August 8, 2011
By Wayne Mates
Over the past 1,000 years, the relationship of labor and management has not changed much. Corporate management (and also small business management) has always wanted the most productivity from the workers who toil for them each day. Labor has always, in turn, wanted the best for itself for the skills it provides. Let’s take a look at the ebb and flow of this relationship and how it effects labor migration. I focus on the American labor force, but reference other countries as well.
During the pre-industrial age, going back to medieval times, people and families were mostly on their own to produce what they needed under the direction of their kings or governments. They produced their own food and provided each other with services and products such as wagon wheels and carpentry skills. People were independent and needed survival skills to sustain life.
In America, we were a nation of farmers, fishermen, merchants, ranchers and scoundrels. Villages sprouted up to serve the needs of it’s’ residents. Each member shared in the responsibility of the survival of the village.
In the early 1700’s the steam engine was invented in England which led to the early Industrial revolution in the textile industry. By the mid 1800’s the yarns and cloth that were produced in each home or town were mass produced in factories and shipped across the country in the newly developing railroads. Other industries followed suit with new inventions and efficiencies in steel, meat packing, and furniture among others that allowed for the production of goods in one location to be shipped to other parts of the country. In order to support these newly growing enterprises, new fuel sources and labor were needed.
John D. Rockefellers’ Standard Oil provided oil to fuel industrial growth. Thomas Edison’s Consolidated Electric supplied power to the city of New York and J. Pierpont Morgan’s bank provided capital to expand it all. But labor was needed for these companies.
Don’t be afraid to give up the good to go for the great. ~ John D. Rockefeller
In order to entice labor to the mills, mines and factories of the late 1800’s and early 1900’s, company towns were established. The companies provided housing, a company store and a wage to attract workers. But even then, the workers were controlled by the company. They paid rent to the company for their housing. They bought what they needed at the company store. In return, they worked horrendous hours, sometimes 14 to 16 hours a day, 7 days a week. For many it was a better life and more money than they had on the farm. There was a sense of security they were able to provide for their families.
People were slowly leaving their ranches and farms and journeying to the city. They were joined by immigrants from all parts of the world, in particular Europe, looking to have a better life for themselves and their families. The immigrants were escaping famine and oppression in their homelands.
In the meantime, the business owners became ever wealthier at the expense of labor. Such was the era of the Robber Barons.
Deplorable working conditions led to the beginning roots of labor unions. Workers began to band together to assert to the company owners that if they wanted to maintain profits they needed to treat their workers better. They would need to give up some profit to keep their workers happy. An American middle class was beginning to sprout. The growth of factories led to new jobs in accounting, sales and supervision. American business was growing and its’ labor force was part of it.
As American industrial might grew through World War I, factories could not find enough workers to keep running. They began to pay higher wages, relax the number of hours someone needed to work to entice people to work for them. The ranchers and farmers left their small villages and farms for the promise of better lives.
To be continued.
Next week, I will continue the historic story of the relationship of labor and jobs in this country.
Filed under News by on Aug 8th, 2011. Comment. 
August 15, 2011
By Wayne Mates
Last week in Part I, I wrote about the relationship of labor and management from our agrarian society, the industrial revolution and through the World War I period. This week I will pick up at post World War I and the migration of labor to cities, the growth of labor unions and the passage of labor laws.
As workers banded together in unions in America’s factories they gained concessions from their employers. Higher wages, fewer work hours and employer paid health plans were some of the benefits gleaned by labor. Compromising and working toward a common goal labor and management created the 20th century working arrangement.
Labor became politically more powerful. Congressional and presidential candidates needed labor support to win elections. Social Security was established. Child labor and other labor laws were passed bringing some safety and protection to American workers.
Post World War II brought major changes in the relationship between labor and management. Modern day transportation systems evolved. Rail systems still moved goods and materials throughout the country and our current interstate highway system was under construction. Modern day cargo planes allowed for easy and fast transportation of products. Management started locating factories where labor was cheap and unions were weak. Numerous factories moved from northern parts of the country to the south. Some workers who had migrated to the north in the fifties and sixties moved back South to where workers and their skills were in demand.
During the seventies, America imported many finished goods from Japan. Japan could produce product at a lower labor cost than a comparable product produced in America. Even with shipping and distribution system costs, they were able to sell at lower prices than their American competitors. There was competition between foreign and domestic product sales. The Japanese companies gained market share.
American companies noticed and moved production of many products overseas, many to Southeast Asia. American companies worked with Asian governments and factories to produce their products with cheap labor. As production moved overseas, companies closed down outdated and unproductive American factories. American production jobs were lost forever. As our factories closed, unions had fewer members and the unions lost political clout.
