It is a bit odd to put the differences on the back of the companies’ culture and shareholders’ greed without taking into account the different economic context between the two periods.
Sears was not necessarily a nice company wanting its employees to be happy (neither were its shareholders): maybe they were offering perks mostly because it was necessary to keep the workforce motivated at the time, and because otherwise they would seek employment elsewhere. Was the job market as good when (and where) Sears operated than now, where Amazon operates?
Similarly maybe Sears was offering fixed pension plans back then because it was much cheaper than now. When interest rates are high it is much easier to promise a revenue tomorrow, than when they are as low as they are now. There is a reason why that type of plan is very rarely offered nowadays, and most agree that it was a bad idea to offer back then (they turned out to be much more expensive that companies and administrations thought they would be, and I would guess this is why Sears’ plan will be bailed out by the taxpayer).
The problem of these workers is not that Amazon is greedy, it is that for many reasons outside of Amazon’s control they don’t have many opportunities.
6
Amazon, or any other Corporation, will stay in this path as long as we customers keep buying its products. We, customers, have a responsibility too. Things will change when Amazon starts losing customers. In this case, we have the power to put pressure on this company. It's our social responsibility
10
As others have pointed out, we are now engaged in a Global Economy, we are no longer a closed loop economy. Coming out of WWII, we were the economy in power. This is no longer the case. Germany and Japan have recovered, and we have the emerging economies of China and other Asian countries to compete with.
Things have changed significantly
A quote:
on Kyl, LLB, US Senator (R-AZ), was quoted as having said the following in his Nov. 24, 2008 press release titled "Auto Industry: Removing the Weight" and posted on his Senate website:
"Ford, General Motors, and Chrysler - commonly known as the 'Big Three' automakers - are riddled with structural deficiencies and weighed down by tremendous 'legacy costs,' the financial burdens resulting from agreements with labor unions, obligations from previous contracts, and state laws restricting them from dropping local dealer franchises.
Even when these companies design cars that can compete with cars made by foreign-owned companies, these legacy costs make it impossible to turn a profit. For example, the hourly cost of labor for the three domestic auto companies averaged $73 in 2007. In comparison, the average for the Japanese auto companies operating in the US was $48. The vast majority of the difference can be attributed to benefits, since US employees at foreign car companies earn comparable wages. Health benefits, for example, add $1,900 to the cost of every Ford, GM, or Chrysler car."
4
I started working for Polaroid right out of college in 1978. I was only there for a couple of years... And this was in Polaroid's twilight, shortly before its products were rendered obsolete by digital imaging. But Polaroid had been founded in 1937 so it had a pretty good run and in the 60's and 70's, almost everybody bought a polaroid camera or polaroid sunglasses, and the company was very high profile.
And it was a great place to work. They had very good benefits and paid well for both professional and blue collar jobs. And they had a very good stock plan for all employees (and their stock had done very well for years). The stock plan didn't do me any good since I was only there for 2 years but I worked with a lot of lifetime Polaroid employees that were approaching retirement that had benefited significantly from their stock plans.
Even back in the 70's, Wall Street stock analysts would trash Polaroid for treating its employees too well. They felt that any benefit given to employees was money that should have gone to share holders.
Forty years on... And the attitude that wages and benefits to employees should be kept to an absolute minimum is pervasive and is now combined with a level of greed among CEO's that would have shocked the CEO's of the 60's and 70's.
My feeling is that all employees should be getting a living wage for the community in which they live and work.
26
When Amazon launched the idea of drone delivery, long before it was even possible on any level, the media went wild. Drones! Packages right to your door! Although I didn't have a drone of my own at the time, I knew this was a lot of hooey.
Why does the media fall for such promotions? Are reporters and editors that dumb? No, they just have too many things to cover and, as a result, don't know much about specific issues. ABC News still has an aircraft "expert" on call to explain how planes fly and crash. Duh? 115 yrs. after the Wright brothers, shouldn't this be rather common knowledge?
The drone thing, like self driving cars, is one of those technology stories that is just too good to pass up. News organizations go for this like catnip. In regard to self driving, by the way, where is the gain aside from the very elderly and the incapacitated? Well, engineers believe driving will be safer, so we must all go along? No.
I am a technologist and I have been interested in the concept of self driving for more than 25 years, not as an overall solution, but as something that can be used selectively.
Driving can be made much safer. One technological way would be the creation of smart highway systems so that every car knows what every other car around it is doing all the time. If someone is speeding on a city street at 90 mph, your car would know and warn you accordingly. A low tech solution would be to re-design roads and streets with safety as the top goal.
5
Republicans always talk about going back to the 1950's, I guess this part of it not so much!
11
@Chris
Another part of the 1950's they don't want to go back to is that was when unions were at their strongest.
9
@Chris actually the part we want to go back to is the part when companies were not so heavily regulated and forced to pay for benefits, that companies could provide good stock plans.
Sears was not alone, my aunt worked for ma bell and retired with a nice pension, how are you kids doing at Verizon? It was a different time, like it or not a very demographic mix and run by people with a very different mind set. Today’s successful bankers are Blankfein and Dimon, how do these guys compare to A.P. GianinnI, don’t ask. How does Bezos compare to Henry Ford, one is the richest man on earth employeeing thousands on subsistence wages for the areas they live in, the other Mr. Ford was smart enough to want his workers to thrive as well so they could afford to buy the products they were producing. Compare Ralph Lipschitz Lauren to Levi Strauss or his descendents the Hass family of San Francisco, as much as he’s tries to burnish his image he made his billions by knocking off Brooks Brothers, clever merchandising and along with Donald ( The Gap) Fisher began in earnest the offshore manufacturing of clothes whereas The Hass family did everything in their power at great personal expense to keep making Levis in America, the country that gave them so much. There was once a feeling we were all in this together that changed around the time of an unjust Vietnam War and a switch to the economics of Milton Friedman when we became a nation of draft dodging “Im in it for whatever I can get for myself” attitude. It’s a new America and a new world order, gone are Roosevelt, Churchill, Eisenhower, Kennedy and Carter we’re stuck with MBS, Trump, Kushner and Bibi. Lol.
.
8
We progressives cannot allow Amazon CEO Jeff Bezos to play hardworking Amazon employees by carrying out a “rob Peter to pay Paul” worker compensation strategy. A few weeks ago, Mr. Bezos promised to raise the minimum wage of Amazon’s workers to $15 per hour as a result of pressure placed on him by economic populist Senator Bernie Sanders of Vermont who has sponsored a federal bill to fine corporations whose workers must subsidize their low wages with taxpayer-funded welfare benefits. In agreeing to the pay increase, Mr. Bezos said Amazon would lead Corporate America by being the first major corporation to commit to paying their workers a living wage. Leadership in corporate affairs requires the exercise of sound ethics, in this case good-faith dealing. It is simply dishonest to promise a worker a raise while eliminating another benefit of equal or greater value. Amazon is a prosperous super-company that can afford to justly compensate their workers while also ensuring their current and future financial prosperity by continuing to give their workers corporate stock. The only way Mr. Bezos can lead Corporate America is by paying his workers living wages while keeping the widening poles of shareholder and worker connected in his company. This is the only way to bring economic justice to America’s workers and resolve our severe wealth and income inequality gap.
11
Amazon is not an outrageously profitable company, their margins last Quarter were just 5%. They simply cannot afford to pay a lot more.
@WillCan Jeff Bezos earn a little less?
11
@Will You’re right Will, Amazon isn’t that profitable, just its major shareholders who bought into the Bezos vision of destroying other businesses and be willing to lose money until you did. He succeeded, aided by an shortsided investing public and consumers who care for nothing nor no one besides themselves, analogous to the citizens of countries who decimate their forests only to find their eco systems and livelihoods gone. Short term thinking for a country guided by greedy people that finds itself racing to the bottom.
9
Comparing a warehouse job at amazon to a sales job at sears doesn’t really make sense. How about warehouse workers at sears? If one is not able to get a higher level of education and rise above the warehouse worker, $35,000 a year isn’t bad, with regular raises. Jeff Bezos came up with a brilliant idea and put hundreds of thousands of people to work. It is far more efficient to have 100 people order online and have one truck deliver the orders than 100 people driving their 5000 lb suv to the store (often by themselves) and pick up their purchase. No one is forcing anyone to work in a warehouse at amazon but the job is there if they need it. They also have many jobs for more highly trained people too.
4
@Wallace Davisfrom another posting from Wormydog
Some 60 years ago I was a salesman at Sears in Houma, Louisiana. I remember a warehouse worker there retiring with a generous Sears pension, plus a nest egg of some $250K in profit sharing. Needless to say employee turnover was virtually nil, and management/employee relations were great. Sharing motivates!
11
The difference in wages has a lot to do with free trade and tightening margins. And yes, the focus on the C-suite. I’m in the last five years of mg career as an enterprise software sales person. My quotas are double what they were on the 90s, yet my base and total earnings are the same. Same for middle management. But oh the exec suite? Thriving.
12
Some 60 years ago I was a salesman at Sears in Houma, Louisiana. I remember a warehouse worker there retiring with a generous Sears pension, plus a nest egg of some $250K in profit sharing. Needless to say employee turnover was virtually nil, and management/employee relations were great. Sharing motivates!
8
I suspect the only solution to this is a national online marketplace run by the government. It's the only way to avert an out-and-out oligarchy in which the likes of Jeff Bezos personally overtakes the elected government (which is to say the broad citizenry itself) in terms of power and influence. Anand Giridharadas in "Winners Take All" confirms that executives with their behemoth fortunes are increasingly enacting their own social visions into their own social programs to transform society in the according to these personal inclinations, with no accountability to voters. When Bezos and Musk have their own personal space programs, we are quite literally living under not one, but several governments, only one of which is elected and authorized by a Constitution (or accountable to one).
Perhaps the enactment of de facto rival governments in this way amounts to a kind of "soft treason" and should be addressed accordingly. As I often do in this forum, I lay much or most of the blame with neoliberal (U. Chicago) economics, which made supposed economic efficiency and wealth maximization the main focus of society and its institutions, legitimizing oligarchy and supporting it. They made money a god, removing our resistance or guard against plutocracy.
This may be our last chance: corporations that begin to eclipse elected Constitutional government in real power are an existential threat. At some point, the government must step in and establish a public utility.
8
To this end, we must tap the whole range of publicly funded and supported universities and private sector experts (programmers, designers etc) of good will to participate in an emergency program to set this up in a matter of months. every tax incentive must be used to lure manufacturers to the government-run marketplace, and taxes levied on Amazon and their equivalent, for example: merchants exceeding $100 million per year in revenue must pay a substantial percentage of that revenue for use of public infrastructure, satelites, roads, perhaps even the air they consume. Perhaps the tax would be determined by a formula including overall revenue, magnitude of executive pay, and pay ratios.
As severe as this sounds, is it any rougher than what Amazon has done to the traditional mom-and-pop outfit?
6
By the way, I believe I may have just supplied a most formidable talking point for DEMOCRATIC candidates with just 2 weeks until the midterm election.
DON'T BE TOO SEDUCED BY THE RECENT PROSPERITY, WHICH, THOUGH BENEFICIAL, IS ALSO SOLIDIFYING AN OLIGRACHIC "PARA-GOVERNMENT" RESTING ON PERSONAL FORTUNES RIVALING GOVERNMENT RESOURCES. THIS OLIGARCHY HAS BEEN CONSOLIDATING ITS POWER UNDER TRUMP AND REPUBLICAN STEWARDSHIP. ONLY THE DEMOCRATS CAN CREDIBLY OPPOSE AND REVERSE THIS DEVELOPMENT; REPUBLICANS WILL CONTINUE THIS TREND PERSONFIED BY TRUMP HIMSELF, OF BIG MONEY USURPING THE GOVERNMENT.
4
It's not often I want to stand up and clap for a NYT comment, but this is one of them. Everyone's afraid to speak truth to power about what Capitalism really is and really does
2
My father was from the post war generation and was in management in the Auto industry. He knew the names of and talked to the factory workers even though he worked in the executive suite.
I learned how to get the respect of co- workers by watching him when I worked in those same factories on the floor operating machines in the summers home from college. And he was the guy who negotiated with the UAW for their pay. What I learned from him was it's not all that hard to be nice to people who are below you on the pay scale. People like my dad are long gone and replaced by numbers guys that could care less about the workers on the pointy end of the stick that make it happen.
13
Amazon’s greed isn’t complicated, it’s just greed!
6
The U.S. needs more ESOPs and worker co-ops.
7
This article provides a stark illustration of how the middle class, who could work in retail or manufacturing and earn a respectable middle class living was decimated by automation, out-sourcing and ultimately the greed of the American Corporations. Amazon made a bid deal about raising pay to $15 an hour, while removing stock options. You can be sure they did a careful analysis that determined this move would save them money. It's essentially all about Greed. Think of the loyalty Mr. Bezos could earn from his employees if he had not only raised base salaries, but improved benefits? How many more billions does he need? Labor has not, and is not, sharing in the wealth being generated in this nation on a fair basis. The decline in wages, pensions and benefits has resulted in a large portion of the population struggling to stay afloat, and as they retire with little or no savings and no pensions, will constitute a drain on the average tax payer - because the wealthy have an inordinate ability to dodge paying their fair share of taxes. Shameful on many levels.
29
Most, if not all, of these workers would be way better off if they were in a union. In my life, I wasn't lucky at love (except for a few years of paradise when I was younger) but I *was* lucky to have two union jobs in my 36 years before retiring. The best thing was you couldn't be fired at the whim of someone higher up without a fair hearing. I was empowered, not just some peon lucky to have a job. So now I have two union pensions on top of social security. Republicans will say that 'union bosses" (read Jimmy Hoffa) have robbed me (dues); but in reality, they worked for *me* and took their mission very seriously.
32
Apart from the financial and stock issues, a major difference in comparing Amazon and Sears is that there is no "face" to Amazon. Back in the day, customers had a face and a name to attach to their buying experience. In "small town America" those faces were our neighbors or our friends' Moms or ... (This was true also of Penney's, and more recently of Nordstrom.) The Internet has eroded the customer experience, so that only the mechanical aspects of a job need be fulfilled - no personal contact, no personal skills, no community presence.
Walmart has (I think) seen the light on this, and in-store customer experience is a target for improvement, even though their on-line presence is growing. Amazon may be seeking to supplant Walmart as the employer of last resort.
3
The Sears and Amazon stories raise the perennial question: What is the purpose of the corporation?
Scholars long ago debunked the myth of shareholder primacy as a legal obligation. But the absence of legal mandate has not deterred companies from embracing such primacy, a strategy reinforced by corporate boards that link executive compensation to short-term share price, a practice increasingly enabled by stock buybacks.
Deepening wealth disparities and attendant social stress will continue absent a vigorous public debate about corporate purpose. One example is an assembly of scholars, activists and business representatives, under the aegis of Corporation 20/20 , has offered the following definition: “The purpose of the corporation of is harness private interests to serve the public interest.” In the same spirit, Senator Elizabeth’s Warren Accountable Capitalism Act proposes a broader vision of corporate purpose.
Absent a robust public debate and concerted legal and regulatory turnabout in favor worker rights and compensation, we should expect a continuation—indeed, acceleration—of wealth concentration that is a key driver of the divisiveness infecting the American body politic.
