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April 12, 2011

Comments

None of my employees--I'm talking about degreed professionals--could make a living on their own.

Why on earth would you employ these incompetents?

Using the top 1% as the standard ignores the fact that a significant majority of adults over thirty, and certainly over forty, live pretty well.

Can we get some definitions for "significant majority" and "pretty well" and maybe some citations in here, please? (JFTR I don't consider being over 40, living paycheck to paycheck and having your 401k wiped out by the market crash and having Social Security and Medicare under attack to be "pretty well," but opinions differ. And if you're jobless and over 40 -- or, god forbid, over 50 -- good luck finding work.)

"or, god forbid, over 50 -- good luck finding work.)"

True Dat - but ageism in our society is a whole other problem.

I read a lot in the last years about ways companies use to get lots of overtime out of employees without paying a cent for it.

If you can remember where you read them, please share with us. Especially if they're in the context of work done in the US.

Thanks!

If everything anyone brings up is "a whole other problem," Marty, then there's no point in looking for systemic or institutional solutions, is there?

"If you can remember where you read them, please share with us. Especially if they're in the context of work done in the US."

The most common way it's done is to classify employees as "exempt" under the Fair Labor Standards Act when really they should be paid overtime under the Act. I just quickly googled for an explanation of the law and came up with this. Not sure that it is completely current, but it gives you a picture. Although many class action suits have been filed against companies who have abused the laws, it's still a common tactic because there's often a fine line between tasks that should be "exempt" or "non-exempt."

"I will add management in with capital, because they generally are some combination of proxy for capital and/or free rider skimming cream off the top."

I ignored this for a day, and then came back to it. I am still personally and professionally insulted. Perhaps you were unintentionally too broad, or perhaps you never worked for any management that mentored and nurtured your career.

Perhaps you never worked for an executive that built a high quality team of people, ensured they had the absolute best opportunity to succeed, managed the company to optimize the value for customers and employees while making sure the company made a fair profit in a tough market. Most of the time while being the first one in the door and the last one working every day, and then preparing for next week over the weekends.

Perhaps you didn't know any management people well enough to watch them spend weeks of sleepless nights trying to figure out how to save one or two more jobs during the 2001 downturn, or be the first to take a pay cut and the last to have it restored to save those jobs.

This is the management I know and have worked with over the last fifteen years. at every one of my peer companies. People I respect and admire. Not a free rider among them.

Maybe you could talk about SOME management who feels entitled, I see a few of those, but not close to most or even a majority.

I could talk about entitled employees who feel they sshould get a raise every year simply for showing up to work, that think bonuses are due them no matter what quality they produce, and that the company somehow should ensure their poor financial decisions are covered when they suddenly find themselves in trouble, despite making top 5% salaries.

But I wouldn't generalize that into "employees are free riders".

I think the wealth distribution is something like:

80/15/4/1/0, but that could be off. I remember reading about the poll (in which most Americans wildly underestimated how skewed the wealth is and further indicated that they were actually dirty socialists ;) ). My memory of the numbers is no doubt off. [checks: yep, I'm off, but not by a helluva lot]

My faith in our current system has taken a pretty big hit as I've been exposed to facts such as these. It's not that I expect wealth parity, but the "American Dream" requires that we all get a fair shot, and that's clearly just not so. The questions, of course, are: why and how to we fix it?

I don't have a blueprint. I dabble with a belief that our inheritance tax is a pathetic joke. I ponder how we could better assist underprivileged kids (the earlier the better), which necessarily leads to thinking about our public education system, which tends to lead me to despair, for a host of reasons.

Screw it, who else wants a drink?

"If everything anyone brings up is "a whole other problem," Marty, then there's no point in looking for systemic or institutional solutions, is there?"

I would love to find one TODAY. I just think it is currently more cultural than institutional, thus probably on a different plane of discussion. Sorry if I sounded dismissive, I assure it is a real problem to me.

