Fair vs. unfair criticism of business: Circuit City vs. bees
Promoted by Brendan -- I also spent some time yesterday looking up bees and Bt corn and completely agree with skymutt that the diary was unfair to Monsanto. I imagine the Circuit City story should provoke some discussion of "fair" compensation and the proper goals of businesses.
crossposted from DailyKos
Goodness knows that big business is hardly free from sin in 2007 America, but the hyperbole and venom of anti-business attacks on DailyKos and other sites is sometimes more than I can stomach. Since every single one of us is at minimum using a computer connected to the internet, I can say with certainty that we are all dependent to some extent on products and services provided by big business, and therefore I think it is only fair that we report on business with a little balance and a healthy appreciation for both the positive and negative aspects of business, and that includes looking with a critical, probing eye at serious charges of wrongdoing by business. We want to be fair. We don't want to smear without a reason.
With that in mind, I'd like to compare and contrast a what I felt was a fair criticism I saw on DailyKos this week about Circuit City, with an unfair criticism I saw of Monsanto, both in recommended diaries.
Some background: as a Democrat, I have a healthy skepticism of the perfect nature of free markets. I believe that, in a modern society, the government should play a role in monitoring and regulating large public businesses to make sure that businesses operate fairly in the market, afford workers a base standard of rights, offer products which are safe and as advertised, and report financial results to investors honestly.
But I also recognize that business, while not perfect, is responsible for many of the things in life that we all take for granted but which make our lives longer, and quite frankly better than our ancestors.
There's probably not very many of you who likes "the simple life" more than me-- I spend every summer hiking in the mountains away from tall buildings and cell phones... but even there, I sleep in a tent made of synthetic materials, wear extensively engineered lightweight boots, and eat nutritious pre-packaged foods that last for months without any degradation of quality. I use a digital camera that can store hundreds of pictures on a blue stick the size of a cheezit, which plugs into my laptop which can probably store more pictures than I could ever take in a lifetime of summers. When I stand on top of a mountain and take in the awesome scenery, I rarely ponder that without these products that business has invented and produced, I would never even have the opportunity to get to that mountaintop. But the truth is, without business, I wouldn't get to the mountaintop. I'd probably be living a subsistence lifestyle entirely contained within the area near my place of birth, like just about everyone did before the advent of modern business.
That's not to say that business shouldn't be expected to live up to certain standards; for instance, businesses should be expected to fairly employ and compensate people. Diarist vassmer pointed out this week an example of a company that came up short in it's obligation to fairly employ people:
Today [Circuit City] announced it will lay-off about 3,400 employees or 8.5 percent of its workforce. The company called the firings a "separation" and the process a, "wage management initutive." Someone was quite creative (and sinsister) to think up those creative euphemisms!
The company has completed a wage management initiative that will result in the separation of approximately 3,400 store Associates. The separations, which are occurring today, focused on Associates who were paid well above the market-based salary range for their role. New Associates will be hired for these positions and compensated at the current market range for the job.
After the firings, the company will hire new sales staff and at much lower salary or "the current market range" since the original employees were paid too well at the outrageous sums of 10-11 dollars an hour.
In addition, according to Bloomberg News, employees will not have an option of taking a pay cut either.
To me, this represents a legitimate criticism of a business: a company firing its longer-tenured workers to hire in new workers for the same jobs at a lower wage, without even giving their loyal employees an opportunity to take a pay cut. If all businesses disregard their employees like Circuit City, it won't be long until few people can afford the products and services of businesses. Circuit City clearly demonstrated an attitude towards people which represents the worst of business: sacificing the people who enable you to turn a profit in the first place, merely to improve profit.
Businesses also have an obligation to make reasonable efforst to produce safe and beneficial products. A diarist yesterday attempted to make the claim that agriculture giant Monsanto was not living up to that standard:
Bees are dying and they act like it's a mystery
However, in Germany where they still teach science they published an article about the toxic nature of Monsantos Triple Hybrid GM corn and it's effect on bees in '05. Why won't the media here mention that GM corn is the likely cause of the bees disapearing? Could it be that Monsanto is a massive multinational corp with a market capitalization of 30 billion dollars?? Of course insects are seen as pests by most people. Most people who passed Earth Science class in highschool understand that every part of the food chain is important and some, but not most, understand that bees perform a task that vital to our survival.
