yes, all for profit! Man is made for profit! We get it. A very anti-Catholic position.

      • February 7, 2012 7:17 pm

        HK writes, “Yes, all for profit! Man is made for profit! We get it. A very anti-Catholic position.”

        Is that really all you get out of Bryce’s comment? Truly the two sides are having trouble hearing each other…

    • MikeR permalink
      February 7, 2012 6:53 pm

      Productivity in this country has gone through the roof, yet the rank and file don’t see pay raises. They’re asked to take cuts or have the hours cut all in the name of better productivity. Bryce seems to think there are tons of well-paying jobs out there in the fields people work. Yes, I could find another job in my field, but it may not pay as well or it may be across the state or across the country. Employees have a stake in a company’s success and they should be paid well enough to enjoy the fruits of their labor.

  6. February 7, 2012 6:29 pm

    Regarding the video, it wasn’t clear to me (or the panelists) what the actual proposal entailed. The phrase ‘term limits’ implies a worker who is protected or unionized for a period of time and then re-evaluated. But that wasn’t clear to me.

    We can deride ‘profit’ all we want, but its not the problem. Well distributed profits feed people and lack of profits starves them. In my opinion the businesses have gotten far to large and decisions are made at a great distance from the reality of peoples lives. Whatever criticism can be made of big government should be amplified many times regarding big business and their dance partners the big unions.

    There are relatively few industies that require huge amounts of capital. Most of our economy could easily be operated with much smaller business models (i.e. thousands of local hardware centers rather than these mega stores, Home Depot, et al.) Somehow we as consumers have participated in this by hailing low price as the be all and end all of our own economic decisions. If there’s anyplace that the notion of subsidiarity makes sense its in scaling down the business size to the place where local owners can see and know who works for them. Going smaller gets us 90% towards where we want to be.

  7. Julian Barkin permalink
    February 8, 2012 10:51 am

    And when the heck can we force the Managers to re-apply? How about every three years all the employees/union has a round table and votes whether to kick the inconsiderate boss to the curb or keep them if they are ok.

  8. Greg permalink
    February 8, 2012 3:32 pm

    Yet Obama is circumventing Congress once again and will be encouraging AGE-discriminatory hiring by high-tech firms………..

    However Sen. Grassley from Iowa gets it:

    …Despite your online chat and interest in investigating the problem, just last week, your administration proposed rules to “attract and retain highly skilled immigrants.” The Department of Homeland Security will expand the eligibility for foreign students to stay in the U.S. under the Optional Practical Training program. This program does not have U.S. worker protections, nor does it require that employers pay prevailing wages to these foreign students/employees. Your administration will also provide work authorizations to spouses of H-1B visa holders, thus increasing the competition for many Americans who are looking for work. It’s astonishing that, at this time of record unemployment, your administration’s solution is to grant more work authorizations to foreign workers. These initiatives will do very little to boost our economy or increase our competitiveness……………

    Read more at

    http://www.grassley.senate.gov/news/Article.cfm?customel_dataPageID_1502=38933

    Record unemployment and Obama throws highly-educated US citizens under the bus?

    Why Mr Obama? & Why to you who voted for him?

    http://www.dailymail.co.uk/news/article-2094424/Jennifer-Wedel-Wife-unemployed-engineer-confronts-Barack-Obama-Google-Plus-chat.html

  9. David Cruz-Uribe, SFO permalink*
    February 9, 2012 8:22 am

    Dan,

    I am moving down here to get a larger commbox!

    “Why would someone take that kind of position if the compensation were a marginal increase over Bob’s job? Not saying 10mm is an appropriate number by any stretch, but chances are his base salary is only 7x-8x of what Bob’s is. Being a CEO myself, I promise you that nobody in their right mind would ever, ever take a CEO’s job for the base salary alone. It is hell.”

    Okay, some facts first. According to Forbes, Francis Blake (our “Frank”) has a total compensation package of 6 million:

    http://www.forbes.com/lists/2011/12/ceo-compensation-11_Francis-S-Blake_BEIR.html

    This differs from the 10.5 million quoted above, but this should work for comparison purposes. Of, this, 1.03 million is his base salary. Bob, who makes $13/hour, makes 27,000 per year. So the actual multiplier, just for salary, is 38, not 7 or 8. He made an additional 2 million in bonus (a sum which is often guaranteed) so the actual multiplier is over 100x Bob’s salary.

