A Sense of Higher Purpose

Among the most e-mailed recent articles listed by The NY Times was a piece on Apple’s store employees titled, “Apple’s Retail Army, Long on Loyalty but Short on Pay” ( http://www.nytimes.com/2012/06/24/business/apple-store-workers-loyal-but-short-on-pay.html?_r=1). 

As someone who covered retailing for more than three decades, I learned very little from the extensive reporting. It was not news to me that Apple, like most retailers, pays its store staff little more than minimum wage despite counting on them to rack up among the highest, if not the highest, sales per square foot among chain store retailers. 

Buried deep in the article was the following paragraph which explains to a large degree why Apple can get away with low hourly wages: “The phrase that trainees hear time and again, which echoes once they arrive at the stores, is ‘enriching people’s lives.’ The idea is to instill in employees the notion that they are doing something far grander than just selling or fixing products. If there is a secret to Apple’s sauce, this is it: the company ennobles employees. It understands that a lot of people will forgo money if they have a sense of higher purpose.”

That last sentence—”It understands that a lot of people will forgo money if they have a sense of higher purpose”—really got me. It brought me back several decades to a presentation by then CEO and founder of Crate & Barrel Gordon Segal. Asked by a Wall Street investment analyst to explain the success of his home furnishings chain, Segal attributed much of it to the dedication of store associates, men and women often with a degree in art or design or teaching. They had a talent for connecting with people and for feeling good about their work. That transcendent feeling, Segal said, allowed Crate & Barrel to keep salaries low because the staff received inner fulfillment from their work in lieu of demanding higher wages.

That’s the same management philosophy that for years buttressed the belief that public employees—firemen, police, social workers, sanitation workers, teachers, nurses, even the military—could be hired at low starting salaries. The tradeoff many of these workers, and government officials, accepted was better health care and retirement benefits. Now slash and burn governors, mayors and their legislative henchmen are trying to balance the books on the backs of government workers. 

Sure, there were and are some malingerers among them. What industry doesn’t have its share of goof-offs and people who take advantage of the system? But do we seriously believe teachers are not among the most important members of society and thus should be valued and paid appropriately? Does anyone seriously want to haul trash—even if it’s just their own trash— in the frigid dead of winter or the blazing hot summer? How about running into a burning building to save someone who might not even be inside the inferno, but firemen go in anyway because a family member or friend suspects a loved one is inside? How many of us are ready and willing to put our lives on the line each time we don a uniform to protect our cities or to safeguard our nation from attack in foreign lands? 

Perhaps what we need is a little more introspection about the good government workers bring to our standard of living. 

If I Were In Charge

If I were in charge....

...I’d order corporate travel programs to boycott all airlines that didn’t pass along to the buyer the funds from the recently expired federal tax on airplane tickets. Except for Alaska and Spirit, to my knowledge, all airlines have chosen to raise fares by an amount equal to the expired tax, reasoning the consumer already is used to paying the higher amount so why not pocket the tax portion no longer being collected for the government. The tax averaged about $20 for a $200 ticket. It’s all very legal, but not really ethical.

I’d maintain the boycott until the airlines dropped the greedy pricing practice. The only way to force airlines to behave is to hit them where it hurts. If it’s too much trouble to boycott all the airlines, then single one out. Within days it will lower prices, no doubt followed by the rest of the fly-boys.

...I’d require all states to pass laws requiring Internet retailers with nexus (offices, warehouses, or other tangible assets) within their borders to collect sales taxes. When the Internet began, it was appropriate to give Web retailers a break. But Internet retailing is quite vibrant these days; the price advantage most cyberspace merchants receive is unfair to brick and mortar companies.

Moreover, those sales tax dollars are desperately needed by state and local governments. They’d also help offset the loss of revenue (from sales and property taxes) when retailers, such as Borders Group, go out of business.

I would exclude Internet start-ups from tax collection liability either for their first five years of operation or until their sales exceed $50 million a year.

...I would require all newscasts and newspapers to show past positions (by date) of politicians featured in stories as a way of exposing hypocrisy or at least changed thinking. It’s truly ludicrous that for the most part only Jon Stewart on The Daily Show goes back to the archives to reveal outright reversals of previously hallowed statements. People (and by that I mean, reporters and editors), let’s get some accountability here, not just for politicians but also for your actions.

...I would disallow government pensions or other retirement benefits for any politician or public servant who resigns because of a sex or ethics scandal (or a felony conviction of any kind), regardless of how many “clean” years he or she served.

...I’d require all politicians to pass an economics class that includes some simple lessons. First, while businesses often resort to cost-cutting measures for short-term profit enhancement, long-term growth can occur only if revenues are raised.

Second, businesses will seek any way they can to increase profits and reduce taxes, even if it means not acting in the national interest, e.g., sending jobs overseas rather than employing more Americans.

Third, cost-cutting can be effective if it does not harm the product, such as by substituting inferior raw materials, or by delivering less value to the consumer.

Fourth, government is analogous to business in that budgets may be balanced by cutting programs, but the value passed onto the public may suffer in the form of fewer police and firemen, lower social security payments, fewer parks, more children per classroom, etc.

Fifth, given the aging of the baby boomer generation and their increased use of Medicare and social security, more revenue generation is required, generally in the form of more tax collections.

Sixth, businesses and individuals often live beyond their current means. They borrow against the future. Individuals do that when they buy a home through a mortgage or make credit card purchases; businesses do that by issuing bonds. There’s nothing sinister or bad in those practices. For anyone in our government to believe it is now a smart move to stifle the future is a repudiation of capitalism as practiced today in the United States.