On this edition of The Bottom Line podcast, host Rick Wartzman chats with Herman Miller CEO Brian Walker. Wartzman describes the episode below.
But Brian Walker, the CEO of furniture company Herman Miller, is convinced that the traditional office—with executives stuck behind closed doors and most everyone else assigned to a fixed workstation—is gone for good.
“I think this falls into the broader trends we see,” Walker tells me on the latest episode of my podcast, The Bottom Line. “You and I probably believed we had to have a car when we turned 16 years old . . . Well, my children are graduating from college and say they’re going to move to Chicago, that they don’t want a car. They’re very comfortable using Uber or using Zipcar or public transportation. In fact, they like it better.”
“In some ways, attitudinally, the digital natives are more used to moving through things that way,” Walker adds. “Ownership isn’t about a thing. It’s about what I get from it.”
Beyond generational values, he notes, something else is fueling this shift to more dynamic and flexible workspaces: technology.
Herman Miller, for example, recently introduced cloud-connected smart office furniture that, before long, will function like this: As you walk toward an open desk and chair, the system will hook into your cellphone and recognize that it’s you. It will then know, based on your digital calendar, what tasks you’re about to take on.
Ready to settle in for a few hours to finish up that report? The furniture will automatically adjust, based on your height and weight, for the optimal ergonomic experience. Just stopping by quickly? The desk will anticipate that, too, rising to a standing position, so you can check your email before you dash off to your next meeting.
A bit later, as you head over to a more collaborative area to brainstorm with some colleagues, the system can tell whom you’re gathering with. And although that kind of tracking is sure to incite fears of Big Brother in some organizations, such information can be invaluable for a manager if handled right.
“I’d love to know . . . when I’m in the product-development cycle how much are my marketing folks actually sitting with the R&D team, or are my finance folks ever really involved,” Walker says. The data could reveal “how the organization is mixing.”
You can listen to my entire interview with Walker here, as well as Marty Goldensohn reporting on how employers are trying to tackle the “privacy crisis” in open offices, and Natalie Foster exploring why it’s time for a big, bold expansion of the Earned Income Tax Credit for the working poor.
The Most Successful Union Organizer in America Thinks Traditional Organizing Is a Lost Cause
On the latest episode of “The Bottom Line” podcast, David Rolf of the SEIU explains why worker advocates need to move to a different model.
If anyone has shown a keen understanding of how to unionize workers in America, it’s David Rolf.
In the 1990s, he was a key player in the Service Employees International Union winning the right to represent some 74,000 home care aides in Los Angeles—the largest union organizing campaign since the 1940s. In his present post, as president of SEIU Local 775 in Seattle, he has spearheaded growth from 1,600 to 45,000 members. In 2014, The American Prospect called Rolf “the most successful union organizer of the past 15 years.”
All of which makes Rolf’s take on the collective-bargaining system—that it is a relic, and that those who truly care about workers should stop focusing their efforts on promoting it—particularly provocative.
“I think we made a valiant . . . bet that if we put enough talent and enough resources behind traditional union organizing that we could somehow bring back the old model,” Rolf told me on the latest episode of my podcast, The Bottom Line. “It wasn’t the wrong theory to try necessarily. . . . But ultimately, when you try something over and over again and cannot achieve the results you want, it’s time to try something new.”
Instead of being sufficiently innovative, Rolf adds, most labor leaders have been “reinvesting and doubling down on our American system of enterprise-based collective bargaining since the union movement started to shrink in the early 1950s.” The result: “Through decades . . . we’ve seen unions grow weaker and weaker every year while continuing to repeat the same strategic directions.”
Today, less than 6.5% of the private-sector workforce in the United States is unionized, a steady drop from nearly 35% in 1955, 26% in 1975, and 10% in 1995.
To move forward, Rolf has plenty of ideas, including promoting worker ownership and introducing “ethical workplace” certification and labeling programs designed to appeal to socially conscious consumers.