As production jobs were lost, America moved toward a service economy. Fewer products manufactured meant management needed to develop sophisticated distribution and support systems which created domestic jobs and kept the economy growing. The middle class was growing and skilled specialties were in demand. Companies paid high wages for those that had skills that could help them expand.
The 70s, 80s and 90s were also known for high profile mergers and acquisitions. Banks gobbled up other banks, computer companies merged with other computer or software companies creating huge conglomerates. With each merger, they consolidated backroom functions such as accounting, support and operations. Workers learned that corporate America could no longer be counted on for a secure job. Everyone and every job became expendable.
Wise are those who learn that the bottom line doesn’t always have to be their top priority. ~Willian Arthur Ward
Factories in Southeast Asia were humming with work. Migration within country borders led to fewer farmers and more people moving to the cities for higher paying work. It was in deplorable conditions similar to the conditions our factory workers faced during the early industrial revolution 100 years earlier.
With a robust internet and low cost reliable telecommunications built during the late 90s and early 21st century, companies not only moved their factory production overseas, but began to take even more advantage of the low cost of overseas labor.
During this time economies coped with both the high tech bubble of the early 2000s and the housing bubble of the mid 2000s. Our service economy stripped of production jobs and faced with high energy costs has sputtered. It is estimated that there are 5% fewer jobs today than there were before this past recession started. That amounts to 6.8 million jobs. In the meantime, our working age population is growing at about 3% a year. Without the creation of jobs, we are faced with the possibility of supporting more nonproductive citizens. Those unemployed or underemployed may be faced with the possibility of moving to where they can find work.
Could this be the start of the next great labor migration? Will we need to create the next land bridge between the Americas and Asia and watch a new migration trend happen? Or will the trend continue and manufacturing will move to an even lower cost area of Africa. Only time will tell.
Filed under News by on Aug 15th, 2011. 1 Comment.
August 22, 2011
By Wayne Mates
While on my annual pilgrimage to the Finger Lakes region of New York State this year I had the opportunity to observe several organizations and businesses in action. Each is the result of the creativity and excellence of the owners or management. Although the businesses are different, they share the common denominator of the ownership pursuing success via creativity and focus on serving a niche market.
The third week of August each year finds antique lovers and dealers in the hamlet of Bouckville, NY, home of Madison-Bouckville Antique Week. 2011 marks the 40th anniversary of the event. It features 2000 dealers from across the country selling antique furniture, clothing, mementos and just about anything that was ever produced. Attendance each year is about 50,000 avid antique shoppers looking for the right item to add to or start a collection.
The event was the brainstorm of a local farmer who wanted to attract traffic to a restaurant he had just opened. Jock Hengst invited several antique dealers to set up shop on his farm for a week along NY State Rt. 20. He was simply looking for a way to promote his business. The event has grown so successful it now rivals the annual antique festival in Brimfield, MA and has become an important revenue generator for the local economy. It is so big it is now run by a non-profit set up just to organize and promote the event.
Jock Hengsts’ Ye Olde Landmark Tavern is doing just fine today with good food and a steady stream of business. Nice work promoting your restaurant, Jock!
On the shores of Cayuga Lake, just outside of Aurora, NY is the 65 acre farm headquarters of McKenzie-Childs. Here they produce eclectic items for kitchen, home and garden as well as tableware that is known for bold colors, artwork and patterns they use in their work. Most of the items are produced at the farm, although some are imported. They sell through their retail stores in New York City, Southampton, NY, West Palm Beach, FL and their store on the farm. They also put out a catalog and their website has all their products.
What makes McKenzie-Childs so interesting is that from a rural environment they design and manufacture products that are unique and saleable. They have developed a distribution system that works for them with a combination of retail shops and catalogs. It reminds me of LL Bean in their earlier formative years in a different product line. The key here is the beauty and uniqueness of their products. They have found a niche and serve it very well. It is interesting to note that while at the store, there was a large group of ladies (not a group of large ladies) that walked out with bags full of product, a testimonial that they have an enthusiastic clientele.
Now, let me take you back to yesteryear to two inns from another time. Aurora, NY is home to the Aurora Inn and in Skaneateles, NY is the Sherwood Inn. Both inns were established as stagecoach stops where travelers could get a room, food and drink before moving on to their next destination.
The Aurora Inn was founded in 1833 by E.B. Morgan, an original investor in the New York Times. He was a business associate of Henry Wells, the founder of Wells Fargo. Aurora, NY is also the home of Wells College, founded by Henry Wells. The Aurora Inn went through a number of owners including Wells College. During the 70s (1970s, that is) the Inn fell on hard times and closed. Through a partnership between the college and the Pleasant T. Rowland Foundation, it was restored and reopened in 2003. Today, they cater to weddings, fine dining and still let out rooms in this historic building on beautiful grounds overlooking Cayuga Lake.
