Essays

Confessions of an Economic Journeyman in an Economic Ecosystem Run by the Four Horseman of Trickle down and a Vacuum

My story is most likely a common one today. I have worked more jobs in more fields than my grandparents ever did.  My travels as an economic journeyman have included the following roles: guy cleaning toilets, dude breaking sidewalks with sledge hammer on city streets, suit selling services to Boards of Directors, and pitchman giving a presentation at an International Organization. Funny thing I cleaned those toilets after I gave that international talk.

I have worked with and for entrepreneurs, most of whom understood the value of their worker, and treated them with dignity and respect. I have also known what it feels like to have economic control and what it feels like when you don’t. What I have learned is it is hard to   educate yourself about the vacuum cleaner that is our economy when you are just trying to survive.  Most of us live paycheck to paycheck, struggle with how to spend the dollars that are in short supply, and at times feel like we are powerless and have no control. When the negatives outnumber the positives in your own economic ecosystem it is hard to focus on how the Four Horsemen of our economic ecosystem might, just might, play a part in all of it.  My journey has led me to a place where I have a little control of my personal economic ecosystem, so I have begun to ask why is it that so many of us feel powerless?

I have arrived at the conclusion that it is the culmination of 40 years of economic orthodoxy built on a foundation of B.S. What I call the Four Horsemen are: (1) raising the minimum wage is a job killer, (2) raising the threshold pay that qualifies salaried workers for overtime is a job killer, (3) share buybacks of company stock is a productive use of capital, and (4) regulatory capture, the revolving door between Washington, K Street, and Wall Street, is a positive.

Alright, some of you just tuned out. Stay with me. Each of these Four Horsemen work in concert to suck the economic contributions you make to a corporation, business, or entity to those at the top. I am still trying to figure out how intentional it has all been.

How does it work? Well, for the first two horsemen, it is based on a belief that there are winners and losers, and that those at the top should win. They do this by getting us to believe that if they raise wages or the threshold at which we get overtime pay, that it will kill jobs, slow the economy, and put us all out of work. They tell us they need to keep our wages stagnant so they can HELP provide us with a job.  They make this argument while sucking all the profits to the top.

Did you know a Union Carpenter in 1972 earned the equivalent of $33.55 an hour, $70,000 a year. Today, a carpenter earns $20.23 on average, about $42,000 annually. That carpenter in 1972 could buy a house, a new car, and maybe afford a summer vacation.  Today he can afford nowhere near the same amount.

Wayback in 1948, unionized auto workers fought for a basic wage.  That basic wage was $20 an hour, a figure that represented the BOTTOM of the union wage ladder. In 1979, 23% of hourly workers earned $20 an hour, in 1989 it dropped to 18%, and by 2000 it was 16%. According to the National Employment Law Project, ¾ of new jobs post financial crisis pay $15 or less an hour, and as of 2015, 42% of all workers earned $15 or less an hour. Think about that for a minute. In 1948, the basic bottom wage was $20 an hour, 70 years later, 42% of all workers earn $15 or less an hour. Are things cheaper? Spouse stay home? Childcare gone down? Houses and cars less expensive? Have rich people dried up and dropped off the face of the earth?  In 2011, the Ratio of Corporate Profits to Private Industry income was at its highest level since 1948.  Corporations were earning just as much, but the workers doing the work were getting much less. While your pay has decreased, theirs has increased, to the point, where Ray Dalio, who has a net worth of 18 billion and oversees 180 billion (has made money for clients in 25 of the past 28 years) believes there is a 60% chance that this all ends violently. 

The Second Horseman is how salaried employee’s wages are exempt from overtime, at an extremely low threshold, thus leading to a heck of a lot of us working for free.  So, you don’t think I am full of BS, Fact Sheet #17G: Salary Basis Requirement and the Part 541 Exemptions under the Federal Labor Standards Act (FLSA) provides exemptions for executive, administrative, professional, computer, and outside sales representatives. To be compensated for the overtime hours you work, you must be paid less than $455 per week, or $23,660 a year. Ask yourself in today’s day and age if $23,660 should be the cut off point? If a Fast Food Worker makes it into management, takes on more responsibility, and makes $24,000 a year; his/her employer can ask them to work 70 hours, and buddy your SOL, because you are only getting compensated for those 40 hours. In 1979, more than 12 million salaried workers earned less than the statutory threshold, thus being entitled to overtime pay. Fast forward to today, only 3.5 million earn less than the statutory threshold, but our workforce is 50% bigger! Hey, Mom and Dad, you both working? How big of a punch in the gut are those childcare costs? How about the healthcare bill?  The “it will kill jobs” crowd argues that such a structure is needed to preserve jobs. I call BS. If in 2011, Corporate Profits were at a historic high and investment in plant and equipment, a popular prerequisite for job creation was low (this creates a host of problems, including the low ratio of total employment to working age population). It begs the question where did the money go (Trump Tax cut increased the speed of that vacuum)?

To the 3^rd Horseman of course. The Share buyback monster that is feeding our stock market to the tune of a TRILLION dollars a year.  During most of the 20^th century this was illegal. They called it stock manipulation. Today we call it the wealthy persons vacuum sucking the profits from workers and society.  In 1981, The Business Roundtable, a conservative group of CEO’s made the following statement: “Corporations have a responsibility, first of all, to make available to the public quality goods and services at a fair price, thereby earning a profit that attracts investment to continue and enhance enterprise, provide jobs, and build the economy.” By 1997, the same group made the following statement “The Principal objective of a business enterprise is to GENERATE ECONOMIC RETURNS TO ITS OWNERS….If the CEO and the Directors are not focused on SHAREHOLDER VALUE, it may be less likely the corporation will realize that value”. Ok, stop, collaborate and listen…..they went from a  “We” philosophy to an “Us” philosophy. Ladies, and Gentleman welcome to the construction of our economic ecosystems vacuum cleaner. Those who support the construction of the vacuum cleaner say, shareholders are people, they are members of society, thus it is a net positive. BS!  Eighty percent of stocks are controlled by the richest 10 percent of Americans. Stock buybacks concentrate wealth at the top and decrease middle class employment opportunities. So, if you have ever gone to bed at night and felt like a hamster running around the proverbial wheel, you’re not crazy! It is the wind from the vacuum cleaner you are feeling.