Especially important, he believes, is to supplant firm-by-firm bargaining with a European-style paradigm in which representatives of the employees, employers, and the government set standards for wages and benefits throughout an entire industry or across a geographic area.
“The more there’s bargaining centralization,” Rolf says, “the less anti-union the culture is, the more union coverage you have in the workplace, the lower inequality is within the overall society, the lower the level of gender wage inequality is, and the more time people get for social and leisure activity.”
Another part of Rolf’s strategy has been to build advocacy organizations like the Fight for $15, which, in his words, has put forth a “bold and morally compelling demand” to elevate the pay of more than 20 million low-wage workers.
Whether a critical mass of labor leaders will ever agree with Rolf and push hard to replace the status quo is far from certain. But nobody, he says, should interpret the organizing triumphs that he and a relatively small number of others around the country have enjoyed as a sign that 20th century trade unionism can survive the 21st.
“Overall, the trend lines are not good,” Rolf says, suggesting that the current system is simply “marking time until its eventual extinction.”
“It’s not to say that you can’t find a few dozen black rhinos left in the wild somewhere,” he continues, “but that shouldn’t make us think that they’re suddenly going to take over the world.”
You can listen to my entire interview with Rolf here, along with Marty Goldensohn reporting on the state of employee stock ownership plans, and Kanyi Maqubela reflecting on why the toughest obstacle facing driverless cars is psychological, not technical.
TV Legend Norman Lear: Maximizing Shareholder Value Is the ‘Central Disease of Our Time’
In a special edition of The Bottom Line podcast, the hit sitcom creator zeroes in on a topic that has long interested him: business and its connection to society.
Through hit sitcoms such as All in the Family, Good Times and Maude, Norman Lear has taken on all kinds of contentious topics during his legendary television career: civil rights, women’s rights, the Vietnam War and more.
But as it turns out, the 95 year old has long had his eye on another issue with huge societal implications: the way that many businesses push to rake in ever bigger financial returns—often in the short term—with little regard for anything else.
“This is the greatest fallacy I think I know,” Lear told me on the latest episode of my podcast, The Bottom Line. “When nothing in nature suggests anything can grow forever, the American corporation is dedicated to a profit statement this quarter larger than the last. . . . Even as I repeat it, it sounds just ruinous.”
Of course, this relentless pursuit of profit stems in large measure from the fact that, over the past 30 years, companies have embraced an ethos of “maximizing shareholder value.” Says Lear: “I think of it as the central disease of our time.”
Lear became directly involved in promoting a cure when he co-founded the Business Enterprise Trust, which during the 1990s recognized companies that tried to solve social problems as a part of their core business strategy. The program was very much in the spirit of the Shared Value Initiative launched by Harvard’s Michael Porter and Mark Kramer—only Lear’s effort came some 20 years earlier.
One corporation that has consistently impressed Lear is Starbucks. It’s “a company,” he says, “that thinks about its employees a great deal.”
But Lear makes clear that this is the exception. Most companies have kept wages flat and gutted worker benefits over time, leaving many Americans anxious and angry. Indeed, analysts believe that one reason Donald Trump won the White House was that he was able to tap into these feelings among the white working class—a group known as the “Archie Bunker vote” in a nod to Lear’s irascible blue-collar lead character in All in the Family.
Yet Lear says he actually isn’t sure whom Archie would have cast his ballot for—Trump or Hillary Clinton. “Either way is possible,” he says. Getting inside Archie’s head, he adds, “would take 11 scripts leading up to the vote, and I haven’t thought that through.”
As for the business he’s in, Lear—who serves as chairman of Act III Communications, a multimedia holding company—stresses that entertainment can have a positive social impact.
He’s excited about a pilot that he’s doing for NBC, Guess Who Died, which will look at the lives of the elderly—a demographic that, in Lear’s words, has “not been represented ever on television in any way that reflects their numbers and importance in our culture.” He also points to the current reboot of his 1970s show One Day at a Time, which last season grappled with a teenage girl coming out as a lesbian to her single mother and grandmother.