The Sherwood Inn shares a similar history, opening in 1807 at the head of Skaneateles Lake, a prime piece of real estate. It also had numerous owners and operated under a number of names before reverting back to the original Sherwood Inn. It is interesting to dine there and watch the tourists putting on airs (I don’t consider myself a tourist since I grew up there and the wait staff recognize me.) Today’s inn is a focal point in the village offering live music, and great food served with impeccable service. They cater to weddings and operate a high end bakery in a separate building in the back of the premises.
Both of these inns have gone through the good and bad, struggling at times but always providing a great value for their clientele. Their management has also learned how to service a specific market segment and to do it well.
It was interesting to see how different businesses have survived and grown, mostly through the creativity and determination of their owners. All have a unique clientele and the common thread is that they cater to their core customer rather than try to sell or cater to a mass market. This perspective serves them well. It is a lesson all business people should learn!
Filed under News by on Aug 22nd, 2011. Comment.
August 29, 2011
By Wayne Mates
As a follow up to my first post on hackneyed expressions to banish, here are 10 more that should be expelled from the English language. Many are equally obnoxious in both business and personal conversation. Unfortunately, some people in an effort to either fit in or look smart, seem pretty ignorant when they use these phrases. So, here are some that are just awful.
- Transparency – How often have you heard this one, both in business and particularly in politics? The idea behind the use of this word is to imply an openness and honesty in presenting communication, facts and figures. This way no one could imply a company or politician was hiding anything. However, when I hear the word, it implies to me that I can see through what they are saying and there is no substance to what is being presented. Tell me you are being transparent and I will challenge you that you are hiding something.
- Drop the Ball – A typical sports analogy to portray someone who has failed to meet an objective or complete an assignment. Was it an error? A simple miscalculation on trajectory? A bad hop? What happened after they dropped the ball? Did they pick up the ball and complete the play? Was there a backup? This sports analogy should go and not into the Hall of Fame.
- Take It to the Next Level – Really? Why? What does this really mean? We completed an assignment or project but it wasn’t good enough, so have to do it better? Should we take an elevator to the next level? Or, can we go up the escalator? Or, maybe the stairs. Bosses use this all the time to try to encourage staff to be more productive. It is pretty transparent to me!
- Plus up Your Answers- The concept behind this phrase is idiotic. Someone asks you a question and you don’t just answer the question, you add more commentary and “add value” to your answer. By doing so, you are supposed to be able to impress the person that asked that you are either smart or trying to give them more information. The problem is that all they want is an answer to their question and additional information will confuse them. They will come back with more questions wasting time for both of you. Just answer the question!!
- Win-Win – I have heard this far too often. It is a win-win situation; everyone gets something out of it. You usually hear this when some compromise is made over an issue or policy. When you hear it, you can be pretty sure that no one won. It was simply a compromise made to be able close out an issue. Most likely no one was really happy. Should we call the politics of compromise (or lack of) in Washington a win-win?
- Client Centered- This is one of the dumbest phrases heard today! NO company that is looking to make a profit is client centered. They create products to sell to the public or to other businesses. They promote their products or services to their customers or potential customers. But are they client centered? NO! They are profit motivated! Look at all the airlines and banks charging ridiculous fees to maintain or build their profits. Listen to the taped “Your call is very important to us” while they put you on hold forever. Client centered? Not hardly!
- The Elephant in the Room- This is better known as the issue no one wants to address for any number of reasons. When I hear someone say this, I want to know where the pink elephants are. I want to hear elephant jokes. No issue should be so LARGE it shouldn’t be discussed. And, the elephant in the room will soon be forgotten as a non-issue.
- Step Up to the Plate- Another sports analogy. This one implies that it is someone’s turn to bat and the result should not be an out, or worse, a strikeout. It also implies that the person has not been capable of getting their job done. Maybe next time I hear this one, I will consider putting the feed bag on!
- Industry Standard – This is terminology invented and used by companies and managers who aspire to be average. Yes, Wall Street uses industry standards to rank one company against another to determine what company performs best. But, what does Wall Street know? They can’t seem to get anything right. If you own a company, don’t worry about industry standards. They don’t matter if you want your company to be the best there is.
- It Is What It Is – DUH!! What else would it be? Maybe the elephant in the room?
OK, so yes, I am a bit snarky and sarcastic with this post. But, don’t you really think it is time to euthanize these expressions. Hackneyed phrases, Be Gone!
Filed under News by on Aug 29th, 2011. 1 Comment.
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