Slarti, a lot can be found in the alternet.org and truthout.org archives.
A quick and dirty google search yields e.g. http://www.alternet.org/story/148840/revelations_of_extreme_%27slave-like%27_working_conditions_and_billions_in_wage_theft_drive_nationwide_protests?page=entire>this (covering other types of wage theft too). For a time during Bush II it was a regular topic at both sites. The most common trick under Bush II was to declare employees exempt from overtime pay by formally putting them in one of the (legally) exempted groups, like administration. Since the arbitration boards (is that the proper term?) are stacked against workers and (mainly) the GOP pushed for abolishing the right to sue, workers are dealt pretty bad hands.
If you wish I can look for more but that will have to wait until to-morrow.

"Although many class action suits have been filed against companies who have abused the laws, it's still a common tactic because there's often a fine line between tasks that should be 'exempt' or 'non-exempt.'"

Let me add that Republicans have tried to curtail class action suits, which is the most effective way for employees to vindicate their rights. The Class Action Fairness Act of 2005 was a "tort reform" effort to make class actions more difficult, and the issue is being raised in the very important Dukes v. Wal-Mart case currently pending in the Supreme Court.

It's difficult and expensive for a single employee to figure out whether s/he is being classified properly (or paid equitably, etc.). Just another way that the rich are becoming more and more advantaged.

Although many class action suits have been filed against companies who have abused the laws, it's still a common tactic because there's often a fine line between tasks that should be "exempt" or "non-exempt."

Maybe I should have been more clear. And maybe the preceding sentence can be tattooed on the inside of my eyelids in fluorescent ink.

But: I was thinking more in terms of specific incidents, not tactics. I'm fairly conversant with tactics and the law (conversant, which I consider to be nowhere in the neighborhood of "having expert knowledge"). My wife has been combined comptroller and head of HR for a construction company, and has also worked in similar capacity in the Defense industry, so she has seen a lot. What I was looking for, here, was whether Hartmut was referring to specific instances where the company got away with it, or where a hole in the law was successfully exploited, as opposed to getting caught and having to fork over a whole lot of back pay.

Like any law, there are always people who either think it doesn't apply to them, or think they can sneak around it.

Again many good points and questions, I will try to make a good reply.

And that disunity springs from...what? Some expectation of a level of equality of outcome?

If I understand correctly, your question here is "what is it about disparities in wealth and income that causes social disunity?"

That's probably hard question to answer, and will probably vary from place to place, time to time, and even individual to individual.

Some poorer people probably do just resent the hell out of the fact that somebody else has something they don't have. Just like some wealthy people (and even not wealthy people) resent the hell out of the fact that some of their tax dollars pay for some poor person to buy food and go to the doctor.

A lot of other people are probably angry because they feel, often accurately, that folks with more money are disproportionately able to further their interests in public matters.

You can probably think of 100 other reasons why relatively more disparate distributions of income and wealth lead to people feeling more at odds with their neighbors and fellow citizens.

It's probably a mix.

The suggestion that income inequality is the root cause of social disunity is not really that well-founded.

The statement I made was correlation. There is likely no "root cause" for social disunity, there are no doubt 1,000 causes. Inequality, of whatever kind, is only one. But it is one.

What I'm looking for, russell, is along the lines of what specific (or general, even) steps do you imagine will get us from where we are to where you imagine we can be

Some very simple examples:

Tax income from capital investments at the same rate as income from labor. If it seems like that will starve productive investment, make an exception for investments that actually create net new capital for companies based in the US and hiring primarily people in the US. But the guy who buys Microsoft low and sells high, not so much. Tax his capital gain as plain old income, because that's what it is.

Provide for meaningful input of labor into corporate governance. In other words, labor representation, with a vote, on the board.

Provide strong tax and other incentives to encourage employee ownership of businesses. Those exist to some degree now, there should be more.