20
For anyone who knows history, this should come as no surprise. This is what Capitalism is. This is what Capitalism does. The wide spread prosperity of the 30 year post war period under which Sears enployees flourished were a historical fluke. We're well along on the course correction of capital accumulation that is destroying the American Middle Class. This isn't some bug, this is the expected outcome of Capitalism. Read Piketty's Capital in the 21st Century. It's only going to get worse from here unless the workers take the power back
14
What's a living wage?
In the 1950s, one parent worked bringing in money and the other stayed home taking care of the other half of the bargain. I.e., cooking, cleaning, making clothes, shopping, taking care of children, etc.
We had smaller houses, a single television, a single telephone, newspapers shared by the whole family, a single automobile or none at all if you lived near public transportation. A one income family could live nice.
Now none of that is considered sufficient. A television in every room, a cell phone for every family member, a computer for every family member, two, three, or even four cars per family, paid child care so the second parent can work, often not economically worth it. By the way, that child care is subsidized even for the wealthy among. The list goes on. Oh woe is me. How does one cope.
This article is not a fair comparison at all.
As if we didn't have enough people feeling sorry for themselves because they cant have more.
7
In his column for The NY Times on May 21, 2018, entitled: "Is Capital or Labor Winning at Your Favorite Company? Introducing the Marx Ratio," Neil Irwin discusses a Marxian wage ratio in which he compares annual profits per worker versus the firms' median wages, for several leading S&P 500 firms. He does this because shareholders gain the profits (after-tax dividends to shareholders) and workers gain the wages (pre-tax expenses) from this divvying up of revenues.
For Amazon, this ratio was 0.19, meaning that profits per worker trailed Amazon's median annual wage paid in 2017. Thus, in 2017, Amazon netted about $3.03 billion in profit, with 566,000 workers. And, the ratio can be calculated as follows:
[$3,030,000,000/566,000 employees) = $5,354 profit per worker]
Since Amazon's median wage was about $28,446, then ($5,354/$28,446) = 0.188 = 0.19]. Mr. Irwin argues that the lower this ratio, the more generous a company is to its workers, at the cost of its shareholders, and vice versa. Since Sear's reported a loss in 2017, the data could be reduced in value for comparative purposes.
Amazon reported about $177.87 billion in total revenue in 2017; so each employee was responsible for about $314,258 of this revenue. [($177,870,000,000/566,000 workers) = $314,258. Sear's total revenue of $22.138 billion in 2017 was produced by 140,000 workers, or about $158,129 of revenue per worker, indicating that Amazon's employees tend to be more productive.
10/24 W 2:18p Greenville NC
4
An interesting metric that merits consideration, but it seems dishonest to compare Amazon, one of the most valuable companies in the world, to Sears in its last year of operation as the company crumbled.
2
Until now the plain fact that a few of us own most of the permanent wealth, while the rest of us earn and spend our incomes year-to-year didn’t much matter. That’s because we needed each other. Just about everything that American capitalists invested in had to be produced by American workers. So supply and demand arranged for those workers to share in the fruits of productivity. Recently however, China and India have become viable labor markets. It’s going to be a long, long time until their labor will be priced close to ours.
What about the greedy capitalists? Well the markets for their products are as unforgiving as your labor markets. If their companies fail to optimize labor costs, price competition will grind them to dust. Abandon your search for villains; It is the wheel of history that threatens to align American incomes with those of poor countries.
These dominant forces promise an America of richer capitalists and poorer wage-earners. Though it’s rude and unfashionable to speak of it, this tidal wave will engulf a voting booth near you - sooner than you think.
11
@Charlierf
Q. If the world market forces wages down, then why are German wages in the industrial sector way above US wages, even though Germany has a large industrial sector that produces goods for export?
A. 1) Their laws (e.g. requiring that corporation boards include representatives of the employees; eg. that support collective bargaining) balance the power between capital and labor. 2) Higher productivity. 3) Better quality.
Q. Does international competition drive wages down in the parts of the economy that cannot be "offshored" or imported from abroad?
A. No. The largest portion of our economy cannot be imported or "offshored": Construction, sales, culture (eg US film, music, etc), education, health care, personal services, and more. With laws that balance the power of capital and labor, and strong unions that enable labor to negotiate for a larger share, labor in these parts of the economy (the overwhelmingly largest) could earn a comfortable income.
The problem is that, at present, employees in the US have little leverage to compel their employers to share the profits.
We can pass laws that provide the leverage and balance to achieve this.
10
My mother was a sales woman at Sears for 25 years. While the benefits were far better than retail benefits are today, she didn’t retire with anything close to $1 million nest egg. Perhaps the keyword here is “salesman.”
10
The goods Sears sold were more reliable than what you buy though Amazon today. Sears stood behind their products and it was easy to be proud to work there. Amazon--well it claims to but not so much when you dig into the reviews of products because it sells anything and everything without knowing or caring to disclose what is really in the box. That said, goods all over are shoddier. Going by-by with Sears (or forever gone) are Sears' competitors. Amazon's competitors? Keep your search engine searching.
9
My grandfather worked as a truck dispatcher for Sears until he retired comfortably in the 1960’s. He raised four kids, owned a nice home in suburban Seattle, had a comfy pension, and a nest egg of Sears stock. How many employees of Amazon (or WalMart) can hope to achieve the same?
14
@Craig S. Your grandfather was an exception. Most workers got nothing out of their employers pension plans since they didn't stay on long enough. The poverty rate in 1960 for those over 65 was 40%.
3
The misguided philosophy says that one of a corporation’s stakeholders, the shareholders, deserves to have their value maximized in the short term. The three other vital stakeholders are not adequately represented at the decision-making table and inadequately compensated. First, the employees — who are the real value creators. They have been turned into a cost to be squeezed. Then, the corporation itself, where investment in R&D and innovation is grossly inadequate. Finally, a business’s customers, who should be a corporation’s prime stakeholder — not the shareholders.
10
The real damage in the shift from profit sharing to stockholders only will be apparent when this generation’s workers retire without a nest egg or any means of support other than a meager Social Security check each month. That combined with trends such as discrimination against older workers and flat wage growth that discourages savings is going to create a catastrophe punctuated with suicides and homelessness among retirees. The USA will continue to lose its standing in the world, but hey, according to Trump, what the rest of the world thinks about us doesn’t matter.
20
Bet the working conditions in a Sears warehouse in 1970 were better than they are in an Amazon warehouse in 2018 too.
And remember that in 1970, Sears had a huge mail order catalog business.
But yeah, paying most workers like garbage does result in the likes of Trump.
Ironically, a Amazon warehouse in 2018 still pays better WalMart. Who served on the Walmart board for years?
8
@Yaj You wrote: "But yeah, paying most workers like garbage does result in the likes of Trump." You got it right.
1
"By present-day standards, Amazon is relatively generous. In addition to 401(k)’s, full-time employees receive medical insurance and a week of paid vacation their first year."
The fact that 1 week of paid vacation plus health/401k is considered generous, especially for a $1 trillion company, is pathetic.
27
@Andy It is generous if you consider this is a minimum wage job. The majority of minimum wage jobs do not have a 401k or give you vacation and medical insurance (which is huge).
2
The oligarchy rules.
11
Why should anyone doing a semi/unskilled job expect to retire with $1 million? That money should have been reinvested in the business. Sears killed itself long before the investment bankers showed up.
3
Because people deserve the dignity of their labor, not to be discardable cogs. But then, that's Capitalism at its purest form
9
Unions.
14
Are the answer. Labor needs a voice or they will be defrauded by management and the wealthy ruling class, over and over.
16
The end of Sears is a sad event among my family members. My mother worked for Sears as a division manager in San Mateo, CA for 20-some years in the 60's and early 70's. When she left the company and quit working she had a nest egg in the high tens of thousands (of 1970 dollars) in what Sears called "profit sharing."
The longer you worked at Sears, the greater Sears added to the employees profit sharing account, topping out at four dollars for every dollar she contributed to her retirement account. Sears stock was golden.
Then Sears changed. Profit sharing went away at some point and the company was just another "pick and pay" operation. Of course, the employees' view of their jobs changed along with it. Loyalty went out the window with profit sharing.
Sears top management just made a series of terrible decisions over time and now the company has paid the final price for their making them.
Sears' demise is a textbook case of shortsightedness as markets changed. It was the same in the auto industry, manufacturing and the service sectors.
Much as I despise how Amazon has steamrolled over retailing, I vote with my wallet every time I buy something. Amazon has made it too easy to buy the things I want and so I trade with them. Sears and dozens of companies like Sears had a chance. They just didn't have the vision.
That's capitalism in a nutshell. It can be brutal but the search for efficiency in allocating capital is ongoing.
2
Part of the problem here is that younger workers show little interest in deferred compensation and even equity if its subject to vesting restrictions (as most grants are). Those nice Sears and other legacy jobs were lifetime careers, and compensation systems were designed to reward worker loyalty. The employer’s benefit was retention and with that, stability. Today, workers switch jobs far more often and no entry-level employee starts a job with an intention to stay for 40 years. Or even 5. True, loyalty cuts both ways, and smart employers will include retention benefits in their comp packages. But if they do so at the cost of current, cash comp, they will lose talent to competing employers who pay more cash, now.
10
As someone who grew up in the 70s and 80s and experienced and witnessed a lot of these transitions first hand, the other part of the equation that the article doesn't focus on is the level of pride and customer service that was routinely provided in department stores where they had career sales associates. Now it can hard to find a cashier, let alone someone who knows the merchandise. I realize that is also a result of more people buying online but it's a bit of a chicken and egg. When employees are treated as professionals, and paid as professionals, you get a higher caliber and more committed employee.
17
Your article starts with an erroneous basis, a salesman and a warehouse worker are at the opposite sides of the spectrum. A salesperson generates revenue for the company, any company and a warehouse worker is a cost center. Want to make money anywhere in the world, be a salesman.
12
@AusTex
Salesman jobs like those at Sears have disappeared and been replaced by jobs as warehouse workers in 'cost centers.'
5
@AusTex You can't sell anything if there's nobody to fill your orders and your customer service is abysmal.
4
We workers are not helpless to fight back against the winner-take-all scheme. Vote for higher taxes on corporate profits that do not go to wages and make all wage costs tax deductible. Tax all profits used to buy back stocks at a high rate while making pension contributions of cash or stocks tax deductible.
If capitalism is all about incentive, then give corporations a good incentive to pay their workers more and a good reason not to spend money juicing their stock prices instead. Make it clear that in America, stacking all your profits at the top will rack up a giant tax bill while rewarding your workers with higher pay, pensions, and benefits will give you a tax break. Let's call it reverse-corporate welfare since such a plan would increase the wealth of poorer people and reduce the need for entitlement programs.
38
Regarding Amazon and Bezos, I have already closed my Amazon Prime account. Could you imagine if all of us did just that in support of workers everywhere? We must use the power of the people to fight back every way we can.
18
@Abbey Road I closed mine, too. And not just to support their workers. It's just not a good deal. Buying anything on Amazon is a real crap shoot; it reminds me of the early days of eBay. You don't know who's selling it, how long it will really take to get it, and whether or not you'll have a litany of problems trying to return it. The Prime "2-day shipping" typically takes 3 to 7 days for me--and I live in Chicago, where you can get almost anything delivered 24/7, meaning they have no excuses. Many items arrive in Sam's Club boxes! Their harried, overworked delivery people just chuck packages onto the sidewalk in front of the apartment buildings here, because they can't get inside; lots of the packages get stolen. The shipping is also not "free," as they state; it's built into the cost of Prime items. The whole plan is such a sham.
3
@Abbey Road Stopped using my Amazon card when WaPo started Trump bashing.
1
Basically, $$$ and benefits that used to go to workers are now going to executives. That's what happens when private-sector unions decline.
22
Wow. This story encapsulates what has gone wrong in America: the wealthier people (the greedy class) have taken all or most of the benefits of our successful, productive society for themselves. Instead of a tide of prosperity in which most boats rise, most boats are now left behind. So, what, suckers? You show up for work, do your job, hope you don't get laid off and the future is more and more of the same until you drop.
The report mentions the tyranny of Wall Street. Yet, when one company decided to ignore rule by stock traders, they created one of the richest corporations the world has ever known. Is there a message there? Yes: by constantly focusing on the short term, by constantly pumping for stocks that go up and can be traded for profits, Wall Street is in the process of destroying the ultimate success of enterprise capitalism. No matter, they will still get multi-million dollar bonuses even when the house is collapsing. This is a kind of madness writ large.
There is no reason for anyone in America to ever be poor. A national wealth fund should be created so that everyone owns natural resources (and gets disbursements) and a significant share of all public companies. These funds could be dispersed at somewhere around 34 yrs. of age to be used in any manner the person chose or allowed to stay in the fund until retirement age.
The old Sears set an example of decency, fairness and sharing. Amazon does the opposite, treating employees like cattle who can never do enough
15
Amazon has always attempted to put a pretty face on nasty practices towards the most vulnerable. Take the first-hand accounts over many years of 3rd party temp workers in their warehouses who were treated like slaves with no bathroom breaks or any rights.
12
The milton friedman mantra of companies’ sole function is to make a profit, and in fact, those which help their employees are suckers is what drives wall street and it’s adherents, the republicans and some Democrats named clinton. So to make things better for the country, things like an increased minimum wage and raising the cap on social security have to be done, and soon.
5
@Cap’n Dan Mathews
Milton Friedman argued for companies to exercise self-interest AND that they should pay taxes. According to him, it is through taxes that companies fulfill their social responsibility. He believed that it was up to the government (elected officials) to decide what social issues are important enough to invest the collected taxes in. One of the problems with Friedman's arguments is that a free-market economy is paired with small government with in return results in reduced corporate taxes. This leads to social issues being overlooked and corporate behaviour not being monitored. To fix the misalignment between social issues and a reduced budget, Republicans offer to further reduced corporate taxes and remove social issues from the agent (e.g., climate change, health care)
4
The success of the GOP's kleptocracy has emboldened corporate sociopaths the world over. America has barely blinked as Trump and his cronies have raped and pillaged the country unchecked for nearly two years. Thieves have learned there are no consequences, so why shouldn't the wealthy hoard all the wealth? What's to stop them?
12
@Steve. It didn’t just start under Trump. In fact it’s why we have Trump
2
Plus, I understand that the Sears catalog pages made great toilet paper for outhouses. Because back then, you couldn't order your toilet paper from Amazon.
6
So Amazon responds to the social network 'mob' supported and encouraged by media outlets like the NYTimes and increases the base hourly wage to that magic $15. With that, came a loss of options and/or large bonuses. And now, the NYTimes is whining again. I'm starting to think that nothing will satisfy the progressives, until bankruptcy occurs. Not likely with Amazon, but certainly happened to the auto industry, Sears, and more to come. You cannot have it all - should everyone make $15 and hour OR should some make less, some make more, and many get bonuses? I prefer the latter as it rewards outcomes vs. entitlement.
1
Greed, greed, greed and run away capitalism. Amazon will be what breaks the camel's back of this country.