To me, this is amongst the most biased paragraphs I've ever read on DailyKos. Let's just look at how nearly every sentence in this paragraph ignores the rule of evidence and insults the reader's intelligence:
Bees are dying and they act like it's a mystery
The diarist provides no link to a source that thinks that dying bees is a mystery, and no evidence that such a person would be unreasonable to have such a thought.
in Germany where they still teach science
I'm sure that some universities in the United States might have a strong comment on that statement.
Then, a loaded question that makes an unsupported charge about "the media":
Why won't the media here mention that GM corn is the likely cause of the bees disapearing?
Of course the diarist never even bothers to explain what GM corn is, nor does the diarist provide a source or evidence tha bees are actually disappearing, nor did they provide a source to the claim that GM corn is causing bee disappearance, nor did they provide evidence that the media is ignoring the issue. I skimmed through the comments and some industrious commenters found sources which at best indicated that the corn could not be ruled out as a factor in the disappearing bees, which are indeed disappearing, according to other sources that the diarist also did not provide.
Could it be that Monsanto is a massive multinational corp with a market capitalization of 30 billion dollars??
Could it be? How about a shred of evidence to go with the loaded rhetorical questions... alas, the diarist, once again, provides no evidence.
Of course insects are seen as pests by most people.
Yep, the product engineers at Monsanto probably aren't even aware that bees pollinate crops... (by this time I have long since tuned the diarist's message out by the way, in case you haven't guessed...)
Most people who passed Earth Science class in highschool understand that every part of the food chain is important and some, but not most, understand that bees perform a task that vital to our survival.
Yep, the product engineers at Monsanto probably didn't even take Earth Science in high school...
The diarist didn't provide one shred of evidence to support any claim he/she made. Not one.
On the other hand, within about 5 seconds of Googling, I found a University of Maryland etymologist who states that the evidence suggests that the genetically modified crops produced by Monsanto are not associated with the bee die-off:
Galen P. Dively
Professor and Pest Management Specialist
Department of Entomology
University of Maryland
College Park, MDColony collapse disorder (CCD) has caused much concern among beekeepers nationwide and it is not clear to date what is causing the die-off. Genetically modified crops, specifically Bt corn, have been suggested as a potential cause of CCD. While this possibility has not been ruled out, the weight of evidence reported here argues strongly that the current use of Bt crops is not associated with CCD.
Now who am I going to believe: this entomology professor who I don't know, or this diarist who I don't don't know, but who has already proven to me that they are incapable of writing two sentences in a row without showing obvious bias? Well let me diplomatically put it this way: I'm glad that the diarist has made me aware of the subject, and I intend to look into the subject more and keep my mind open-- but at this moment, I'm leaning toward the entomology professor (even though the professor is American, not German).
Bottom line: if we as Democrats want to be part of the solution as far as correcting some of the harmful practices of business, we'd better start by making sure we are fair to business, just as we expect business to be fair to people. When we do point out a legitimate abuse of business, we want to make sure that we have built maximum credibility by consistently demonstrating fairness and objectivity. That starts by acknowledging that businesses are beneficial and necessary entities that sometimes cause problems, usually unitentionally-- not inherently evil entities that only become more destructive and malicious as they get bigger. A hostile attitude towards business in general is the wrong attitude for Democrats and a losing attitude at that.
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Comments :
Interesting -
I googled too and found this article which doesn't seem to absolve GM crops from harming bees:
[emphasis mine]
I agree though - if one makes a claim against an evil corporation one should show some basis for it.
Sic semper tyrannis
Yes, there is apparently varying scientific opinion
I think that if there is disagreement in the scientific community about an issue-- if there doesn't appear to be any consensus-- the responsible thing to do is to report on all sides of the issue. Obvious, i know, yet I rarely see it done, because everybody wants to be Woodward and Bernstein on the blogs and make a sensational case against somebody. If you believe one side over another, tell why: "such and such scientist is a paid Monsanto lobbyist", etc... If you believe the company has engaged in bad behavior, tell why: "Monsanto executives knew about the problem going back 10 years and did nothing... here's the proof..." Instead, the diarist gives me the 30 billion market cap of Monsanto as the only evidence that Monsanto is bad.
skymutt: wise and powerful... enlightened...
