How To Kill A Successful Company: A Short Guide

Several years ago, a company I worked at, which was well respected in the industry, experienced a traumatic shock. It was sold. The company had been founded almost a century earlier, and although it had undergone a few changes in ownership, had continued to grow and become extremely successful. The ownership which had been in place since the late 60's was perhaps its most successful incarnation. At the time I was hired in 1990, there was a actually a waiting list for many of their positions, starting with the file room and stenographers (yes, they had actual hard files and stenos). The president of the company was strict by most standards. He believed in being on time, working until your lunch or break. At the same time, employees were respected, well compensated up and down the entire company hierarch with an excellent insurance plan.

There were also small non-quantitative "bonuses" which added immense value to being an employee there, such as an outing to the track. The company would shut down for the day and take everyone to the races (the company owned box seating), lunch at one of the upscale restaurants, along with anniversary lunches, gift cards, and turkeys at Thanksgiving. The white collar employees, such as myself, had individual offices. Each morning the company president would come by and greet each employee. He would check to see that the trash cans had been emptied the previous night, the carpets vacuumed, light bulbs changed, office furniture was in good repair, and everything was in working order.

True, there were a few downsides, such as their refusal to modernize when it came to technology as fast as some would like (although, at the time, the company was slightly ahead of the technology curve within its industry) and there was a professional dress code for everyone. They lacked a professional HR person (the person they had in that position also was in charge of building maintenance, the mailroom, shopping for supplies, and filing up the soft drink machine). There was also a departmental rivalry which encouraged to mistrust the other departments; a "dog-eat-dog" mentality, which was extended to include individual employees within each department so that fellow employees were to be viewed more as "frienemies". Stenos were given quotas with a chance at a small bonus. But, nevertheless, there was a strong work ethic and the president was someone you could easily respect.

After the president retired, things changed rapidly. There were fewer and fewer pay raises (even COLAs), updates in technology slowed to virtually nothing. Building maintenance became nearly nonexistent. Gone too were many of the small perks such as an outing to the race track, luncheons and turkeys. There was greater emphasis placed on intercompany competition. Employees were subtly encouraged to steal fees from fellow employees (especially if they were in another department). Employees were expected to lie to clients when it came to issuing remittance checks (the company would hold the checks for approximately ten days, sometimes longer), or find ways to beat the attorneys down on fees and to get clients to go along with changes in terms which would, of course, benefit the company's (but not necessarily the employee's) bottom line. Ultimately, the company's reputation took a nosedive.

Some employees excelled at this and were rewarded with better claims. Some didn't, or simply wouldn't go along. They were either fired or forced out be being given poor quality claims with no opportunity to make money. Everyone was on a small base salary plus commission, which had been reasonable and a person could make a good living. In fact, most lived off of their commission checks and banked their base salary. However, the company used this as an excuse to forego COLAs, and they often adjusted the draw upward, making it harder and harder to earn a commission. This applied to stenos as well as inside and outside salespeople (outside salespeople were also responsible for making personal "adjustment" visits usually covered a territory that was several states wide and covered huge geographic distances. They were compensated for overnight stays, given a company car plus per diem). Eventually that too stopped. They were still expected to meet quota---bringing in new business, calling on existing clients, and making personal contact with debtor businesses. The toll became too much for everyone, and so began a period of constant turnovers, and with it, the quality of claims (which, naturally meant fees and overall income for everyone dropped). However, "favorites" still continued to earn top dollar since management could still farm out the best claims or volume to chosen individuals.

It soon became a very depressing place to work, but among the veteran employees, they had so much time invested in the company and had been out of the job (and technology) market for so long, felt they were trapped. Of course, management itself continued to make money hand over fist, which only increased the general animosity, and with it, productivity declined. Many of the benefit and insurance packages were either eliminated or cheapened for everyone except management. Everyone started simply going through the motions. It didn't take long for leading clients to leave either. Employee innovation or suggestions were ignored or rejected out of hand; after all, what could "mere" employees, some with more experience and/or education than even the senior most management, possibly know? At one point a management consulting firm was brought in. Employees and management were surveyed, interviewed, and finally brought together for the verdict. The result was that management was completely out of touch---with the employees, with the industry, and with each other. However, management faulted the consulting company for not doing an adequate job, and certain employees for "sabotaging" the project. Yet everyone knew the truth, whether or not they wanted to accept it.

In time, the company embraced technology ("embraced" is a little too strong of a term. It was more like being made to shake hands your worst enemy after a fight). Several in upper management had left by this time, along with much of the senior personnel. But by this point, the technology was too little too late, and the company was quietly put on the market despite transparent lies from senior management to the contrary. Again, management showed how out of touch it was by initially valuing the company based on its previous glory and not its current reality. Eventually the business was sold at a fraction of its original estimated worth. The match, however, turned out to be one made in Hell. Management did its best to place a positive spin on the sale, which I suppose was all it could do. Promises were made about no major changes, vast improvements to come, no layoffs, more advancement opportunities, better income potential, but some of us knew better and a few even said so. These were two completely different companies from two unrelated industries, with completely different philosophies internally and culturally. But, hey, everyone got a free coffee mug with the new owner's logo on it and a $25 gift card! Apparently loyalty can be bought, and at bargain basement prices too!

The company became a small American cog in a global European based machine. We were managed by individuals thousands of miles away who had little or no understanding of American business practices and knew nothing of our industry. It wasn't long before the white collar staff lost their coveted offices in favor of open cubicles. The income structure was changed too, but not for the better. The "disconnect" attitude was replaced with a "stepchild" attitude. We were expected to conform to a structure and philosophy which simply didn't work. We had to adapt to a computer system which was incompatible with everything we did, and on prescheduled timetables which were unrealistic. Long term employees---veterans---were seen not as assets but as liabilities and were viewed with an air of suspicion. Thus came the next exodus, be it willingly or enforced.