6
“It was not unusual for people to have $250,000 to $350,000 when they retired in the 1960s and early 1970s,”
I am disappointed the Times would run this type of nauseating falsehood. Fact: In 1980, only 43% of workers had a pension.
@Will
The passage you quote refers specifically to Sears employees, and specifically in the 1960's and early 1970's. It does not refer to workers as a whole or the early 1980's. This is very clear from the context.
The point is that Sears, at the time, was an example of a company compensating its employees with generous profit sharing - not that this was the norm.
25
@Will What Gator said. Also, "only" 43% of workers had a pension?? That's an astounding number, especially considering that now, only 15% of private-sector workers have a pension plan (source: Pension Rights Center).
12
@Poussiequette How many have a defined contribution plan today?
The workers don't get paid and produce the richest man on earth, Jeff Bezos. This country can't get past old ways, can it?!?
3
That headline comparison is applies to oranges. Compare Sears warehouse workers to Amazon warehouse workers. Or compare Sears salesmen to Amazon software engineers. Otherwise, you're just making false equivalences. I bet in both cases, Amazon warehouse workers and software engineers do better than the Sears people did.
1
I am going to wildly speculate.....A book was written in the late 1980's about excessive executive compensation....but mostly ignored. Often, I hear people complain about how much professional athletes are paid -- I don't know if that is because many of them are black, or not. What they do not get is that these athletes and the team owners actually engage in arms-length negotiations -- Owners clearly won't pay a dime more than they must to get the talent they want. This is not remotely what happens in corporate America...where CEO's negotiate mostly with themselves -- after, of course looking in the mirror and being told they are the fairest of them all, and where actual performance is irrelevant. I think there may be a connection. In the "old days" before free agency and the ability of professional athletes to demand the compensation they now get, CEO's weren't so hugely paid. But -- since those "kids" started getting so much money, the CEO's -- guys and gals in suits -- think they must also get huge paychecks.
2
Ivan F. Boesky summed it up best: “Greed is good.” True, he went to prison for insider trading. Served a minimal two years in Club Fed and remained a multimillionaire on his release. And now Donald Trump is president. Our nation really is off its rails.
11
This owners keep all mentality harks back to the days of slavery, when the owners kept all but enough to keep the slaves from starving.
6
back in 1972 janitors were retiring from sears and roebuck with kitties of $300k. but back then it was old white men running the country, not the social justice cognoscenti of today.
3
Did the opening up of China benefit Americans?! And they say NAFTA was bad for the U.S. worker! Nixon's the one! Oh, those Republicans!!!
2
@Counter Measures Lower prices for goods are beneficial.
@Will At the cost of American jobs?
1
@chris diianni Right now we have a 3.7% unemployment rate with 1.1 job openings for every person out of work. Any Econ textbook will tell you that free trade doesn't take away jobs.
Idiots, if you bothered to run numbers, you would find that American corporations spend much more on benefits for (FT) low-wage employees today than Sears ever did in its heyday. 10% for retirement? For a low-wage worker today, it's about 30% just for healthcare benefits.
4
@Ernie Cohen
How many companies provide health care benefits to low wage workers today?
It's also worth noting: that medical costs have risen by leaps and bounds since the hay day of Sears that being part of the gobble, gobble economy; there was a time when the executive officers took pride in having a well paid work force. Today its all for the executives many of whom drive their companies in to bankruptcy and walk away with millions in golden parachutes.
3
Global competition
American companies now compete in a global market place that barely existed fifty years ago. The US (led by Nixon) didn't open up China until the '70s.
US companies now openly compete with those barely paying their employees a living wage - let alone providing them with a 401k plan.
That's not to say that Bezos couldn't pony up more for his employees. Such a move, though, would have negligible effect on what is a world wide phenomenon.
2
I worked for Gannett for years and watched and felt the contempt of corporate managers for reporters and other staff at local newspapers.
Pensions disappeared, as did pay raises, and longtime employees were laid off and replaced with new hires just out of J school adept at click-bait journalism.
It is not just Gannett, of course. Print journalism, including the Times, is failing at its purported mission.
Make a profit, sure. But it'd be nice if you spent some of your money, Times, Gannett..., on journalism.
8
This article uses lots of cherrypicked statistics and anecdotes to create a sob story. The poverty rate for those over 65 in 1960 was a staggering 40%. It's now 9%. A cursory glance of news articles from the 1970s shows a series of scare stories about pensions, whose benefits were denied to those with short tenure and many of which failed forcing congress to step in in 1974 with the Pension Guaranty Corporation.
3
It would be great to see the tax code provide a strong disincentive for corporations like Apple to horde cash.
I'd love to see that our societal requirement for granting corporate charters is that, in exchange for the charter, the corporation must have as a primary goal the generation of wealth. That wealth could be in the form of wages for employees, equity for shareholders, or community and ecological investment. But the bottom line is that corporate profits cannot be hoarded. They must be distributed back to society.
The way to incentivize this is through the tax code. Basically, tax corporate cash and other non-business related, passive investment holdings. E.g., profits in year 1, start be charged a wealth tax in, e.g., year 3, year 4, .... until those profits are reinvested in the company or disbursed to increase community wealth.
To allow for companies to accumulate savings for major investments/purchases, the tax rate could be set so that accumulating savings had a tax liability approximately equal to the carrying costs of Grade A corporate bonds.
(One detail is that share buy-backs would stay on the books as undisbursed profits subject to the wealth tax. Companies must either figure out how to productively plow profits back into the company, or increase overall wage spending, or return profits back to shareholders and the community in the form or dividend payments or investments in the social and ecological wealth of the community.)
1
Part of the problem is Americans want cheaper goods. That leads to more disposable income for the consumer too, but at the expense of the frontline worker in the industry. Sears was routed by cheaper stores, selling cheaper goods by employees making less money. If Americans valued all that Sears was offering, they would have continued to patronize that store. Instead, Americans valued the total amount of money they were spending on goods over the value of having an employer like Sears.
We make decisions about how we spend our money. Time after time we maximize for our own personal profit over the good of the whole. We get what we pay for, and then we complain about what we traded for it in the bargain.
8
Facts matter. The Sears salespeople were seen as driving the top line, fulfillment staff at Amazon, while key to meeting customer expectations are seen more as an expense. Anyone who has worked in corporate America knows these two types of workers are rewarded differently.
3
Lower wages, no benefits and less than 30 hours a week seems to be the mantra of many corporations. Even with a "generous" $15 an hour pay, most workers will struggle to make ends meet. To top it all, cost of living skyrockets as profits for the shareholders and executives are squeezed from consumers. Where is this leading to? My guess is to a society where the wealthy live beyond their dreams and the rest of the country struggles to get by.
Lets party on!
3
Sears shows how capitalism worked when it was not hobbled with all types of regulation -- particularly legal requirements to provide all types of benefits; plus extensive regulations on how to provide pension benefits. Let's roll back the laws that prevent more companies from being like Sears was in the day
Start with rolling back the culture of executive GREED that demands pay ratios of several hundred to 1. From a recent study on executive pay:
"Although the 271:1 ratio is high, it's still not as high as in previous years. In 2015, CEOs made 286 times the salary of a typical worker 299 times more in 2014. Compare that to 1978, when CEO earnings were roughly 30 times the typical worker's salary."
Okay, Mr. Market-Is-King: you think general prosperity is lifted by market forces being allowed to work their magic, unhampered by bothersome regulations. To which I answer: All human relationships, economic/employment, political, familial, community, friendships, what have you, are governed by ethical principles & notions of fairness & propriety, & the conditions you tolerate or promote attest to your particular ethics & notions of fairness & propriety, & are never merely the product of abstract or automatic or mechanical market forces: they attest to your values & what you think right & proper.
If you think these wealth & income ratios (including their trajectory in recent decades) are right & proper, you subscribe to a post-moral, raw might-makes-right, Darwinian outlook. If that is your ethic, you inherently invite those disadvantaged by the arrangement to join forces to out-Darwin you, using the government as necessary to take anything & everything they can yank from you. If you want to live by post-morality, you abdicate any appeal to moral principle.
Address greed first.
1
Unions once helped many American workers not just by fighting for better pay, benefits and working conditions but by encouraging non-union companies to improve their offerings in order to keep unions out. Since then, the majority of American voters have made it crystal clear--via who they vote for--that they are no longer interested in collective-bargaining rights. The result is plain to see. Want to know why the path to the middle class grows ever more narrow and precarious? Ask your fellow Americans.
7
This is a perfect example of companies not being in vested in their workers and sharing the wealth they are creating for themselves and shareholders. After WWII companies basically partnered with the work force so all could share in the wealth. That attitude is obviously out the window today on most workplaces Bezos et. al. can afford a billion less and includes the workforce with better benefits and pay
2
Robots can't spend cashed-in shares. And robots will eventually replace most, if not all, frontline Amazon workers. Bezos is thinking of the future.
@DGL47 Then who will be left to buy stuff from Amazon?
3
@Maloyo
Bezos can go to town spending all his money buying from Amazon.
This story shows the deleterious effects of libertarianism and the increase in egotism among corporate founders and executives. Sears and Roebuck were as brilliant and innovative as Bezos, but they clearly had a different view of their place in society--i.e., that they had a place. Today's corporate bigshots think of society as nothing more than resources for their own aggrandizement.
13
My last employer granted new hires 1,500 shares that vested gradually over 4 years. The company was acquired after 2 years. All those half-vested shares were distributed, and since I was only half vested I think I made about $800.
The old shares were then replaced by a brand new grant of 1,500 shares per employee – again vesting over 4 years' time. During that time, the company's share price dropped by 60% or more. I left 2 years after the acquisition and made maybe $300 total. I was not surprised, and would have been astonished to make anything worthwhile. Still, not worth 4 years of deferred income.
1
Got a call from a tech startup offering a lowball salary and “equity grant”. They got snotty when I asked for audited financials, even though I’d offered to sign a non-disclosure.
Seemed surprised when my final response was “you expect me to invest in your company but won’t disclose the most basics of what I’m investing in. No thank you”.
5
Back in the day companies like Sears viewed employees as assets, today companies like Amazon view them as overhead.
28
Are we seeing the emergence of a new business model: Predatory employment? The conditions at Amazon warehouses and elsewhere, including the co-worker informants are also pointing in the direction of this new model. Horrifying.
8
@Cemal EkinIt is not a "New" business model. It was the standard business model before unionization. No that Americans no longer beleive in unions, it is coming back with a vengeance.
4
These retrospective pieces always fail to address the impact of globalization on workers. 50 years ago was before Nixon visited China. This is ancient history compared to today's economy.
American companies had to pay American workers well because they were in high demand. It didn't matter if they were low-skill, they were "geographically privileged". Now, with global suppliers, producers, and shippers, there's no turning back. The global middle class will rise, but the premium of the past for American workers is gone.
Further, I'm not sure a Sears salesman is the 1:1 with an Amazon distribution worker putting something in a box after being told exactly what to do. A salesperson from Amazon's cloud division is likely going to do even better than the Sears salesman mentioned.
10
@Tom L I disagree. American Corporation went overseas for their own profits. And as American productivity rose over the 70s, 80s and forward, owners put that extra profit in their own pockets and wages stagnated and are still low. So, big deal Bezos raised wages to $15, who can live on that?
Yes, we live in global world, but that is not what will keep the American worker with empty pockets.
2
Well, who can live on $15 is about 99% of the world's population, since even $15/hr puts you at the cusp of the global 1%. That alone tells you the story here... America is part of a global economy where our high-cost, low-skill labor isn't as attractive as international low-cost, low-skill labor. Competition is global, so if you want to ignore this, you'll drive American businesses into the ground. Baidu isn't going to see Amazon paying workers 50/hr and then decide to do the same - they'll instead run Amazon out of business or into full automation.
I graduated from SUNY Binghamton in June of 1971 with a degree in American History. I decided to stay in town for a year before grad school in order to hang out with my friends who were still seniors. I took a job in the shoe department in the local downtown Sears store. I was the guy who measured your feet and went into the stockroom and found every size but yours in the style you wanted.
On my first day, staff were celebrating the retirement of the store's maintenance manager. I was told by my manager Frank that this fellow was leaving with several hundred thousand dollars in stock and other benefits and would be moving to Florida.
Frank, my boss had been with the store for twenty years and apparently was able to support a wife and kids comfortably on his Sears earnings. He and other department managers were discussing how much they were looking forward to a comfortable retirement and encouraged me to stay on and enter the management intern program. I opted out and went on to do other things.
I think about those men and women and hope they were able to achieve retirement before everything changed.
Now I am retired in Florida, pretty comfortably after a career in public education. I hope that shoe manager Frank was able to do the same. For anyone working in retail or for Amazon, the new oligarchy has obliterated the American dream.
30
Many comments speak to the long developing trend in income and wealth inequality. Many factors have contributed to this but the failure of government and its leaders, who have become much more interested in and beholden to corporate interests due to lobbying and political donations and influence, seems to be at the core. Our democracy has lost its way. The current administration is perhaps the worst in this regard. Yet many of those disenfranchised by corporate America somehow are in favor of the administration. The irony is stunning, really.
14
Though Mr. Trump is a more crass version of his predecessors, Republican and Democratic administrations are all beholden to corporations. I believe the people who support Trump are voting against Democratic social politics, understanding they are financially disenfranchised by both parties.
4
@bkd Right on bkd! The Dem's are as beholden to Wall Street (Remember Hillary's Goldman Sachs Speeches) as the Repubs. LGBT and bathroom issues are not important to most voters and may even cause some voters to vote against candidates supporting those issues. Just remember 2016!
1
Sadly, the mantra of companies aspiring to please all stakeholders -- employees, customers, investors, management, and the community -- vanished in the 1980s. Trying to please all stakeholders hurt the companies' profitability, which hurt their stock prices, which made them targets for corporate predators funded via junk bonds. Thus was born the mantra, "maximize shareholder wealth."
I don't have a good solution to this, because in addition the domestic problem of maximizing shareholder wealth, companies also had to start competing against foreign firms, who, thanks to the strength of our currency, were able to offer their goods for substantially less. This was a good thing for the rest of the world: in fact, I've heard it called the "platinum age," because the "golden age" just doesn't due justice to how much the open US trade borders helped enrich the world. And it was good for us too, bringing in cheaper products (and giving us more disposable income), not to mention helping to end the Cold War and bringing relative peace and stability to the planet.
I think we should reexamine the fiduciary responsibility of corporations. Rather than having management act as agents on behalf of shareholders only, we could put legal teeth into having them act responsibly towards employees and the community as well. So if share prices sink and new management takes over, such as a private equity firm, then that new management will have legal liability to the others as well.
8
@Ted How would you do that?
Aside from the obvious culprits of a 40 year assault on unions, regressive tax policies, deregulation etc etc how much blame should be put on the complete lack of ethics or integrity possessed by the folks running these companies? Clearly there has been a paradigm shift in corporate governance. Essentially, they underpay their workers and outsource the true cost of living onto society as a whole i.e. the Wal Mart model. And as an added bonus, some corporate raider/hedge fund guy comes in, guts the company and sells off the bits. #sad
15
@Dave
Dave, Please understand. Mr. Bezos has purchased his own personal organ of propaganda that defines preaches that all reality in the "liberal" West; is what Amazon, Walmart, Apple, Facebook JP Morgan/Chase, and others, have created.
