The toilet in my hotel room broke, so I called the front desk and the lady told me they will have an “engineer” up right away to fix it, so I am assuming “engineer” is a euphemism for the maintenance man. Regardless, it reminded me of this excellent Henry Blodget piece the other day in the Business Insider:
These days, if you suggest that great companies should serve several constituencies (customers, employees, and shareholders) and that American companies should share more of their wealth with the people who generate it (employees), you get called a “socialist.” You get called a “liberal.” You get told that you “don’t understand economics.” You get accused of promoting “wealth confiscation.” You get told that, in America, people get paid what they deserve to get paid: Anyone who wants more money should go out and “start their own company” or “demand a raise” or “get a better job.”
In other words, you get told that anyone who suggests that great companies should share the value they create with all three constituencies instead of just lining the pockets of shareholders is an idiot.
After all, these folks say, one law of capitalism is that employers pay their employees as little as possible. Employees are just “costs.” You should try to minimize those “costs” whenever and wherever you can.
This view, unfortunately, is not just selfish and demeaning. It’s also economically stupid. Those “costs” you are minimizing (employees) are also current and prospective customers for your company and other companies. And the less money they have, the fewer products and services they are going to buy.
Obviously, the folks who own and run America’s big corporations want to do as well as they can for themselves. But the key point is this:
It is not a law that they pay their employees as little as possible.
It is a choice.
It is a choice made by senior managers and owners who want to keep the highest possible percentage of a company’s wealth for themselves.
It is, in other words, a selfish choice.
It is a choice that reveals that, regardless of what they say about how much they value their employees, regardless of what euphemism they use to describe their employees (“associate,” “partner,” “representative,” “team-member”), they, in fact, don’t give a damn about their employees.
As they say, read the whole thing.
Villago Delenda Est
Adam Smith. Socialist. Liberal. Doesn’t understand economics.
Yup. I think we’ve covered them all.
It’s only economically stupid if you care about the prospects of the enterprise beyond the current fiscal quarter. If I’ll be gone, and you’ll be gone, to live with our money in the Caymans, this is very smart indeed. Well, at least for those who don’t know how to think longer term than the current fiscal quarter. Because there is no guarantee, at all, that you will be safe from the vengeance of those you have fucked over to get your ill gotten gains, even in the Caymans. It’s amazing how the social contract that you think protects you melts away when people get desperate enough after you’ve shat on it repeatedly. Just ask Louis XVI about that.
Those toilets are really complex.
Sounds like your engineer got a title bump but no pay bump. Up next: Senior Engineer with benefit cuts.
Engineer – it’s what we in the hotel business do when we want employees to feel important but not pay them enough to actually be important. That’s why maids who clean your room are called room attendants, room service waiters who bring your food are food service workers, maintenance men are called engineers and front desk clerks are guest service representatives.
How well your employees treat your customers/clients flows directly from how well you treat your employees. A truth that seems to have been forgotten.
Sounds like your hotel has some quality control issues. Did they give you more beer?
It’s neither “capitalism” nor traditional American corporate wisdom that the purpose of a corporation is to maximize share holder profit. That’s bullshit that became promoted & fashionable in the 1970s.
Imagine trying to tell the big robber baron companies of the 1890s and 1920s that they exist primarily to pay maximum profits to the share holders: they would have sent their goons to beat the shit out of you, share holder or not.
This phase of capitalism is going to go out with a bang. Mainly because those currently running the system are the worst capitalists ever.
@El Cid: Milton fuckin’ Friedman.
@raven: I’ll say. And they’re really difficult to fix when they’ve been clogged by the entire economy of the richest nation in the world.
Gin & Tonic
@Mary G: Maybe all the beer they give people is why the toilets are broken.
An engineer is probably cheaper than a plumber.
I’ll bet that engineer really knows his shit.
@Villago Delenda Est:
I’ve said this a bunch of times; if capitalism ruins itself, reduces the economy to a shambles and the country to third world status… elites live very well in third world countries. And that’s why our one percenters don’t care.
I suspect there’s a good chunk of our one percenters that would gladly destroy their own companies and even cut their own incomes, so long as they know that in the process the general public will get hit even harder and will continue sliding down the scale from “enfranchised middle class citizenry” to “poverty stricken masses.” (After all, you can always hire half the poor to kill the other half).