Ok, this leads me to the Fourth Horseman of Trickle down, the Regulatory capture that takes place in our Nation’s Capital. The never-ending virtuous cycle jobs program for the politicians who move in and out of the corridors of power, as they empower that vacuum cleaner to suck the profits to the top. Makes you ask the question, are elections a formality?  Are these people strong enough to say no to the seductive side of power and the dark side of the force that can turn a good person bad.

That’s why we generally have laws, rules, regulations, procedures, what we call checks and balances. Those are what keep us from acting like a greedy asshole who believes it is ok to screw his fellow man (you remember Gordon Gecko’s Greed is Good). Ok, had a hulk moment. But my point is our elected officials are supposed to work for US! Instead it feels like they abandoned us.

That leads me to my last point. Was it intentional? I mean most of us are too damn busy to get in the weeds with this shit.  We elect our public officials to act as our better angels and craft policy that maximizes the CITIZENS RETURN. Today, it feels as though they keep us poor and angry, so we look for scapegoats, blame one another’s tribe; all while the masters of distraction keep that vacuum running at full speed. We need to wake up, call them on their BS, and sing from the rafters that the only people that benefit from TRICKLE DOWN are the architects that built and designed the system.

I mean, what’s wrong with a living wage?

Ever ask why there is always a resistance to raising the minimum wage?  I mean, when was the last time it was raised?  Today many are fighting for a $15 minimum wage, and hell, Bank of America just increased it to $20. However, for the last 90 years the same song has been streaming across our economic ecosystem; raise the minimum wage: you kill jobs, put people out of work, and keep people stuck in poverty.

This is a play out of the “I want to keep my power” playbook. A funny thing though, during the last 90 years when we have increased the minimum wage, we created more jobs. During the 80’s when the minimum wage was at its low point, we had fewer, not more jobs. So, this caused me to ask why?

Why is the “it will kill jobs and hurt you” argument so effective?  It is so effective because we operate in a world where we have been told that it is a zero-sum game, and for someone to win, someone has to lose.  The people who believe in trickle down want you to believe that they should win and you should lose. They do this by getting you to believe in a fear based system that revolves around loss and is based in a belief that there is a scarcity of resources. They use this fear to argue that if they gave you a higher wage, businesses would close, jobs would be eliminated, and therefore you would be worse off. So be happy with the wage you have.

However, ask yourself does it have to be this way?  If we are all part of the same economic ecosystem, then surely, we “All” belong and have a place in it? For those at the top doesn’t it make sense that if I take a little less, I actually gain more? If my fellow brother/sister can earn a living wage, not be on government assistance, and take their family out to eat in my home town, at a small business owners restaurant, does that not benefit us all? If you want to bring the system into balance it means that the corporation and the small business just might have to accept a little less material wealth in exchange for some karmic wealth, some wealth that flows from a system that believes in a humane form of capitalism?

When a system funnels all the benefits to the top, our human based system starts to fray. I know what your going to say, if the capitalist takes the risk, creates the business, then they should get the economic windfall that comes with it.  That’s fair. But is it fair when that capitalist gets their income at a 500 to 1 ratio? Can you be happy with a 35 to 1, 70 to 1 relationship? I mean you still get rewarded, but not while punishing the people whose labor makes what you do possible. That is where the karmic part of capitalism comes into play. By accepting less of a spread, we all get the benefit of a greater windfall.

I guess my point is, when it comes down to it, would you rather live in a system that operated in balance, one that believed that we all belong, and was grounded in sustainability and emanated from a belief of abundance and not scarcity. I mean, we are all human, so does it make sense, that the spirit of our capitalist system be grounded in humanity? 

Surfing the Human Wave

I can’t surf but have marveled at the way a person can climb up on a board, pick the right wave, and glide across it for the ride. Miss just one calculation and you find yourself being beaten by a wave as it pushes you under water.

Today, in our public discourse we are actively choosing to let the wave beat us under.  I am by no means perfect, but we all must work harder at holding one another up, helping one another find a wave each of us can ride.

Recently, Russell Westbrook an NBA superstar, has voiced his disgust at the way “fans” degrade him at live games, troll him on social media, and occasionally throw items at him while he is working. Ask yourself why we feel it is “acceptable” to act in this way? I wonder if you would like someone hovering near your place of work, cursing at you, trolling you on social media, and throwing bottles at you when giving a presentation? Are we entitled to behave this way just because we choose to pay the price of admission?

But then we have a President that loves nothing better than to destroy his enemy of the day in a Twitter rage. We follow this up with attacking his rhetoric right back, adopting the tactics of personal attack, weaponizing words without fully appreciating the words we use.  We define decency downward to a point where we accept these forms of behavior as the “norm”.

This acceptance moves us to view the world as a zero-sum game. Where we pit one group against another, all gaming the system to our advantage and another’s disadvantage. Is the problem us? Is it the system? Or is it the incentives we have put in place?