“The lack of acceptance for people who are very different from you . . . this show will help a conversation about it,” says Lear, who was one of those celebrated this year at the Kennedy Center Honors for his lifetime achievement in the arts—set to be broadcast on CBS on Dec. 26. “And there is no way conversation doesn’t aid in the long run.”
You can listen to my entire interview with Lear here:
Why One Private-Equity Pioneer Is So Fed Up With The Industry, He’s Ready To Quit
Co-published by Fast Company
Leo Hindery has long been outspoken about super-rich fund managers who exploit a loophole that allows them to pay the capital-gains tax rate—about half the ordinary tax rate—on a huge chunk of their personal income.
Co-published by Fast Company“Greed is winning,” Leo Hindery tells me on the latest episode of my podcast, The Bottom Line. “I don’t like its trends. ” Hindery, a private-equity pioneer, is fed up with the mores of his $2.5 trillion industry.
“I’m not sure I’m going to stay in the business,” he says.
Hindery, who runs New York-based InterMedia Partners, stresses that he looks forward to continuing to make “thoughtful investments” on behalf of others. But he is mulling a new vehicle outside the realm of private equity.
“I don’t like the fee structure,” he explains. “I think it’s usurious. I think it’s caused really unfortunate—almost unethical—behaviors by some of the managers. I’m not happy with it. So we’re going to change our own perspectives.”
Hindery’s displeasure comes in large measure from seeing private equity change over time. When the field began to take off in the mid-1980s, he says, there was more of an inclination to acquire businesses and hold onto them for five to seven years, building them up along the way.
But now, he says, there is so much capital chasing so few good deals, it has put pressure on private-equity managers—often young generalists with zero experience in the types of businesses that they’re buying—to become overleveraged and then try to turn a relatively quick profit.
“They’ve backed away from the longer hold, and they’ve gone for the more expedient action of cutting . . . costs, especially employee costs,” Hindery says.
His peers infuriate him in other ways, as well. Hindery has long been outspoken about super-rich fund managers who exploit a loophole that allows them to pay the capital-gains tax rate—about half the ordinary tax rate—on a huge chunk of their personal income. “It’s just unconscionable,” Hindery says. “It’s beyond intellectually absurd.”
“There’s nothing that suggests that what we do as managers of these monies is a capital gain,” he adds. “To call it a capital gain is to call an orange an apple.”For Hindery, the declining standards in private equity are one piece of a larger picture in which the leaders of corporate America have become increasingly focused on short-term profits at the expense of the greater good to society.
When Hindery went to work for natural resources giant Utah International in the early 1970s, fresh out of business school at Stanford, he says he plunged into a world in which major CEOs “were patriots.”
“They believed in the value of their employees as assets,” he says. “They believed in their responsibility to their communities and to their nation.” Today, however, “I can’t make that generalization much anymore.”
Hindery acknowledges that social impact investing is a force to be reckoned with, as more and more public-pension funds, university endowments and charitable foundations steer their investment dollars into those companies that are good stewards of the environment and their workers.
But money managers and top corporate executives—the bulk of whose own compensation is typically linked to their company’s share price—are still often motivated by other concerns. At least for now, says Hindery, “greed is winning.”
You can listen to my entire interview with Hindery here, along with Larry Buhl reporting on efforts by a group of wealthy individuals called the Patriotic Millionaires to battle income inequality, and Rachel Schneider exploring why we need to develop new indicators that measure people’s overall financial health, not just their creditworthiness.
The Bottom Line is a production of Capital & Main.
Why Giving Ex-Felons a Second Chance Is Good for Business
On this bonus episode of The Bottom Line, Gretchen Peterson of Dave’s Killer Bread and Scott Budnick of the Anti-Recidivism Coalition share how those with criminal backgrounds often make great employees.