So, how did I fare? Well, I had been one of the employees who looked out for fellow employees regardless of their department or role. I openly opposed any and all internal conflict. I refused to take advantage of my attorneys or of the clients (however, if there was a way we all could mutually benefit, I was all for it). I was seen as a "shop steward" or employee liaison. Employees came to me on a regular basis to discuss problems with supervisors, management or other employees. I often served as the conduit for new ideas to improve work conditions, improve productivity and so forth. Management, rather than appreciating my role, which was at their behest, actually feared it. They did everything they could to force me out, from verbal harassment to cutting my income my over 1/3 at one point. Somehow though, I always made money. In fact, I was lucky enough to collect the single largest recovery in my department's 90+ years history (and the second largest in the company's history) and collected the most total fees earned in the company's history. I was also one of the most requested managers to handle certain clients exclusively; this, despite routinely being given the worse claims.

But, if you want to really know how I fared and what it was like, here's an example for you. It is an email exchange which was sent out shortly after we were acquired by the new division Vice President. So, here is goes: "Start with a cage containing five monkeys. Inside the cage, hang a banana on a string and place a set of stairs under it. Before long, a monkey will go to the stairs and start to climb towards the banana. As soon as he touches the stairs, spray all the other monkeys with cold water. After a while another monkey makes the attempt with the same result. Pretty soon when a third monkey makes the attempt, the other monkeys will try to stop him. Remove one monkey and replace it with a new one. The new monkey will see the banana and want to climb the stairs. To his surprise, the other monkeys beat the snot out of him. Another attempt and another attack. He knows that if he tries to climb the steps, he gets assaulted. Next, replace another monkey with a new one. It gets the same treatment. The previous newcomer even participates in the punishment with equal enthusiasm. Continue the process until all of the original monkeys have been replaced. The new monkeys will continue to attack anyone trying to climb the steps and retrieve the banana, but without knowing why they are doing it. Nevertheless, no matter how hungry they are, no monkey will approach the steps". The intent was to tell everyone that the "old ways" of doing things was gone, but that's not how it was taken by most of the employees (someone in new management had previously commented that trained monkeys could do our jobs).

After a few minutes of thought, I fired off a reply and for good measure, copied all the same people as he did. Here's what I said, "That works until the monkeys decide to organize their efforts. One goes for the banana. One serves as lookout, and the other three wait to beat the bejeezus out of the asshole with the water hose. They split the banana and laugh and laugh". A few years later, I was promoted to Special Projects Coordinator to the President---an Assistant Vice President position within the new company. My role was improve the workplace efficiency and working conditions, evaluate individual and departmental performances, assist with HR functions, help resolve any workplace conflicts (I was a certified mediator), in addition to my existing position as the senior Legal Manager in the department. It was a role I enjoyed (and the additional compensation was nice too).

The point to all this is that employees aren't liabilities to be used and discarded. Employees, especially those who've been properly developed, are essential to the success and longevity of any company. To be dismissive, condescending or arrogant in dealing with an employee is to sow the seeds of the discontent and that may eventually affects the bottom line, not to mention the life of the company no matter its standing in a given industry or how old it is. I am not, of course, saying that management should jump on every suggestion, but it should keep its eyes and ears open as to what the employees are saying or not saying, as the case may be. Is there a specific issue which keeps coming up? Is there a trend to comments or suggestions? How are the attitudes? What are other companies, both in and out of your industry, doing to improve worker moral? Are the employees being engaged?

Ask for their ideas---and be willing to implement the better ones. Nobody knows the job better those who do it day in and day out. When I was in the military, on Command Staff, I was taught to always praise in public and criticize in private (something this company rarely did). Acknowledge everyone's contribution. Treat everyone, from the lowest individual on the totem pole to your peers, as equals. Be fair in your criticisms, praise, and especially in compensation. And in this world of global competition and connectiveness, accept that one size doesn't fit all, be it in the product or service you're selling or how your company functions. Learn to appreciate the little nuances. While cubicles were the norm for our new parent company in their European or Asian offices, they weren't here in the US. Personal offices were seen as a source of professionalism and of accomplishment, plus they added in our ability to do our jobs, which were often highly stressful, in quiet. The loss of those offices I think set the stage for what would be the death kneel of the company which would come just a few years later. Lastly, if there is an employee, no matter how much they may earn, who doesn't fit in, be it bullying, domineering, temper tantrums, inappropriate behavior, or being abusive, don't be afraid to terminate that individual. It's one less stressful and potentially harmful situation eliminated, and that allows for a more smooth running department or company, which means a more productive department or company.

Privacy: Do We Still Have It?

Don Sterling was busted when his girlfriend allegedly went public with a recording of a rant against her for bringing blacks to his games (he's owner of the LA Clippers, at least for the moment). The comments were made in what was supposed to be a private conversation in his home, which now raises the question----is there any privacy left? Can we assume that nothing we say or do at any time anywhere is private? We have long been accustomed to accepting what we say and do in public is, well, public and potentially can come back and bite us on the butt. But what about in the privacy of our own home? The second issue is whether Mr. Sterling or anyone else has the right to express their opinions regardless if it's politically or socially correct or not, so long as there is no threat made or implied. In short, can we reasonably expect to be protected by the Bill of Rights, especially the 1st, 4th, and 5th amendments? Is "free speech" or our right to expect privacy a thing of the past?