I believe it is all three. The “Us” can listen to someone’s opposing viewpoint without firing off a personal attack in response.  We can choose to disagree with policy without demeaning the person. Because when you make it personal, like a porcupine, peoples defenses spring into action; at which point any chance for meaningful dialogue is gone. We retreat into our pre-defined tribal corners and in Old School style put the “ear muffs” on.

Speaking systemically, we have a systems problem.  Whether you look at our justice, tax, political, immigration, environmental, or civic systems, we have allowed the “incentives” to swing out of balance. How did this happen? It happened when the representatives we sent to craft the rules decided to cater to their donors; building a system that created an “incentive” structure where a disproportionate amount of the benefits flowed to the top.  This inequality was compounded when our political system was hacked by elected officials who chose to pervert parliamentary rules to their benefit, thus encouraging gridlock, toxic partisanship, and obscene inaction. With our system simultaneously morphing into a shareholder economy.

It just decided to manifest itself at a time when we need our best, our brightest, our brave trailblazers to set a course that allows us to climb onto that board, catch that wave, and ride the break into shore together. Or else we may collectively be thrown under water and drown as a result of this collective failure to act.

We are starving as a society for solutions on climate change, the gun epidemic, our unjust justice system, and rigged taxing regime. At a time where we are building more walls than bridges, on a foundation whose cracks have begun to fissure. Our children are counting on us to be bold, to work together, and build a new foundation that is inclusive, equal, balanced, compassionate, and protective of the planet we share.

Because we will either sink or swim together. Wouldn’t you rather encourage your fellow human to hop up on that board? Or are you going to choose to hold them under? Either way, the wave will break, where do you want to be when it does?

The Economic Journeyman, Education, Automation, Value, and how reversing the vacuum of the Four Horsemen of our Economic Ecosystem can transcend the Blue vs. White Divide

That vacuum I spoke of and the Four Horsemen of our economic ecosystem benefit from a “marketing message”, educational nudge, and a belief that “doing” the work is below “managing” or “overseeing” that work, at least when it comes to pay and perceptions. A shift can occur, a leveling of the playing field can take place, but we economic warriors need to stop playing by a pre-defined set of rules and learn how to bend those rules to achieve a more humane and equitable form of capitalism. Ain’t gonna be easy. But if we want OUR WORLD to not end in a dystopian conflict we got to start somewhere.

We need to have a shift in the way we think.  We operate in silo’s and separate the “White” from the “Blue”, the creator from the doer, and carry with us a “bias” in how we view one another. Our age is an age that requires the “White” and the “Blue” to work in partnership where we merge the creative mindset with the doer’s ability to bring an idea to life. When we elevate the skills of the “doer” and shift to a mindset that rewards the contributions of those that create the physical and digital infrastructure we enjoy, then we can begin to remove the negative monkey mind emotions and feelings that some have towards people who work in the trades. Yes, we need to make sure that we construct the infrastructure we need, while making sure it can survive the test of time, but neither is possible if we don’t work together.

This economic journeyman has had his monkey mind get the best of him. I fell out of the “White” working world and found myself with extremely high educational debt and no job. I had worked in the trades during my summers in college, so found myself working as a laborer. When I was on the job, two thoughts continued to run through my head: (1) This is friggin hard work, and (2) I went to college, what the hell am I doing this work for? When you push stone in a wheel barrow, jack hammer through asphalt in winter, and dig and mix concrete all day, that educational nudge you received throughout your life, coupled with that “bias” made me feel like I somehow failed. At least that is what I felt and what my monkey mind allowed me to believe.  It wasn’t until I assumed the role of cleaner of toilets, that a shift occurred in me. I shed that negative connotation of the “blue” and began to learn lessons from the diverse group of co-workers around me. This stigma, that got the best of me for awhile needs to shift. We the people of the “White” and “Blue” are partners in a world that needs to work together on its foundation. The creator needs the doer, and all of us would be better of if we knew how to do both. We have the choice to develop a spirit where we design, build, and educate our world in a way that values the creator and the doer, because we need each other, so let us teach with that intention in mind.

If we do this, then we can start to heal the “Red” and “Blue” divide that feeds our politics. Recently, I had a conversation with a co-worker, an interesting kat who grew up in the South. He said the draw for them is to the trades, but that there is a sadness that permeates the air. We talked, and together we came to conclude that part of it is this belief that those who work with their hands, the ones that those country songs are based on, somehow feel as though they are viewed as second class citizens. He also said that in his experience the nudge is play it safe, not to explore the creative part of yourself, and this too feeds that divide. This is what drives that whole Coast vs. Heartland/South divide that defines our toxic politics today. We need to shift the way we think about the “White” and the “Blue”, so that we can break the toxic tribal politics that we are living with today. Listen to a song by Alan Jackson called a “Hard Hat and a Hammer” to get a sense of who these people are. Ok, shit, this is a big shift, so where the hell to start?

First, it requires that the guiding principle of a Corporation shift to one along the following: “a corporation should provide goods and services at a fair price, while valuing its people and planet, and providing a return to shareholders”. A little more “We” and a little less “Us”. 

Where do we start? First, we own up to the fact that the “marketing message” that the only way to achieve a quality life is to make a $250,000 plus investment in a college education is a myth, especially today. Yes, college graduates do make more, but they also owe more, thus the rub. In 2019, 2.5 Million of your fellow Americans owe more than $100,000, 610,000 people owe $200,000, and 12.3 Million owe $10,000 to $25,000. Second, providing for a fair and equitable minimum wage that tells your workers you value them and does not kill jobs, but creates consumers, and an ability to climb that rung up the American Dream ladder is good (has been absent lately); it also gets them off government assistance, thus reducing government expenditures, leading to a more balanced budget.  This applies to those salaried workers above the threshold who work overtime without getting paid. Raise that threshold to $60,000 a year. Send a statement that the ones doing the work are on equal footing with the one’s collecting the dividend. This leads to that Share buyback monster, we need to reverse the vacuum. That capital can be put to more productive uses. Where? Rebuilding the foundation of our society, its infrastructure, both physical and digital, in ways that are in line with Mother Earth and do not work against it.

