Monday, December 5, 2022

Capitalism Series, Part 2: The Short-Sightedness of Quarterly Reports

 While I would never put the white hat completely on corporations, I think many of their problems are caused or made worse by the quarterly reports. CEOs, department heads, sometimes an entire company's future is on the line because of what Wall Street thinks of a quarterly report. 

Even the shareholders are subject to the whims of Wall Street. It comes down to a few people who punish or reward companies for meeting (or failing to meet) their expectations. Somehow, wondering whether Wall Street got it right or wrong is never the question. 

I hold stocks, too. In my 401k, and in a personal account, but I generally invest in index funds, less weighted by one or even a few select companies. I can appreciate the shareholders' need to know, but why so often? Wouldn't twice a year be plenty? 

Companies are held to this impossible standard of beating expectations every quarter. There might be one (Apple) that has managed to do this, but I think every other company has seen its share of ups and downs. And even Apple had its down days way back when. 

Very few are willing to dive deeper than whether profits are up or down. Never mind if the company bought some badly needed equipment that increased their expenses, but decreased human injuries. Human injuries aren't included in quarterly reports. 

Even when a company has an outstanding report, the very next day, the question becomes, how will we fare next quarter?

Which doesn't help a company think about long-term planning, doesn't allow time for R&D, doesn't even reward companies when they recall products to keep everyone safe! Despite another bad ruling by the Supreme Court, corporations are not themselves people, but they are indeed comprised of people. 

Most people didn't start their first day thinking that they'd hate the job. They go in with all kinds of enthusiasm, hoping to feel valued. But work enough days in a corporation, everyone comes to realize that the corporation prioritizes their quarterly reports above all else. Of course people want to quiet quit! Or quit altogether. Just because an abused spouse stays doesn't mean they enjoy it - they just don't see a way out.

I wonder what would happen if the quarterly report did include injuries, retention percentages, customer complaints? I wonder what would happen if CEOs got their bonuses docked for injuries, complaints, lack of retention? 

I'm starting to shop more B Corporations, which is a designation for companies that are committed to benefit all stakeholders, not just shareholders. It's a step in the right direction, and if more companies got on board, it might just change the world. 

Thursday, December 1, 2022

Capitalism Series, Part 1: Unions

I find the easiest way to contemplate the bigger problems is always to follow the money. 

We've all heard that money and power corrupt and while of course that's not true of everyone, I'm becoming more and more convinced that the greed for money and power is the root of most of the bigger problems. 

One of the things I always go back to is a line from Michael Douglas' speech at the end of Aaron Sorkin's The American President regarding some politicians' interests: "making you afraid of it, and telling you who's to blame for it." Using that tactic has allowed them to continue to profit (either financially or politically - most likely both) off of fear and anger. 

Unions are once again in the news: Starbucks, UC grad students, the railway workers, etc. I've said it before, unions are the area in which I stray most from the Democratic Party and the progressives. Here are a few reasons why: 

  • Lack of accountability for union leaders. I first wrote about this during the grocery store worker strike of the early aughts. The workers had been paying into a union fund to subsidize health care costs, but the union leaders ended up spending that money elsewhere, leaving the workers with no support when health insurance costs continued to rise. The workers had to strike (during the holidays, as I recall) and live off even less in order to make up for the union leadership's bad acts. While I understand that the leadership is elected by their members, many members have enough information to vote in their own best interest. 
  • Lack of accountability for workers' poor performance. It was very clear to me that in Sylvia's middle school, they placed all their best teachers in the eighth grade and all their worst teachers that they couldn't fire in the sixth grade. That did NOT get her off to the best start in middle school. Of course, I don't believe that teachers should be fired for saying "gay" or encouraging critical thinking, but I also know that there are some that are simply not good at their job, and the effects on their students is too severe to keep them in that position. 
  • Unions create more hierarchy. In my acting days, there were a lot of auditions that were union only, but of course, the only way to get a union card (at that time) was to get a union gig, but how would you get that without the opportunity to audition? It was a catch-22 that created a those who have and those who haven't to divide the acting community. I know some employees that have to belong to a union, but that union isn't supporting them (see first bullet above), and there are also millions of workers in jobs that aren't covered by a union, and therefore, do not get some protections that others enjoy. It's pitting workers against workers. 
  • Divides instead of unites. If we want to protect the labor force, then we should protect the entire labor force. All workers should have a modicum of control over their schedules. Everyone should get some paid sick time. The problem with unionizing one Starbucks at a time is the that the baristas at Peet's are not protected. It might help some but not all workers get a fair deal, making them wholly unfair. 
  • Corporations do not change their stripes. Some corporations end up using "independent contractors" or close down stores to avoid unions. Lyft managed to get a proposition passed in California excluding them from CA's attempt at stopping the former. Or they use the increased wages at the bottom as an excuse to raise prices - and yet somehow, the C-suite can always afford bonuses and raises! 
Unions were a critical step in creating some of the federal laws that we have today to protect labor, like criminalizing child labor and mandating work breaks. But let's think about where we were at that time: we didn't have the internet or the ability to spread the word beyond our own communities. Keeping it local was the only way workers stood a chance. 

But times have indeed changed. 

Why are we limiting ourselves to one Starbucks, one industry, or even one country? Don't all workers everywhere deserve protection? Why are we continuing to be so small-minded about how to change the world? We're not thinking big enough.