And they've found it to be good.
Vietnam broke the social contract in this country once and for all. Until then the rich had paid there taxes and shared the wealth and the poor had fought our wars. Lyndon Baines Johnson led us into a war that we weren't willing to win, that the rich would not support and the poor would not fight. That broke this nation, it has never recovered, and for the rich that means every person for themselves.
The rest of the explanations are fictions of convenience, woven to cover past sin not atoned for. This will only get worse until we truly heal from Vietnam.
4
@Charles Becker
The Vietnam war, much as one hated it and fought against it (as did I), had zero to do with dissolving the profit-sharing mode of corporate business. That began in the 1970s, when corporations were--or felt themselves to be--beset by union--supported wage levels, sharply increasing international competition, and high inflation. The one who did most to break the social contract was Reagan. For starters, remember the air traffic controllers strike . . . and the introduction of 401ks?
15
@RBD,
Your focusing on the symptoms, not the disease. You are treating the fever, not the infection. What you say is true, but it's not the *cause*, it is the effect of the broken social contract that we came out of Vietnam with. What you say, is, however, easier and more comfortable to deal with than actually looking deep inside ourselves and our nation to address the fundamental problems of a divided society.
“The significant increase in hourly cash wages effective Nov. 1 more than compensates for the phaseout of incentive pay and future stock grants,” said a company spokeswoman...
Um. Except for the fact that wages are taxed at a much higher rate than capital gains, and unrealized gains are not taxed at all until the stock is sold. Plus whatever is left of the $15/hr after taxes is going to be spent on daily necessities whereas stock is usually saved as a "nest egg".
As for Sears - this once great retailer was finally driven into the ground by the carelessness & incompetence of its last owner, a hedge-fund manager who is still worth billions even after ruining Sears & causing 10s of 1000s of workers to lose their jobs.
25
Let's consider that each Amazon employee who socked away the dollar or dollar fifty raise could, at the end of the year, buy at least the share of stock that she would have received under the former stock grant plan. It would require some fiscal discipline and long-term vision, as most stock investments for most people do, but it's not as if employees' stock grants are being taken away and exchanged for bubkes.
2
@Harold B. Spooner They were being awarded 2 shares annually. Now assume that the individual will be making 30,000 a year ($15 x 2000 hrs). This places them in fairly low tax bracket (12%) for the IRS. Call their total tax burden to be in the neighborhood of 17% for the sake of this argument (though state/local taxes will probably total more than 5% for some), That $1.50 extra will result in about $2,490 extra a year. Amazon stock is currently selling for over $1,700 per share. So they are losing out as they can not buy two full shares on the raise they are being given in exchange for losing that stock issuance. Not to mention the fact that even if they were to save that 1.50, they likely will not get interest earnings nearly as good as a share of stock would have over the lifetime of their employment.
1
@Harold B. Spooner
$1.50 saved for a year would equate to $2496 ($1.50 x 2080hrs x 80% after tax). That's substantially less than the $3500 invested in 2 stocks each year. Especially if the stock keeps going up or splits.
when corporations were doing so much good for their employees, the top tax rates were far higher than today, so it made sense to pour the money into employees - they didn't lose the money to the gov't and the employees could afford to spend money on the products the companies sold.
9
Those who labor should reap the benefits of their labor. Employees first and always. And why can't the shareholders be employees? That would truly make everyone vested in their company.
6
Thanks to Ronald Reagan and his corporate backers who sought to destroy unions, the ground work was laid for what is happening today. The average worker could not confront corporations to pay higher wages or other benefits. Today the workers have no power, with no unions, to force corporations to pay decent living wages. Unions must be brought back in full force for workers to prevail today. Without unions, the only course of action for workers is to boycott corporations which will end up a messy fight.
The dye was cast in 1973, when a lawyer from Richmond wrote a memorandum, later called the Powell Memorandum for the United States Chamber of Commerce. In essence it stated that corporations have the most money to gain control over workers, therefore setting new policy. Many US workers were fooled into accepting right-to-work laws, which further depleted their powers to gain decent living wages. First and foremost, there must be a rejuvenation of unions to protect the workers.
Since the 1980s, there has been a new partnership between the corporations and their shareholders, leaving the workers in desperate economic circumstances.
FDR had the right solution when he said that if the corporations don't want to pay a decent living wage, let them leave the country and go elsewhere. Unfortunately that is the only choice we have today to confront kleptocratic corporatocracy.
26
How much did widespread issuance of credit cards beginning in the 1970's exacerbate this trend?
As workers' salaries began to stagnate they suddenly had a new source of money to buy those must have items before the next check or yearly bonus arrived. If used prudently credit cards were great. But fail to make your monthly payment in full and suddenly you get saddled with usury interest on your borrowing. And it is interest you cannot write off like a house mortgage.
Over the years, how many millions of families have self indentured themselves by racking up credit card borrowing they never pay off? Always bleeding them dry by month's end.
And don't think this is lost on the bosses who are smart enough to read the data. Once bosses know employees cannot quit the job because of their "situation" the bosses can ask those employees to do more or pay them less because the employee is strapped with debt and would suffer greater hardships much greater - if they lost their job - than they would if they weren't saddled with debt.
The 2008 financial crisis was textbook case of companies getting rid of head count and forcing those remaining to pick up all the slack. Productivity went through the roof. Companies made historic high profits.
And as the economy recovered, the companies have been slow to replace those good full time jobs because they know they still have the workers pretty much where they want them.
Still self indentured to the myriad debt they've taken on.
9
Just what is "complicated" about Jeff Bezos using his stolen wealth to destroy competition and employ slave labor?
It's not complicated at all. WE THE PEOPLE must DEMAND that his little "empire" be broken up into little pieces, taxed to the maximum and turned into true employee-owned companies where every person equitably shares responsibility and profit.
I do not want to live in Jeff Bezos vision for his world. Do YOU?
16
Who did Bezos steal his wealth from?
Sorry, is it OK to compare folks making twice the minimum wage to slaves, something America is still struggling with the aftermath of?
Which pieces of Amazon did you think should be broken up and how?
Is it the success of Bezos that upsets you? Is it that he created jobs for half a million people? That he created a trillion dollars of wealth, and helped ensure a major player in tech was American?
Shouting (all caps for online) ambiguous talking points from the left doesn't get you in hot water the same way as it does on the right, but advocating for communism is as misguided as advocating for racism.
1
@njglea Right, take away privately founded companies, now owned by stockhplders, many middle class and gove them away to the people. Is this Valenzuela or Cuba? How did that turn out for those places. Slave labor? These workers can't leave and are in chains? See definition of slavery. its up to other businesses to compete with Amazon rather than tearing down a company popular with the American public. YES I love Amazon, till something comes along doing the same thing I like better. Not leaving the house, ordering books, music and other stuff without leaving my den is great.
1
And the top tax bracket during the 40's, 50's, and the 60's were something like 80% or even higher at times, which helped keep the development and maintenance of infrastructures that served everybody in the country. Today's corporate and social structures are built to serve the wealthy 0.1%. The inequality is sickening to watch. We're going back to a few rich people being served by a bunch of servants, and we know how that ended in France. What Jeff Bezos could do to make a mark in the world is to take Amazon back to the Sears era of really taking care of all of his workers and to be a model for the rest of the high-tech world.
18
@Momo - According to IRS records, the average tax paid by wealthy taxpayers during this period was about 35%. There were a zillion loopholes.
3
@Momo Bezos and Sears job was and is how to serve their customers best. The customers said Bezos. Why deny customers their choice? Should we also go back to the assembly lines of auto manufacturers being just workers rather than the now in-place a few workers and robotics? What would a car cost than? A small Ford, $100,000?
2
@Momo...The "Sears era" ultimately lead to decline and now bankruptcy reorganization to salvage what is left of Sears, if anything. I don't care for Bezo's predatory tendencies, but holding Sears up as a model is naïve nostalgia.
It’s possible to shift the legal ground so that companies would be pushed by tax law to give employees shares. However, since stockholders own companies and thus also they own the United States, that tax law change won’t happen soon. Where are the Democrats on this issue? Why does our country accept this shift away from union power and shared wealth?
7
@Daniel Mozes So YOU want government to forcibly give shares to workers diluting many middle class stockholders holdings and lessening their return? I think not. Leave my amazon holdings alone. Country has shifted away from unions because of unions actions as to their connections with union workers and with the businesses itself. Corrupt union bosses taking huge chunks of money for themselves and the mob, see Jimmy Hoffa. And protecting workers over business and consumer interests. See auto workers union protecting union workers drinking and smoking weed in company parking lot during lunch hour so they could go back to work on a car you just might buy later.
3
“The mantra is shareholders above all else.” This is the problem with our system today. Of course publicly held companies are responsible to their shareholders, but it shouldn't be at the expense of their employees, communities, customers, and the company itself. Unyielding forcus on quarterly performance makes it very difficult for companies to make decisions that are healthy for the long-term sustainability of the company and its non-shareholder stakeholders. They are not permitted to feel short-term pain for long-term gain.
As this article shows, it wasn't always this way. But it's a pernicious system that is fueling growing economic inequality.
5
@Samantha Cabaluna Right Amazon is hurting their customers, communities, and the company itself. What do the customers say? They only made Amazon the biggest retailer in the world. They have provided jobs for how many in the communities. How many communities are lining up asking Amazon to open their new super plant in their community. The company itself is now worth what? There are no non-shareholder stakeholders. There are only shareholders.
Let me guess. Sears was taken over by a Wall Street banker, who saw the generous compensation plans & pensions as cookies i the cookie jar he could raid. Then when the business fell apart he blamed the employees for it.
America has only one governing principle: free contract. That means bargaining power is everything. What you make, what you earn is mostly a function of your bargaining power.
Back in the 1950s Sears competed with America’s manufacturing industries who were all unionized for help. Compensation had to b higher because workers had more bargaining power. The worst jobs were with the Government which payed lower salaries but made up for it with better and more secure benefits. In the current age, those are seen as comfy jobs that deserve less pay and benefits.
The median wage has been flat since 1972, even though GNP has gone up 150%.
From 1945 to 72 median wages, across the board, poor, working, middle & upper class, went up lock step with GNP which had gone up 100% since 1945. If that trend had continued you would be making 150% more today than then. The middle class went from 2 of every 3 Americans in 1971 to less than 1 in 2 today (<50%).
In high school in summer 1977 I got an unskilled labor construction job paying $20/hour ($80 today). Today with vast education, technology design experience, and a law degree from a tier 1 university I’m lucky to get $40 an hour.
The American social contract was broken when Reagan was elected & he broke the PATCO union
49
@Tim Kane: I was around in 1977, a little older than you. Just so the younger people on this board know, in 1977, 20 dollars an hour for a high school summer job would have been unbelievably high. 10 dollars an hour would have been considered absolutely great.
1
@Tim Kane PATCO broke their signed "no strike" union contract. Don't blame Reagan, blame the union leaders and those that followed them out to strike.
@Tim Kane...Guess again, Tim. While the Sears geniuses sat in the penthouse of the Sears Tower in Chicago surveying their realm at a great distance, a couple of yokels in Bentonville crept into niches the Sears Tower geniuses couldn't be bothered with. It was all down the elevator shaft after that. Sclerotic management felled Sears, not Wall Street.
Please don't forget to mention that those employees wages are taxed to the last penny, while the shareholders can engage in many many tax dodges, so it is 'only the little people who pay taxes' as Leona famously said. This is simply not just. I believe terribly obvious injustices like this will lead to violence.
21
Corporate greed is beyond. I am going to cancel my Amazon prime (again - I am embarrased to admit). Jeff Bezos literally does NOTHING FOR SOCIETY at all. The same with Apple - love how they have to pay the European Union billions in back taxes that should be going to the United States. We all have to do better and shop local whereever and whenever possible. I will start with myself.
24
@C . that's the best idea yet. divest. if they won't share with workers why bother. they suck us "shareholders" in because they 401Ks keep feeding the pigs. the issue is that the 401K owner gets crumbs and the big investors (who are corporate execs) take all those gains along with their salaries.
1
@C I experienced withdrawal symptoms when I dropped my Prime membership years ago, back when the nightmarish Allentown warehouse situation hit the news. But now I'm over Amazon. Am relieved not to have to worry about getting any of the multitude of counterfeit products that have overrun the site. I still shop online a lot but have had good experiences with Target, BedBath&Beyond, Home Depot, NewEgg, Barnes&Noble and other trusted web sites. You can do it! :)
1
OK, how many people here have a stake in an S&P 500 index fund?
Well, what you own is 4.41% Apple, 3.58% Microsoft, and 3.13% Amazon! And nearly all your gains in the past few years are due to a handful of tech stocks that are characterized by ruthless efficiency.
So think of the huge number of people with 401K accounts who are smiling every time they get their quarterly statement. That's where all the profits are going.
Currently, there is nearly $8 trillion in assets in index funds. So there is about $250 billion in Amazon stock held by a broad swath of the middle and upper-middle classes, who certainly aren't complaining.
4
@Jonathan
No one I know has stock--which is why I find it so funny when people use the stock market to justify voting for Trump--'look how well the economy is doing!' they crow. I want to know for whom? The constant hope of the constantly let down.
7
@Jonathan: 80% of all stocks are held by the 1%. That’s where the profits are going. The 401K accounts help keep the stock prices high, thus padding the estate of the 1%.
The median wage has been flat since 1972. The middle class has fallen below 50% - it was over 60% in 1971.
Corporations are an ownership collective. It was fair when they were forced to bargain with a labor collective. We’ve eliminated the latter at the former’s behest and destroyed our social contract. What we have is a declining working class hooked on opioids, meth, extacy and self destruction and voting for Trump because they see no problem doing to the country what has been done to their own lives.
11
@Tim Kane - I doubt that. Vanguard mutual funds alone manage $6 trillion, which is more than 1/4 of the S&P 500 cap. I doubt that many billionaires invest through retail mutual funds that are marketed to the average Joe.
Today’s corporations refusing to acknowledge a social contract with their workers produced the discontent that got Donald Trump got elected. These are the same corporations that are allowed to pour billions of dollars into our elections to buy the outcomes they want.
Capitalism can be used for good (the Sears example) or for bad (pick almost any modern corporation). Capitalism needs to be reined in.
Even with the raise, an Amazon worker won’t have enough for retirement even if they have given a lifetime of hard work to the company. So how will the raises look when robots take over the jobs? They won’t ask for a raise or stock.
Jeff Bezos is estimated to be worth $146 billion – and that worth is estimated to be increasing by $260 million a day. These are obscene figures. How much does anyone need to live comfortably? If you give people the basic necessities – jobs that can purchase food and shelter, and healthcare and education – it will temper collective discontent and assuage humanity’s worst inclinations like racism.
What’s the purpose of an economy? Is it to produce financial profit for a few or social profit for the collective?
Vote. Vote early if you can – otherwise be there Nov. 6. Power to the people, not corporations.
34
@Michael - Actually, Mr Bezos appears to be down $22.25 billion since October 1. Easy come, easy go?