This will encourage a virtuous cycle where those “blue” workers and makers can apply their craft and make an imprint on our world, thus providing more of a balance to a system that favors “White” over “Blue” but prefers them in debt. As we speak a Plumber in the greater Atlanta region earns $90,000 a year in wages and commissions, aircraft mechanics and heavy-equipment technicians can earn in excess of $100,000 a year. College graduates still earn $932.00 more in earnings than all workers, but also carry a debt payment of $280 a month or more. The average salary for someone in the “trades” is $52,000 a year. This needs to change. As I shared with you in my last article, the wages for trades workers has been going down since 1948, something we need to reverse. This can be done by doing a couple things: (1) Raise the Minimum Wage for most skilled laborers to $33.00 an hr. as the bottom of the wage scale, salary of $70,000 a year, and $20.00 an hr. for laborers as the bottom wage, $41,600 a year as the baseline. (2) Reverse that vacuum and direct those Trillion dollars in buybacks into infrastructure and wages. We need the Investment, so why don’t we start now?  Since, 2016 wages have started to rise for those with a high school degree or less, faster than any other group, according to the Economic Policy Institute. But if ¾ of all jobs post financial crisis paid $15 or less an hour, and as of 2015, 42% of all workers earned $15 or less an hour, we have a long way to go. Raising the Minimum wage and increasing the overtime threshold are a good starting point. Then we can move to drive down the costs of education both “White” and “Blue” or merge the two. Point is we need to pay people more and greatly reduce the cost of acquiring skills, so we all can create and contribute more. We should also explore the implementation of an “apprenticeship” based model in more sectors of our economy, so that we don’t lose the vast amount of knowledge that those departing the workforce have accumulated. This includes the exploration of Income Sharing Agreements as an alternative investment vehicle for education. To address spatial inequality, we need to do the equivalent of the Marshall Plan when it comes to rural internet, so those in the areas where the manufacturing sector has abandoned them can have the choice to build businesses in the digital economy that are not reliant on a single company or factory setting up shop. To do this we need to make sure that vacuum cleaner is not set up in a way that makes it cost prohibitive for them.

The reason why raising the minimum wage and adjusting the Overtime Rules is so important is 64% of the jobs in the year 2026 will require no education beyond a high school degree, compared with 25% that will require a college degree. Can we admit that the “marketing message” that college is “needed”, “debt is good” and it will lead to a “life” in the Middle Class is not exactly a match. Yes, college offers lessons in how to open the mind, acquire knowledge, become more diverse, learn how to think; but let us admit there are no guarantees. Take it from this economic journeyman who has walked in the world of “blue” and “white” there are no guarantees and some of it comes down to how lucky and open you were to an experience on a certain date at a certain time.  What we can do is be more honest in the information we present, provide people with options, but make sure that those Four Horsemen of our economic ecosystem don’t work against us. Those at the top, they like to win at all costs, so we need to be aware of how they might bend the rules, to preserve and keep the vacuum running.

I see the trend and speed at which we are moving towards automation as a tool in their tool belt. Because the funny thing about equipment, it can be depreciated in value in a way a human can’t. So, if we go back to those 2011 figures I reference in my previous article, where I tell you that Investment in plant and equipment is low (indicator of lack of investment in job creation), the last thing we want is for it to spike, but instead of providing jobs it replaces them. Look I am not a Luddite and am a geek when it comes to all things, tech, new, and innovative. However, what we need today are those jedi warriors that can talk the language of the technologist, humanist, and capitalist. Collectively we need to watch that they don’t bend the rules in favor of that vacuum. How would they do this? By making the argument that by raising the minimum wage, they are forced to adopt automation and robotics faster, so they can contain costs, as we pesky humans are just too damn expensive.  They will go this route because the Shareholder primacy that drives the Four Horsemen, tells them that you need to “optimize efficiency” at the expense of “humanity”. It comes from a mindset that workers are interchangeable parts and a commodity, that do not require an investment in skills training, or for that matter the consideration that they have more “value” than the role they happen to be performing. I see trends for example in logistics, where they are speeding towards self-driving trucks that can run 24 hours a day, that deliver to micro-fulfillment centers, run by robots; only needing a human at the moment for that last mile delivery (may go the way of the robot). We can debate if this is good or bad at a later time, my point is that we must craft the rules in such a way that we value the contributions the worker makes, recognizing that they are not a commodity and have more value than what the Top has assigned to them. Yes, I am a capitalist, but one who believes that it needs to be human centered. That requires us to make sure the automation we do use blends into our everyday lives, supports and assists its human counterparts, and does not out right replace them. We need to think long and hard about this, because there are already more “working poor” than “middle class” people in our economic ecosystem, so decisions need to be made that provide a balance. Maybe pay people more, have them work less, thus allowing them to spend time with family, and volunteer in the community; letting the machines pick up the productivity gap? But back to that “blue” and “white” dynamic, don’t you think all of that smart automation that we blend into our lives needs to be repaired, fixed, serviced, and maintained (just got to make sure the Digital Millennial Copyright Act does not consolidate power at the top in this area)?