If we're going to treat labor on a market basis, decouple health insurance and other similar services from the employee relationship, so that workers can participate in the labor market from a stronger position. By "stronger" I mean "less than utterly dependent".

Some simple ideas, off the top of my head. Not my field, really, so I can't really do more than throw ideas against the wall. But I'm sure a more systematic and thorough set of policy proposals is doable.

Are you suggesting that we now evolved to a cultural environment where such is not possible?

Actually, I think the kind of thing you describe is harder now than it was when you, and I for that matter, were younger.

It cost me $2,000 a year for full tuition to attend a very, very good state university. As an example.

First, does worker ownership entail workers going down with the ship if a business fails?

Yes. If a business fails, the employee's ownership stake is worth bupkis.

More on employee ownership here and a list of some very successful employee owned corps here.

There will always, no matter what gov't says or does, be folks who have limited capabilities, who don't or can't take advantage of free education through grade 12, who won't or can't find a way to obtain further training and job skills and these people will always be at the margins.

Yes, I get that. That's who the social safety net should address.

I'm more worried about things like the U6, and the ways in which household debt has undermined middle class wealth.

I'm not talking about the margins.

I am still personally and professionally insulted. Perhaps you were unintentionally too broad

This is a really valid objection, and I would say I was too broad, and perhaps not completely unintentionally.

To be honest, I had just read about Jamie Dimon getting $600K in moving expenses, and my instinct was to go find a pitchfork.

On the flip side, I know a guy who cashed out some of his own retirement money to make payroll, and that in the middle of a divorce proceeding, so he had to explain it all to the attorneys during the financial discovery process. That, my friends, is some serious skin in the game.

So yes, you are correct, it is very far from all management who qualify as free riders. In future I'll try to be fairer, and more specific, and narrow my brush.

Apologies.

I just think it is currently more cultural than institutional, thus probably on a different plane of discussion.

This is an *extremely apt point*.

Doing anything like what I'm talking about would involve changing US culture. It's not impossible, but it is a very, very large ship to turn.

Thanks all.

I don't directly know how effective this kind of tactic is, but there are certain recourses available to workers, in cases of wage violations, or even in case of suspected wage violations.

russell, thanks for the response, and I'll get back to you when I've had time to read it in detail. The capital gains thing is something I can support. Everything else I'd like to read through before I say anything else.

Slarti, I mainly remember overview articles on the topic. I do not know how much on e.g. wagetheft.org is about the specific unpaid overtime trick (and it is of course an advocacy site, so no guaranteed lack of bias).
As sapient stated, WalMart is a notorious offender.
An example where it works the other way around can be found over her. Germany has rather strict shopping hour laws but there is a (limited) loophole that allows to keep a shop open after hours, if only company executives (procurists) do the work. Some companies formally granted procura to willing employees to have enough staff to run. In this case it is the state that tries to prove that in most cases this is a scam to evade the shopping hour laws while the employees (who get better pay for this after-hours work) are in cahoots with the employers.

Dukes v. Wal-Mart is a sexual discrimination class-action, not a labor hours suit. It deals with possible violation of sexual discrimination laws, not possible FSLA violation.

Did not check that special case (should have done that first :-(. ) but WalMart has the general reputation of being the poster-child in the area of worker exploitation (I did not actually know that it involved the sexual kind too).
Leaving in a few minutes, so I have to step out of the discussion until to-morrow.

"Dukes v. Wal-Mart is a sexual discrimination class-action, not a labor hours suit. It deals with possible violation of sexual discrimination laws, not possible FSLA violation."

Yes. I brought up the case because I believe that class action lawsuits are generally the most effective way for employees to fight corporate attempts to violate their various rights since it makes cases more economically viable to litigate. The mechanism of the class action lawsuit has been under attack.

Hartmut is correct though that Wal-Mart has also been a notorious violator of FSLA. As to your request for examples of companies getting away with violations of FSLA, if they're getting away with it, it's hard to identify them.

