Tuesday, November 27, 2012

Billionaires, Bakers, Bankruptcy and Backpedalling (Part One)

In response to the criticisms by The Blog, and others on Facebook, of Papa John's Pizza CEO John Schnatter's claim that he, a multimillionaire, can't afford the 14¢ per pizza cost that The Affordable Care Act would inflict on his personal profit margin will force him to cut employee hours and increase costs to his customers, a lovely young lady, who is not just a friend of The Blog, but damned near family of The Blog, who is predisposed to lean to the right, posted the following question...

She continued....

I thought that her central question was an excellent one. So excellent, in fact, that I asked her permission to allow me to use it as the basis of a blog post, here.

***** Two weeks have passed since The Blog pecked out the above.*****

When the old PC set out to write this post, he wanted to give a well thought out response. Research was done. Sources were found. Graphics were collected.

Thanksgiving week arrived and The Blog went off-line to spend time with his family.

But the world does not rest. Not even over a holiday week. And, Holy Crap! did things get weird last week! So much so that, what I thought would be a pretty straightforward post suddenly developed more twists than an Ira Levin play.


So, in the interest of keeping this post from becoming completely unruly, I'm going to try to break it down into two or three parts to be posted over the next couple of evenings.

Tonight, I will try to address the basics of her question. In later posts I will discuss some of the stories of interest that have come to light over the past few weeks. Especially last week.

So, here we go....

Why are people so bitterly outspoken about CEO's and Founders?
Because, 40 years ago, the average CEO made eight times more than his/her average employee. Around 1980, that began to change. CEO salaries climbed while employee wages began to stagnate. Today, CEO compensation is nearly 300 times higher than employee's wages, while those wages have flat-lined in that time. 40 years ago, CEOs and founders still had their mansions, household staffs, expensive cars and such. But, they also treated their employees as valuable assets to their companies, rather than as expendable cogs in their profit machines. Or worse, as thieves, stealing from their "rightful" profits.

The Blog once, personally, witnessed a $40 million a year CEO berate a $20 thousand a year employee for walking on his $80 thousand turkish rug with his shoes on. A bit of a disconnect, no?

And, by the way, those employees pay about 27% in income tax on their wages while their employers use loopholes to pay about 12%. 

It's not like they just woke up one day and inherited all of that prosperity.
Well, sometimes no. But, very often, yes, they did inherit that wealth.

Inherited wealth is far more common than "Horatio Alger" style, success from nothing wealth.

I have observed, over the years, that those rare few who built their success from scratch are more likely to have empathy for their employees than those who inherited their wealth.

Not always. But, generally speaking.

Consider Howard Schultz, CEO of Starbucks, who rose out of "the projects" and has, personally, seen to it that his employees are paid a living wage and receive medical benefits, as opposed to the Walton siblings, who inherited their Wal-Mart fortune from their father (who must be spinning in his grave.) They didn't "work their way to the top." They were born there. And it shows.

(More about the Waltons in tomorrows post.)

Do you really care about their beliefs... on certain issues.
 Yeah. Actually. I do.

It is a sad fact that it is virtually impossible, in today's world, to not do business with people whose business policies are contrary to my beliefs. But, given the choice, I will do business with a company that does right by it's employees and customers over one that does not. Even if I have to pay a few cents more for the product. 

Quality is the only thing that matters to me. 
The truth is that quality is lacking in much of today's corporate climate. Quality is certainly not something that you will get from "Papa John."

My invitation stands. Come visit me sometime and I will buy you a quality pizza made by actual Italians in a hole-in-the-wall pizzeria.

You will never eat a Poppa John's pizza again! 
Success breeds jealousy.
Mitt Romney called this "the politics of envy." And, it is an exquisite pile of steaming bullshit.

The Blog can't speak for others. But, I don't begrudge the successful the spoils of their success. I just want them to recognize that they didn't succeed without the help of us "little people."

It's a matter of basic ethics and, dare I say it, morality.

More tomorrow night...

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