More than 600,000 people in the United States are let out of prison annually, only to find that landing a job is near impossible.
In fact, a year after they’ve gotten out, some two-thirds of these folks remain unemployed—often because of the stigma that they carry and concerns over what kinds of workers they’ll prove to be.
But where many businesses can only envision big problems among this population, others have come to discover huge pluses.
Most companies believe that those who’ve spent time locked up “might be unstable or just unemployable—and all of that is untrue,” Gretchen Peterson, the director of human resources at Dave’s Killer Bread, where about a third of its 300 employees have criminal backgrounds, told me on the latest episode of my podcast, The Bottom Line.
My other guest, Hollywood producer turned prison-reform advocate Scott Budnick, makes the same point. With the right training, those who’ve been released from prison tend to display “a hunger and a work ethic even more than your traditional . . . employee,” says Budnick, the founder and president of the Anti-Recidivism Coalition, a nonprofit in Los Angeles.
For both Budnick and Peterson, the idea that society would turn its back on ex-felons and leave them jobless—especially when some 70 million American adults have criminal records—makes no sense.
We should want those who’ve paid their dues “to be able to reintegrate and compete with everyone else without this scarlet letter that they’re wearing forever,” Budnick says. “That’s good for public safety. That means there’s an 80 percent less chance that they’re going to commit another crime. . . . That means they’re going to pay taxes.”
Says Peterson: “They’re your next door neighbor. When people can personalize that and get to know an individual, then they realize that person has made a mistake potentially, or maybe two mistakes. . . . But should they be held accountable for that for the rest of their life once they’ve served their sentence?”
At Dave’s Killer Bread—which traces its own history to 2005, when co-founder Dave Dahl was welcomed back to his family’s bakery after a 15-year prison term—myriad benefits have materialized from this philosophy.
For one thing, Peterson suggests, former felons are usually engaged and productive because they are grateful for the opportunity they’re receiving. “They’re very appreciative . . . to have stable employment,” she says.
Attracting front-line workers is also easy because DKB, as the company is known, has earned a reputation among re-entry programs and criminal justice agencies around its hometown of Milwaukie, Oregon, for being a second-chance employer. “We are never short of candidates,” Peterson says—even though it spends almost nothing on recruitment.
What’s more, she says, people who’ve been incarcerated can bring certain insights to the workplace that others lack. “It’s definitely an advantage,” Peterson says, noting how one of her colleagues is an excellent supervisor because of a high level of emotional intelligence that he honed behind bars. “He needed to be able to assess and read and listen and work with other people from all walks of life in order, really, to survive that experience,” she says.
And finally, Peterson explains, there’s this virtue: The company is a magnet for those who, like herself, want to do some good in the world. “It’s a mission,” she says. “It’s more than just baking bread.”
You can listen to my interviews with Peterson and Budnick here.
LinkedIn Wants to Find You a Job — All 3.5 Billion of You
On this episode of The Bottom Line, Allen Blue lays out how he and his team are trying to build the mother of all job-matching platforms.
We all know that technology is poised to wipe out lots and lots of jobs. Driverless trucks threaten the livelihoods of hundreds of thousands of people. Robots can now flip hamburgers. Artificial intelligence is creeping into all sorts of professions—law, accounting, and, dare I say it, journalism.
But technology is also assisting folks in landing jobs, including through online platforms that match their abilities with employer needs—while helping to fill in any knowledge or skills that they might lack.
“We’re able to look . . . and say here are the skills that are required for that set of jobs” that a company has open, Allen Blue, the co-founder of LinkedIn, told me on the latest episode of my podcast, The Bottom Line. “And then we can look in the surrounding area and say, ‘Are there any schools out there which are teaching these skills?’ And similarly, we can say, ‘The people who are available to take those jobs—do they have those skills?’”
In this way, Blue adds, “LinkedIn brings a really unique perspective into measuring supply and demand and skill gaps, trying to understand where, in a given location, education, employment, and people who can take jobs . . . actually all come together.”