The reason why we have always said college is preferable to the trades in my lifetime, was that (1) it is hard work, (2) labor is required to make money, and (3) you reach a ceiling in earnings. Agree with the first two, not necessarily the third. However, in our current system nudging them towards college because more education “will enhance earning prospects on its own, is not only wrong, it’s cruel, saddling too many with unrealistic prospects and crippling debt”. Here we need a balance, we need to teach kids that working with your hands is just as noble, so is capturing the world through the lens of a camera, performing on a stage, or creating a work of art on a canvas, as it is being a banker on Wall Street. If done right, what you build and create, can long outlive whatever transaction you record in someone’s ledger. Second, we need to teach both kids and adults how to walk in both worlds, present them with a choice, and let their talents and ambition take them where they may go. Because you still need to work hard, commit to a lifetime of learning, and make smart economic decisions that allow you to navigate our economic ecosystem with a degree of creativity and freedom. To me our education system should be developing a system that teaches someone how to tap into their creativity, expose them to new forms of thinking, so that you can look at a problem from a different angle and perspective that might have escaped you. What we need is people who are comfortable coloring inside and outside the lines, and most importantly are taught that is o.k. to fail, but take the time to reflect, and recognize it for the opportunity that is presents.

But none of it is possible if we continue to feed the Four Horsemen of our Economic Ecosystem and allow that vacuum cleaner to run at full speed. Part of this is requiring the corporations and businesses to pay their taxes. We should not live in a system that suppresses its workers wages, attempts to cut their benefits, pushes the responsibility to care for citizens and infrastructure onto the government, all while crying that the entitlements are too high, especially when the money is there, but their priorities are not. It is important that we do so for us and our planet. A glimmer of hope is starting to emerge, we need to encourage and embrace this shift.

Rose Marcario, CEO of Patagonia, sees a vision where we move beyond the bottom line.  She has said that “I don’t think it’s a conflict of interest to say that you can make money, and have a prosperous and successful business, and also do good in the world”. Recently, Patagonia, announced that it would only take on new corporate clients for customized Patagonia gear, if that company had a significant sustainability plan as part of its mission.  It can best be said in her own words “Capitalism needs to evolve if we’re going to have a healthy planet and we’re going to have healthy people on the planet”.

Let me end with a bit about my story. As an economic journeyman I bought into this myth about needing a higher education, a graduate degree, to achieve a “Middle Class” lifestyle. As the first-born child that grew up in a single-parent household, I thought it was the only way for me to do better than my parents. Yes, I have had some great experiences, seen some amazing things; but I have also struggled to come to grips with how I would pay off the student debt I amassed, and the why, as in why does it cost so damn much to try to better yourself? Like I said my journey has had me pitch products to CEO’s and dig a hole with post hole diggers. Both have their positives and negatives, but I keep coming back to the question: why wasn’t I presented a more diverse option of choices in my formative years in my educational experiences, and why did every one, at every step along my path, tell me that “investing” in higher education is always the right answer, even when it might not be the right fit? Today, we say you need a college degree, but then say if you want that job you need that Masters, but then you graduate, and they tell you need a PHD, that is the educational nudge we all have heard. At some point does the law of diminishing returns come into play when you factor in the “investment” you need to make.  I own it, I accept it, I take the positives from it, I have learned the lessons of the journey, and tell kids along my path it is important to acquire information, seriously consider the options, and be your own advocate. Because no matter how you slice it, starting your Professional career with student loan debt makes it a steeper climb, limits your choices, and requires some angel help along the way.

What we need to do, you and me, is take back our power. The crazy thing is throughout history the people on top have been bending the rules to suit their purpose, because they play a different game. We need to recognize this and realize that we have the power to bend those same rules back in a direction that turns off that vacuum cleaner, and empowers us to say that we value “people” and the “planet” in our economic ecosystem, because the gods honest truth, the survival of our species and the soul of our country and our world are at stake. By stopping the Four Horsemen of our economic ecosystem, turning off that vacuum cleaner, and taking back our power we can choose a better path.

The Economic Journeyman, the “Scarcity Marketing Message” and how it undervalues the family and “We the People”, whatever happened to e pluribus unum?

A funny thing happened to me the other day, I was using a quarter to scratch off the silver stuff to get at an Amazon gift cards code to buy a friends’ book. I flipped the quarter over and I looked at the eagle and the small phrase on the back, it says “e pluribus unum” which translated from Latin means Out of Many, One. Then I asked myself, how far have we traveled from the intent behind that statement. Look across our ecosystem at our economic, environmental, immigration, political, and civic systems and ask yourself are we operating with the intention of this motto in the policy choices we are making right now?

As mentioned in my earlier essays that vacuum is in continuous operation. This is my analysis: They say we need to cut taxes for corporations, to stimulate the economy, to create jobs.  Then they use the windfalls generated to feed the vacuum, while saying they can’t raise wages. Next, they tell us not enough revenue has been raised by their tax cuts, thus increasing the debt, telling the low wage worker: that they need to reduce your government benefits, to cut costs, to balance the budget. Leaving the low wage worker with low pay and less assistance, while that vacuum continues to suck. Then like the movie Groundhog Day they say that we need additional tax cuts and keep on using the same circular logic. Leads me to ask, why does it seem they try to balance the budget on the backs of those that seem to have the least ability to absorb such policy actions? I mean recent reports say most people do not have enough savings to absorb a financial shock, could this play a part?