The reason we now call the maintenance person an engineer is that it sounds like a better job. A little cheese wiz on that stale cracker that is your job to make it go down easier. That if we give you a better title we won’t have to give you any more money. “Hey, we gave you a better job and you want more money too? Ungrateful shit. Don’t slam the door to my Mercedes, I’m late for my golf game.”
Last night I discussed these issues with Lynn Stout, author of the The Shareholder Value Myth.
I have another good employer. We had Trader Joes and Costco and now we have:
I feel like you could beat them at their own rhetorical game, start saying “Wal Mart is yesterday’s retail model. They refuse to innovate for the 21st century!”
@Ruckus: It’s also a lie to the customer, err guest. Just like the “barrista” pushing a button to generate a coffee, then calling out your name.
Some union maintenance staff belong to the operating engineers local. Hence the title. They primarily operate the HVAC and mechanical systems. And unclog toilets, paint, etc.
Back to lurking
Yup. And even if it did make sense to maximize shareholder return above all else (hint: nope), it’s bullshit anyways, since corporations are maximizing management control and return. Managements have continuously restricted the ability of shareholders to elect board members and exercise other voting powers, and formed interlocking boards of directors that prevent any outside influences. The companies with high executive compensation are statistically the worst at stock price performance.
Wally world as it’s run now didn’t make sense in Dickens day, it makes far less sense now. Unless you are a sick fuck 1% who doesn’t give a shit about anyone else. They live in mirror houses, all they can see is themselves.
@Kay: Ooooh, that’s good, Kay. Start calling the idea of paying a living wage a “disruptive” business model, and watch the lemmings charge over the cliff!
@El Cid: How would the robber barons describe the purpose of a corporation?
Yep, I work in the software business and pretty much anyone technical is an “engineer,” regardless of education level. They’re all smart folks, but come on.
Right, but they love new things. Say “this is new!”
Then we need a management book with a number in the title. The Seven Secrets of QuikTrip :)
We can’t accept this status quo mediocrity among the 1%. I won’t stand for it.
For sure but I look at the first lie, that to the employee. And it really should say, “We have you by the genitalia, we own your livelyhood and your health care and we are never going to let you forget that. Now don’t slam the door to my Mercedes you worthless piece of shit.”
A real shot in the arm for worker productivity.
What makes our current notion of “capitalism” even more pernicious is that the financial sector of the economy (bankers, brokers, insurance companies, hedge funds, etc.) has grown to a record proportion of the real economy. A “trader” sitting in front of a row of computer screens, trading derivitives (currency swaps of something), is considered a “maker” not a “taker” even though he or she produces nothing tangible, and in most cases, nothing of value.
Wealth is simply skimmed from the productive sectors of the economy and put into the pockets of financiers who distain any regulation and view the world as a collection of “counterparties” who share their amoral worldview. Goldman Sachs made billions moving aluminum ingots around in warehouses. J P Morgan manipulated energy prices. The world is their casino and they’re going to play until they run out of your money.
Wah wah wah, the world sucks America sucks . . .
A long time buddy in Seattle retired the other day from her job at a cruise line..They gave her a party at 7pm..because it was the end of her shift. She’s retiring, a great asset for years..and she cannot leave for her party till her shift is over..More absurb, especially in terms of cost-benefit..her $5 mass transit pass had one week left on it.. She wasn’t allowed to officially apply for her benefits till she turned it in..one week! Like I told her, that is the brainchild of some idiot middle manager..it costs the company far more in personnel time and paperwork to process the stupid pass!.. The good news is that many of her buddies, who got work at 5pm and earlier, came back into town for her party.
In the early 70’s I was given a chance to create my own securities firm..it’s been painful often, but thank heavens for humanity that I was my own boss..I would never had been able to work under those conditions..My assistant gets a high 5 figure income for 4 days a week..and she earns every dime and more. I could pay less, but my life would be far more difficult. I don’t know..I am glad that Blodgett is speaking out..unfortunately, in the securities industry..he is a pretty lone voice.
And the only way to win at that is to elect as many liberals as possible. And not any of those half ass liberals that talk the minimal talk and then don’t do any of it. We have to take back the country, be the liberals that the conservatives think they hate but really enjoy when they are in office and make things work.
