(what to change)
Commercial work – meaning what exactly…? Well I am talking about all the people and work that is involved in the private/commercial sector. Meaning not government, not voluntary organisations and not any work that gets done just for yourself or your family. I am talking about work that gets paid in wages and salaries. I am also trying to limit this discussion as tightly as practical, because there are aspects of this part of the economy that deserve special attention.
Firstly I want to explicitly acknowledge the strengths, benefits and issues of the private commercial sector. The commercial sector is the heart of the economy. It is where the entrepreneurial energies and ingenuity are found most predominantly, particularly in small businesses. Small business is the seeds of large businesses. Small businesses provide most of the employment in the economy – or at least that is what is always claimed and depending how you are measuring it, yes, it is substantially true. Small businesses are started and run by brave people who put huge hours and passion into making their dream come true. Often against huge odds and pressures, such as bad staff, unethical interference from larger competitors, unnecessary bureaucratic burdens by various levels of government and economic cycles that are beyond their control. Every year, thousands of new businesses are started and thousands fail as well. The general business environment is pretty hostile and it takes a lot of things to go right for a business to succeed. Those that do survive and succeed deserve their success. They have the opportunity also to grow bigger and even become the next big corporate success. Exploiting their niche and talents to become more than a business, they can become institutions. That is a pretty rare thing though and we could definitely do more to aid and encourage businesses to succeed.
It is all a fine balancing act though, between encouraging enterprise and restricting unwarranted and undesirable activities. Certainly business and commerce is often prepared to exploit any opportunity to make a profit, be that pollution, fraud or crass exploitation. Businesses are run by regular normal people, so they are liable to the same sorts of bad behaviour. However, on the flip side they are vulnerable to those same problems too. Businesses need employees in order to operate, employees who can as often as not be incompetent, lazy or just plain thieves. As things currently stand we have regulations up the wahzoo to prescribe all parties rights and reasonability’s in any commercial relationship. And where there doesn’t exist a rule already, there are courts and parliament to make a new judgement or ruling as necessary. Sometimes that even works as intended, although too often there are losses that just have to be absorbed without any effective comeback. In this essay, I am going to try and stay away from the technicalities and legalities of commerce and look at some more holistic issues that deal with work as it impacts us on a personal level. The other stuff I will try and address in other posts that are more specifically directed at business, commerce, money, tax’s and government regulation. Here, this is about what work means to us personally.
There was the comment made under communism that they pretended to pay us and we pretended to work. Interestingly enough, it’s not so different under the capitalist system either. Yes there are plenty of people who make out like robbers and still others that manage fine just thanks. But there are also huge numbers of people who get paid really crap money. Unsurprisingly, a lot of people don’t particularly feel a lot of commitment to their work, or put a huge amount of effort in either. Realistically, paying people to come to work is about bribing people to do something they wouldn’t even consider doing otherwise. It is also about paying them the least you can get away with. Any dollar you pay to an employee is a dollar taken away from the bottom line profit. Anyone who has slogged their guts out starting and running a small business has experienced cost control and other issues the rest of us have probably never even thought of, in trying to get the business to pay them back something. Compared to the amount of work that an employee puts in, the business owner is going to feel that their efforts deserve reward ahead of anyone else. Of course it is all about balance, but where does the line get drawn?
Well as it happens the line has already been drawn somewhere and there is a whole dynamic involved. It involves the State, social culture, business constraints and practices. For the sake of argument, consider this scenario: If the state paid $500 per week as a cost of living allowance (an unemployment benefit) to anyone who asked for it and wasn’t working, how many people do you suppose would just not ever bother getting a job at all? If you take that $500, add on another $100 for what will be taken straight off in PAYE tax anyway, and then add a little more, say another $100 per week, you are already up to a $700 per week gross income. $700 x 52 = $36,400 per annum. There are a lot of people that already only earn about that much at their jobs. So for an extra $100 a week, why would you put up with the crap involved in having to go to work? A hundred dollars that would probably get swallowed up in costs like your transport in any case. I suspect most people wouldn’t bother. I also believe that says much more about work than it does about people. I don’t believe most people are bone lazy, but I do think it means that most work just totally sucks, it is about the jobs and the workplace having become horrible places to be. It is also about how we have set up our society in a way that means the money runs everything. If you aren’t working and earning a wage or salary you will end up pretty well destitute. If I had confidence there was indeed some rational logic to the whole system then I could live with that, but that’s not how it works. The connection between what you do and the rewards you get are tenuous at best. I am not going to bother arguing that point directly with anyone, either you believe it or not, and I am not here to change your mind. Except to say that a sports star or musician can make in a week what most people make in a year. Hmmm, because they are worth it… I don’t think so. Certainly they can demand it within our current system, but that’s a whole other kettle of fish.