Today, I chatted with the Amazon direct delivery driver that dropped off packages to me. I asked him how his Easter was. He informed me that he worked all day delivering packages. This led me to observe a duality at work. On the one hand Amazon provided this driver with the ability to earn a wage when he might not otherwise be able to. However, when we chatted further, he told me that the “boss” told all the drivers that anyone who called in for the day off, would not have a job upon their return. This all occurring on a day that numerous faiths hold sacred, the day before a day we have assigned to focus our attention on our Mother Earth.  I know that Amazon pays its drivers about $15 an hour in our area, they get no benefits, and unlike UPS are not a member of a union. This part of our ecosystem has focused its attention on driving down the cost of goods, so we can all enjoy less expensive products, but do we do it at the expense of our own brothers/sisters? By paying people less, so we can get cheaper products, what are we saying about what/who we value? It has caused me to start asking if we paid people who serve all of us a fair and equitable wage, would that allow them to spend Easter with the ones they love, whoever they might be? Do corporations want their employee’s poor, but their customers rich, and are the two mutually exclusive?

Being the son of a single mom, I have become more than a little annoyed at how the system seems to value a woman’s value in the workplace less than their male counterpart. My Mom busted her ass, she raised two boys, educated herself, and landed a good solid job. She did not have an easy journey, but the fact that she busted her ass as hard as she did and was paid less than a man of similar circumstance and talent is just bullshit.  Part of the shift that should occur is the recognition that a person who performs a job, should be paid the same, what is so hard about that? I mean really open the HR Books, look at your employee’s, and pay people that do the same work, that are equally good, the same.  Does that make too much sense?

Here are some facts for you, in 2017, women’s median earnings were 80% of a man. The average salary for women was $41,997 while for men it was $52,146. Geographically, Louisiana had the largest pay gap with a ratio of 69%, while California had the smallest, at 89%. It is even more pernicious in professions that require an educational investment, for Financial Managers women earn only 65% of what their male counterparts earn, losing out on 19 billion in economic value. For Chief Executives, they make 75% of what a man makes, losing out on 10 billion in economic value.  So, take what we have learned about the Four Horsemen of our economic ecosystem and look at it through the lens of how it is valuing your mother, aunt, daughter, spouse, or co-worker. The numbers tell a story that while wages are low for all, it is acutely so for women.  The more they advance up the professional ladder, the system, seems to exact a certain amount of pain equity on them. The financial aid departments that charge you for tuition, don’t charge women less than their male counterparts when they invest in education to improve themselves, but the professions they enter do, what message does that send? Do you think it should change? What is stopping us?

This leads me into how we “value” the family. My Step Dad, comes from a big family. He had 8 brothers and sisters, his father worked a sales job in the grocery industry, and his mother stayed at home until the kids went to school. They lived in a middle-class town, with a good school system, and were able to take vacations. Now I ask how possible is that today? How much are parents expected to do? Both parents work, both uber their kids to various activities, and are often asked to work more than 40 hrs. and often pay for childcare. What happens when the wage or salary made, does not cut it when you factor in the cost of childcare? What do you do? What happens when a woman earns a salary above the overtime threshold at $24,000 a year, is asked to work 60 hours a week, but has one kid, and must find a way to pay the $14,760 a year in childcare costs. Leaving $9,240 a year to figure out how to survive (generally can’t afford an accountant to swing the tax game in your favor).

Seems to me, we need to start valuing the family a little more and feeding that vacuum a little less. The idea that you have to maximize the amount of time at work to earn enough to support your family, but not have the “time” to be present does not seem to create much “equity” when it comes to the most important parts of ones’ life, their family. When you factor in low wages, no overtime for those above the threshold, add to it a Student Loan balance, and pile on childcare on top of that, how much do we really value the family? In 2018, the average cost of childcare for an infant at a center based child care was $1,230 a month, $14,760 a year. At a family child care, it cost $800 a month, $9,600 a year. If you have two kids in day care that is $29,200 at a center based childcare center and $19,200 for a family-based day care. What does it say that those care givers in these places earn $9.83 – $11.45 an hr. with an average yearly salary of $21,993? How much do we value the workers in this system? How much “pain equity” do we inflict on families who must balance all these economic costs? What/who are we saying we value? Most parents today must work a job, some more than one, it’s not a choice, and in my mind the system could be structured in a way that “values” their importance to the overall health of our “economic ecosystem”. It seems like we need to provide for paid family leave, more flexible work relationships, universal childcare that prioritizes care and education for all kids, and an increase in the take home pay of people. Work should be what we do to create the economic energy to maximize the time with our family, contribute to our community. Not something we have to dedicate the better part of our waking hours to, especially if there is not a recognition of the “value” of the family when the rules being written starve this part of our economic ecosystem but continue to feed that vacuum. The balance in our economic ecosystem needs to swing back in the direction of the family.

Ok, I recognize I am painting with broad brush strokes. There are employers who value their employees, provide health insurance, and a 401K for retirement. However, this treatment is not applied to all workers across our economic ecosystem, and where it is you have high deductible plans. When it comes to 401K’s lets admit something, they are not the same as the pensions that were given to earlier generations. There are a lot of people across our economic ecosystem who do not get the benefit of an investment in their retirement. We should look to those employers who get it right and emulate them in a race to the top. Not engage in policies and practices that encourage a race to the bottom.

This leads me to the way we keep score in our society and how we value the accumulation and retention of wealth. Peruse the periodicals, what do you find, the Top 10, Top 100, Top 200, lists of billionaires and millionaires. As if it is a race to amass as much wealth as possible. Who are you racing? How much is enough? How satisfied are you? Do you even open yourself up to asking that question? Would it be better to have a Top 10, Top 100, Top 200, lists of billionaires and millionaires who spread that wealth in a way that treated what they achieved the same way as a painter that decorates a canvas in the creation of a work of art; but their creation could be spread across the “economic ecosystem” with an intention that “all” have value, and that men and women were valued the same economically, and that the “family” had a sacred place in our daily lives? The problem is that those Four Horsemen of Trickle Down in our economic ecosystem stated that this was the intention, but that the rules that were written did the opposite, so what was the intent?