1
@ Michael, Evanston
Ironically, the trends that led to Trump are exacerbated under Trump, who deceives the cheering minions at his rallies. In the past, Trump has hired Polish, not American, workers to raise his buildings and shifted hard, blue- collar workers by refusing to pay them until he was forced by bankruptcy court to pay them pennies on the dollar. This is the man who is going to change his spots to rescue you? At least a hatred for minorities still binds Trump and his minions together by blaming darker complexions and immigrants for ruining the little, forgotten guy’s chances, when it’s really the greedy guy at the top of the food chain who’s more than happy to perpetuate this myth.
If Amazon is so sure there is no difference in the change of benefits, why don't they let employees choose either option. A buck raise, or continued stock grants. Of course we know why.
28
Yet another article about the wonderful lives of the baby boomer generation. It's the same story re-told again - they were handed it all by their parents and didn't pass it on.
This isn't about Amazon or Sears. This is about how one generation cashed in at the expense of the next one.
10
@Jshwa Neither Jeff Bezos, nor most of those benefitting from stock options at Amazon, are part of the Boomer generation. The same is true of almost everyone involved in the hyper-successful companies of the current tech world.
Sears also predates the Boomers by a significant amount of time.
I understand your point, and it has real truth to it, but it's not really central to a story about the difference between how a pre-boomer and post-boomer company differ in their treatment of employees.
7
@Jshwa
It is frustrating to continually hear people bash the boomers as though they caused the problem. We did not. We were born and we have lived the lives for which we had the opportunities. And most of us don't have it nearly as great as younger generations seem to think we do. I own my house. It is also my first house, which I paid for over 30 years, which could use a ton of work which I can't afford. Retirement? I would lose my insurance. Vacations? A long weekend home.
Yes, the issues under discussion are very much about the change in corporations and their understanding of their role and responsibility as corporate citizens. They do not believe they have responsibilities to other than their shareholders and their CEOs. They pay as little as they can and give as little in benefits as they can get away with--they are lousy citizens in their neighborhoods, too. The gap between the pay of ordinary workers and CEOs has soared beyond imagination and reason.
Stop scapegoating boomers.
1
@Paul Davis - Bezos is technically a late baby boomer, since he was born in 1964. Most of the tech companies like Oracle, Microsoft, and Apple were started by baby boomers in the 70s.
No doubt that executives today are disproportionally better compensated than the front line workers. But don't forget that the generous and outdated (pay for seniority vs. performance?) packages offered to all employees in the "good old days" resulted in bloated cost structures and complacency. Many of those "generous" companies that failed to change are no longer around.
3
@George Foo: But this is precisely how Japanese companies work: lifetime employment, pay based upon seniority. We were told for decades that this was unsustainable. But when the Great Recession came, it was 2/3rds of the American auto industry that filed for bankruptcy, not the Japanese auto industry.
3
@George Foo There's a happy medium in there somewhere. They have enough to ensure their executives are wealthy beyond belief. That trickle down effect if the wealthy peeing on the rest of us.
2
@George Foo . it amazes me how justifications abound for why it's not fair to share in profits. disproportional executive pay doesn't put money back into the companies to grow it for everyone's benefit. it simply creates the environment where clever people in suits can make it seem like they are creating worthwhile stuff when in fact they are selling the idea of creating worthwhile stuff to get more 401ks to keep feeding the pig.
This should be able to be handled by statute, but given the rulings of the past and present "Gilded Age" Supreme Courts, we probably need a constitutional amendment (which is absurd as corporations are creatures of statute which limit the liability of investors to the corporation -- a huge boon for which costs can surely be laid).
In any event, we need to (a) establish that corporations are not "persons" with any rights beyond statutory rights and with no "free speech" rights, etc., and (b) establish that corporations must be run equally for all stakeholders -- consumers, employers and shareholders.
Shareholder sociopathy only developed in the 1960's and did not really begin to be implemented until the Age of Reagan. We must crush it. This is not a matter of "party." Instead, our current "party system" and its yelps and howls serves to distract us (and is generated to distract us) from this fundamental truth.
From wild growth in inequality to the total corruption of our politics, madcap deference to corporate irresponsibility (and the structural financial penalties for corporate responsibility) is the fundamental cause of all that has gone wrong since Reagan.
Trump voters were making a fumbling protest against pro-corporate Hillary. (And Trump lacked the sincerity and the competence to actually keep his economic promises, so he has turned to the "culture war" to maintain his "base.")
The corporate form must be returned to social responsibility or all is lost.
11
Highly ironical that at a time when c.e.o.'s Zuckerberg, Gates, Bezos and Schultz inter alios appear so concerned with issues of social justice, and pat themselves on the back for it, employees are getting stiffed. Consider 1 ad by a fast food chain, , which shows an excited young African American coming into work with a college acceptance letter in his hand and being applauded by manager and fellow employees alike, and pitch is the company is doing its utmost to send its workers onto higher education.. Yet I who get my breakfast every day there,asked several whether there were any paid holidays, and answer was negative:They r not even paid for Christmas, and time off for sick days is a chimera!No folks greedier than a c.e.o these days and his shareholders!Starbucks, among the most pious of the corporations, came up with idea baristas should engage customers on social injustice while serving them bitter, over rated coffee. That idea did not last long, as it probably would have led to fights.But article is informative and well written and merits a hosannah!
19
I live by Newport, RI home of the Robber Barons of the 19th and early 20th century. It's good to see that the Robber Barons persist in every century and even today. It gives me a warm feeling inside to know that Nothing Has Changed under the sun.
4
Corporate greed has existed as long as corporations. Greed is too simple and demonizing an excuse. It is simply not useful
Look rather to actual changes over the years. Two, in particular, come to mind--globalization and the decline of unions.
While globalization has had many, many benefits, one of the effects has been to allow companies into the US that have lower costs, lax environmental laws, abhorrent labor conditions. Our companies have to drive out costs or go belly up. IT forces companies to lower broad-based benefits, because any benefit time 100,000 employees is very expensive.
On the union side, who gets all the money in corporations? People with negotiating power! Whether that power comes from perceived unique skills, cousin of the president, or sycophant, that's where the money flows. The unions in the US broke in the 80s and we are all feeling the widespread ripples from that. So-called right to work laws only exacerbate the problem and further reduce worker power.
Demonizing executives might shame them into taking actions like
Amazon did. Are the workers better off though? They have gained income security at the expense of upside.
The US needs to have standards on firms that we allow to compete here at home, and we need to strengthen the negotiating power of the rank and file. For ' sake, get out there and vote for legislators who will do their jobs.
6
Since Day 1 of Clinton's First Term, the working class has hadn't a party who represents them.
Pre-Clinton, Democrats were the party of Sears Workers. Post-Clinton, they're the party of Amazon CEOs.
9
It's far more accurate to describe employees as elbowed out of the line, then walking back to the rear while senior executives, lobbyists, advertisers, consultants, legislators, and private foundations siezed an increasingly outsize share of the largess generated by the growth of corporate wealth.
Employees, during the reign of St. Reagan and the demonization of the right to collective bargaining, became commodities.
7
Your lead suggests this is "part of a trend." This is a culmination, or a logical progression (since we don't know how it will end, if ever) not a trend.
The shareholder has always been king. With a burden of quarterly earnings calls and stock prices dependent upon earning reports, Corporations are trapped in a chase for profit at the expense of workers, customers and the environment (if not executive salaries - its still people making these decisions after all). It is only in the last decade that activist shareholders have begun demanding full disclosure of harmful corporate activities and pay disparities.
5
@Lynne I think you missed the central point about Sears'-like behaviour: making the employees into shareholders.
Also, but somewhat tangentially, German companies have shareholders too, but the German economic culture has not elevated quarterly earnings reports to the power that we have allocated them in the US. It isn't inevitable that we do things in this way.
3
“For what has a man profited if he gains the world, but loses his soul.”
The Shareholders shall inherit the earth.
The executives who make the big bucks let the money tricle down to the management who keep the employees low, as well as trickling down to the shareholders, who keep raising executive “compensation .”
3
It isn’t all about the shareholders. It is very much about company executives, who continue to cash in, holding down compensation for those who do the heavy lifting in order to boost it for the corner office class. For every company, there should be a comparison of the total compensation trend for management and non-management employees.
It is the overly generous compensation if executives that most impacts the company’s bottom line, particularly in underperforming companies where executives do very well while working and really cash in when forced out.
4
The sales workers at Sears actually sold the products to customers, and were vital to the success of the stores.
Over at Amazon, the web site does the selling, and the warehouse workers are deliverymen only, who will soon be replaced by robots.
10
@Jonathan And the salespeople knew their product and were an asset. Some MBA came along and decided they were a cost. Compensation went down and eventually the knowledgeable salespeople were bought out and replaced by cheap new hires.
Company went down the tubes, but look how much they saved on employee costs.
5
@veh - There is a New Yorker cartoon, with the board of directors looking glumly at a sales chart. The CEO is pointing to the place where sales plummeted: "That's when we decided to lay off the sales force".
From the depths of the Depression, the Dems and the progressives and the workers' movement offered a New Deal. That deal carried this nation in prosperity for nearly half a century. In the late 70s, in the face of a changing world and an oil crisis not of structural origin but motivated by geopolitics, the GOP promised a Conservative Revolution that would make things better. And America and America's workers bought it.
Here we sit, 40 years later. Yes, the promised boom happened. More than once. Each boom was, however, accompanied by a bust that left the country ever worse off.
Wake up. Vote. And, for god's sake, stick with your choice -- the road ahead requires commitment. There are no easy solutions.
10
"Each boom was followed by a bust." True, but the busts hurt average Americans , not the wealthy. Those bottom feeders experienced the busts as opportunities for enrichment. This increasing the wealth gap that is sucking the middle class out of existence.
Went to work for Sears in 1959 at what was to be new store in a shopping center. We stocked the store that summer, unloading trailers and filling the stock rooms. We all worked long hours thru the grand opening and then into the Christmas rush. After all the money was made they let go about 25 to 30 people. People who were never told this was only short term employment. Not the great employer as reported.
2
Why is America making me wonder what it must have been like in pre-revolutionary France or Tsarist Russia?
13
@James R. Filyaw
At least France and Russia back then did not pound their chests exhorting democracy, freedom, and the greatest and bestest country in the world.
for an excellent companion piece to this article please read (google) the Sept 5, 2017 article from the NYT "When the Rich Said No to Getting Richer"...in it the author mentions how George Romney (Mitt's father) turned down several bi annual bonuses...he was "worried that the "temptations of success" could distract people from more important matters"...the author also points out that "In the early 1960s, the typical chief executive at a large American company made only 20 times as much as the average worker, rather than the current 271-to-1 ration."
13
The same people who profit from poorly supported employees are the same people who sit in the pews of churches, synagogues, and who attend mosques. I think religious leaders need to step forward and say it’s not good enough to believe in helping others while at services and then forget completely about helping people in the workplace. Shine a light.
2
@Jim
Doesn't look like daddy's mantra had much effect on his own son. The irony...
You think Amazon is bad? What about Apple?
Amazon is a retailer. Its workers have to be physically present in the US. So, yeah, it underpays them and overworks them and doesn't care if they quit because there are always more lined up outside asking for jobs.
But Apple can do its work anywhere, and anywhere but here is where it chooses to do it. Manufacturing: the country with the lowest wages. Management of intellectual property: the country with the lowest taxes.
Economists claim the lower production costs of imports make America richer by giving us the same amount of stuff at a lower cost. But if all the savings end up in the hands of the top 3-5%, and if the other 95-97% are actually LOSING income so that the 3-5% can have more, more, more . . . then how are WE any better off?
19
@Green Tea - China is not the country with the lowest wages. Furthermore, only the final assembly of Apple phones is done in China, at a cost of roughly $6 per phone.
Most of the actual manufacturing is done in factories in Taiwan, Korea, and the US. Wages are higher in those countries, but the factories are heavily automated. However, there is no way to automate the final assembly with current technology.
The final assembly could be done in the US at a small additional cost, but this is basically tedious unskilled labor, and it would be difficult to find people in the US who could do it, even at $15-20 an hour.
@Jonathan
Wait a minute. Unskilled labor that pays $15-$20 per hour is something US workers can’t do? Did you mean to say it’s labor US workers are unwilling to do?
Green Tea has a point, and when we see through the Veils of Adoration that Steve Jobs and his ilk have marketed us into believing, Apple, Starbucks, Facebook, et Al look pretty hypocritical and unscrupulous.
@Diego - I mean to say that working conditions required to make iPhones would be unpalatable to US workers. Would thousands of workers be willing to live in a dorm right next to the factory, and work 12-14 hours a day when needed? The young Chinese workers will do this for $3.25 an hour plus time and half for overtime. The work is not so unskilled either, these are young workers who are able to assemble iPhones at a high level of speed and dexterity.
This is what happens when no one either in Washington (Bernie Sanders excluded) or Main Street pushes back on the inevitable excesses of capitalism. Executives realize that there is very little resistance anymore in always putting stockholder interests first or excessive executive compensation. When a two year old has a box of cookies, the only way to stop them eating them all is to take it away; you can't 'half-smile', shrug, and say 'things change'.
6
@JeffB
you mean bernie venezuela?
@jibaro
Relax, Jibaro. Why don't all of you fear-mongering anti-socialists pay attention to the countries where some socialism works in tandem with capitalism? There are many of them in Europe. Stop giving the anomalies as examples.
Shareholders have long since become more valuable to corporations than employees. Employees are replaced whenever possible by contractors, as company boards and management increasingly distance themselves from the people who actually perform the services or make the things that the company sells.
When a company announces a layoff, its stock goes up.
The laid-off and poorer employees are not the only ones who are worse off: you can't reasonably argue that people who are disposable and know it are giving their best. You can't get rid of an employee with decades of experience and resources, and expect the same results from a less-experienced (and lower-paid) contractor.
Amazon and other behemoths have the capacity to pay their workers fairly and share the immense profits the workers generate for them. They choose not to, and the United States is a poorer place overall.
But the stockholders are happy.
15
I and my spouse grew up in the Chicago area. Many of our friends and neighbors had very good jobs with Sears and generous retirements waiting when they got older. Sears had a huge impact on the entire Chicago metropolitan area, as well as many small cities and towns throughout the country. Stock ownership was widespread, and not just held by employees. The company, like many other of its time, supported the development and sustenance of the middle class. Amazon and Walmart do not providing a perfect example of the wealth polarization our country.
Sears' products were of the highest quality (hand and power tools, clothing, appliances and household goods) and service was excellent. Long before the internet you could buy from the catalogue and have merchandise delivered to your home.
It's a sad day to see this once robust company whose employees and products were a symbol of a robust middle middle class go into bankruptcy.
23
Worker Benefits are also much more positive than 100 years ago. and Yes, the world is tougher now, the US has global competition for workforce and labor rates. Yet, we still have it mighty good here, relatively. Those at the "poverty line" here are actually much higher standard of living than literally 93% of the people in this world.
2
@Joe yohka
"Those at the "poverty line" here are actually much higher standard of living than literally 93% of the people in this world."...
Perhaps because we subsidize their food, health insurance, etc. with tax dollars from the rest of us and with money our government must borrow.
1
Let's go dancing in the streets, then! The only thing is, our poor live HERE.