Thanks russell!

I also found this interesting observation from Jake Tapper at ABC News today.

re: "from Jake Tapper at ABC News"

Oh, yes - the Republican Retreat of January 2010. And we all remember how receptive the Republicans were to that olive branch. Funny how lessons are learned!

Agreed, sapient.

Dobie's a nice guy, but he reminds me a good friend of mine, also a nice guy, who can express sincerity in the most cloying, obvious, insincere ways possible.

Or is it the other way around -- expressing insincerity with cloying sincerity?

Whatever, my friend means what he says.

Just so, the Dobe stands on one end of an unbalanced scale and offers the measurement up as the long-sought-after paradigm of balance in all things.

At the Bureau of Standards and Measurements, there is a glass case with a picture of the smiling Dobe inside, a finger, maybe Jake Tapper's on one end of the scale, and that, good people, is the standard of balance in the universe.

It's about time Obama balanced out Republican contemptuosness with his own. He's got a ways to go to achieve that perfect balance.

Note: except for the nice guy part and the last sentence about Obama, I kid about the Dobe, of course.

I've got my own problems.

"At the Bureau of Standards and Measurements, there is a glass case with a picture of the smiling Dobe inside, a finger, maybe Jake Tapper's on one end of the scale and a middle finger(possibly Countme-In's) on the other, and that, good people, is the standard of balance in the universe. "

and order is restored. :)

;) That's good one.

Pop over and submit your standards of balance to this survival test:

http://www.redstate.com/erick/2011/04/14/barack-obama-fully-embraced-death-panels/

Also, remember that numerous elected Tea Party Republicans reward Redrum murderous lying vermin, like Erick Erickson, with guest posts over there. None of THEM ever get banned.

I have a feeling you'll be requesting help from both of my middle fingers before long.

As Slarti notes, the Walmart case now before the court is a sex discrimination case involving alleged gender-based pay disparities. The High Nine will likely dissolve the class because that kind of case isn't amenable to class disposition due to lack of commonality among the million plus class members.

Not so for FLSA cases. Yes, employers do try to use the exempt classification to avoid overtime. When they get caught, though, it isn't pretty. The law is very worker friendly, the corporate form is no defense (the courts will look right through the company and nail the people who took the money out), damages are usually double the amount of overtime owed over a two year look back period and are in addition to attys fees which the company has to pay to the workers' lawyers. If it hasn't hit the news yet, it will soon: a very large, well known corp will be paying a multi million dollar settlement on a very large FLSA case. The larger the company, the more likely the jury will find a wilful violation which creates a three year look back on wages.

perhaps you never worked for any management that mentored and nurtured your career.

Perhaps you never worked for an executive that built a high quality team of people, ensured they had the absolute best opportunity to succeed, managed the company to optimize the value for customers and employees while making sure the company made a fair profit in a tough market. Most of the time while being the first one in the door and the last one working every day, and then preparing for next week over the weekends.

Perhaps you didn't know any management people well enough to watch them spend weeks of sleepless nights trying to figure out how to save one or two more jobs during the 2001 downturn, or be the first to take a pay cut and the last to have it restored to save those jobs.

Not to beat a dead horse, but I've been thinking about this a bit over the last couple of days. Since you asked about my personal experience, I thought I would make a reply from my personal experience.

I've worked for folks who have made some good opportunities available to me. Chances to punch above my weight, learn some stuff, do some things that were a stretch for me. Those were really valuable to me, and I'm grateful for them to this day.

And, of course, when those opportunities come up, you better freaking hit. You better perform. So, along with the opportunity comes a lot of extra effort.

I have no problem with that, it's how I've made my career, and it seems fair to me. You give me a chance, I'll do whatever I need to do to knock it out of the park.

Win-win.

So, "nurture my career", sort of. More accurately, give me enough rope, and let me show what I could do. They took a risk on me, and I appreciate it, a lot.

