[**Editor's note--this week everything is a must read.]
First up is this cartoon from Gary Varvel:
In the Daily Beast, Ted Gioia points out workers are increasingly being asked to work for free by wealthy institutions:
In recent weeks, the Ritz-Carlton hotel company, the NFL, and the Smithsonian Institution have all made news by asking people to do work for free. Such practices are hardly surprising in themselves—working for nothing seems to be a key building block of the new economy. But the fact that these requests come from such huge organizations with deep pockets raises troubling questions. I could give many other examples. A few weeks ago, designer Dan Cassaro publicly shamed Showtime for its attempt to get free creative work from professionals as part of a “design contest.” Santa Anita Park recently called for volunteers to work at the Breeders’ Cup World Championships—an event that gives out $25 million in prize money to its well-heeled participants but wants folks in the neighborhood to serve as unpaid staff. The Pittsburgh Post-Gazette, part of the Block Communication media empire, is now asking writers to submit 750-word essays for no payment. I note that this newspaper is unionized, and its parent company reportedly paid Ted Nugent more than $50,000 to play at an event for a sister newspaper. But now it wants writers to donate their services?... What a strange turnabout! Remember when people did volunteer work to help the poor? Now the poor do it to help the wealthy.
Your editor attended the High Water Women Conference this week which included a keynote address by Heron's Clara Miller and much discussion about gender-lens investing. In this Business Insider interview, the Container Store's Kip Tindell discusses his philosophy for treating workers, which includes pay their retail clerk's an average $48,000 and promoting leadership among women:
BI: How many women executives do you have at The Container Store? KT: Roughly 70% of the top leadership positions at our company are held by women. BI: That's a reversal of the gender breakdown at most major companies. Was that an intentional choice? KT: We were just looking for the best leaders. Obviously, we have nothing against men. It's just that the skillset — communication, empathy, emotional intelligence, understanding what we stand for (Conscious Capitalism, servant leadership), and being like our target customer — really fits the bill with women. When we did our board, though, we did seek out women because we wanted the board to reflect company management. BI: Hiring is a big part of your strategy. Tell me about your "1 great person = 3 good people" rule. KT: We're talking about business productivity. Of course, no one person is better than another person as a person. But if you can, why not hire great people? And you can pay them twice as much and still save, since you get three times the productivity at two times the cost. They win, you save money, the customers win, and all the employees win because they get to work with someone great. These people are the best in the industry, and I can't wait to get up in the morning and work with them... BI: You managed to get out of the recession without doing any layoffs. Why was that important to you? KT: We've never laid anybody off in the history of the company. We do fire people. We are a meritocracy and want excellence. But laying people off is a very distinct thing. When times are tough you do have to adjust your expenses to your sales. Laying people off is an easy way to do it, but it's not the best way to do it. At the height of the recession I was at a big bank's conference and many top leaders were there; I was the least important person in the room. I didn't like what I saw. It was a testosterone-fueled competition for who was laying the most people off. It was very upsetting. BI: How were you able to avoid it? It was like holding hands at the dinner table as a family and talking about how we were going to spend less money. Salaries were frozen, and 401(k) matches were suspended for awhile. Employees were happy about it because they were saving their colleagues. Sales over the two-year period from 2008 to 2009 were down about 13% to 14%. But we bounced back quicker after the recession because of the loyalty factor. [Southwest Airlines cofounder and former CEO] Herb Kelleher is one of my heroes, and he said: You can build a much better organization on love than you can on fear.
Over at In These Times, Rebecca Burns reports that some Uber drivers have decided to strike against low wages by turning off their apps:
Uber has been a target of particular resentment because of recent fare cuts. In September, the company emailed drivers to say that a summer discount on its standard “UberX” service of between 15 and 20 percent, depending on the city, would be continued into the autumn. In an infographic accompanying an email to drivers in July, the company reasoned that the price cut would generate higher demand for rides, leading to more trips per shift and resulting, ultimately, in a boost to drivers’ bottom line. Many drivers, however, were unconvinced. “I had an awesome day! I earned $5.33 an hour!” snarked one UberX driver on an online driver forum. Thanks to highway tolls and long trips to pick up passengers wanting to go only a few blocks, he explained, more rides hadn’t offset the lower fares.