    Not that long ago, most CEOs made salaries that were much closer to the salaries of even their lowest paid employees, and in Europe the current differential is much smaller. The CEO of Nokia has a base salary of about 1.3 million (1 million euros), but his lowest paid employees make so much more more than Bob that the multiplier is shrunk. I have no objection, a priori, to high CEO salaries: it is a hard job—though I think you exaggerate its difficulty. But their wages should not be obscene compared to the people who actually make the company run.

    With regards to your final point: this really ignores the motivations that drive people to become CEOs. University presidents, large city mayors and governors all manage enterprises that are equally complex and are equally grueling, but they do it for far less money. Their motivations are complex: their is an element of money involved, but they are far more motivated by the power that comes with the position and the prestige that accrues to being “the boss.” CEOs are also motivated by power and prestige. After a certain point, money just becomes a token in the power game they play.

    • February 9, 2012 9:46 am

      The question of motivations driving all of us is crucial in setting the tone for wages and profits for all involved. This is where we lose concensus and fall into grave traps, especially from a gospel point of view. The ‘prosperity gospel’ is an anti-gospel and a real delusion causing an idolization of mammon. Leadership roles are true burdens, but accepted with grace they stir creativity, growth, integrity within the group/enterprise, wholeness and solidarity and other positive attributes…including shared prosperity. If prosperity becomes the overriding concern and driver…things head south.

      We all need to understand that work is a gift and an essential element in all human development from student to trainee to worker, manager and CEO and Board of Directors. Yes each has their priority and responsibility, but it should form a shared concensus of interests. True leadership understands this and brings it about…it “animates and guides”.

      Francis of Assisi maintained in his ‘Salutation to the Virtues’ that when one possesses any virtue we possess them all…and if we offend one we offend them all. This extends to the business realm also. When creativity brings harm we have a warning. When prosperity comes at the expense of the most basic human needs we go backwards. None of this is easy, its all very difficult. But the work of life is keeping our individual or even corporate ‘mission statements’ connected to the mission of a gospel life project.

      • Dan permalink
        February 9, 2012 1:54 pm

        While I agree with everything you’re saying, I’m not clear how it relates to the salary disparity issue.

      • February 9, 2012 3:10 pm

        Dan, I’m not trying to formulate any particular salary ratio between highest and lowest paid employee. What I am driving at is that gospel values need to be applied in making all business decisions, especially those affecting the well being of employees. I ‘get it’ that we reward and compensate hard work, unique skills, unusual talent, etc with high compensation. And I accept that there will always be envy and scorn regarding the advantages vs barriers that each individual encounters in life. Yet in all of this, we still need to acknowledge at some point, that we’re all eating from the same table.

    • Dan permalink
      February 9, 2012 10:54 am

      So the actual multiplier, just for salary, is 38, not 7 or 8. He made an additional 2 million in bonus (a sum which is often guaranteed) so the actual multiplier is over 100x Bob’s salary.

      Re-read my comment. I said his base salary is 7x-8x. Not his total compensation. I also did not say that 10 million is an appropriate compensation level. It is egregious. But I can understand why someone wouldn’t even contemplate taking on that kind of responsibility for $200k per year.

      Not that long ago, most CEOs made salaries that were much closer to the salaries of even their lowest paid employees

      The vast majority of CEO’s still fit into this category. In our small company, my base salary is only about 10% higher than my lead software developer and less than most of my executive team.

      The exception – and the key differentiator from 50 years ago – is that these high-salaried CEO’s run companies of a size and scale far beyond what the average company does. But you can’t take the handful of CEO’s that make millions in compensation and paint the whole industry with broad brush strokes. Look at a chart of the highest paid CEO’s and after you get out of the Fortune 100, salaries drop dramatically.

      I have no objection, a priori, to high CEO salaries: it is a hard job—though I think you exaggerate its difficulty

      And why would I do that? Don’t judge someone until you walk a mile in their shoes. I would wager the average person has no idea just how hard it is. I had no idea, or I would never have done this. The perpetual and continual sacrifices I have to make in every aspect of my life to keep my company afloat against insurmountable odds are not worth any kind of compensation. Not even for 10x my salary.

      University presidents, large city mayors and governors all manage enterprises that are equally complex and are equally grueling, but they do it for far less money.

      Again, don’t use the Fortune 100 as your barometer. The compensation a CEO in an average company gets is probably very close to, or less, than those you list above.

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