Yes, entrepreneurship is a positive, risk takers are needed, but not if the sole purpose of the enterprise is to maximize profits at all costs. Dreamers and creators when partnered with doers can build some amazing places, products, and provide wonderful services. That’s not in dispute. What I challenge is the idea that we need to sacrifice peoples “sacred” time with their family, while not recognizing that those who make up your economic ecosystem would work harder for you, be happier doing it, if they knew you valued what they did, had that intention embedded in the fiber of your enterprise, and paid everyone their true value, male or female. How many of you grew up with a parent not able to attend a school event, an athletic event, because they needed to work, or find yourself being that parent now? How many find themselves answering emails at 9 pm, 10 pm at night, not because you want to, but because you must? Where/what are the boundaries?  With your work role, your family role, where is the time for you?

That brings me back to “e pluribus unum”, Out of Many, One. Would our economic ecosystem function more “holistically” if we paid people enough to climb the economic ladder, if we valued everyone’s contribution, the same, regardless of sex; allowing people the opportunity to create memories with the ones they love, or simply create? Yes, in our economic ecosystem you generally need to work, but do you live to work, or do you work to live? Should the rules we write be crafted in such a way that makes that possible? If it is, what is our part in opening ourselves up to that possibility and asking those better angels(?) we elect, why are they not working to achieve this goal?

Confessions of an Economic Journeyman, The Family Farm, IP, that vacuum, and a Cloud Kitchen?

This past Saturday, I grilled some food outside on a warm spring night. A nice steak with an applewood rub paired with thinly sliced sweet potatoes marinated in Vermont Maple Syrup paired with pineapples and chili powder sprinkled on, a little sweet and spice.  It led me to ask, how does that vacuum we have been discussing impact the food we eat, the people who grow it, and how it might be impacted in the future.

As with most things it comes down to how we define something, how we choose to craft the rules, and who the intended beneficiary is.  When it comes to our food production, the architects of that vacuum have had their hand in this part of our economic ecosystem as well.

When you look at the farming industry you find that there is an overall decline in income, an increase in production expenses, and a reduction in prices for end products sold.  Between 2017 and 2018 working capital dropped by 16%.  In fact, more than half of all farms had a negative farm income during this time period.  Remember that minimum wage worker not making enough to make ends meet, due to those Four Horsemen of our economic ecosystem suppressing their wage? The small family farm is feeling some pain equity too.

 Here are some stark figures:

• The 273,000 smallest farms (1-9 acres) make up just 0.1% of all U.S. Farmland,  
• The 85,127 largest farms (2,000 or more acres) make up 58% of farmland.
•  Of the Two million farms in this country, the 76,865 making $1 million or more in 2017 represented just over 2/3 of the $389 billion in total value of production. Compared to the 1.56 million operations making under $50,000 annually that represented just 2.9% in the total value of production.
• The total number of farms has declined by 3.2% according to the 2017 USDA Agricultural census (done every five years).
• Just over 105,000 (5% of all farms) of the 2 million US Farms accounted for 75% of sales.
• The number of farms selling directly to consumers dropped from 144,000 in 2012 to 130,000 in 2017, the silver lining is that the 2.8 billion in goods sold direct to consumers ($21,750 per farm) was an increase of $12,897 over the $8,853 realized in the 2007 census. So, less farms selling direct but making a lot more from those sales.
• The number of dairy farms dropped by more than 17% while milk sales increased by 4% to 36 billion, further evidence of consolidation in the market. Average Income for farmers was down 2% (Average yearly income for a farmer is $43,053), falling below the average of an American workers income.  
• The average age of an American farmer has increased by 1.2 years, to 57.5 years old.

The power to control prices, production, and the market is skewed in favor of those at the top here too. So, how does that vacuum come into play?

In the agricultural sector a small farm has been defined as “any place from which there was the potential of producing $1,000 or more of agricultural products for sale, during the referenced year”. The number of farms in this demographic increased between 2012 – 2017; and includes a high percentage of “zero-sale” farms.  In fact, if the Agriculture census treated zero sale farms as a category of its own, it would be the largest category in the census.  In 2012, 602,119 farms were counted as having less than $1,000 in sales, in fact 440,000 of these farms were owned by wealthy families. If land is classified as meeting this definition, it can be used to take advantage of tax breaks in the code. The remainder are farms that belong to minority or female farmers that would love to be more productive, but found a severe lack of investment, resources, and often were denied credit. That $1,000 threshold was low in 1975 when it was established, and if adjusted for inflation would be $5,000 today. The 2017 Census showed that nearly 604,000 farms reported sales below $1,000.  This has broad political implications as it gives a lot of power to states that have a lot of small farms on “paper” only.  A lot of these small farms are not working farms, but “hobby” enterprises of upper middle-class people looking to go green. States get their federal aid for farms based on the “number” of farms they have, so keeping the threshold low serves some states from a funding perspective.  Ok, so, politicians fail to act here too. How does that vacuum suck those profits to the top?

That vacuum sucks those profits by crafting Intellectual Property laws that funnel profits and consolidate power at the top. This is done through the Digital Millennium Copyright Act that allows equipment manufacturers to invoke anti-piracy laws that make it illegal for farmers to fix their equipment, forcing them into exclusive maintenance relationships with authorized dealers.  In California a small concession was negotiated between the California Farm Bureau and the Equipment Dealers Association, in which John Deere and other manufacturers said they would make repair manuals, product guides, diagnostic service tools, and on-board diagnostics available to farmers by 2021. But no where did they provide for the sale of replacement parts or the prevention of software locks. Bottom line is you get to use your equipment, just can’t fix it.