LinkedIn’s vision is nothing if not grand. Through the project that Blue is spearheading, known as the Economic Graph, the company eventually hopes to digitally map all of the world’s 3.5 billion workers, the hundreds of millions of businesses large and small that span the globe, and every educational institution that has an offering of interest to employer and employee.
“We have been growing faster and faster over time and . . . that growth has come to incorporate more and more people from throughout the economy,” says Blue, who serves as vice president of product management at LinkedIn, which is now part of Microsoft. “I hope that we’ll be able to provide meaningful value to large groups of them in the next three or four years.”
In the meantime, the company is experimenting with various aspects of the Economic Graph in places near (including Colorado, New York, and Arizona) and far (India and South Africa). “We are very much in a learning phase right now,” Blue notes.
Among the biggest takeaways so far: Don’t try to get too prescriptive about what kinds of jobs people should be aiming for or what training they’re going to need. Instead, let the data do the talking in real time.
“The thing which is inevitably true about the future is that it’s going to change quickly,” Blue says. “So the most important thing for us is not actually to try to create a specific solution to a specific foreseen problem, but rather to create a system which is resilient . . . and reacts.”
You can listen to my entire interview with Blue here, as well as Megan Kamerick reporting on a national network called TechHire that is forging pathways for overlooked Americans to gain skills and access to technical jobs, and Dorian Warren providing his take on how Donald Trump is betraying the working-class communities that he vowed to fight for.
Why the Founder of Beyond Meat Won’t Demonize the Consumption of Beef
On this episode of The Bottom Line, Ethan Brown explains why working with the meat industry is essential to transcending it.
The first time that venture capitalist Ray Lane ate something produced by Beyond Meat, one thing stuck with him—literally.
Back then, six or seven years ago, the company was focused on creating a chicken-like strip from plants. “I put it in my mouth, and it’s still there 15 minutes later,” recalls Lane, a partner emeritus at Kleiner Perkins Caufield & Byers, which in 2011 became the first outside investor in Beyond Meat. “I’m trying to pick it out of my teeth.”
Since then, Beyond Meat has added to its offerings plant-based burger patties and crumbles good for tacos and Bolognese—all of it with the same aim: to replicate the flavor, texture, and full sensory experience of eating animals but to deliver high levels of protein (mostly via peas) in a way that is far better for both human health and the environment.
“My mother always questions my strategy on this and says, ‘Why are you always trying to make it taste like meat? Why not just make it taste good and leave the rest alone?’” Ethan Brown, Beyond Meat’s founder and CEO, told me on the latest episode of my podcast, The Bottom Line, where he was joined by Lane.
But Brown believes that the only way to crack the mass market is to acknowledge that people have a strong attachment to meat and to take that on directly—a decision that has catapulted his company’s products into the meat case (and not the health-food aisle) at Whole Foods, Safeway, Kroger, and other chains.
“Meat is central to who we are as a species and as a culture, and so the notion that people are going to stop eating meat, I think, is a false one,” Brown says. “But the idea that people will start eating plant-based meat is a very promising one.”
Brown’s determination has led to another crucial piece of his strategy, as well: not shying away from collaborating with traditional players in the meat industry. “There’s a lot to learn from them both on the production side and on the development side,” Brown explains.
And so, while Beyond Meat counts the Humane Society of the United States as an investor, Tyson Foods owns 5% of the company. Meanwhile, former McDonald’s CEO Don Thompson, another investor in Beyond Meat, is the one who came up with the name of the company’s signature product: the Beyond Burger.
“It would be a mistake to demonize the consumption of meat,” says Brown, who himself is a vegan. Climate change, which is driven in large measure by livestock production, “is a global problem we have to solve together. There’s not time for ideological differences. . . . Protein is protein.”