Circuit City
What's wrong with businesses paying employees market value? As long as we have a minimum wage (and higher state minimums) shouldn't businesses pay what the position is worth? If they overpay and go under, everyone loses. If they underpay, the workers go elsewhere and the business suffers. Of course it may be in the company's interest to treat workers well, since that minimizes turnover and probably increases productivity (guessing), but that's still a market-based correction.
To the extent that we need to regulate "fair" compensation doesn't the minimum wage cover that? I completely agree that it's awful for the people who lost their jobs, and I'd support funding retraining programs and job-search assistance... but I'm not sure it's Circuit City's problem (except to the extent that firing a lot of employees pisses of people and costs them business).
Come, my friends. 'Tis not too late to seek a newer world -- Tennyson
Good points,
although as consumers we also have the right to choose businesses that we feel treats their employees more fairly (which you hint at in the parenthetical at the end).
Whatever the economic reasons for their decision, it seems like enormously bad PR. Why not just scale down salary for new hires in order to gradually phase out the overpaid percentage? Or offer pay cuts to its current workers (now they have to train thousands of new workers, so the trade-off doesn't sound huge)?
Saint, n. A dead sinner revised and edited. - Ambrose Bierce
Oh, I think they should be allowed to do it....
...as in, I don't think there should be a law against it, but I think it's a pretty garbage practice that can and should be roundly criticized-- especially when you consider that they can't pay their employees the raises that they give them in part because they pay their CEO what he probably calls a "market rate" too: about 500 times that of an entry-level employee.
skymutt: wise and powerful... enlightened...
So Brendan...
How are the value of positions calculated?
What if all companies "underpay" thier workers, where do they go then?
Again, how is the value of a workers life calculated in terms of "market value"?
How is the minimum wage achieved?
Great questions n/t
I will take a crack at these...
The value is determined incrementally each time a worker agrees to work for an employer at a certain rate.
If management imposes any condition on workers across a whole industry, pay or otherwise, workers can choose to organize. The possibility of strikes threatens the priorities of management, since if no work is done, there is no income from which to pay management. This is why it is important for government to protect labor rights.
Wages don't determine the value of a worker's life. I work for a tiny company (3 people) and take less money that I could probably get elsewhere. I value my vacation time and freedom to make my own schedule more than the money.
skymutt: wise and powerful... enlightened...
The value is determined incrementally?
I'm having trouble understanding this, inspite of its' vagness what does "the value is determined incrementally" mean? Is that to say wages rise the more workers enter employment?
You make it sound like a walk in the park. Don't forget when they do strike they're not getting paid either. If it was a simple choice everybody would be marching for higher wages. The fact is, unions have been instrumental in improving the living conditions of the working class for 150 years now. It is not about joining one when you face redundancy or some other sticky situation. It is not about the goverment protecting the "Labor rights". It is about the workers, building upon what generations of workers before us have been fighting and dying for, protecting and improving OUR Labour rights.
Maybe not directly, but they are inseperable from the quality of that life when everything of use value is measured in the form of money. If your job didn't supply you with enough money to buy the basics then you'd have a busy schedule foraging but you wouldn't have alot of vacation time to enjoy.
I'm having trouble
All I'm saying is that each time a person accepts an employer's offer at a specific wage for a specific job, it tends to either reinforce the 'market' wage for that job, or it moves it a tiny bit up or down.
Well most of the tim, no strike is necessary and labor rights are asserted through the collective bargaining process. But without the implied threat of a strike, collective bargaining would have no teeth.
skymutt: wise and powerful... enlightened...
Eh?
So we come back to the same question, why does the wage stop, or go up, or go down (every which way but loose) to a specific "real" number/wage?
How the value of positions is calculated
I realize you are being more philosophical than realistic, but perhaps you are really not familiar with how this is done in Corporate America. If you are, skip this reply.
The payrate for positions is usually determined by what other businesses pay for similar positions in the same geographic area. A large corporation with offices in several cities performs periodic evaluations (say every two to three years) of what a given set of job duties earns in each area. They then use this data to set a range of salary values that comprise the norm for that type of job. Some companies call it a salary schedule, others a salary grid, but the concept is the same. Most companies use this method to determine the top dollar value they will pay for a given set of job duties in a given market.