We've long accepted that whatever we did or said in public was likely to end up in the news or YouTube or some other social media site, but what about what we say or do in private? We know that Google, Yahoo and other web providers track us, as do stores (all in the name of improving and individualizing customer service), so does the government. Once we could expect reasonable protect under the 1st, 4th or 5th amendments, but since 9/11, those rights have largely been circumvented in the name of national security. Today, we're all now considered potential terrorists by those whose job is to protect us.

There is no privacy at work nor should one expect there to be since the Bill of Rights doesn't apply there (it only protects individuals from the federal government). Our employers have a right to see and hear everything we do during business hours, and many are now asserting that they have a right to know everything about the private us too, including our personal habits, health condition, diet, hobbies, and even memberships. We are increasingly viewed as to the "value" we add to the company just like any other asset. And when we start becoming a liability, we're terminated. Banks look at us not as individuals, but as credit risks. They too look at our "data portfolio" just as insurance companies do in determining our "cost risk" and potential impact on their bottom line based not just on our incomes and payment histories, but where we live, our medical histories, our buying habits and so forth. Soon we'll be evaluated as to our potential "value" to the company or society before a medical procedure is approved. It seems our "own time" isn't our own any more.

We have drones in sky, watching us like cyber vultures out of a Sci-Fi novel. I can see the day when insurance companies or employers start doing flyovers to see if we're really hurt when we fill a worker's compensation claim or when we call in sick. Maybe our car or cell phone monitors will alert HR as to whether we really went to the doctor that day, and then they can check the insurance cloud to see what doctor we saw and what prescriptions were written for us. And with all this increase on technology, we're finding that not our cell phone and cars, but our Smartphone, Ipad, and who knows what else is monitoring everything we do. In place of a heaven watching us, we now have the data cloud, and it knows if we being bad or good for goodness sake! For me, another image comes to mine, such as "HAL" from the movie, "2001: A Space Odyssey" or perhaps the super computer "Colossus" in the movie "The Forbin Project".

We're consistently be asking for our opinions through surveys and polls, as well as indirectly through monitoring and our sites visited and our searches. Have you noticed that as soon as you've searched for a product, that product or similar ones start appearing through ads and emails? All this is designed to increase the data file on us---individually and collectively. I recently read an article where new homes are being equipped with monitoring devises; they sense who's there, our wants and our preferences. It turns our lights on and off, fixes our coffee, regulates the temperature, gives us a verbal update on traffic, weather, and the news. Heck, I recently read a story about development of sex robots (called sexbots) in Japan which records and stores our likes and dislikes! Seriously. Come on, whatever happened to a good old fashion hookers? Are they becoming an obsolete profession? Surgeries can be done remotely through robotics and there is even monitoring robots who visit patients. Is there nothing sacred from technology? Of course, be it medical, financial, employment, or even personal, all data is stored. To be evaluated for "the net time".

Express an opinion and soon it will no doubt be recorded somewhere. As it is now, the closest most of us will ever get to immortality is to put something on the internet, and you can bet it will find its way into some database somewhere for who knows what purpose. It seems we have finally created the perfect beast, and it is us.

Exploring the Constitution: Privacy
http://law2.umkc.edu/faculty/projects/ftrials/conlaw/rightofprivacy.html

Legal Information Institute
http://www.law.cornell.edu/wex/privacy

Employee Free Choice Act---The Pope Says So!

Here's an interesting article I came across on the AFL-CIO News Blog site. A few weeks ago, a coalition of Philadelphia-area rabbis and rabbinical students, along with the Philadelphia Jewish Labor Commitee, called on the former Republican and current Democrat Arlen Spector to support the EFCA. Now comes the Pope! Enjoy the article.

Papal Encyclical: Workers’ Rights to Form Unions Must Be Honored
Posted By Seth Michaels On July 8, 2009 @ 9:55 am In Legislation & Politics

In a new [1] encyclical released yesterday by Pope Benedict XVI, the leader of the Catholic Church discusses the challenges of a global economy. He notes that workers’ ability to form a union and bargain is at risk and makes it clear it’s a matter of moral imperative to preserve that freedom.

Here’s what the pope has to say on the need for workers to have the freedom to form unions:
Through the combination of social and economic change, trade union organizations experience greater difficulty in carrying out their task of representing the interests of workers, partly because Governments, for reasons of economic utility, often limit the freedom or the negotiating capacity of labor unions. Hence traditional networks of solidarity have more and more obstacles to overcome. The repeated calls issued within the Church’s social doctrine, beginning with Rerum Novarum, for the promotion of workers’ associations that can defend their rights must therefore be honored today even more than in the past, as a prompt and far-sighted response to the urgent need for new forms of cooperation at the international level, as well as the local level.

The [2] Vatican and a wide variety of Catholic leaders have continued to express support throughout the year for workers’ freedom to form unions, and many Catholic [3] scholars and organizations like the [4] Catholic Labor Network and [5] Catholics for Working Families have come out in support of the [6] Employee Free Choice Act.

Article printed from AFL-CIO NOW BLOG: http://blog.aflcio.org
URL to article: http://blog.aflcio.org/2009/07/08/papal-encyclical-workers-rights-to-form-unions-must-be-honored/


Homes Still Cost Too Much
By John F. Wasik,
Author of Cul-de-Sac Syndrome: Turning Around the Unsustainable American Dream

You would think with home prices still dropping like hailstones in most areas, that homes would be bargains.

The present buyer's market obscures a key fact about the housing crisis though: millions sought the refuge of cheap credit, subprime and adjustable loans during the boom because they were the easiest routes to homeownership in a time when house prices far outpaced income growth.

The sad fact is that the Great American Dream is still out of reach for far too many and it was the declining affordability of decent houses that was one of the triggers of the housing bust.