They then assert corporate control over the “seeds” that you are “allowed” to plant and are obligated to “repurchase” but can’t store or reuse.  In 1970, U.S. Plant breeders (individuals, universities, and corporations) were given the right to patent new varieties of seeds and tubers, as well as certain genes, traits, and methods for producing plant varieties. This process allowed the patent holder to enjoy the exclusive right to reproduce and market these “inventions” for a term of 20 years.  As they developed genetically modified and pesticide resistant seeds the larger corporate interests consolidated their control over the industry.  To enforce their rights, these large corporations sued small farmers, even those who had seeds unintentionally drift into their fields from neighboring farms.  In 2019, 60% of the market for seeds (concentration occurs when control exceeds 40%) is controlled by 4 companies.  Recently, Pepsico sued a group of small farmers in India who were using their patented FL2027 potato (critical ingredient in Lay’s Potato Chips), agreeing to a settlement with each farmer for $143,000 each.  I always thought that Mother Nature and the Spirit controlled the circle of life, in farming it appears it is owned by Bayer, Corteva, ChemChina, and BASF.  As market control and access to seeds consolidates, farmers have less choice and pay a higher price. When you consolidate control over the food supply, you have less variety, a decrease in diversity, and undermine the incentive to innovate or engage in cutting edge research.  What you end up with is the corporate control of food.

Bottom line is by controlling the access and maintenance of the machines you use, the seeds you plant, and how a small farm is defined, corporate and political interests structure the agricultural system in a manner that funnels the profits to the top. Sound familiar? All readers who have seen how their lives are impacted by the Four Horsemen of our economic ecosystem; can you show the small family farmer some love? They feel that vacuum and are running around the same wheel you are, feeling like they too are running in circles.  The architects of the vacuum want Blue vs. Red, and Blue vs. White, to battle it out amongst ourselves. If we simply look at our rural and city neighbor through the lens of the vacuum, then what starts to emerge is our problem is with the architects, not each other.

So, what do we have to be on the lookout for in foodland? The Cloud Kitchen and how the architects could further enhance that vacuum.  Cloud Kitchens are commercial kitchens designed for on-demand food preparation for places that have no dine in option.  They distribute food on platforms like Uber Eats, and inside their digital storefronts, can quickly test menu items and adjust to user tastes and preferences.  Such a system allows for the infrastructure and software to be created that enables food operators to open “delivery” locations with minimal capital costs or development time.  A stand-alone restaurant can only access and act upon its own data. A company like Uber Eats has access horizontally to all the data from all the places it delivers for and can use that data to vertically integrate and start selling its own food leveraging all the data it has access to. 

How disruptive could this be?  UBS published a report titled: “Is the Kitchen Dead”.  In the report they forecast that online food ordering could rise an average of more than 20% to 365 billion worldwide by 2030, up from 35 billion today (observe scope of Meituan Dianping in China to see what is possible).  Millennials are three times more likely to order in then their parents, and food delivery apps are represented in the top 40 most downloaded apps in major markets. The danger arises in how Cloud Kitchens partnered with delivery apps could make it more economical to order in than cook at home.  By utilizing gig workers, freelance talent, and automation the costs could be reduced in such a way that ordering in from a Cloud kitchen is more economical.  How would this impact the farmer, who they sell to, where items are sourced from, the price point of the produce? 

The nascent impacts of this trend are being felt in real estate. Developers are building more spaces with communal kitchens, as the 25% plus of single person households in the U.S. and U.K. will start looking at whether the economic benefits of sharing a kitchen are more appealing than owning an underutilized one.  What if some apartment developers decide to design apartment units with no kitchens?  Will “Cloud Kitchens” and affordable healthy food provided in app in a busy world slowly usher in an age where people lose the knowledge of how to cook? All things we need to think about?

That brings me back to that vacuum. If “Cloud Kitchens” and the data that they acquire enables the players in that marketplace to consolidate power and control in the hands of a few players, then that vacuum will continue to operate at full speed. It will also have broad implications for the Family Farm, your local Supermarket, the place you live, and the items you decide to fill that space with.

We are entering a world where “data” is the economic currency and electricity of our age. As we migrate to more robust AI systems, the question becomes who “controls” the data? In the U.S., Kai Fu Lee has observed we tend to favor technology platforms that apply a “light” touch, meaning our tech giants build the platforms and let those downstream set up and operate the businesses that utilize the platform. In China it is a “heavier” approach where they tend to vertically integrate products and services in one platform, allowing them to adjust to the market with much more speed. So, for companies like Meituan Dianping they have a much deeper insight into the Chinese consumers preferences, habits, and choices. The AI systems we are moving towards feed on data, the more, the better they work. China has embraced this, due to a different culture and history. What we will grapple with in the U.S., is if each citizen controls their “data”, can determine when and where it can be used, may be compensated for it, then the fuel that the A.I. systems need to operate more seamlessly may be less effective and reliable at offering viable valuable solutions to the problems they are being used to combat. Food is just one market where technology, data, and automation may fundamentally change consumption habits. What we must do is make sure any such systems are used to solve the “citizens” problems within a society and not as another tool that provides power to that vacuum. 

My point is that the architects of our economic ecosystem touch each one of our lives. The person jack hammering through asphalt in New York, the waitstaff in Alabama, the small farmer up at the crack of dawn in Iowa, the autoworker at an assembly plant in Ohio, the Truck Driver in Colorado, the Paralegal in California, the Police person in Chicago, the Salesperson in Arizona, and the Teacher in Oregon. Each of our lives have been affected by that vacuum. Seems to me we would be better off if we stopped fighting one another and started demanding that our better angels in Washington build a system that benefits us, not those at the top. Just a thought?