Hate Those Regulations And Unions? Look In The Mirror, And You'll See Why They Exist

Senior managers seem to take great pleasure in excoriating the twin evils of government regulation and labor unions. Without those, they say, think how much more efficient our marketplaces would be! Think how much more profitable our company would be!

It's my opinion that government regulations and labor unions are in fact statements about how badly many companies are run. I can't think of many governments that begin with massive regulation of corporations -- regulation comes about because of horrific instances of environmental pollution, workplace safety lapses, or other abuses. Labor unions have trouble getting into companies where workers feel valued and well-paid. If your employees are starting to mutter about unionizing, the problem's not with them: it's with you.

I wrote a few months ago (full post, here) about the tiniest hints that companies are learning that hiring more employees and paying them better results in happier customers, bigger sales, and even higher profits. Today's New York Times has two article that relate to this discussion.

In the first (full story, here), Steven Greenhouse writes about the growing pushback against "on-call" schedules that give workers little or no control over their working hours. In many cases, workers learn only a day or two in advance -- occasionally on the day itself -- whether they will be working or not. That gives them little time to arrange for child care, for example, or to work a second job to improve their financial situation.

A retail organization representative is quoted opposing proposed regulations that would require employers to pay workers extra if they are given less than 24 hours' notice, or to grant flexibility for care-giving or school-conflict requests: "Where employers and employees now work together to solve scheduling problems, you’ll have a very bureaucratic environment where rigid rules would be introduced."

Expect that, as I hear it from retail employees, employers and employees don't "work together". Unless you define "working together" way differently from the way I do.

A University of Chicago professor notes, "Frontline managers face pressure to keep costs down, but they really don’t have much control over wages or benefits...What they have control over is employee hours."

And employees have no power to resist.

That situation won't change until retailers stop thinking of their store employees purely as a cost. I know I'm not the only shopper who has left a store in annoyance, and without spending the money that I had intended to spend, because I couldn't find anyone on the floor to help me.

In the second story (here), Eduardo Porter compares the commitment that many early- to mid-20th century employers had to their employees to what passes for commitment today. He recalls Eastman Kodak's early profit-sharing plan, Ford's revolutionary (for the time) $5 a day salary for its workers, and other well-known examples. Meanwhile, today, too many companies still worship at the altar of Milton Friedman and "shareholder value".

Companies, of course, are not charities. Their main responsibility is to remain profitable.

Still, there is a case to be made that attending to workers’ rights or environmental degradation might help the business in the long term...

More broadly, company executives are under a new form of pressure. George Serafeim of Harvard Business School points out that the information age has brought greater transparency to corporate operations. Customers, investors and employees know more about what businesses do around the world and can exert influence to change their behavior.

Of course, while corporations may clean up what's visible to the outside world, that's no guarantee that the same will occur on the inside. Which is why I support whistle-blower protections, too.