Robots do not pay taxes Credit: www.nanowerk.com
Some lightworkers, when they contemplate serving the Mother as a financial wayshower, may think that they need to “learn how it’s done.”
If that’s a generic term, I agree. If it’s a felt need to operate as we used to in the old Third, I think I’d demur.
The prevailing business models are what got us into the mess we’re in in the first place, all in the service of the people who controlled the economy. Why in Heaven’s name would anyone want to imitate them? Surely that simply prolongs the crisis.
We’re arguing for a heart-centered approach on this blog and we probably won’t find a business model for that among those that the masters of business held out to us from pulpits like the Harvard Business School or Business Week.
Let’s look at what happened in the germinal 1990s.
I’ll be ignoring elements of the economy that doomed it, such as the derivatives crisis, which was a scam and has resulted in a debt so large that it probably can never be liquidated. I’m focusing on the work force.
The fall of the ordinary worker started in the 1980s when waves of mergers and acquisitions tore many companies apart. Then a series of corrupt schemes like the junk-bond mania, the dot.com bubble and later the mortgage-foreclosure scam sapped America of jobs and profitability and condemned the middle class to ongoing indebtedness and a lack of prospects.
But what really finished workers off was computerization or automation. That led to jobless recoveries from what were considered to be “recessions,” the loss of careers, the demise of benefits plans, and many other forms of hardship for obsolescent workers who bore the brunt and costs of automation.
It was a double whammy because robots don’t pay taxes so the very same class that was deprived of its livelihood was also asked to bear the increased tax burden that resulted. More people off work meant more call on government services and that meant higher taxes, all borne by the people who were under assault from automation.
The rise of outsourcing to low-wage countries completed the defeat of the worker. Now people hire themselves out as consultants without benefits, at low wages. Many hold down two or three part-time jobs. And all the time their debts mount.
Companies took a Just-in-Time attitude towards their workers:
“‘Companies are managing their workers as they manage their inventories of unsold goods,’ said Leslie McNulty, research director of the United Food and Commercial Workers Union. ‘They are trying to keep both sets of inventories — employees and merchandise — as low as possible.'” (1)
Let’s look here at the impact of automation on it. Later I’d like to look at the philosophy behind that mess, which I came to think of as Business Darwinism. Please consider this an attempt at consciousness raising in the area of financial wayshowing.
One business analyst asked the $64,000 question in 1991: “What is a computer for, if not to save labor?” (2) Exactly. A computer is a labor-saving – or labor-destroying – device.
Fortune Magazine described how extensive the automation revolution was.
“[Computers are taking] over progressively more of the work that can be routinized … from guiding machines that make things to transmitting information within the organization or across its boundaries. Bingo, you’ve got flexible manufacturing, programmed trading, and point-of-purchase terminals wired into the supplier’s factory.” (3)
I’ve said on occasion that the younger generation has never known a permanent, full-time job with benefits. This is the era in which those jobs were decimated.
Because automation created a buyer’s market for labor, companies could ditch their benefits plans along with their permanent, full-time workers – and they did in droves.
Business Week in June 1993 noted that “companies are often using outside consultants, many of whom were laid off earlier, to lower their costs.” (4) In that same article they suggest that “even when companies have work that needs to be done, they often use temporary workers to avoid paying the cost of benefits.” (5)
Employees were fired and hired back on as consultants, without the benefits they once enjoyed and only for as many hours as was absolutely deemed to be necessary. A society that embraced “just-in-time” production also adopted “just-in-time” employment. The cost of benefits plans now came to be called “the burden rate.”
I remember how afraid I was to leave my job at the time. Electronic Engineering Times in 1991 suggested that the feeling was general: “Disgruntled employees don’t dare leave their posts in 1991. There might not be another job down the road. So they stay and gripe.” (6)
Said another business analyst: ”Fear is rampant in the workplace.” (7) I remember how that was. We all led lives of quiet desperation.
One banking executive suggested a formula for estimating when employees should be replaced:
“Theoretically every time you make a $10,000 investment on technology you should have replaced one employee.” (8)
Automation replaced hundreds and hundreds of thousands of workers. And, said the Financial Post, “most of the jobs lost are lost forever.” (9)
No one was safe. Here are some of the occupational activities that became extinct, diminishing the number of jobs available to the younger generation:
• Storing, filing and retrieving;
• Monitoring, analyzing, accounting and reporting;
• Middleman work such as booking, selling, ticketing, dispensing, shipping, and receiving;
• Making transfers of money, mail, stocks, or information;
• Issuing information policies that consumers can just as well request from a machine.
This list grew as “systems” got better at doing our work. No occupation, not even computer programmer, was immune from what is essentially a social virus.
What was usually not said was that not only jobs were lost, but whole careers. Workers moved from one new career to the next, trying to stay one step ahead of the computer. One group moved to the next occupation even while employees in that occupation were moving to another. Travel agents might become medical-lab assistants. Lab assistants might become hospital unit coordinators. Unit coordinators might become travel agents, all trying to stay ahead of the machine, which seemed to be just a few paces behind them.
“Social Darwinism is respectable again,” one analyst wryly observed. (10) Social Darwinism is the theory that not just nature, but society also, is red in tooth and claw. The fittest survive and the weakest go to the wall. Such a philosophy has no truck or trade with the divine qualities. Indeed this era of the 90s was the high point of Social Darwinism – or Business Darwinism – as a social philosophy.
Business Week described how bleak the picture had become:
“As companies large and small embrace new technologies and eliminate jobs, millions of workers are finding that their old careers are becoming obsolete. In just the past year, even as the [U.S.] economy grew by some 2.6%, more than 500,000 clerical and technical positions disappeared, probably forever. And better information systems are eliminating the need for lots of middle managers.
“It’s no wonder that so many Americans are distressed: they see their paycheques lagging inflation, and they worry about joining their families and friends in the ranks of the unemployed.” (11)
Said one business executive in 1991: “Whole levels of middle management have been wiped out and will not be replaced.” (12)
Added Business Week in 1993:
“Corporations have been laying off huge numbers of middle managers because the re-engineering and technology make it possible to do without them. In the old corporate hierarchies, middle management’s function was to transmit information from the field or factory to the executive suite and relay commands from the corner office back to the troops. Databases and computer networks now do the job faster, better, and for less.” (13)
(Concluded in Part 2.)
Footnotes
(1) Uchitelle, 1990, 4; Johnston, 1991, 115.
(2) Steinhart, Jim. “Database Octopus,” Canadian Datasystems, May 1991, 58.
(3) Fortune, May 17, 1993, 39.
(4) Michael J. Mandell and Christopher Farrell, “Jobs, Jobs, Jobs — Eventually,” Business Week, June 14, 1993, 72.
(5) Loc. cit.
(6) “Nervous and Insecure. With More and More Companies Downsizing, EEs are worried about Their Jobs,” Electronic Engineering Times, October 14, 1991, S52.
(7) Anne B. Fisher, “Morale Crisis,” Fortune, November 18, 1991, 71.
(8) James Miller, CEO of Royal Trustco in Macleans, Nov. 23, 1992, 44
(9) James Purdie, “Upgrading is the best route to job security,” Financial Post, Dec. 16, 1991, 11.
(10) David Olive, “The New Hard Line,” Report on Business Magazine, October, 1991, 15.
(11) Mandell and Farrell, ibid., 72.
(12) Harold Johnson, managing VP of Korn/Ferry International, an executive search firm in Vivian Brownstein, “Though Some Jobs are Gone for Good, Employment will Rise Again,” Fortune, November 18, 1991, 29.
(13) Business Week, June 14, 1993, 58.