In 1973, the rock group Bachman-Turner Overdrive had a big hit with their song Takin' Care of Business which celebrated the joys of being a rock musician as opposed to being trapped in a "slaving job to get your pay."
The chorus of that song goes as follows:
Taking care of business (every day)
Taking care of business (every way)
I've been taking care of business (it's all mine)
Taking care of business and working overtime
More than four decades later, while most corporate CEO's in America aren't saying "it's all mine", they are certainly acting as if it is in terms of compensation and the distribution and sharing of rewards with line level employees.
The relative wages that an employee gets paid for working in his or her "slaving job" today compared to what they were paid forty years ago are much lower than they were back then. And, the gap between what those in the C-suite make versus the employee group writ large has become a chasm.
Over the past several years, much of what has gone on in terms of taking care of business has come down to taking care of the business's executives - and in some instances its shareholders - in "every day" and "every way." (See our earlier blog for a discussion on the steps that have been taken to increase the size of the executives' and shareholders' wallets and pocketbooks.)
As we move into the second half of 2016, there are nascent signs that the times they may be changing - at least a little - and that business may be starting to place a somewhat renewed focus on taking care of employees again.
Drawing upon recently released analysis of tax data done by Emmanual Saez, economics professor at the University of California, Catherine Rampell of the Washington Post Writers Group reports, "... the bottom 99 percent of earners saw their incomes grow by 3.9 percent. That is the strongest annual growth rate since 1990."
In June, the research firm of Penn Schoen Berland sampled 800 employers in a Workforce of the Future Survey sponsored by Time, the Aspen Institute Future of Work Initiative, Burston Marsteller and the Markle Foundation. The survey disclosed that:
- More than one-half of the employers use independent contractors and expect to use even more in the future.
- In spite of this, 58 percent of the employers say full time employers are better for their company because they are more invested in the business, loyal, available when needed, and easier to retain
- Nearly 80 percent said they provided benefits such as health care and paid vacation to full time employees while less than 20% provide these benefits to independent contractors.
- Almost 70 percent of employers indicated that they felt the "social contract" which tied "health, retirement and other benefits" to "traditional full time W-2 employment" should be reformed to provide the opportunity for independent contractors to get some of these benefits but felt that it should be up to the business to determine the level and nature of those benefits and who and how they should be paid for.
The results of the Workforce of the Future survey are a mixed bag indicating that the traditional employment model is eroding but that it is still a preferred mode and there may be some wiggle room for improved treatment of both the members of the full time and contingent workforces in the years to come.
In contrast to this equivocal stance, on July 11, Howard Schultz, CEO of Starbucks, announced that in October it will be raising the base pay of all employees and store managers at its U.S. company-run stores (approximately 7600) by 5 percent or more. In that same announcement, Schultz committed to meeting employees' scheduling needs - especially to ensure benefits eligibility - and doubled its stock award program for hourly workers with more than two years of continuous employment.
On July 12, Jamie Dimon, chairman and chief executive of JP Morgan Chase weighed in on the "business taking care" side of the ledger with an op-ed in the New York Times titled "Higher Wage Wisdom." In his piece, Mr. Dimon asserts, "A pay increase is the right thing to do. Wages for too many Americans have gone nowhere for far too long."
He goes on to state, that his company:
- Will raise the "minimum pay for 18,000 workers to$12.00 to 16.50 an hour depending, depending on geographic and market factors " (the current minimum is $10.50 per hour) over the next three years
- Invest more than 200 million in 2016 in training entry level employees and 325 million in "career-oriented education aligned to growing sectors"
Dimon and Schultz are not alone in increasing the minimum wage at their businesses. Over the past two years other businesses such as Walmart, Ikea, Aetna and the Gap have raised their minimums as well. In addition, various surveys of small business owners show that on average at least 50 percent of the respondents favor an increase in the minimum wage.
Over a century ago in January of 1914, Henry Ford raised the pay of his employees to the unheard of wage of $5 per day. That was more than double the daily pay of the average factory worker at that time.
Ford took that action not out of the goodness of his heart but because it made business sense. It increased productivity in the plant and gave his employees more dollars for consumption. Ford saw the logic of his business taking care as a means for taking care of his business.
Admittedly, in a global economy with huge wage differentials, intensified competition, increased automation and technological innovation and numerous other complicating factors, taking care of business and business taking care is not as simple and straightforward in 2016 as it was in 1914. Still, there is emerging evidence that an increasing number of today's business executives are seeing that logic as well.
That is a good thing for the future of the American economy because the future of that economy is the future of the American worker and workforce. The business leaders who recognize this and who are stepping forward to take care of their employees are taking care of America's business.
They will not get a bonus for doing this. But, they will earn the enduring respect of those who work for and with them and those citizens concerned about the future of this nation and its promise of opportunity for all.