If you really want to get depressed, read the comments on the linked article. Apparently illegal immigrants are the ones who are really to blame…
Oh, better. Plus, the Sloan School of Management. Stick that in there somewhere, and send it to Tom Freidman.
The column writes itself.
@Kay: Wow, I had no idea. QT is out of Tulsa, Oklahoma, very, very red turf.
I travel a lot in my job and always try to go by QTs when I need gas, snacks, etc… The restrooms are usually pretty clean (even the men’s room) the employees are cheerful courteous and helpful.
And it’s really just a convenience store but now I know why it’s a nicer place than the other ones out there, they don’t treat their employees like shit.
Weren’t the trusts back then run a lot more like a personal family fiefdom than a lot of their counterparts today? It’s my impression that things are more fluid now. You’ve got a lot more one percenters who don’t really care about the long term prospects of the corporations as long as they themselves get paid – the stereotypical “become CEO, ‘restructure’ and ‘streamline’ company, jump ship with golden parachute once it goes under, move on to next CEOship” vulture capitalists.
(Though there are still family-run megacorps in the old school sense, Koch Industries being the obvious one).
Bingo. That’s the lesson the “maximize shareholder profit” people are missing. If you’re in the retail business, you want people to buy stuff from you. And if you treat your employees well, you reduce turnover, you get knowledgeable pleasant people working for your customers, and customers want to come in and buy stuff.
These people seem to be trying to do retail without the “people buying stuff” part of the equation. Profit has two parts, revenue and costs. How can you ignore revenue? That’s economic kindergarten. Hell, that’s Lemonade Stand 101.
The Robber Barons is a great example. FTM, South Sea Bubble shareholders.
@Kay: Saw this one on Daily Kos: WinCo, a private grocery store chain that plans on expanding to Texas, has lower prices than WalMart and yet:
A sanitation expert and a maintenance engineer,
A garbage man, a janitor, and you my dear.
I read on a labor site that low wage employers don’t want to reduce turnover. The idea is if employees stick around too long they are able to organize, form relationships with co-workers, and/or feel invested in the job and start making demands. That makes sense to me, because I always wondered why they seem to seek chaos.
“Engineers.” Just yesterday I was noticing how “colleges” have disappeared and (almost) every institution is a “university” now. Name inflation.
I love QuikTrip! I took them for granted when I lived in Atlanta; now I wish we had them here in NoVa.
That’s the most infuriating thing about the modern 1% – on top of all the damage they inflict on the country, their companies are creating absolutely nothing to show for it.
At least the old robber barons ran companies that produced actually useful things – railroads, steel, oil, coal. Even the slave owners could truthfully say “my plantations produce cotton and people buy that shit.” What the fuck did Bain Capital ever produce?
What hotel are you staying in? Tell us so we know not to stay there, given the problems you’ve had…
When I was in PA, they codified that only actual licensed engineers could use the term “engineer” in their job titles (train engineers were granted an exemption). The company I was with had to issue all the non-PE engineers (mostly the younger staff) with new business cards using designer instead of engineer. I’m not sure what unlicensed engineers (which would be most mechanical & electrical) or professors used.
It keeps the word from used in too many euphemisms as JC mentioned.
Back on topic – Surprised to read something like that from a business trade journal but at a certain point, companies are hurting themselves.
I had not realized how pernicious this “profit every quarter” mindset had become until I read The War for Late Night: When Leno Went Early and Television Went Crazy by Bill Carter.
The whole Leno train wreck was created by the NBC executives’ fear of even a short-term dip in ratings if they switched Leno for Conan. They tried to keep both; with disastrous results.
It is even bludgeoning our own viewing; reality shows make the bottom line fat, because they are so cheap to produce. But where are those once-fat syndication rights? While some shows do make it to DVD and are rerun on Internet outlets, it’s a pittance compared to the bonanza reaped by the likes of Seinfeld or Star Trek.
I’ve been utterly absorbed by a blog from 2007 (and older) written by a Wal-Mart employee called Behind the Counter. It is a dramatic picture of the mayhem that ensues when people are paid poorly, barely trained, and managed by bosses who are more frightened of upper manangement than they are eager to impress them.
When the only people who wish to inflict Wal-Mart shopping on themselves are the grifters and scam artists who fill his days, I wonder how well Wal-Mart will do then?