1
The conventional wisdom is that people like Henry Ford built the middle class by paying good wages. This middle class then had enough money to buy his cars, thereby ensuring Ford's continued success.
Today's businesses, if they even hire U.S. workers, pay so little that many employees need more than one job or government benefits to survive. They can't even scrape together $500 or $1000 for a family emergency.
The result is that fewer and fewer employees can afford to buy the things that companies are selling. That's not a winning formula for long-term profitability.
9
Why should today’s huge multinational conglomerates, even those ostensibly based in the US, care about the overall prosperity of US citizens? Thanks to globalization, there is a new & increasingly prosperous middle-class expanding in China & other previously “third world” countries who can now afford – and who now desire – “American” products. The US is sinking, other countries are rising. Companies will sell to whoever has the cash. They are not charities. They are businesses who serve their shareholders. Period. It’s the government “of the people, by the people, for the people” who is responsible for advocating for US citizens, not Jeff Bezos or the Koch brothers.
15 years ago, Circuit City floor salespersons were paid on commission. TVs, Computers etc. were all considered big ticket items. Customers needed a lot of hand holding and convincing before committing to buy one. A top circuit city salesperson could make 100K a month. Today, nobody pays TV and Computer salespersons a commission. The margins are not there and customers would rather pay a lower price than be coddled by a salesperson. Car salespersons make a good living, so do insurance agents and real estate agents. What differentiates these from the apparel and hardware salespersons is the profit margins on the product, opaqueness of the transaction and customer preference to pay a higher price for a more personalized service. Amazon competes on price and service alone, the same product can be bought from another online or in-store retailer for a lower price. I think Amazon pays well for the kind of employment they provide.
3
The plain truth is that we faithful Amazon e-shoppers enable Amazon and others to do what they do and for them to not feel guilty for having done it. If their shareholders knew we shoppers don’t condone certain aspects of Amazon’s business practices they may not be so fast to adopt measures that benefit the few at the expense of the many.
4
The workers themselves have some culpability for their predicament. They vote into office politicians hostile to workers and sympathetic to corporations. They refuse to join unions. They meekly accept the paternalistic promises of CEOs who tell them they will be taken care of, only to find their companies sold and their jobs gone. They agree to train outsourced replacements for themselves. In short, workers have lost their self esteem. A quick look at the labor history of the U.S. includes stories of men who gave up their lives for the right to earn a decent living and work in safe conditions. Where was the outcry from Amazon workers when their stock awards stopped? Not a peep. At the end of 2017, Amazon had almost 600,000 employees worldwide. There is tremendous power in that number, but the workers do not use it. Imagine if there had been an employee walkout in protest of losing their stock awards? If Amazon and other workers are treated poorly, they must accept some of the blame for that. You can only be mistreated if you stand still and allow it.
9
@Ms. Pea:
That is not true. See related NYTimes article from Oct 9, 2018.
@Ms. Pea
Easy to talk when you can afford your bread. As you know, we the rank and file have job opportunities galore and head hunters are fawning all over us to hire us. It's called being squeezed and desperate. Also, warehousing jobs are not in the middle of Manhattan, are they?
Perhaps you'd like to tell your Seattle Amazonians making the big bucks how they should go on strike because their fellow warehouse colleagues just got dealt a bad hand. Oh, not a peep on that.
Somewhere along the line large corporations decided that the employees who keep the company in business and running weren't worth compensating as well as they used to. The decision was made to favor the shareholders at the expense of everyone below the level of executive. Other decisions were made: to stop training and investing in employees, to hire only those who fit whatever stereotype the employer had about itself, to periodically "downsize" by firing the most experienced and therefore older employees to save money.
It was hard to find jobs when I graduated from college in 1980. There were too many of us chasing too few jobs in every field even the sciences where companies claimed, as they do now, that there weren't enough people to fill the jobs. The reality is quite different. Companies don't want to hire people on as permanent employees. Jobs are advertised as entry level but the skills required are more than entry level. One job is posted by multiple agencies and if you apply to that one job through multiple agencies you wind up with nothing.
To use the cliché, it's a race to the bottom in terms of wages, benefits, and standard of living. Companies don't want to pay or train for the skills they desire. They don't want to share the wealth with the employees that make it possible. We are living in a klepotocratic corporatocracy where the quality of our work doesn't matter. Nor do we.
25
I think WWII had a lot to do with shaping our employment policies from 1940 - 1970. From basic training to foxhole fire fights soldiers learned the importance of unit cohesion and solidarity and these values were not left on the battlefield. C-Suite executives often shared very similar experiences with the blue-collar workers on the shop floor and this was reflected in the corporate social programs and compensations plans.
This changed around the period of the Vietnam war. Deferments meant that the haves could avoid service while the have-nots fought and died. It also coincided with Milton Friedman's opposition to conscription and advocating for maximizing shareholder value. Today, very few business executives share many life experiences with their shop floor employees. As such their values and ideals are simply not inclined to foster the sort cohesion and solidarity of their forebearers.
39
@MJC I had a conversation on inequality of wealth with a coworker a few weeks ago and your comments above echo my sentiments exactly.
Unfortunately, those business executive "values and ideals" don't leave room for social services or infrastructure, either. A sense of shared community has been replaced by intense protectionism of the immediate family and its wealth and assets.
6
I saw the two headlines side by side: "Amazon raises pay to $15/Hour" and "Amazon stops giving employees stock." What one hand giveth, the other hand taketh away. The only thing that keeps me from completely loathing Bezos is the fact that the president* loathes him.
6
Maybe the willingness of Sears' executives to share the wealth had something to do with extremely high marginal tax rates.
9
Bezos creates working poor, not jobs. Wage slaves.
27
What was not said in this article or any other especially when it relates to Amazon are robots. Amazon is NOT designed for humans to work for period. That's why we have deaths from exhaustion in their warehouses. So we have robots who don't need or want stock in the company and our vile business schools teach that business's only responsibility is to make money and nothing else.
Look at Germany their employees are all stake holders and their economy is rock solid.
17
Home Depot once made its employees wealthy also,but is now floundering, note to management,it’s not the employees, it’s you.
10
Two questionable comparisons the first five paragraphs? (Sears salesman to Amazon warehouse worker and 1950s worker percentages to Bezos -- did the old Sears not have warehouse workers? Did no one own a comparable amount of Sears stock?).
This subject deserves better. This is the story of America's decline at the hands of the 1%. The facts are bad enough, there's no reason to make it seem worse.
7
The important thing is not workers. It's that our economic system produce billionaires who can warp the government and tax system to insure they stay in power.
18
The article clearly illustrates the problem with modern capitalism...
When a company reaches a point that it has a well made and affordable product and well paid employees, it still has to show a profit in the next quarter. The only way to continue to make more profit is to skimp on the quality of the product, raise it's price, pay employees less, or absorb another business.
I call this the Ouroboros effect. At some point all purely capitalistic endeavors have to eat their own tail to continue to grow.
(and none of this is going to be the same after automation takes all our jobs inside 50 years... so there's that...)
9
One piece left out of this article is the apparent total lack of interest in modern (younger) employees even thinking that they would stay at one employer for 20 or 30 years. While some of that may be attributable to the sad way in which the MBA class views workers on a par with a piece of equipment, the contributing counter is that many employees have no interest in remaining with one firm for the long haul, apparently believing the grass is always greener somewhere. Perhaps that is true in cases, but in the old system the two parties, workers and management, realized there interests were tied together. Now, neither side cares and we see the result.
5
@George S
I'm not sure it's purely a question of not "wanting" to stay at an employer for many years. Raises at many jobs are nonexistent and changing jobs is the only way to increase your income from a starting salary that may have worked as as single twenty-year old, but is insufficient to raise a family on.
16
@Sarah
I agree, and employers often look to lay off or "retire" senior employees with higher salaries and accumulated vacation time. There is no benefit in being loyal to a company in many cases.
@George S
You are correct in that neither side sees a reason to stick together, but job-hopping is not the invention of the “younger” employee, and there are greener pastures. As @Sarah points out, some of us leave for those greener pastures as often as possible because it is usually the only way to significantly increase salary or attain a promotion.
Most employers nowadays only provide merit increases that are sporadic (years without a raise) and do not keep pace with cost of living increases (healthcare has outpaced wages for decades now). Also, employers tend to hire from the outside rather than promote from within. The employee working his or her way from the mailroom to the corner office at one company is a threatened and endangered species.
So, anyone with a modicum of ambition should plan not only on changing employers, but also plan on personal life disruption and imbalance: relocation, travel, long hours.
1
Nomadland: Surving in 21st Century America profiles workers in an Amazon warehouse, and it isn't pretty. Workers are treated like automatons, then discarded when their bodies break down. I stopped buying from them after that. I prefer to give my money to companies that treat their employees well.
3
I was driving through a depressed Catskills town early this morning and wondered what things were like there in the 1950s and what they could be today if local residents had decent jobs and all of this human capital was not wasted.
I was a personal witness to the decline in corporate largesse over the decades as I saw annual raises and bonuses shrink from double digits to single digits to sometimes zero, with a commensurate drop in health benefits and loss of retirement pensions. I also watched highly paid CEOs, who displayed no ability to grow their businesses, instead boost profits by making cuts. And I watched Wall Street analysts put increasing pressure on companies to grow earnings without the slightest thought as to what might happen to employees.
There are lots of guilty parties out there, including my fellow Democrats, who have done little to fight these trends.
32
Exactly. Bill Clinton's NAFTA agreement was the final death nail for Upstate NY industry. Companies packed up and moved overnight.
7
I remember a time when a man running the sporting goods department at an O'Neils department store (analagous to a Macy's) could raise a family on his income and had benefits. I don't mention if because of nostalgia. I mention it to show how much work has been degraded and undervalued so that the 1% could sweep up all the surplus value of labor to satisfy greed. Of course, almost 35% of the labor force were in unions, which even helped the non-union worker get s better, more fair deal. No one in the mainstream media talks about it, but Marx was fundamentally correct in his assessment of capitalism.
And if you don't believe me, look at the climate crisis and how the corporate class puts short-term profit over the survival of humankind and a sundry of other species. It's an insane way to run and organize a world, unless you are running it into the ground.
23
Why is it that Sears treated its employees better than Amazon?
Simple: because it had to - workers were organized in unions in the past at a much higher rate than today.
The article simplistically portrays companies's decisions as a result of managers' duty. So false!
The decision to go back to an era where profits are shared belongs to the public: Organize! Find a way to take a seat at the table and share the profits that your work generates!
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@MS
Appliance salesmen were in unions? Union membership was much higher back in the day, but it was most likely in industrial trades, not department stores.
5
@George S But the existence of union jobs put pressure on Sears et. al. to match that standard of living. Unions raised the boats of all workers.
This is comparing APPLES AND ORANGES though. The typical Sears employee was a floor salesperson, whereas the typical worker at an Amazon warehouse is a warehouse worker ('stacker', etc). The capitalist system has always rewarded salespeople better, since they are needed to 'win sales'. And therefore the company needed to reward them better 'lest they move to a competitor.
The internet has largely obliterated the need for salespeople so yes, millions of decent paying jobs will disappear.
It'd be better to guide your adolescents towards web design/programming, than sales!
2
@FYI You're right - a better comparison would have been Macys - which is probably heading for bankruptcy as well.
1
Nice. Sears is dismembered, and they manage to foist the retirement bill on the taxpayers !
On another note, things like this are why marriage rates were higher...households more stable. Middle class people could afford to go on vacation, they had health benefits, and a small financial cushion for life's inevitable shocks.
I'll bet most, if not all, of that money was circulated through the economy, not dedicated to chasing the latest bubble.
As a late boomer, I've watched the world that my millennial children are going into...and its a lot harder, most of the tectonic plates have shifted. Thank you for a look back at what was for many, a fairer economic world. While I am appalled at the whole MAGA movement, even a blue voter like myself agrees 'where they are coming from', financially.
12
Let's not let nostalgia get in the way of facts. Sears has a history of union busting techniques. It's workers flourished because the unions pushed Sears to implement better worker compensation in order to keep unions at bay. Who's pushing Amazon? No one with any power.
If Sears were starting today, it's workers would be in the same position as Amazon workers. This article makes it sound like Sears was a benevolent employer that did right by it's employees out of the goodness of it's heart.
4
The analysis between the companies misses out on the types of people each organization had to employ
The retail landscape has changed.
Amazon makes a loss on its international portfolio and a gross margin of less under 10 % on its retail business.
Sears in its hey day probably had a much larger margin and more cash available to spread around.
In addition, Sears probably wanted highly talented sales people to make sales. Amazon does not need that. The website makes the sales. They need lower level people to fulfill, but not physically convince buyers.
3
Consumers decided to end Sears reign with their purchases.
1
@Nick - there's a deeper story regarding Sears' bankruptcy, namely financial engineering and corruption:
https://www.nytimes.com/2018/10/16/opinion/sears-bankruptcy-lampert.html
10
This is the most critical issue facing our country. We need good jobs, housing and food on the table. Access to quality health care and education are essential. Everything else being debated in this country is just noisy distraction.
When you have CEO's and stock holders reaping 99% of the wealth, the future is bleak for the vast majority of us.
24
This is about greed. We either need to solve the conundrum of “how much is enough”; or, use a different yardstick than dollars to keep score of individual success.
It is also where we are as a society in that the truth is we will all have to give something up we care about in order to solve our big problems…and money (cost) is part of the solution. Who goes first?
I, too, like the idea of profit sharing. As the gig economy continues to expand, there will be (I hope) more equity in that transaction as competition for workers increases.
Insofar as imported manufactured goods are concerned, rather whine about inequities in labor costs, we can impose significant environmental tariffs in that the product transportation (particularly ships) is some of the highest polluting modes of transportation out there.
Finally, you cannot continue to ratchet down wages and expect stable or increasing real estate prices. Something has to give. So, look for real estate devaluation ala the 2008 recession (we missed a major opportunity for genuine market correction and a check on banking at that time) coming to a neighborhood close to you.
7
"Four out of the top five executives earned less than $175,000 each in annual salary in the last three years, but got tens of millions of dollars in stock."
This is because the salary is taxed at a much higher rate (32%) than dividends (15%). It's just another way the rich are destroying America.
18
@Equality Means Equal Amazon does not currently pay a dividend.
1
@JG
Capitals Gains are taxed at 15% - so when those shares are sold the gain and the tax is less than half the rate of salaried workers
And - before a company goes public those cheap shares somehow end up in Roth IRAs which is how these internet billionaires will avoid billions in taxes forever
2
Well written, people retiring after app. this year are in for trouble unlike the workers from 1945 till the present.
Loss of medical, pensions, unions, low or no wage growth while the top guys get fat are big reasons.
Another one is the simple fact that after WW2, Europe and Japan were destroyed and the USSR and China and India had very inefficient economic systems. We were constantly telling the world to imitate us economically.
Well guess what, they did and now the whole world is our competitor instead of being the only game in town from 1945 to app. 2000.