"Mentor", not so much. At least not in the sense of helping your figure out what kind of person you are, what your strengths and weaknesses are, help you understand what's involved in taking your next career steps, provide some guidance in negotiating the challenges.

My old man helped me out a bit in those ways, when he could. Managers, not.

I did work for one guy who had that sort of "I won't ask anyone to do what I wouldn't do" thing. He was just a natural alpha-dog leader, and he led by example.

That same guy also once explained to me that I should think of working for him like being in a life-raft with a bunch of people, and if it started to sink somebody was going to be thrown over, and I should think of what I needed to do to make sure that wasn't me. Which is mentoring in a kind of creepy Glengarry-Glen-Ross kind of way, I guess, but I don't think it's what you mean here.

The same guy also gave me a review once where he described working with me as being like the Woody Allen joke about the uncle who thought he was a chicken. They wanted to get him some help, but they needed the eggs. I think his point was that he found me somehow weird and difficult to work with, but I was doing good work, so he had to keep me around.

What do you do with information like that? I didn't know whether to laugh, punch him in eye, or say "F**k you asshole" and walk out.

He needed the eggs, I needed the gig. So I just shut up and went back to work.

I was only ever laid off once in a little over 25 years. In my industry, that's pretty good. My layoff came in about the third wave of layoffs at the place I was working in during the post-bubble, post-9/11 crap job market.

This is that 2001-era downturn you're talking about.

After the first round of layoffs, the President of the company had all of his line managers tell everyone that his only regret was that he hadn't laid more folks off, sooner. The line managers were told to make it clear that those were his exact words, and that they had been told explicitly to pass them along to all of us.

Nice guy.

I could probably regale you with further tales of C-level and general managerial weirdness, but I'll stop there.

Long story short, the folks I've worked for have been a mixed bag. Some really, really great people, some real jerks. Some folks who were really, really good at what they did, and some folks who had stumbled across some success and who were barely holding on for the ride.

And everything in between.

But the kind of collegial, avuncular, watching-out-for-my-people's-best-interest, go-the-extra-mile-and-then-some kind of thing you described here, no. It's not been my pleasure to work for anyone quite like that.

I've always had good, friendly relationships with the folks I've worked for, and I've always understood two things very clearly:

1. Perform or you're out
2. You might be out anyway, whether you perform or not, for reasons that have nothing to do with you, and over which you have no control.

The nature of what I do doesn't lend itself to hanging out a shingle and working at a direct-to-consumer level, and it's my preference to work as an employee, where you have a sense of ownership and pride of craft in the product you create, as opposed to working as a hired gun.

So, I just accept those two rules, do my best, work my ass off, watch my own back, and carry on.

I *never, never, never* assume that senior management at any place I work is making my personal or professional best interest a priority, and no-one I work for has ever done anything that would lead me to do otherwise.

I ship product. They pay me. Everybody's happy. We all come back and do it again tomorrow.

That's my experience. As always, everyone's own MMV.

My guess is that, at least in the industry I work in (software), most folks' experience is somewhat like mine.

"That same guy also once explained to me that I should think of working for him like being in a life-raft with a bunch of people, and if it started to sink somebody was going to be thrown over, and I should think of what I needed to do to make sure that wasn't me. Which is mentoring in a kind of creepy Glengarry-Glen-Ross kind of way, I guess, but I don't think it's what you mean here."

Well, it was mentoring from someone who could have used a mentor on mentoring. I give him a lot of credit for trying. Too many managers don't get that part of the job at all.

And, I would agree that way too many people have a set of experiences that vary somewhere around yours.

Managing is a much harder job than people think it is.

On a lighter note, to me anyway, I had an employee come into my office one day and request a promotion to a manager position. This employee had never really expressed much interest in managing so I asked why the sudden interest. They said that they had decided that they needed to work 9 to 5 and cut out having to work extra hours on projects so they needed a managers position so they didn't ever have to work more than forty hours a week.