Thus an administrative assistant in this company in San Francisco, who does the same work as an administrative assistant in Houston, gets paid much more than his Houston counterpart, but makes roughly the same amount as other administrative assistants in similar organizations in San Francisco. And overall, the value that an admin assistant provides to any organization does have a limit -- would a smart business pay an average admin $250K a year?
It is a bit subjective when one gets to higher level jobs ("is analysis of X the same as analysis of Y?") but the process is actually fairly refined.
And this may be where Circuit City went wrong. They may have failed to establish the top salary for a retail sales clerk job.
"Perplexity is the beginning of knowledge" -- Kahlil Gibran
Some answers
How are the value of positions calculated?
By what companies and workers mutually agree to contract for. I understand it doesn't necessarily work out perfectly in practice but short of government controls on wages for every position I don't see how else it could be regulated.
What if all companies "underpay" thier workers, where do they go then?
If the companies don't pay enough, the workers will look for other types of employment. In theory this mechanism should efficiently produce the optimal number of employees for a given field, although again in practice people don't act on a purely economic basis.
Again, how is the value of a workers life calculated in terms of "market value"?
Not sure I understand the question: worker's life, as in what if he dies? I'm more than happy to have government regulate safe working conditions.
How is the minimum wage achieved?
It's a made-up number that has little connection to either a living wage or market value, and it's an inefficient method of preventing poverty.
Come, my friends. 'Tis not too late to seek a newer world -- Tennyson
Wishful Thinking
Worker and manager at the negotiating table, manager offers $10 an hour, worker asks for $12, they agree on $11. This merely describes a process, the same as your answer. Why does the manager start with $10? Why not $100,000,000 or $0.00000001? Anyway, they "mutually agree", once again, what gives this mutual agreement its' value, why is $11 acceptable for both?
Great plan, unless there are no other types of employment, the new employment pays even less, you havn't the skills, you have to move from your home(land) ect...
Without organised workers there would be nothing for the goverments to regulate. It is in fact the workers who are doing the "regulating". Off the point, but I'm not letting goverment take kudos for something they in reality have, and still do oppose.
If we're talking about the minimum wage set by the goverment then I agree completly.
Regulatiion of safe working conditions on the part of govt.
is absolutely and totally necessary, and the fact that our government, for the past 30-some-odd years, has allowed many big businesses to get away with not providing various and necessary protections to ensure their workers' safety and physical/psychological welfare and well-being is absolutely disgraceful, if not criminal, imo.
Witness the deaths of the 13 miners in a coal-mine in West Virginia roughly a year ago. Management, in this case really didn't care one wit about the safety and well-being of the mine's workers, and it backfired horrendously. Only one of them survived that horrible incident (I admittedly forget exactly what happened), and he was permanently damaged as a result.
The trouble with the present minimum wage is that
it's not enough for workers to live on. A raising of the minimum wage, which Senator Kennedy has been doggedly campaigning for is in order.
I've always disagreed with this
You can actually "live" on the minimum wage in America still, in terms of the very essentials: food, water, clothing, and shelter. It's only impossible to make your life look like 'middle class America' on minimum wage-- a standard that is often confused with the concept of 'life'.
skymutt: wise and powerful... enlightened...
Circuit City payscales
Just chatted with a customer who recently left Circuit City. He said that their pay practices allowed the store manager a lot of leeway in pay so that they could reward good employees, and that some employees with several years service were making upwards of $22 an hour at his store. Overall he had a positive experience working for them. He started out at 19 years old, no experience, making $12 a hour, and got steady increases.
"Perplexity is the beginning of knowledge" -- Kahlil Gibran
do you really think Circuit
do you really think Circuit City sucks?
LOL
If they send out spammers to to spam boards that come up on vanity search they SUCK big time.
SUCK, SUCK, SUCK!!!
Sic semper tyrannis
Ha
Maybe he's just gathering information... really, it just shows you how much the company cares about serving its customers.
Come, my friends. 'Tis not too late to seek a newer world -- Tennyson
I hang
on a board whose owner insists on not upgrading the ancient software they're running. Spammers like this - 5-10 a night. Their MO is resurrecting old, long forgotten topics that have some relevance to their spam. They almost never come back or hang around to be eviscerated.
Sic semper tyrannis
Damn... and I clicked his sorry link :-(
Spammers suck even more than Circuit City :-(
skymutt: wise and powerful... enlightened...