On top of the lower prices, Uber has also demanded a larger cut of fares. New UberX drivers in San Francisco now hand over 25 percent of their earnings to the company; drivers for the more expensive Uber black-car and SUV services, which unlike UberX are operated only by professional drivers, surrender 25 and 28 percent, respectively.
You might also be interested in this piece from CNN's Jeanne Sahadi on how foreign workers "lured by false promises of good jobs in America, soon find themselves enslaved in plain sight as victims of labor trafficking." Over at Philanthropy New York, Michael Hamill Remaley discusses whether philanthropy is promoting low pay at nonprofits, highlighting an upcoming event on the issue November 5:
It is a fact that nonprofits are among the employers in New York, and across the nation, that most commonly pay their employees less than self-sustaining wages. Paying a “living wage” should be a no-brainer for organizations that are existentially defined by their commitment to improve social conditions in some way. But there are several major factors that impel nonprofits with the best intentions to pay their workers less than living wages...Government contracting systems are the main culprit, but the philanthropic sector also plays a role. Is it possible your organization is contributing to the problem?
According to the Wall Street Journal, risk managers of major financial institutions are worried about the U.S. wealth gap. Check out this chart:
The growing indebtedness of most Americans is the main reason behind the erosion of the wealth share of the bottom 90 percent of families. Many middle class families own homes and have pensions, but too many of these families also have much higher mortgages to repay and much higher consumer credit and student loans to service than before. For a time, rising indebtedness was compensated by the increase in the market value of the assets of middle-class families. The average wealth of bottom 90 percent of families jumped during the stock-market bubble of the late 1990s and the housing bubble of the early 2000s. But it then collapsed during and after the Great Recession of 2007-2009... If income inequality stays high and if the saving rate of the bottom 90 percent of families remains low then wealth disparity will keep increasing. Ten or twenty years from now, all the gains in wealth democratization achieved during the New Deal and the post-war decades could be lost. While the rich would be extremely rich, ordinary families would own next to nothing, with debts almost as high as their assets. Paris School of Economics professor Thomas Piketty warns that inherited wealth could become the defining line between the haves and the have-nots in the 21st century. This provocative prediction hit a nerve in the United States this year when Piketty’s book “Capital in the 21st Century” became a national best seller because it outlined a direct threat to the cherished American ideals of meritocracy and opportunity.
In the Washington Post, Matt O'Brien looks at the meritocracy gap:
Even poor kids who do everything right don't do much better than rich kids who do everything wrong. Advantages and disadvantages, in other words, tend to perpetuate themselves...Specifically, rich high school dropouts remain in the top about as much as poor college grads stay stuck in the bottom — 14 versus 16 percent, respectively. Not only that, but these low-income strivers are just as likely to end up in the bottom as these wealthy ne'er-do-wells. Some meritocracy. What's going on? Well, it's all about glass floors and glass ceilings. Rich kids who can go work for the family business — and, in Canada at least, 70 percent of the sons of the top 1 percent do just that — or inherit the family estate don't need a high school diploma to get ahead. It's an extreme example of what economists call "opportunity hoarding." That includes everything from legacy college admissions to unpaid internships that let affluent parents rig the game a little more in their children's favor.
Your editor considers the Ebola outbreak to be in part another story of poverty and how inequality manifests. For one check out this story in the New York Times showing work on a promising vaccine for the disease was shelved for a decade because the biggest market is "countries with little ability to pay." The Economist offers a number of excellent charts about the disease including an interactive one comparing it to other deadly diseases such as SARS. Check out this one on health systems highlighting the medical system inequities:
The Bill and Melinda Gates Foundation has given $5 million in aid to the WHO along side around $20 million from the U.S. government. The Gates Foundation last month pledged a total of $50 million to help fight the disease. Still, the New York Times' Stephanie Strom reports donations have been slow to gain speed:
the Ebola crisis is different, charity officials and experts say, though it is hard to say exactly why. Perhaps it lacks the visual drama of a natural disaster. Or it is harder for people to understand what their money can do to fight a disease with such a high mortality rate and no sure treatment. It is not even clear that providing food, housing and protective equipment will have any impact — or how those things will get where they are most needed...