It's not that home prices haven't plummeted as banks unload foreclosed homes at fire-sale prices. The national median home price fell to $169,000 in the first quarter, according to the National Association of Realtors. Bank-owned properties are selling at 20-percent to 50-percent discounts.

"Contrary to popular belief," says Jeffrey Lubell, executive director of the Center for Housing Policy, "the recent decline in home prices has not resolved the nation's housing affordability problem."

Homes cost too much even before the bubble, so home buyers were willing to do anything to get into the domicile of their dreams. After all, homeownership is an American birthright, or at least that promise was sold to Americans starting in 1946. "Buy as much house as you can afford!" That's what the bankers and real estate agents were telling us for generations because of generous tax breaks and easy, often government-guaranteed financing.

Unfortunately the cost of land, homebuilding, taxes and homeownership far exceed what millions of households are able to cover with nearly stagnant personal income growth in this century. Inflation simply ate away at wages that just weren't enough to pay ever-rising bills for property taxes, maintenance, health care, education and energy.

Even at the height of the boom, Harvard researchers at their Joint Center for Housing Studies found that almost 18 million households were paying more than half of their incomes for housing (about one-third is considered reasonable). They were also hit hard by rising energy costs, which rose twice as fast as total spending from 2004-2006.

That wasn't always the best advice. The Harvard group last year found that "nowhere in America does a full-time minimum wage job cover the cost of a modest two-bedroom rental at 30 percent of income." Those stranded in the low-wage service economy, left behind by the technological revolution of the 1990s, could barely afford to rent a decent place in most cities, much less buy.

Those families who are paying more than half of their budget for housing have little to nothing left over for healthcare, food, clothing and education. That hurts more than 14 million children living in low-income households, whose families had less than $600 per month on average for other essential expenses.

So was anyone surprised when brokers and subprime lenders targeted minority and low-to middle-income neighborhoods then walked away when they sold trillions of these mortgages to Wall Street and the largest banks? They were selling the American Dream!

From sparkling new suburbs in the Sun Belt to inner cities, cheap money and neutron-bomb adjustable loans meant nobody had to be house poor -- at least for a year or two. Then the explosion hit and we're still feeling the aftershocks.

Further exacerbating the affordability crisis was the tendency for municipalities to favor upscale, sprawling home developments over middle- and low-income housing. Since home values are directly fueling property tax income in most places, nearly every community can get more money for schools and public services. When you base property tax revenue on home valuations, bigger price tags translate into better-equipped schools, fire stations and libraries.

Yet building McMansion subdivisions only inflated the housing bubble and reduced the stock of affordable homes. From 2002-2005, home prices soared 45 percent in areas restricted to upscale building, versus 24 percent in unrestricted areas. Moreover, by creating these "spurbs," sprawling urban areas unconnected to transportation and city centers except by endless highways, homeowners costs rose to catch up with needed infrastructure, schools and other public services.

The housing crisis has given us a rare opportunity to re-evaluate and re-invent the American Dream. As I note in my new book The Cul-de-Sac Syndrome, if we're to increase the homeownership rate, government will have to create incentives to build more affordable housing.

We'll also have to find a way to de-link property taxes from funding local services to reduce the number of overpriced homes in a handful of areas. Perhaps even eliminating tax breaks for mortgage interest would keep prices at realistic levels because you wouldn't be subsidizing ever-larger mortgages.

Ultimately, though, the American home and community will have to be re-invented. Houses will need to be ultra-energy efficient to reduce long-term ownership costs and even produce their own energy. This can be done with factory-built, green homes.

Then we'll have to build -- or re-build -- high density, walkable communities that are close to jobs and retail outlets. This is already happening throughout the U.S., although building and zoning codes need to change to allow this to happen on a large scale. Even more federal incentives are needed for green building.

We've just experienced a great teaching moment in history. The American Dream as we know it was not sustainable. Now we have the chance to make it affordable, ecologically sound and socially beneficial. It's a rare opportunity.

©2009 John F. Wasik, author of Cul-de-Sac Syndrome: Turning Around the Unsustainable American Dream

Author Bio
John F. Wasik, author of Cul-de-Sac Syndrome: Turning Around the Unsustainable American Dream, is a personal finance columnist for Bloomberg News and the author of several books. His most recent book, The Merchant of Power, was praised by Studs Terkel and well reviewed by the New York Times. Wasik has won more than fifteen awards for consumer journalism including the 2008 Lisagor and several from the National Press Club. He has appeared on such national media as NBC, NPR, and PBS. He lives in Chicago. For more information please visit www.johnwasik.com

Poll Results

I asked you how we should deal with rouge nations such as North Korea (which launched a seventh missile and may be behind the recent cyber assault on US and South Korean business and government sites). 12% said of you said the best thing to do was to ignore them (kind of like the classroom showoff I suppose). 37% of you thought we should talk with them. Perhaps they can be reasoned with. I guess that comes from Neville Chamberlain School of Diplomacy. Interestingly, none of you thought we should talk with them and cave into their demands, which is exactly what the US government has been doing for years now. And an amazing 50% of you, however, thought we should remove theses bullies from power. Good idea. Now make nice boys…or else!

Unionfacts.com or Fiction?

Have you seen the Unionfacts.com commercials? If you haven’t, you’re in for a surprise. One segment of the commercial shows an “average” blue-collar cashier thanking union bosses for the “privilege” of paying union dues just to have a job. Another segment shows a factory worker thanking union bosses for giving money to candidates he doesn’t support. The next segment has a hospital employee thanking unions for working harder and getting paid less because she doesn’t have seniority. The last segment has a clerical employee thanking union bosses for harassing employees into joining a union.