The other Iron rule of capitalism is that you get what you pay for. And if you pay your employees no better than if they were incompetent lazy dumbfucks, that’s what you’ll get.
Amazing how few people in positions of power understand that.
Macro, sure. Micro, not so much. It’s economically stupid for the nation, but perfectly sensible for McDonalds. So they lose their own employees as customers. So what? Due to the productivity of their employees, they’d only lose 1-2% of their customer base in exchange for paying them what, 25% less than is needed to keep them as customers? That’s a no brainer. It’s selfish and demeaning as all hell, but that’s corporate america for you.
That’s true in almost all states. But enforcement is universally lacking.
Remember when, if you needed a question answered, you could contact the Personnel Department? Then it became the Human Resources Department? That’s when I first realized that I was basically just as treasured as the resources we used in production. They religiously started to pay as little as possible for both.
Having said that, compared to today’s corporate level of appreciation I was like a family member. Evolution.
That works as long as all the other fast food franchises also treat their workers poorly. Some companies are starting to see they can separate themselves from the pack by having cheerful employees who keep the restroom clean and won’t spit in your burger.
@Violet: It’s not his words, but here’s famed writer Ida Tarbell (who wrote against the about the company’s monopoly practices in the famous piece “The History of the Standard Oil Company” in McClure’s) describing John D. Rockefeller’s view of how to conduct business:
But if you look at how he set up the structure of the Trust to both combat restrictions on interstate corporations and the potential interferences & short-term variabilities of shareholding investors, it suggests it:
The company paid extremely rich dividends–but the priority (both in terms of where the money went, as most profits went back into the company, as well as decisions) was always on the operations of the company, its development, its strategies, its advancements, and only by so doing it was to benefit the owners.
Sure. In-N-Out pays something like $12/hr to start and it shows.
But does that deliver more/better customers? I don’t think so. At least, not at the bottom on the ladder. We have a massive, pervasive race to the bottom on price in quite a lot of markets. WalMart is the poster child for this. Their stores are shit, but that doesn’t matter to people that want to save $.04 on band-aids. And there are a LOT of those people.
“just lining the pockets of shareholders” There’s also stiffing the shareholders to line the pockets of the CEO and pals.
I blame the business “schools,” which if I were Queen of the World would all be stripped of everything except the classes in double-entry bookkeeping. The Newspeak they promote (“optimize visioning, augment core structures, facilitate cross-silo transmission…”) is bad enough, but they are the chief pushers of the idea that companies exist solely to increase value for shareholders — not to produce anything. Or if they do produce something, it should be only just good enough to bring in money, and it doesn’t matter how crappy the product is as long as they can get away with selling it. If they could make money by turning their employees into Soylent, they would — and they’d argue that it was a good thing. Screw them and the horses….
Odie Hugh Manatee
Employee sales are down at the Big Box retail store that my wife works at. Today she was told that she can get an additional 10% off purchases this Saturday. She told her boss that she can’t put that discount in the bank and since she isn’t paid shit for her work, she won’t be buying any extra shit from the company. If her employer paid her what her work was really worth then she would have some extra money to burn where she earns it. Additional discounts are worthless to people who don’t have the money to spend.
Discounts strive to make employees feel appreciated but all they really are for is to move more of the employees income in the company bank account, leaving them with even less to live on.
I’m late to this, but I’ve always thought that is a reason people like In & Out Burger so much. The burgers & fries are good (not great, IMO) but people line up to a ridiculous degree for them. The place is always clean, the quality is high & stuff is fresh. They pay their employees over minimum & provide health care & benefits.
Here in Vegas in 2009, when the recession was howling, a new In & Out opened up. They were hiring 50 or so people, & had 5000 turn up, to stand in line in January. People were desperate for jobs, but you did not see that turnout for McD’s opening up.
ETA: I see Martin addressed I & O already.
Rich (In Name Only) in reno
Depending on the size of the hotel your in, this title could be appropriate. I’ve worked in several places where building maintenance guys were referred to as “stationary engineers,” but we were working in good sized retail/office complexes with big HVAC systems, with boilers big enough to stand upright in, and two story cooling towers that took up half the roof. All the engineers I encountered were ex-navy, who transitioned from ships to buildings. They told me it was basically the same system.