How The One Percent’s Short-Term Thinking Is Cannibalizing America’s Future
Today’s investor class demands maximum profits without investing in their own workers. And that’s bad for both society and their businesses.
Imagine, if you will, running into an acquaintance at a coffee shop and engaging in some pleasant small talk. At some point, said acquaintance, who we’ll call Tim because why not, mentions that he’s looking for a 2,000 square foot, four bedroom house in Southern California and wants to pay about $350,000 for it.
“I’m not sure that will work out,” you muse in reply, “maybe you’ll find yourself a fixer-upper in Temecula or Oceanside, but even there, you’re looking at mid to high 400s.”
“Oh, no,” Tim shakes his head, “I’m not willing to pay that much. And besides, I’m looking in Los Angeles because there’s no way I’m going to either of those places.”
“Do you know a realtor who tells you that’s a possibility in LA?” you attempt. “Have you actually went out, looked, compared, and figured out what the market there looks like?”
“Well, yes,” admits Tim, “I have. People want $800,000 or more for that sort of house, but that’s just insane. Who would pay that much? They’re not even that nice in my opinion. These people are just entitled. They think just because they have a big house in LA I should fork over all this cash. I’m not made of money, and their entitlement is just absurd. What gave them the idea that their houses are worth so much?”
“Many reasons, but it boils down to people paying those prices and more people wanting to buy than there are houses for sale or even being built. It’s just plain old supply and demand.”
“Again, that’s absurd,” Tim scoffs into his coffee. “I’m not budging. They’ll come crawling to me when they’re ready to sell at a saner price,” he concludes as he heads for the door.
Now, if you were in this situation, you’d rightly assume that Tim is delusional. SoCal is famous for beaches, movie stars, and high real estate prices. Surely he should know that his price range is not in any way tethered to reality. And yet, Tim is behaving like far too many employers in today’s economy, demanding top-tier talent at entry-level wages, and superlative qualifications for even the most mundane positions.
Job ads equivalent to requesting a PhD in mathematics and 15 years of experience for manual data entry in Excel for minimum wage, or a Nobel Peace Prize along with a decade of military service being demanded for a customer service job at a call center are daily punchlines on social media, and the subject of years worth of academic work trying to explain that too many companies simply aren’t being reasonable. Unfortunately, the companies that needed to hear this most were about as open to honest feedback as hipsters are to non-gluten-free waffles at brunch.
Where Did All The Workers Go?
The paradox of so many companies not finding workers in a booming economy is easily explained when we consider the second part of their plea to “find qualified workers,” the part they all too often omit: “at the wages we want to pay.” Of course, employees aren’t showing up.
After more than three decades of stagnant wages when adjusted for inflation, 8 in 10 are now living paycheck to paycheck. A stunning 6 in 10 don’t have $500 socked away for an emergency, and slightly more than that couldn’t find $1,000 for a rainy day. More than 4 in 10 will retire broke, citing debt and insufficient income as their primary impediment to saving money for the future. And all this is after they’re worked into the ground with long hours, few days off, and little regard to work-life balance by employers. In more disturbing, but accurate terms, they’re not taking these jobs because they can’t afford to put themselves deeper into a fiscal hole, not because unemployment is so glamorous.
In the lean years of the Great Recession, employers saw a glut of desperate workers ready to do anything they could to stave off possible foreclosure as their home values plunged and 401k accounts shrank faster than the contents of swim trunks in cold water. Spoiled on premium labor at bargain basement prices, they’ve been refusing to adjust to a new reality, that workers now have choices, and they need to either up their pay or settle for the workers they can attract instead of throwing temper tantrums and whining about the entitlement of younger generations unwilling to go into debt to work for them.
This is in part why job openings are at a record 6.6 million, but unemployment, as typically measured by the BLS, is hovering at around 4% while workforce participation continues to slowly, but steadily shrink. Of course, low wages aren’t the sole reason for this arrangement. Older workers headed into retirement with fewer younger workers there to replace them and automation also play big roles. However, all this has happened before, and employers responded with better pay, more benefits, and training to attract the workforce they needed. But today, they’re frequently refusing to do any of the above.