If anybody that wanted it could just opt for taking a $500 a week social security allowance instead of having to have a job, then a commercial enterprise paying any less is just not going to be able to attract employees. The nett result is that the amount that the state sets as the unemployment benefit, become the threshold for incomes. If a business cannot afford to pay above the threshold then it is likely to be out of business. So it becomes an interesting exercise between the government and the commercial sector setting the bar to take account of a number of factors. It’s a balancing act between: a benefit sufficient so that people are nominally provided for when unemployed, is low enough that people don’t want to stay on the Dole because it isn’t really sustainable, and that doesn’t compete with market wages or cost the govt too much. Leaving aside the cost to the govt, if the dole was set up at the $500 amount suggested, then how many businesses would collapse because they couldn’t or wouldn’t pay sufficiently more than that to attract workers. Quite a lot I suspect, but maybe we should just let them collapse. Are they really adding that much to the economy and society in the grand scheme of things? It is a tricky thing having society and the state get between an employer and an employee. There is a terrible potential for governments to destroy the economy. On the other hand a commercial, particularly corporate, sector that has driven incomes down to the point that a “normal” family life isn’t achievable is also destructive to society. When both parents have to work full time jobs just to be able to afford to exist, it means that something has gotten out of whack. Particularly when 50 years ago a family could manage to get by and even get ahead on just one income. There are a lot of extenuating circumstances to that situation of course, but the trend is clear enough, relative incomes have collapsed. Something is going to have to change soon because if this trend is going to be turned around then incomes need to start rising. If part of that means setting the environment so that businesses that pay very low wages to employees find they cant get anyone to do the work, then they would either have to raise pay or go out of business.
I a general sense I have no problem with companies going out of business, there would of course be significant cost involved with widespread occurrences of this, but on the other hand it also opens up opportunities for someone else to move in to meet the demand. The situation would also be vastly helped by moves on other fronts to stop miss-investment of money. This is really a subject for different post, but I will quickly say this: of the sum total of money in the economy, if we didn’t have so much sucked off by big commercials, corporations and monopolies, then there would be more money to spread around amongst the whole of the population. Since it is the working class that buy the things that these large corporations are selling, it makes no sense to impoverish the working class, Henry Ford understood that. He determined when he started making cars that he needed to pay his workers above average wages, because they would be a big part of the customer base for his products. It was all a big money go round that needs everyone to be involved and succeeding. But the current money Barons couldn’t give a stuff about any of that, they just want maximum returns. The money games and the rules and practices are not designed to keep things equitable, they are designed to bias the playing field, to get the highest return possible. That wouldn’t matter so much if investment was into the productive economy, but unfortunately that’s not what has happened, instead investment has flowed into the bubble economy.
While I am no Marxist, he did make the pertinent comment that ‘Capital is dead labour sucking the life out of current living labour’. The accumulated capital from past endeavours is invested with the view to getting that regular quarterly profit and annual % rate of return. Unfortunately it doesn’t really care how and where it finds that from as long as it does. Hedge-funds and the like will look at a business plan and say, unless you can return me in excess of 17% return and give me a controlling stake so that I can buy, sell and configure your enterprise as and how I see fit to make me the most money I can possibly squeeze out of it, then I am going to take my $millions and put them elsewhere. Like into finance companies for instance, and look how well that has turned out. Worse actually because the terms of such investments often include provisions that the big-shot investor has priority in getting their money back first in any situation. Its not an accident that these types of people and organisation have ended up with mountains of cash, they screwed everyone else over in every deal they ever did.
If you are a farmer, you just have to accept that one year out of every five you are going to have a problem; drought, flood, frost, low prices, higher cost, whatever… something is going to mean that you wont be making any money that year. Therefore during the other four years you need to be prudent and make allowances for that. Your work is on average going to return you a profit but it is never guaranteed any particular year. OK that’s fair enough, farmers work their businesses with the understanding that’s the case and get on with it. And yet for some reason nobody else in business want to have to accept that sort of situation. If they can possibly wriggle out of any such problems they will try to. Instead of investors in a company saying “ohh we made a loss, that will have to mean we don’t get a dividend this year”, what happens instead is that the dividend still gets paid (because the investors are the most important people in the enterprise after all, Ja?) and the cost and loss instead get passed on to someone else. Normally that’s the employees in the company, either people are made redundant, wages are cut, or some other mechanism is found to get more and more out of the workforce. It wasn’t the employees that caused the problem, but they are the first to take it in the neck if there is a problem. Generally, problems in a company stem from management, or should that be mismanagement, but they are the last to take any pain. The top bosses have fabulous salary packages with bonuses and golden parachutes, and they in conjunction the boards have everything wrapped up so that they are Alright Jack, whatever the outcome. Even if the company collapses, often there is zero accountability to the small people, be they workers or the retail investors, but the management and major investors somehow manage to walk away with a tidy profit. Amazing how often in fact a company can be leveraged to the hilt, run into the ground, then left to die as a hollowed out husk. With that sort of dynamic permeating the commercial world, is it any surprise that labour/management relations get so bitter.