6
What is it costing us, the taxpayers, to continue to pay out these defined pensions when the mother company files bankruptcy? I have a number of relatives who are still collecting nice pensions from the federal government after U.S. Steel went bankrupt. Why do they continue to get their pensions without interruption while the rest of us have to rely on 401k's and the stock market's performance (if we're lucky to have one of those) or our own savings? Are these retirees' Social Security checks reduced dollar for dollar based on their pensions? Mine is, even though I held positions paying into Social Security much longer than my teaching stint. This article needs to be fleshed out more, especially considering how little today's workers have money set aside for retirement. For many, that number is $0.
1
@Karen K Your position is that because you don't have something as nice, the other person shouldn't. Instead, let's look for how you and others like you can benefit from practices like profit sharing! Otherwise it's just jealousy, crabs-in-a-bucket thinking and a race to the bottom for all.
9
The retail landscape was completely different 70 years ago. There was no foreign competition, far more regulation that protected companies like Sears and much lower employee benefit overhead. It’s easy to be generous to your workers in that environment. Sears was the Amazon/Walmart/Home Depot of its day. A more interesting story would be how local small businesses competed against Sears. I doubt they did well.
2
@Padraig Lewis Your argument does nothing to refute every argument in the piece relative to the mantra of shareholder value above all else. Indeed this is the self-espoused corporate mantra. But for that, 2/3 of Besos' billions could go to workers within the exact same context you describe.
5
Bezos follows the Ferengi rule: "Employees are the rungs on the ladder of success. Don't hesitate to step on them."
14
@Edward Bash Agree Edward. Not only does Bezos step on them, he does it deceptively.
1
This is a result of Republican economic policy. It’s that simple. Tax law is what has done this. When earned income was taxed at 90%, there was no reason to make a huge salary. You have most of it to the government. So the money was spread to others and everyone did well. We have a new guilded age now, which is exactly what Republican donors have paid for. And people who go to work with their names stitched on their shirts have bought it hook, line and sinker. #MAGA
19
Sears had a terrible reputation for firing workers as they neared retirement. I don't call that having workers flourish.
2
@Kate Baptista
Can you back that up with a link? I grew up in the Chicago area with many friends and relatives who worked for Sears their entire lives and never heard of that.
4
Democrats need to stand up clearly for labor- no more Clintonian compromise that has, at best, slowed the slide towards the obscene inequity of growth in this country.
But laborers also have to stand up for unions- this slide began with the divide and conquer, often racist strategies that created the blue-collar Reagan democrats.
This unfair wealth distribution has gotten so obscene, it makes one wish our government had a House of Commons, so at least one branch of the government stood up for labor.
Unfortunately, the unlimited power of money in our political system and media make positive change very difficult until the owners are literally threatened with revolution or we have another depression where many of them lose their money and power.
The collapse of the Soviet Union probably hurt workers in the free world by reducing the incentive to share wealth with labor in democratic nations. Propaganda and political payoffs are so much cheaper than higher wages and apparently just as effective at sustaining order.
21
@alan haigh Yes and at the same time, uions--especially public sector construction unions across the eastern seaboard--need to be more attractive to workers--much more of a no-brainer. Today it is NOT.
As it stands, their piflering of the MTA's budget is a national embarassment. LIkewise, the bad old days of mafia corruption are not far behind us.
4
@GenXBK293 Every organization of human beings involving money and power leads to a level of corruption, however, this fact is often used to use a lesser corruption to justify a much larger one.
Unions need to be policed for corruption as do corporations, but eliminating unions is just a way of increasing corporate power over workers, which is much more responsible for the huge and growing gap discussed in this article than any issues with unions.
1
Maybe if Amazon made a decision to have half of the products it sells made in the USA , it could redeem itself.
6
@Greg
Consumers are partly to blame. They want more stuff at much lower prices. Hard to maintain lower wages, meet environmental and OSHA standards and lower prices. Hence the exploitation of Asian labor and pollution moved off shore as well.
3
@Heart
People can't afford to pay more for stuff when everyone's wages are stagnant. Can you blame them for wanting cheaper goods?
Naturally, this being the NYT, the comments offered in this article, like most articles, is some kind of"justice" oriented solution. "My wages are too low! Somebody ELSE must be to blame! Those EVIL capitalists! Let's get together and bring them down!"
I liked the profit-sharing answer, which is what firms do when they offer stock options, and actual shares which has some sensible economics in it, but in the end here are some blunt truths:
If you are not happy with your pay, you need to find a higher paying job. If you can't find one it means you are being paid market rate. It's a harsh fact.
Employers colluding to stem labor movement (via non-poaching, wage fixing) is illegal. If you find this, contact your representative, contact your DA. They will take the companies to court.
If you don't want cheaper labor in other countries competing we have re-think global trade, which is doable, basically restricting trade to countries with similar standards of living. It will raise costs, so be aware.
But unionizing will only cause American industry to fail faster as labor will be moving faster overseas or automated.
10
@Kaushik GhoseI: Are you so unbelievably naive that you actually believe what you wrote? Is that possible?
Unions made this country, They worked well for us, and they work well all over Europe. Without unions, we'd still be working 79 you weeks and children would have no protection from rapacious bosses. Do you like your weekends? Thank the Unions. The trope that unions are corrupt and only cause problems is thanks to the combined efforts of bad leadership and corrupt employment practices. Unions simply mean collective bargaining, which the bosses love for themselves, but want to keep for themselves.
As for going to court, who do you think owns the courts? Who writes the laws, (See ALAC, etc.)?
No thanks. I prefer justice, and that means that we all have an equal voice. What could be wrong with that?
22
@Kaushik Ghose What a scare tactic: if you push for a more equitable arrangement, we'll replace your job with robots. As it stands, the matra is already to cut labor costs as much as possible, regardless of the consequences for real Americans--and ideally to automate as much as possible.
Also the argument that if you don't like it, get a better job is rediciulous. That works for perhaps those more talented individials who can outcompete others. Obivously if everybody tried to move up, there isn't enough volume of higher paying slots.
What would work, is for workers to think out of the box and start their own businesses. Guess what, this is prevented for millions by anti-competitive "non-compete" agreements that have shackled many into modern-day serfdom.
6
@Kaushik Ghose, “If you’re not happy with your pay...”
That entire paragraph presumes people employ other people based on talent and skill. Anyone who believes there is no nepotism or favoritism in hiring or promoting, or that any of us can just go get another job is naive.
There is a reason justice enters the picture, and it isn’t unique to the NYT.
If the democratic party doesn't start clearly standing up to the clear economic changes pushing wealth from workers to owners as clearly articulated in this article, it is a failure of democracy that would bring tears to the eyes of our founding fathers.
We need more leaders like Bernie Sanders who unflinchingly state the reality of wealth distribution in this country although the root of the problem is, the more uneven the distribution the more power goes to those to the receiving end.
You don't need to be a dictator to own the media megaphone- in unfettered capitalism the owners own that too.
12
Greed. There you go. The ppl need to stand up and stand together. It’s called union. The only thing these greedy corporations understand. A union is power for the little guy. There’s safety in numbers and a union is a healthy part of the company. There’s no reason the ppl can’t prosper other then greed and the unions don’t like greed and they protect the workers and spread the wealth. If you want something from these me me me generation billionaires you have to take it. One word ppl...union.
13
My father worked in a Sears warehouse for over 40 years. To this day I marvel at how my parents made that one salary support a family of five kids-- we never lacked for any essentials, never felt any economic insecurity. My father's retirement was comfortable, and that seemed as it should be after his years of hard work, including outside work in the brutal Chicago winters. His pension wasn't lavish, but he had the money he needed for good medical care, and could replace expensive essentials when needed, such as a modest car, or a new furnace. That lack of worry was essential to a peaceful retirement. And it provided his children peace of mind as well.
148
@Francois- Yup. This was true of jobs in many industries. Today, many people I talk to are working harder now, for less than they were 30 years ago. That 'piece of mind' you mention is gone for many. I miss it.
11
It doesn't help that the different layers of employees are more segregated than they used to be.
My father was in management at a big hardware company. At the base in our city, he knew the names of the elevator operators, telephone receptionists, long-term dock workers, secretaries, and all the other people who did hands-on work. "Team" meant more than "management team" back then.
65
“...frontline employees don’t affect our company’s bottom line” That arrogant statement was made by American Airlines current CEO Doug Parker a few years ago. It is evidence of how he values his employees who are the face of American Airlines. He is not unique, just more tone deaf. I am gone from American, and happy to be so.
32
This is part and parcel of republican inc. strategy. Wrest money, then power from the worker into the hands of the bosses. Kill the union. Drop pensions in favor of 401k and get rid of free healthcare for those who work for you. Jeff bezos Might strike you as liberal but I’ll bet there is a Republican behind that sheepskin facade. I dumped amazon a year ago. Now I shop locally but still use the amazon free app to read reviews. Then I see if I can purchase it from a local source. I may pay slightly more, but until mr bezos shows a willingness to do something positive with his billions I cannot in good conscience give them any more of my slave wages.
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@Gomez - I'm with you. No shopping at Amazon, or Walmart for that matter.
1
He has enough money to pay for the damages in Florida and a few billon left over as change. What does that tell you.
No one represents employees in corporate Board Rooms. If the SEC required public companies to report on employee compensation as they already require executive compensation reporting, we would know what companies are doing and Board Rooms would focus a bit more on employee compensation.
22
Turns out techies are too dazzled by ingenuity and fabulous gadgets than economic justice. No surprise; decline of education regarding sensibility about philosophical roots of humans’ worth, beyond their function, has been exiled to “specialties” department in the academy.
14
Capital over Labor, the American Way.
We value wealth accumulation above all else. It is how we measure a persons value. We do not value occupations that deliver benefits to the general public, only occupations that generate personal wealth and power.
Rugged Individualism, Self Determination, I got mine, it's up to you to get yours.
Unions would have never taken root in this country were it not for the Great Depression. Of course they declined because they are collective in nature, all for one, one for all. Americans cannot abide the common good, only individual accomplishment. None of "my money" for those "others".
We have allowed the concentration of wealth at the top because we think we will be there too. Too much "me" and not enough "us". Many of the traits that we believe made America great are killing us now.
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@mike
"We have allowed the concentration of wealth at the top because we think we will be there too."
Oh yes? Isn't that a personal view?
1
@Angus Cunningham- I was thinking this the other day. I think every one who owns a business fantasizes that someday they will be in the 1% of the 1%, or at least heading in that direction. And I believe that fantasy drives many business owners' opinions and politics. As a business owner with a few employees, I realize I would hardly have one penny if it wasn't for their efforts. Where I take responsibility for running a "well oiled machine" (haha), it is a team effort to provide a living for all of us.
The answer is, and must be, unions. The only historical entity that spoke for the workers.
Sears plan, which was a benefit, was a successful attempt to keep out unions.
Now, Amazon and others have no fear of unions, since the Republicans have effectively killed most off.
165
@Marc Sorry Marc, but unions are not the answer. Yes, the public service employees enjoy wonderful benefits for the most part, but they cannot be sustained and are bankrupting many states (IL, CA, for example). They are paid more than the private sector, which inflates our taxes and the administrators that really benefit (teachers pay varies across the country, but administrators make ridiculous money and benefits). On top of that, unions protect all workers - you don't do your job, no problem, you cannot be fired, cannot lose your pension or benefit. And oh, you can 'retire' at 45 on the tax payers back. Unions were so corrupt in Detroit that the UAW has a marble building built in the early 2000s as the workers were suffering. They also had an office in the city government building, where the council paid city workers 13 months for 12 months of work and excessive bonuses as the population of the city decreased and businesses were forced to close. There is nothing good about unions in the 21st century, especially public service unions.
1
With a union they could do something like calling for more than twice the federal minimum wage! With that kind of pay hike everyone would love Amazon for listening to concerns of workers. It would really change the tone of the conversation - folks would really have to dig to find niche stories to bash them then.
1
This should help us better understand why republicans want to go back to the good ol’ days.
7
"Solitary, poor, nasty, brutish and short". Thomas Hobbes. In 1651 he was describing life. We can apply the same to today's life in America. "It's a dog eat dog world out there and I am wearing milk bone underwear". Norm Peterson, Cheers. He had it right too.
Few are going to take care of the worker unless they are forced to. With Union participation dwindling it will get harder. A voice of one is listened to less than the voice of many.
16
Cutting the Amazon cord won't be easy for me, but I *will* cut it.
9
How can we "make America great again" when the policies of the Republicans are to enrich the wealthy at the expense of the average American? There's no sharing. We are headed toward an undemocratic society along models of feudalism or plantations where wealth is concentrated in the hands of the few and the vast majority are impoverished. This is not what made "America great again."
73
Outstanding article, and thanks for both the historical and economic background. Reading this makes me an even fiercer advocate of employee-owned companies, or having employee and union reps as members of the board of directors. The company I work for went to the ESOP model last year, and it has been fantastic for worker morale and productivity.
The history in this article was extremely useful, and it's interesting that Sears stopped its profit sharing program in the 1970s. That date tracks with the 1964 tax reduction bill and the full recovery of Japan from the ravages of World War II. I began high school in 1974, and that's when I began paying attention to the economy at both a macro and micro level. That was also the period when my dad, a union worker with Washington Gas, began complaining about how much more he was having to pay towards the family's health care. An article on the 1964 tax bill, Japan's recovery, and the god-awful stagflation of the 1970s would be a great companion to this very well written article.
40
The fundamental difference between then and now is that then employees were considered assets now they are considered liabilities.
The fundamental cause, then corporations were run by Engineers now they are run by Accountants.
40
Everything to shareholders, who are then taxed at a lower rate than those who actually do the hard work.
The American Way.
127
Econ 101
Sears flourished in a National, not Global Economy
Sears flourished when companies could not answer to demand by Unions for Wage increases by moving the company to Mexico. Now they can
Amazon is a Global company. If it fails, Alibaba will take over. It is itching to do that, and has much lower labour cost,
In the most recent quarter, Alibaba’s operating margin was 31.25% while Amazon’s was 2.31%
Paul Krugman keeps telling us open markets are wonderful, everybody benefits from open markets.
No, not everyone, Capitalists yes, Chinese workers yes, US workers not
47
Globalisation also seems to have accelerated the way corporate income is distributed. Namely not just to reduce labor costs in some sections of a business but to enable literally massive increases in compensation in others (eg ,"executives"). Going back to econ 101 these changes have negative consequences for the economy. E.g is it better for the economy as a whole to have one billionaire or one thousand millionaires? I certainly am not arguing against capitalism but everything in life has unintended consequences and isn't this the advantsge of living in a democracy? If something is doing harm we can fix it?
1
Well before the RICO statutes and the Kennedy administration if an employer threatened to move a factory overseas or even to a non-union state he got a brick thrown thru his living room window as a sort of shot across the bow.
The mob being tied to unions seems distasteful to middle class sensibilities but remember what Gandhi said: Poverty is a kind of violence, the worst kind. So it’s really a reminder that the 2nd best strategy after cooperation is tit-for-tat (see Univ of Mich Econ Robert Axelrod’s simple but seminal book “The Evolution of Cooperation” - perhaps the Pres read that book or at least its first 13 pages which is all u need to understand the thesis)
Oliver Wendell Holmes said that the Law is rooted in vengeance. It is a remarkable substitute for violence and vengeance in dispute resolution. The Japanese found a way out of the cycle of violence between management and labor by granting tenure to employees as a quasi property right forcing management to have to deal fairly with employees or risk total failures.