Not having worked less than sixty since I became a manager I was speechless, for days.

Managing is a much harder job than people think it is.

I agree with this.

The extent of my "managerial" experience is leading small teams at a project level. Even at that level, I would describe it as being pulled in ten different directions at once while being nibbled to death by ducks.

With an hourglass dropping grains of sand, constantly, in the background.

Not for the faint of heart.

Even at that level, I would describe it as being pulled in ten different directions at once while being nibbled to death by ducks.

Sooo stolen, this will be.

Russell, your 5:33 is one of your best.

It's remarkable how business (you meet the same types of managers in government) supports itself on a superstructure of ruthless sadism.

I suspect that explains why Mafia and gangster films are so popular in our culture.

They explain how it works.

Now, I've experienced good, humanistic managers, but ruthlessness seems to be the Donald Trump style now.

I thought Glengarry-Glen-Ross was a great movie, but I'm always thinking in movies like that about the possible shorter version.

I mean, let's cut to the chase, like Bambi Meets Godzilla, with Bambi muscled and nuked up.

Maybe the guy suggesting who should be thrown overboard first in the life boat is actually the next juicy meal to keep everyone else alive. Yum, that sadism-fed marbling and gristle.

Oh, he knows navigation? F&ck him.

In the movie's case, I'm thinking of either a client or the Jack Lemmon character unleashing some automatic weapon violence against every f*cker in the room about eleven minutes in, with a slow-mo Ginzo knife machete attack on the Alec Baldwin character for good measure, cause HE finished second.

Why do those Americans, some of them probably combat veterans, sit there and take that crap?

This action would obviate irritating government intervention and regulation in the real estate market, as conservatives desire, and prevent the uncertainty caused for victimized sadistic entrepreneurs going forward, because then freedom-lovers would know the, uh, carrots and sticks upfront for as*holes treating people like sh*t.

You know, if Americans had the cojones to stand up to the Ayn Rand filth in their midst.

Which they don't.

This is why we have government, and the whining from the sadists that comes with.

"In the movie's case, I'm thinking of either a client or the Jack Lemmon character unleashing some automatic weapon violence against every f*cker in the room about eleven minutes in, with a slow-mo Ginzo knife machete attack on the Alec Baldwin character for good measure, cause HE finished second.

Why do those Americans, some of them probably combat veterans, sit there and take that crap?

[...]

You know, if Americans had the cojones to stand up to the Ayn Rand filth in their midst."

Sometimes this hits too close to home. This happened in Boston. It wasn't entertaining or funny. It was a software company not a real estate company.

No one applauded.

Sooo stolen, this will be.

Don't forget the hourglass.

Why do those Americans, some of them probably combat veterans, sit there and take that crap?

Shooting people ain't gonna solve anything.

Here is the deal. We have three factors of production: capital, raw materials, labor. The wealth created by production is considered to belong rightfully to the owners of capital.

Maybe also the owners of the raw material, although not always. It depends.

Labor gets rent on their time.

And there is the problem.

Three factors, each equally essential, only one, maybe two, but generally only one is considered to have any rightful claim on the value created.

WTF is that about?

Shooting people ain't gonna solve anything.

Depends on who you shoot.

But that is my black black sense of humor talking as well as being simply a way of mentioning theCasey Heynes video incident. That's definitely a vibe I'm feeling lately, especially after this. You can be sure that across the aisle collegiality is going to improve dramatically after that, eh?

The Alec Baldwin character in "Glengarry-Glen-Ross, the movie, might have ended up a fairly nice person and working for a non-profit if he had been dealt some anti-bullying chops as a kid like the bully was in the Casey Heynes video.

But he was indulged with "Atlas Shrugged" and, I suspect, used Grover Norquist as his model for sub-human behavior instead and grew up to write bogus mortgages as a sadistic lying sales manager.

I can only guess -- after all, it is a movie.

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