The commercial invites readers to visit their webpage at Unionfacts.com, so I decided to do just that. The well designed site has some enticing pages, such as “Hijacking Elections”, “Union Profiles”, “When Voting Isn’t Private”, a “Fact” page, plus a section relating to the media and their ads. All very well written I might add. There was also a blog about Senator Orin Hatch on the Employee Free Choice Act. However, what interested me most was the “About Us” page.

Unionfacts.com is the product of the cerebral sounding Center for Union Facts, located in Washington, DC. They describe themselves a non-profit 501c (3) organization “supported by foundations, businesses, union members, and the general public”. Dedicated, they proclaim, to showing Americans about union leadership. They claim to be non-partisan and not anti-union. I suspect they must have looked at the Teamsters for A Democratic Union model (http://www.tdu.org/), which is dedicated to promote open and honest elections as well as responsible accounting of union financing (that isn’t to say that this organization isn’t without a certain amount of controversy too. Some union members accuse them of being front for anti-union groups). While the “About Us” page is informative, especially the FAQ, what was more interesting is that none of the officers were mentioned. So I decided to do a little online sleuthing.

Unionfacts.com was created by Washington business lobbyist Rick Berman of Richard Berman and Company. Mr. Berman’s claim to fame has been developing an ad campaigns against groups like Mothers Against Drunk Driving (MADD) on behalf of the liquor industry. He has lobbied on of behalf pro-tobacco interests groups against the Center for Disease Control, and been involved in campaigns against the American Medical Association and EarthSave International just to mention a couple (consumerdeception.com). He was a large contributor to Newt Gingrich’s GOPAC (sourcewatch.org.). He has also been a long time active member of the pro-business US Chamber of Commerce. Not exactly a stellar resume for the founder of what is portrayed as a “non-partisan” organization bent on spreading the “truth” (and I presume the “American Way”) about organized labor.

Now before I proceed any further, here’s the “disclaimer” portion of this article. I am a member of a writer’s union, which is part of both the UAW and the AFL-CIO, as well as the past state chairman of this union. I have also been a delegate to the Greater Louisville Central Labor Council. My grandfather was a member of the Order of Railroad Conductors and Brakemen (and yes, a Republican, which wasn’t as mutually exclusive in those days). My wife is a retired Teamster (Local 89), and her father (also a Republican by the way) was a member of IUE-CWA Local 761 at Louisville’s Appliance Park, owned by General Electric. I’ve been employed in “white collar” jobs my entire working career. I also teach business management and human resource management classes at the undergraduate and graduate level. I count as friends both labor and business leaders. I believe in a balanced playing field. My personal philosophy is that both groups have to work together. One can not dominate the other and expect to remain in business or employed for long.

Labor has done a lot for this country. It has given us established work hours, the 40 hour work week, health and education, benefits, vacations, child protections laws, safe working conditions, and the right to bargain just to mention a few. Business has given us more product diversity and a higher standard of living than any other nation in history. They have done this through intensive research and capital investment. It’s also true that most states have “right to work” laws, meaning that businesses are free to hire and fire you with no or little notice. But on the other hand, you’re free to accept, decline, or quit anytime you want. There are also “open” and “closed” shops, meaning that union membership isn’t available or required (“open”) or by accepting an offer, you are required to also join the union (“closed”).

Is this fair? I guess that depends on your perspective. The reason there is a union in the first place is that at one point in time, employees felt threatened (I’ve always said that the chief reason for unions was bad management). If you don’t want to join the union, don’t accept the job. But what if you want the job but not the union? At a closed shop you don’t have any choice. I’ve thought that instead of having an open or closed shop, that the company have two pay rates (after all, they already have exempted and non-exempted classifications) with corresponding benefit packages. In other words, give the perspective employee a reason to want to join the union—better pay and benefits along with job protection. Alternatively, the non-union employee would not be subject to seniority or other job restrictions.

When it comes to politics, I have to agree with the commercial---sort of. I don’t think anyone, union or not, should be required to give to political action funds. I think employees should be able to opt out of having their union dues or pay going to a particular candidate or party. Why? Because it’s my money and I’ll decide who I’ll donate it to. Unions long ago defaulted on the ability to strengthen their position by blindly supporting just one political party---the Democrats. Nowadays, unions are seen as little more than the party’s cash cows. Instead, unions should (as they did once upon a time) support the best candidates for office regardless of party. That ensures a balance on both sides of aisle and increases the likelihood of favorable legislation. Think it doesn’t work? Look at business. They back individuals in both parties and have done quite well at it thank you. When I ran for state representative against an incumbent Democrat, all of my 30 or so volunteers were either active or retired union members. They knew I could do a better job and the letter behind my name didn’t matter one hoot. Not all Democrats are blue collar working stiffs and not all Republicans are rich.

Let’s take another look at the commercials and website. Both are interesting for what they say and don’t say as I’ve already stated. But, you may be wondering, why run the commercials now? There’s no pending labor or business legislation coming up. The answer is deceptively simple. This is a presidential election year. Money that Labor would be spending on Democrats is now going to have to be diverted to defend unions against these ads. Labor put all its eggs in one basket so to speak, while business bought the whole chicken coop. So, thank you Unionfacts.com for bringing this object lesson to light.


(Americans have had enough of high gas prices. We’re tired of being the pawns of oil companies and Arab Sheiks. Well, that’s been the argument so far. But one thing is for sure. The debate over global warming and energy is just getting started. I thought you might enjoy this article by Jay Hakes. Mr. Hakes is the author of “A Declaration of Energy Independence”. You can also check out a recent interview of Jay at http://www.wwltv.com/video/news-index.html?nvid=267393 which discuses Mr. Pickens’ energy plan).