Our elites chose to throw labor under the bus. By defanging the mob with RICO statutes it became open season to inflicting Econ violence upon American workers at all levels. RICO was passed in 1970. The median wage has not gone up since 1972 while GNP has gone up 150% since then. In the 30 years before 1972 the GNP had gone up over 100% and wages for all groups, poor, working, middle & upper classes all went up in lock step to that.
1
Compare how upper management was doing vs. floor workers, then and now.
10
This idea you can get ahead by promotion alone is futile. Corporations are pyramids. It's smaller at the top. The old method ensured that everyone gained something along the way even if those who eventually moved up were wealthier. The current methodology ensures stagnation for most people and eventually perjury.
As for stock options as the solution: I would ask the former employees of Enron, WorldCom and GE what they think if their ESOPOs and ISOs now. We have had a decade long bull run. Wait a few years and see what the same people think at Amazon. This reminds me of the same conversations they had at the airlines after 9/11.
13
Well, Sears is gone and it was never a 1/3 of what amazon is.....good riddance..
3
Retail used to be a good career job. Workers were full time with a complete bag of benefits. Now the vast majority are part time with no benefits. Many people go from one job to another during the day to make enough. I believe what drove this change is the massive cost of medical insurance or health care if a company is self insured. Fixed pensions were nixed by the fact people live much longer today. A company like Sears has more people on the pension system than working. I believe a single payer health system and better SS would allow businesses to pay better and return to full time jobs.
62
I am in my 60s so see the damage this has done clearly. America was a happy place when I was young, everyone had a piece of the pie. Even high school dropouts had a shot to own a car, a home, have medical insurance if they stuck with their factory job. Today college graduates struggle to find work that offers benefits or pays a decent wage. America is not serving it's citizens well these days and needs to change policies so everyone is invested in and taken care of.
181
@KS, the U.S. once I understood the benefits of STABILITY. What is favored today is apparently excitement in the form of roller coaster rides in the markets and the business cycle. I suggest these people go ride Six Flags or go whitewater rafting or bungee jumping.
America today is like building a house in the middle of a hurricane.
11
@KS I understand your perspective. However, the times you are talking about were the peak of US exports and we did not have a 'global' economy. When competing in a global market where most workers are NOT paid even close to what we would call a living wage, and were worker expectations started close to zero, you are talking apples and plastic. No comparison. Those that embrace the global economy must understand the consequences. Now, is CEO compensation anywhere in the world 'right?' I say no, I also say no to options and bonuses that go to upper management without even having good outcomes. Look how the CEO of Sears robbed the company, made very bad decisions, and walks away a very rich man in spite of his poor performance.
1
@KSremember there was a lot less government regulation of companies during those Sears Years. Also companies were not required by law to provide an array of benefits and time off. Yet without all that government regulations, companies were very generous to their employees. Maybe we should return to those times.
Some necessary background to the history of profit-sharing.
Labor's great uprising of the 1930s liquidated itself by its wage focus.
Some necessary tedious economics.
Labor's approach meant that union victories (wage increases) raised the costs of firms, and increased the supply curve for labor ( Microeconomics 1A).
In turn, the intersection of supply and demand curves for labor shifted to a higher wage (union victory) and lower employment (union defeat).
By the 1970s, the full-employment wage demand was much above what productivity allowed. Rather than beat down the stagflation-generating wage, our establishment chose globalization.
That is, they dealt with the American problem by abandoning it, and running to the much lower wages of the Third World, and soon, China.
The lesson of this dismal outcome of the uprising of the 1930s is: don't go for wages; go for ownership of the firm, ie profit-sharing.
If a strike victory meant an increase from, say, 10% to 15% ownership of the company, workers would have a gain comparable to a healthy wage increase.
But, the crux: owners can no longer recoup part of their concession by raising prices and laying off workers. Profit remains highest at the same price, employment, sales, etc. It's just that more of it goes to workers.
Victory rather than Pyrrhic victory.
Sooner or later, there will be another great uprising of workers. May it fight for ownership, profit-sharing.
Rather than kill itself with wage battles.
15
@alyosha -- Excellent points with a big caveat - strict governance within union management. Incompetence and corruption did as much damage to unions as the GOP and the "Right to Work".
10
It's true. I worked at Sears in 1969 and many of the employees were career employees who not only were paid a middle class income but received generous retirement benefits. And there was a path to advancement, from the sales floor to the management office to the corporate office. No college degree required.
105
This is such an important article which needs to be shared far and wide. These changes in corporate governance to benefit shareholders over laborers is the result of conservative policy in both the private and public spheres. Laborers are financially harmed for generations because a lifetime of work no longer builds wealth. Corporations reputation is harmed because consumers have zero loyalty and distrust them. It's a visicious feedback loop which is important to understand before we can address wealth inequality.
56
Match this story back to the man that died in his car and no one noticed for a week. Corporate employee pay and benefits have been stagnant or reduced for the benefit of shareholders and executives who pay lower tax rates than salaried workers
73
This is the central problem in this country. Corporate GREED. A lack of interest in being good corporate citizens by giving back to the USA for providing the infrastructure and market for companies to flourish. The core of our current rot. No sense of loyalty or duty to the country only the bottom line. Voters believe the hogwash that the "government" is the problem. No, corporate greed is and always has been the problem.
223
The depth of our income inequality and levels of corporate greed would not be sustainable without our complicity. We have a vast religious movement devoted to it (Evangelicals), a political party that defines itself by greed (Libertarianism) and popular culture that idolizes it - from the "Rich Housewives" to a plethora of love/hate/but-wanna-be-rich-at-any-cost entertainments. I wish it was just the corporations...
15
@deathless horsie plus no environmental responsibility, packaging, bottles, ingredients...etc. I wish the consumer would wake up.
4
@deathless horsie As the comment states, contrary to the title of article it is not complicated, it is simple. Greed!
1
There shouldn't be any crummy jobs. Low skill or high skill is irrelevant. Nobody should have to put up with exploitive pay and abusive, dangerous, or otherwise inhumane working conditions. Workers must demand an end to crummy jobs!
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@Dave That's why we need unions.
6
The only people who have a decent standard of living today without being highly educated are employed in government or public education. There is seniority to protect age discrimination, rich pensions(in a debate the cost to move teachers from defined benefit to defined contribution was pegged at 800k per teacher), and (in the case of Conn)lifetime health care including spouse. I know paralegals, nurses, phys ed teachers who have six figure salaries on top of this even in mid 40s. Even trash collectors can make 60k with OT. I know the state is going broke(like Sears) but the individual workers aren't and their families seem far more stable and less stressed than non govt /ed workers.
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When you referred to people in public education not being highly educated I assume you meant the food service workers and bus drivers. Most of the rest of us (aka teachers) have graduate degrees.
Our benefits are due to our being organized and through those organizations our political activity. Where the states have been taken over by reactionary politics, the first move is to crush those organization and move to a system where educators are treated like, well, warehouse workers.
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@Ken. I agree,I am retired with a union pension and unless we wake up and support our unions again our future is what is described as what goes on at Amazon.
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I view McDonalds, Amazon and Walmart workers as a literal retail army that sacrifices so the rest of us can have access to cheap "food" and goods. Most will move on to better paying jobs. I personally spend most of MY retail dollars with WMT and AMZN (Prime). Both operations win on either price (WMT) or service (AMZN). Their value virtue is without equal.
I recently retired after almost 30 years in industrial sales and got, nope, not a pension, but a gift certificate at a high end local restaurant. That's it. I feel though that I was fairly treated and no one sheds a tear that I'm living mostly on SS and savings. The (legacy) accounts I developed are still producing income for my former, small business, employer. Walmart and Amazon are the Sears of the present era.
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@Economy Biscuits actually they aren’t. Walmart doesn’t pay its employees a living wage, so a large majority are forced to get help from the government via food stamps, Medicaid and other programs. Our tax dollars make up what Amazon and Walmart fails to pay their workers. If these companies offered ESOP programs at least these low wage employees would have something to use in a rainy day fund. Currently they have little to nothing. And the Walton and Bezos “Kings” continue laughing all the what to the bank. It’s disgusting.
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@RD I wrote that the workers are a "retail army". That implies that they would be subsidized by our tax dollars. I support wars around the world that I don't believe in. I don't mind subsidizing retail workers. If these people didn't have a job at Walmart, they might not have any job at all.
In 2018.... American ego's seem to be a whole lot larger than their paychecks. Lots of judgemental attitude but little wealth.
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The race to the bottom is no myth. It's our cruel reality.
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I actually walk the walk on this one. My 3 employees are paid the best in the business. They get vacation and generous bonuses on top of salary. I could pay them a lot less.
But I do the work too. And I understand the work it takes to run the business. Back in the day, before the MBA, executives earned salaries that were not insane compared to workers. There was respect for workers. Ask Amazon, Tyson foods, or any university president and they have actual disdain for workers.
I can buy most of the stuff I want. I get to take vacations, I have savings. So maybe I don’t get first class tickets. I can’t blow money in Vegas because I work to hard to earn it. What is so wrong that my employees get to do the same stuff I do?
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The cult of the entrepreneur has inflected American culture to the point where there is no respect for an honest days work unless you are the owner or the boss of the enterprise. In America, to be an employee is to be a second class citizen with ever fewer rights. The crazy part of this perspective is that not everyone can be the boss... and there can be no boss unless there are workers... where are you headed?
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@What others think 100% agreement. Wish I wrote this myself!
Thank you!
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If an Amazon employee doesn’t like his/her overall pay, he/she should apply for a job with an employer that pays more, overall, than Amazon. If there are no such higher paying jobs elsewhere, then he/she should be happy that he/she has what he/she has. The employer/employee relationship should be between the employer and employee. Bernie Sanders and The New York Times should not be involved in this relationship. Take Bernie Sanders, the NYT and the like out of the equation and the natural forces of supply and demand determine overall pay. This is Economics 101. If an employer is paying too little, employees will jump ship to where pay is higher. When that happens, the employer has too few workers and must increase overall pay to attract workers. That’s natural. Politicians tampering with the supply and demand curves is not natural. (In this case, the Bernie-forced increase of Amazon’s minimum hourly wage for starting employees from $11 to $15). So, to allow that $4 increase, demanded by Bernie, something had to give. Removal of handing out stocks and other benefits should be no surprise to anyone.
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@ABC123 Corporations are not “natural.” They are artificial creations, legal fictions, created out of thin air by politicians — politicians like Bernie Sanders who are selected by their fellow citizens to represent them. Americans have authorized the creation of corporations because, by and large, they are better at achieving prosperity than alternative forms of business. Our current legal framework — which is nothing at all like Economics 101 — tilts far too much in favor of shareholders. (And by the way, in Economics 101, it is essentially impossible to make a profit, because another competitor will enter the marketplace and drive down prices.)
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The three richest Americans hold more wealth than the bottom 50 percent of the country — some 160 million Americans.
“Poverty is the parent of crime and revolution.”
-- Aristotle
The law of supply and demand is no sufficient for economically just society.
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@ABC123 I guess it was just out of the question for Bezos to give up more of his billions. Apparently you can’t conceive of this scenario as opposed to the one where the workers broke even on pay for the company to receive good press which translates into better earnings for those with stock...
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All this started in the late 60's...early 70's when US companies started buying products from the Far East. It was a cost saving, profit-boosting measure that was promoted and encouraged by graduates from the country's elite business schools. They didnt care if the buying strategy disrupted established relationships with US manufactures which resulted in layoffs. Boosting the bottom line and their end of the year bonuses was all that mattered. Management soon adopted the same attitude towards its own employees. Jobs were cut...factories relocated. first...to low cost states...then to low cost countries. Management forgot about the connection between well paid workers and sales....something Henry Ford understood. Long and short is....that management and stock holders don't care about workers. We're no different then a piece of machinery. Soon most of us humans will be replaced by machines. Question is...who will buy all of this stuff if everybody is either earning subsistance wages or is unemployed?
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@K.Walker Wrong. It started in the late 80s and escalated in the 90s as a result of the UN allowing China to join in trade agreements. Before that time, the world saw/knew that China would undercut other asian and western countries with the huge workforce of people that worked for nothing. They were afraid, rightly so, that China would manipulate their currency and 'dump' products at below market prices to take market share. The UN and trade groups were right to be concerned, but then they felt over confident and decided to let China in. It's been a devastating decision. But it was based on UN decisions; probably their own greed too.
While fully admitting there were problems (gender, race mainly) with the older corporate model, it helped strengthen worker commitment to the company, by building a structure where workers and professionals were all invested in the company's success.
Amazon may find its decision to raise pay while stripping incentives and ending the issuing of stock to warehouse workers backfiring as employee morale slips. Yes, there are people waiting for jobs, but it's s tighter labor market than before, and an unhappy workforce is a problematic workforce.
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Great piece of research and analysis from the NYT. It helps explain the increasing income inequality in our country that is in turn creating much of the malaise American's feel. Maybe we can't go back to the "old days" but analysis like this article provides information for those who control the economy (and less likely our elected leaders) to come up with ways to make our wealth work for many Americans not just a few.
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@ECM remember in those days there was a lot less regulation, a lot less pressure for income equality, etc. Sears is a great example of capitalism at work.
How many stores did consumers have to choose from, back then?
Supply and demand, baby. Add in some over population of low-education, low-skill workers and voila. Retail employees are a dime a dozen.
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We tend to jump to Amazon but miss the real company that turned everything upside down: Walmart. So who was this person, Sam Walton, the founder of Walmart, anyway? He was the guy that one day was told he was the richest man in the world and he didn’t even know or care a bit! He often drove an old dusty pickup truck to his airport to collect dignitaries and even royalty! This guy was down to earth! He worked all day every day and he revolutionized retailing as we know it!...until Amazon came along.
What did he do that the K-Marts and the Sears and the JC Pennys and all the rest did not do? You can sum that up into a few statements: He expanded into the suburbs where the giants did not go, he was frugal, he invested in technology, and he knew what customers wanted! Example: One day a manager told him they sold the white cotton socks at a higher price because they were popular. That’s a standard managerial cookie-cutter action a manager would take, ladies and gentlemen. Sam Walton told him to mark down the socks anyway, because the customer would be more bound to the store. And he was right. One thing in addition to that, which would make Sam Walton a rarity now days: He was proud to be an American and started a program to buy more American made products after he was informed that his company was basically China in disguise. He was a great man. Then he died. As usual, something was lost when he did. The term "associate" was started in USA by him and it died with him too.
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Given that Sears has filed for bankruptcy, that means that all those shares are worth, well, nothing today. Locking away all your shares in one company goes against the foundations of modern financial theory (portfolio diversification).
In any case, what's to stop employees from buying shares on the stock market if they want to participate in the upside? They can get exposure to the same volatility and risks as shareholders very easily.
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@liberty What is to stop an Amazon lower-paid employee from buying two shares per year of stock valued at $3500 per year? Here's what: that is roughly 9% of his or her gross pay.
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@Everbody's Auntie
The advice to diversify is excellent. Separating one's retirement funds from one's income source is fundamentally very very smart.
The price of the stock is not interesting, as there are mutual funds, and also other investment instruments that will allow an employee to do so.