You can listen to my entire interview with Brown and Lane here, as well as Ernest Savage reporting on efforts by a startup called Milk and Eggs to bring fresh fruits and vegetables to food deserts, and Natalie Foster exploring why the Independent Drivers Guild in New York represents an important new form of collective worker power.
LISTEN: Why Hello Alfred Is Focused More On Its Workers And Less On Algorithms
On this episode of The Bottom Line, CEO Marcela Sapone lays out her vision for turning service jobs into good jobs.
When Hello Alfred launched a few years ago, many naturally assumed that the service was exploitive, with the company’s “home managers” tackling household chores and running errands for folks while earning meager pay and no benefits. This, after all, is how most of the “gig economy” functions.
One early customer, for example, wondered whether she was “contributing to unfair labor practices” by using Alfred Club, as it was then called, noting in Fast Company that she couldn’t “stop feeling guilty about it.” Slate characterized the startup as “Uber for servants.”
Yet, in fact, Hello Alfred has always been the anti-Uber—at least when it comes to taking care of its workers.
“People need to have jobs, and they need to feel like they are connected to the mission of the company that they’re working for, that they’re being paid well and treated well,” Marcela Sapone, Hello Alfred’s CEO and co-founder, told me on the latest episode of my podcast, The Bottom Line. “That’s how you actually affect change at a large scale.”
In tangible terms, this means that Hello Alfred has only W-2 employees, not independent contractors. They make about $25 an hour on average, according to Sapone, and “we’re hoping that over time we can pay even more.” Those at Hello Alfred also have health, vision, and dental coverage. And the company is intent on adding a retirement plan “once we’re a little more established,” Sapone vows. Front-line workers are offered skills training on a regular basis, as well.
This deep investment in employees is smart business, Sapone maintains, because, “at the end of the day, they really are our product”—even though Hello Alfred is powered by software to help maximize efficiency and considers itself a tech firm.
The model seems to be paying off. Sapone says that Hello Alfred, which serves primarily residents of large apartment buildings in New York, Boston, and San Francisco, is “operationally profitable.” It has plans to expand next year into Chicago, Washington, and Los Angeles.
But Sapone’s vision extends beyond Hello Alfred. She hopes that the company can help to set a new standard for service jobs across the country.
“There is a general distaste . . . in technology companies,” she says, “to really focus on the people element. A lot more of it is focused on how you build these algorithms, what’s the machine learning component, what’s the AI component.”
Many of who’ve been able to disrupt existing industries have achieved “rock star status,” she adds. But “you also have kind of a duty to build things . . . and not just for one class of people but for all the people in that value chain.”
You can listen to my entire interview with Sapone here, as well as Ernest Savage reporting on efforts by the National Domestic Workers Alliance to create good jobs in sectors that haven’t traditionally had them, and Dorian Warren weighing in on the mad rush by one city after another to attract Amazon’s new headquarters.
A New Episode of The Bottom Line Podcast
This week on The Bottom Line podcast, Rick Wartzman interviews Albert Wenger, partner at Union Square Ventures, on the unique economic challenges humanity faces as we enter the “knowledge age.”
This week on The Bottom Line podcast, Rick Wartzman interviews Albert Wenger, partner at Union Square Ventures, on the unique economic challenges humanity faces as we enter the “knowledge age.” Plus, Robin Urevich reports on what many see as a model for a universal basic income —Alaska’s Permanent Fund Dividend. And Natalie Foster examines how the Affordable Care Act has been a boon for entrepreneurship.
Robert Reich’s Seriously Funny Crusade to Save Capitalism and America’s Middle Class: Podcast
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Moonlighting Teachers Learn Hard Lessons from Uber
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Conversations on Trump’s America: Robert Reich Previews a New Era of Savage Inequality
- Labor & EconomyNovember 16, 2017
Robert Reich on Trump’s ‘Dangerous Tax Bill’
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California Doubles Down on Its Green Economy, But Kicks Cap-and-Trade Down the Road
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Kicked to the Curb: How USC Drove a Bicycle Repairman Into the Street