Boone Pickens’ Energy Crusade:
Prophet or Con Man?

T. Boone Pickens has broadcast his way right into the middle of a presidential election debate about United States energy policy. Americans are upset about $4 a gallon gasoline, and the iconoclastic oilman has bought a lot of air time to tell us what he thinks about the situation.

Pickens’ views have injected some fresh air into the public dialogue, and most of his ideas stand up pretty well to the scrutiny of serious energy analysis. But we must be careful not to replace one set of problems with another.

His ads and web site warn about the money sucked out of the American economy by its negative balance of trade in energy. Pickens has identified a problem as least as big as high prices at the pump. The energy trade deficit is larger than our trade imbalance with China and far more costly than the war in Iraq. Moreover, much of the money ends up in the hands of America’s enemies. Though some laissez-faire economists find this situation acceptable, it’s hard to argue that our dependence on foreign oil can be sustained at current levels over the long haul without further damage to the dollar and the general U.S. economy.

A vigorous American Petroleum Institute advertising campaign, President Bush, and presidential candidate John McCain imply we can drill our way out of our dependence on foreign oil. Pickens disagrees. Again, score one for the man living in our television screens. Offshore oil drilling is expensive and unlikely to lower oil prices or have a dramatic impact on the world oil market. We shouldn’t rule out some carefully monitored expansion of lands available for exploration and development. But opening up more offshore areas in a country that has been drilling away since 1859 won’t be a game changer in an expanding world oil market.

Pickens emphasizes renewable energy, particularly wind power, as a solution to our energy predicament. Wind supplies a significant share of energy in some European countries and is growing here. We should expand the role it plays in electric generation.
But overemphasis on wind can distract attention from solar power and biofuels (not derived from food products), which offer greater potential for further technical development.

The idea that we should use government subsidies to get wind and other renewables into the market overlooks a big problem. The amount of fuel we consume is so large that subsidies will have unacceptable budget impacts for any fuel that achieves broad usage. The key policy here is making sure the fossil fuels pay their own way for external costs related to national security and the environment.

We should also adopt a national renewable electric generation standard that mandates a greater share for these clean and domestic sources, as many states have already done. Last year, the U.S. Senate came very close to breaking a filibuster against such a standard. After what has transpired since that vote, the Congress should quickly adopt the standard next year with tougher provisions than in the 2007 version.

Pickens correctly points out that expanded use of wind and solar, while intermittent, can save significant amounts of natural gas, the most environmentally benign of our fossil fuels and largely available from domestic sources. He then advocates that natural gas resulting from this displacement be used to power America’s vehicles. This would cut the need for foreign oil, reduce pollution and has been technically doable for a long time.

But this is the fork in the road where Pickens makes the wrong turn. Until we figure out how to sequester the carbon emissions from coal-based electricity or add significantly to the number of nuclear plants, we face a critical need for natural gas to reduce the use of coal. After having ignored the problems of greenhouse gases and global warming for decades, our nation cannot add more coal plants without risking great damage to our climate. There’s not enough gas to take on bigger roles for both transportation and electricity.

Fortunately, there are other alternatives for powering our cars and trucks that will work as well or better than natural gas. First and foremost, we need to demand more efficient vehicles. The Energy Independence and Security Act passed last year mandates that the 25 miles per gallon currently required for cars and light trucks be raised to 35 mpg by the year 2020. But we should not have much trouble raising the standard by a mile and a half a year. That get’s us to 40 mpg by 2020 and 55 mpg by 2040.

Ethanol produced from corn kernels is not worth the federal subsidies currently provided. But we should be utilizing liquid fuels from other plant sources, such as corn stover (the waste materials left over), bagasse from sugar cane, wood chips, and switchgrass. Even more exciting, but perhaps further down the road, is biofuel produced from algae. We also have the option of plug-in electric hybrid vehicles, which are very attractive economically, especially if recharging takes place at night when the demand on the electric grid is low. In other words, we can take the bold action Pickens calls for and still reserve natural gas for electric generation.

The Texan who wants to end our addiction to foreign oil may not have every detail right, but we should be grateful that he’s calling for some mighty big solutions to some mighty big problems.

From 1993 to 2000, Jay Hakes headed the Energy Information Administration, the data and analytic arm of the U.S. Department of Energy. He has just published A Declaration of Energy Independence: How Freedom from Foreign Oil Can Improve National Security, Our Economy, and the Environment (John Wiley & Sons, 2008).
http://www.wiley.com/WileyCDA/WileyTitle/productCd-0470267631.html


Poll Results

I asked if you thought candidates only were “fair game” when it came to politics, or if their families were subject to the same scrutiny. Interestingly, half of you said that the whole family was subject to the same level of public review as the candidate. The rest of you said that only children under 18 should be exempt. Wow, you all are a tough crowd!

Big Steps

As pretty much everyone knows, I enjoy reading the comments from you, the reader. One such individual, who goes by the moniker of "Moderate Man" recently submitted an article he wrote which I would like to share with you. Of course, I'm obligated to include the usual disclaimer that the guest writer's opinions are not necessarily those of this blog. With that said, sit back and enjoy Moderate Man's article, called "Big Steps". I'm sure you'll find it most interesting:

Where is the leadership? Why do you vote for candidates without vision? How about the ones who will promise you anything to get elected and part you from your money? Why aren't the major parties redesigning their methods? If the parties are failing to serve the population, then why don’t the cities and some regions become self sufficient to a greater extent than presently? Let me give an example. The Kentucky State legislature considers Louisville Metro and Jefferson County a donor county towards their budget. We consistently give more tax dollars to Frankfort than we receive. As we are the largest city in the state, it probably is justified to assist the other parts of the state with our taxes. However, the other parts of the state have an obligation also to be frugal with the states money. 120 counties for a state this size are too many. Too many county seats with patronage employees and political potentates. I recommend reducing the number of Kentucky counties by one third. But I am a realist. I know this will never happen as the people we vote for would not vote themselves out of a job and will gladly splurge at the taxpayer feeding trough. So the other parts of the state thumb their nose at their responsibility to be guardians of the budget money. And they resent Louisville Metro for being so successful. Its time for our City leaders to realize that if we want anything done, we will have to start pulling us up by our bootstraps. Frankfort won’t help us unless they think that without their help our town’s revenue machine may dry up and they will receive less funds. Our town needs additional tax monies to expand a stagnant population, develop a robust economy, attract high wage employers and more corporate headquarters. We need a small City sales tax added, increased property tax not capped at 4 %, increased occupational tax and less user fees for city services. We also need a separate taxing district for the parks, another one for the arts, and another one for the library. We already give special districts for sporting facilities. The medical community for the most part is a for-profit business and only a select group of non profit facilities should be subsidized, like additional medical care for indigents and the poor. Our town could use the extra revenue for tax abatement to lure corporate headquarters, develop light rail, rebuild our aging infrastructure, keep the arts groups intact, enhance the parks for generations to come, provide an educational Mecca in our libraries. The funds could be even used to give 60% partial college scholarships to every one who wanted to go and who attended a 4 year local public high school, have good grades and will then attend their hometown college like Kalamazoo, Michigan does. This town had the will. Do we?

Employee Free Choice Act

Here's a piece of good legislation for change. This gives employees the right to decide for themselves whether or not they want a union with out harassment from management or pressure from union officials. The US House votes on this today (March 1, 2007). Let's hope it passes. Of course, if companies want to avoid unions, it's a simple matter of treating employees with respect, providing for a clean and safe work environment, ensuring a decent living wage and benefits. Companies who don't have no one to blame except themselves. For additional information, here's a link to the AFL-CIO site and the article written by James Parks: http://blog.aflcio.org/2007/02/22/employee-free-choice-act-sticks-to-values-we-care-about/

Illegal Immigration

On May 1st, the “International Day of the Worker”, tens of thousands of protesters took to the streets across the county to protest pending legislation regarding illegal immigration. Many were illegal workers. Some waved their national flags, while others waved the American flag. A few were even dressed in native costumes. What the media barely covered was another national march four days later on May 5th, also known as Cinco de Mayo. Cinco de Mayo is the Mexican celebration of a victory over French and Pro-French Mexican troops in their fight for independence which began in 1810 and took some 11 years to achieve. The espoused goal of these protests was to flex their economic muscle by shutting down businesses and restaurants.

So, what’s all the fuss about? One group wants open immigration while the other wants controlled immigration right? Well, not exactly. This fight is about whether illegal immigrants can come and go in this country with complete disregard of our national laws. Mexican President Vincente Fox has publicly said that the United States does not have the right to restrict immigration. He believes these workers have every right to enter this country to seek work. President Fox believes we should dismantle our border stations and remove our border patrols.

Those who support President Fox’s point of view believe that our immigration laws are racist because they’re “directed” primary against Spanish speaking individuals. They believe these illegal immigrants should be able to obtain drivers licenses, permits, etc without restriction. Perhaps not surprisingly are the business owners who want to keep the gate open as well. They point to the numerous jobs, mostly menial, low paying and sometimes dangerous, which wouldn’t be filled if not for their “undocumented” employees. They also claim that these workers pay taxes through the purchases of goods. Finally, proponents of open immigration, especially in the Hispanic community point to the potentially huge voter block, which is something politicians are keenly aware of and don’t want to upset. Indeed, during the May 1st demonstrations, many carried signs which read, “Today We March. Tomorrow We Vote”, implying of course that illegal immigrants should be given our most cherished national possession, the right to vote.

My take on all this is somewhat different. We are the most diverse nation the world has ever seen. Americans, as a whole, enjoy the cultural diversity our nation offers. But, we’re also a nation of laws. That’s how we function as a society. If someone wants to come to this country, that’s great. All we ask is that they get in line. We have procedures for immigration, just like everyone else. As a sovereign nation, we have the right to secure and protect our borders. In Mexico for instance, if you’re caught being there illegally, the “undocumented” employee gets an automatic 2 years in Federal prison. If they’re caught a second time, they get 6 years in prison. If they’re dumb enough to get caught a third time, they get life! Most every country in Latin America has similar laws. All we do is deport them so they can try it again the next night. So, while President Fox seems to think we should open our borders, he obviously doesn’t believe the same should hold true for Mexico. It should also be pointed out that President Fox has also repeatedly failed to create jobs, or develop a solid middle class per his campaign promises, and his country has an almost insatiable need for US dollars because of the level of poverty.

As for the demonstrations themselves, they had virtually no effect on the national economy whatsoever. It seems the only ones hurt by the protests were the businesses who closed in support of the protests. Some are now permanently closed. Such was the public's response. And while we’re on the subject, how many countries do you know of where illegal aliens can openly protest in the streets! I bet it’s not many.

Regarding the well worn charge of racism, nothing further could be from the truth. We are a nation of immigrants (I’m, for instance, prominently of Northern German origin with a little Scots/Danish thrown in). We only ask that they apply for citizenship like everybody else. If they don’t want to be a citizen, then at least get a work permit. I don’t think anyone cares where these people are from. It just so happens that the vast majority of illegal immigrants are from south of the border. I know it’s hard to believe, but we just don’t seem to have many Canadians sneaking across the border at this point.