So workers get disillusioned and burnt out, or swap jobs casually. There is no value in the work they do, they are paid badly, working conditions are hostile, they are asked to treat other people in ways that are reprehensible, and the product they sell is overpriced hype. What are the rewards that would make you engaged and happy to come in to work in the morning? Not all jobs are like that of course, but too many are. How many people would say they would jack it all in if they had a choice, if they didn’t have to make the mortgage payments, pay the school fees, or service the car loan? There is also just plain inertia, they are doing what they are doing because they are doing it and what else would they be doing. Actually on that last point they are right, there really aren’t that many options. If you work in a bank for instance, what are you going to do if you leave your job? What you are trained and experienced in is banking, it is a seriously formidable hurdle to re-train as anything else, and if you move to another bank all you have changed is your seat, it is still just a clone of the original, nothing has really changed. So if work isn’t about fulfilment and other things like personal development, what is it about? Well, its about the money and we have made money the alpha and omega of everything, it has become a God around which everything revolves. We have houses that have to be paid for in a way where we never win, either from rents or mortgages that are pitched right up to the limit we can afford. Our homes are in suburbs miles from our work so the only option is to own a car and commute through rush-hour traffic and park at extortionate cost. Taxes on everything suck a little here and a little there and yet still they find something new we have to pay higher fees and rates for. Structurally induced inflation means that everything costs a little more every year, but incomes continue to stagnate. There is no longer anywhere you can stand where you are not getting taxed or charged. Our whole built environment reflects monetary objectives over humanistic ones. In order to survive you have to run your life away in the rat race wheel.
We get sops to keep us distracted and hopeful; Lotto, a pay rise, American idol with dreams of striking it rich and famous. It is all nonsense of course, for all we may fantasize about highly paid sports and entertainment stars, they are the exceptions, just noise at the statistical fringes. Our lived reality is that none of us are ever going to escape the trap, we are minions and wage slaves and we always will be. The commercial world and capitalism do offer opportunities, but it can’t be for everyone, it can only ever be for a select few. And if the system can be gamed to keep it an exclusive club for the hereditary elite then so much the better. There doesn’t need to be any specific restriction, it just needs enough obstacles and high enough hurdles that it is practically not possible for more than a few to make any progress. Some of that is just life and the nature of the universe, but some of it is things we actually can change. We do enough stupid things to ourselves as a society with our rules and regulations that there is room for dramatically improved results if we were working in a coherent and rational direction, but we are a long way from that currently. We have problems that need addressing and yet we are not only not addressing them we are effectively pretending they don’t exist. If we think happy thoughts and sing LaLaLa loud enough, perhaps we won’t notice we are spiralling into the toilet. It is a death of a thousand cuts, or alternatively it is the frog slowly being boiled. Either way, do you really want to live this way. If work sets you free, you wouldn’t know it from looking around the prison we have put ourselves in. What it mostly does is chew us up and spit us out when we have nothing left to give.
So lets start the revolution, we have nothing to lose but our chains. Yes, work is necessary, as is money, work can indeed be the route to a better future. It will take a lot of work just to reset our systems, let alone building and creating the wherewithal to improve our lives and society. Nothing is going to get done without a lot of disagreement and debate either. The pathway to better working situations will have to evolve, there simply won’t ever be a complete blueprint for the workers paradise. But if you enjoy and find satisfaction in your work, if you are getting sufficiently rewarded financially that you can get ahead, then things will be heading in the right direction. If you hate work and there are no good options available, then we can conclude that likely things are not changing in the ways they need too. There is going to have to be an intense philosophical and economic debate on how the economy will need to be reformed if we are to achieve the goals we desire. There is no point in delaying getting started either. I am limited in what I can usefully contribute to this endeavour, but I know it needs to be done and will advocate as strongly as I can for it. I will also try and write further commentaries, Posts and assays on the topic as and when I have something specific and helpful to add. In the meantime, if you have any thoughts or comments, then I would encourage you to express them. Many hands make light work.
Here’s an interesting article that has some pertinant related points.
Do Businesses hate their workers?
From the Blog “Naked Capitalism” 10/11/09
” In America, it isn’t hard to answer the question in the headline “yes.” The oft recited, “Our employees are our greatest asset” is pure Orwellian prattle; most companies treat employees as liabilities, doing everything they can to minimize labor costs, getting rid of workers whenever possible. And this now extends well up into the management ranks, with most people who are still on the corporate meal ticket assigned responsibilities that would have constituted 1.5 to two jobs a decade ago… “
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