Decades of trickle-down economic politics appear to be taking their toll. Lauded as “job creators” and profiled as geniuses with answers to all that ails us in strings of hagiographies, far too many executives seem to have bought into the idea that they’re brilliant simply because they run a company and believe they’re entitled to a pliant workforce by virtue of posting a wanted ad. When asked for their sage advice by the media on how to resolve the problems being faced by service workers and those barely holding on to a middle-class existence, their attitude towards their employees seems to resemble that of Futurama’s Pharaoh Bender.
“Lowly slaves, err… valued employees, Why aren’t you working?”
“But we are sir; we’re working right now!”
“We meant yourself to death, you lazy, entitled moochers.”
Trickling Down The Road To Nowhere
Margaret Thatcher said that the problem with socialism is that eventually, you run out of other people’s money. The same problem applies to trickle-down economics. Feasting on money earmarked to keep a society healthy, educated, and connected means that the mobile, prepared, motivated workers necessary for a post-industrial economy won’t materialize in sufficient numbers. They’ll have to guess their way into in-demand jobs and get lucky with acquiring the right experience. In return for short term gains and quarterly rallies, massive corporations and their owners are cannibalizing their future, and the bills are finally coming due.
Coasting on decades of reserves and residual worldwide goodwill towards America, they’re still profiting, but that capital is beginning to run out. Trade wars are costing jobs and rattling global markets. Scapegoating replaced decades of investment in future businesses and improving standards. Education is being actively ruined by a lack of focus, budgetary neglect, and one-size-fits-all schemes. Alliances are fraying over unilateral belligerence by the living avatar of narcissism and paranoia who was able to capture the presidency thanks to a system in which where you vote is more important than how you vote. And as we’ve just seen, jobs are going unfilled, stunting long-term growth.
None of this should be taken as a rationale to advocate seizing the means of production, but as a reminder of the idiom “pigs get fat, hogs get slaughtered” and evidence that the American investor and corporate class is acting like entitled, spoiled hogs. Rather than cultivate a strong, lucrative base and present compelling visions of a future in which their employees can fight some of the world’s pressing ills and advance civilization with their work, generating trillions in value and profits for decades to come, they’d rather stash the few billion that could’ve made all that happen in their bank accounts so they can sit there and earn interest. At its core, it’s the same mistake for which they deride the working poor: not properly investing their money so it can grow into something truly beneficial.
I didn’t come to bury capitalism and decry its supposed evils but to lament it being wasted on those who refuse to use it to its fullest potential and heap scorn on their self-centered myopia which forgoes the $100 bill they can put in their pockets next year so they can snatch an extra dollar today. It’s not difficult to establish relationships with schools and colleges, encouraging curiosity-based education, bringing back shop, gym, and other classes encouraging healthy living and a flexible, creative mind. It’s not impossible to pay your employees enough to help them thrive when you do, reducing turnover and increasing output. It’s not crazy to aspire to turn your business into an agent of change for a better future. We used to do this all the time until instead of praising long-term success, we started to worship the quarterly result.
If we really want to make America great again, we should look at what made us so successful in the past. It wasn’t the mantra that “greed is good,” or railing against the immigrants who would contribute money, blood, sweat, and tears to make this country what it was, or the Dickensian classism of the Gilded Age, or the moral, nativist panics of racists, bigots, and paranoid Birchers manically eager to regress any sign of progress, seeing the very word itself as a tool of New World Order sedition.
It was looking to the future with optimism and seizing on the ideas and potential of every American, no matter the color of their skin or where they were born to attempt things no one else dared and dream bigger than anyone else thought possible. And right now, we’re too busy helping billionaires stuff their pockets with our money to do enough of that to overcome the end of industrialization as a successful superpower.