With respect to jobs, it’s true that illegal immigrants take the jobs that no one wants. But, on the other hand, what choice do they have? They’re here illegally! If they were citizens, do you think they’d be housekeepers, gardeners, or janitors? Do you think they’d want to work in sweatshops, or in jobs that don’t even pay minimal wage or don’t offer benefits? Do you think they’re overjoyed working under the hot sun, in fields picking crops for literally pennies? I think its criminal that employers would treat anyone like this, illegal or not. If employers are really that desperate to find people to work in these jobs, my suggestion is that they need to clean up their act. There are already numerous local, state and federal laws. Let’s enforce them. Pay your employees better. None of this “piece work” garbage which works out to pennies on the hour. We have a minimal wage law in this country. Pay it. Make working conditions safe (and sanitary). Offer benefits. Help illegal immigrants get temporary work cards. Meanwhile, I think local, state, and federal government should look at stopping the source of illegal immigration by focusing on employers who hire illegal workers. Businesses, even the most shady, understand money. They understand, and sometimes fear publicity. Hit them in the wallet with stiff mandatory fines and publish their names in the newspapers. It won’t be long before they’ll stop or face being run out of business.

I think this area is also an untapped resource for unions too. Unions can help these folks; while they’re still in Mexico or Latin America to get temporary work permits. They can offer them English classes. They can sign them up as union members. They can teach them how to organize and the benefits of being a union member. They can also help them become citizens. For those who want to return to their home country, these people would represent a ready source of organizers with US Labor contacts and training. It’s a win-win situation for Labor.

Finally, these illegal workers do not pay taxes. Yes, they pay sales tax whenever they go to the grocery, but that’s about it. Employers usually attempt to skirt various tax laws by applying social security and other tax deductions to a single social security number, or they pay in cash or in the form of tips or as “independent contact” employees. Illegal workers also make use, at taxpayer costs, of public schools, which often have to employ translators for the students (again, at tax payer costs). They also generally don’t have insurance, so once more taxpayers have to pick up the cost for accidents, or health care costs (of course, we’re not even considering lost revenue for work done illegally because permits weren’t obtained, or the effect on the economy because of illegally low wages).

American is like a giant quilt. We are a patch work of every nation, every religion, and practically every culture on earth. I believe this diversity is what makes us great. But like any quilt, we are a strong as the thread that binds us. Language, in my opinion, is that thread. Without a common language, we can’t continue as a country. We’ll quickly drift into our own separate neighborhoods and communities. Whole cities and areas will become like foreign outposts. Soon, we’ll have nothing in common because we are unable to speak to each other, and when we lose our ability to communicate, we’ll soon lose our identity as Americans. So, I would say that any immigrant to this country, be they from South American, Asia, or Europe, should be required to know basic English. As for that piece of legislation, the U.S. Senate proposed a spineless piece of work granting illegal immigrants amnesty (again). Sadly, even our own U.S. Senator, Mitch McConnell (R-KY) failed us by supporting this travesty of legislation. I seriously doubt this bill will go anywhere. Finally, I’d like to close with a quote from one of my favorite presidents, speaking on the issue of immigration:

"In the first place, we should insist that if the immigrant who comes here in good faith becomes an American and assimilates himself to us, he shall be treated on an exact equality with everyone else, for it is an outrage to discriminate against any such man because of creed, or birthplace, or origin. But this is predicated upon the person's becoming in every facet an American, and nothing but an American...There can be no divided allegiance here. Any man who says he is an American, but something else also, isn't an American at all. We have room for but one flag, the American flag... We have room for but one language here, and that is the English language... and we have room for but one sole loyalty and that is a loyalty to the American people." ------Theodore Roosevelt 1907

A Mega Union: Really?

The AFL/CIO is meeting this week to discuss basically the future of the mega-union. However, there are huge fissures in the union movement today. Labor rank and file seems to understand the current political and economic landscape much better than Labor leadership does. They understand their economic realities and the oft confusing distinctions between the two parties, while leadership is in a perpetual catch up mode. 

The rank and file knows not every Democrat coming down the pike is necessarily pro-union, and not all Republicans are anti-worker. They understand that for unions to be successful (12% of the workforce now compared to 37% in 1960); they must reach out and support pro-labor candidates where ever they can find them. They know that Labor needs friends on both sides of aisle just like corporations, who have friends on both sides. You can’t fight with only one arm. Why should unions be expected to?

Case in point, I am the state chair of small union affiliated with UAW and AFL/CIO, the National Writers Unions. I belong to the Central Labor Council. My wife is a retired Teamster. We both belong to the Retiree Local 89. I am also Republican. I ran against a conservative non-union "good ole boy" Democrat with a poor Labor voting record, I received no support from Labor leadership, and yet just under half of my volunteers (approximately 15 people) were active or retired union members. 

Look at the Governor’s race. Here in Kentucky, all of the union leadership endorsed Democrat Ben Chandler on behalf of their union, while the majority of union membership voted vote for Republican Ernie Fletcher. it would have been less embarrassing to have allowed the members to vote without intimidation or manipulation and gone with their choice. The same story is repeated everywhere throughout the country, especially in the Northeast.

Until unions have a political party of their own (as every other Western nation does), it must look pass the letter behind a person’s name. They must look at whether or not the candidate supports the basic tenets of the union movement. If the candidate is or has been in office, then examine their voting record regardless of their party affiliation. Don’t assume anything. 

If it’s predominantly pro-labor, then support that individual. If not, then find someone else who is. Unions aren’t an arm of the Democratic Party and shouldn’t be treated that way by either party. And never should the union vote be taken for granted. As for me, I believe in and trust the rank and file to make the right decisions over union "leadership" any day of our hardfought 40 hours workweek.