In fact, large gifts from individuals may end up being what differentiates the philanthropic response to this disaster from others, Mr. Rooney of the School of Philanthropy said. In addition to the Zuckerberg-Chan donation, the Bill and Melinda Gates Foundation has pledged $50 million to fight Ebola, distributing the first portion of it to the World Health Organization, Unicef and the C.D.C.; and Paul Allen, who helped found Microsoft with Mr. Gates, has promised $12.9 million to the C.D.C. on top of a $2.8 million gift to the American Red Cross that accounts for most of the money that organization has raised to address the outbreak. His total giving toward Ebola efforts is more than $26 million.
“It’s really intriguing that the bulk of the private giving so far has come from a who’s who of the Silicon Valley types of donors,” Mr. Rooney said, “but it really hasn’t gone very much further than that yet.”
Even more depressing than sluggish aid is the lack of needed healthcare workers to stem the tide, which could be exacerbated by new quarantine rules following a New york doctors infection, reports Abby Haglage in the Daily Beast:
Sebastian Vidal, a field coordinator for MSF, told NPR he was “flabbergasted” at the lack of international response. “We see that Western countries are preparing themselves in case they have one or two cases,” said Vidal. “This is not acceptable. You just cannot let a whole continent become infected and people die by hundreds. People are giving advice, talking and talking, but we don’t need advice. We need people on the ground doing the job like us. Please come.” “There’s just some hysteria surrounding the virus that prevents people from coming,” Craig Kenzie, a logistics manager with MSF told Canadian Breaking News Wednesday after returning from a trip to Kailahun in Sierra Leone. “Of all the missions I have done with MSF, on the ground, this is one of the clearest needs that I’ve ever worked in. You have a huge need that’s just not being met. And it makes no sense.” In other disasters, such as earthquakes or tsunamis, volunteers come running. But in the face of Ebola, they run the other way.
There are a number of excellent pieces looking at Ebola with an inequality lens, be sure to read Laurie Mazur's post in the New Security Beat. as well as this piece by the Boston Globe's Carlo Rorella who warns Americans to stop panicking because "this is not the zombie apocalypse" and maybe we need some soul searching:
There’s not much compassion for those actually threatened by Ebola in our discussions of the disease, which are animated by inward-turning questions about how much we trust our government and how secure we should expect our lives to be. The answers abound with contradictions. Apparently, we want our government to guarantee our perfect safety from terrorists and Ebola, but not to do anything about more pressing dangers — like guns — that kill citizens all over our country every day. We rely on cheap goods and labor from abroad, but we want to hermetically seal our borders. We want to feel connected to others, but we shun the company of flesh-and-blood people in ways that seem mundane now but were confined to the realm of science fiction just a generation or two ago.
What we really don’t want to accept is that the routines of humdrum existence, accruing over time, can eventually add up to the end of the world as we know it. Our squeamishness about confronting that possibility hamstrings our current conversations about inequality, public health, climate change, and the state of our democracy, among other subjects.
In the Nation, Michelle Chen looks at whether work-sharing is really a better alternative to layoffs. In this report from the Economic Policy Institute, Lonnie Golden discusses the lack of overtime protections for low-income salaried workers and the need for regulatory revisions. Over at the Roosevelt Institute, this recent primer by Susan Holmberg and Michael Umbrecht attempts to unpack the issue of CEO pay, explaining the problems, "including the harm it imposes on workers, businesses, and society." Salt Lake City is addressing its homeless problem by putting people in apartments which the city is finding far cheaper than jailing them or erecting homeless shelters reports the Nation. And the Atlantic reports on Baltimore's solution of using abandoned house development to address the city's homelessness via a community trust program. Meanwhile, CECP reports on corporate giving in their report, finding that in 2013 it totaled roughly $25 billion.