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So this investment group managed to find value in a company which previous managers had not, that's fine. But they also captured all the rewards, which none of

by owyn 10y ago

So this investment group managed to find value in a company which previous managers had not, that's fine. But they also captured all the rewards, which none of the actual workers could do. 2.3 billion divided by 1200 is about 2 million per worker, yet they make $10 per hour. While this is legal, it seems wrong. There are plenty of frameworks (stock options, employee ownership, unions etc) that would have accomplished this but it seems like only in the tech industry is it assumed that the people doing the work deserve some of the rewards. As events like this are more common it should be just as common for non-knowledge workers to be able to benefit from turn around a like this.

jjoonathan 10y ago
> only in the tech industry is it assumed that the people doing the work deserve some of the rewards That's only because the supply/demand situation of tech laborers gives us bargaining power at the moment. It won't last forever.
- vinceguidry 10y ago
  > That's only because the supply/demand situation of tech laborers gives us bargaining power at the moment. It won't last forever. Tech is unique in the job market in that it's much easier to move up the value chain relative to other types of jobs. There is very much a tech underclass of easily-replaced workers. As time goes on, more and more of these sectors become commodified. IT workers used to be really highly paid, now they're replaceable. PHP was once in high demand, now it's only a little better than being a IT worker. The question here is whether there will always be a sector for tech workers to move to where they can easily leverage themselves a seat at the table. I find it hard to believe that it'll suddenly go away anytime soon.
- jdavis703 10y ago
  Even non techies get large stock option grants, while an outlier the chef at Google made millions when they IPO'ed. At other places I've worked writers, designers, HR, tech support etc have all gotten options. Is this not typical?
zenkat 10y ago
Tech companies don't give options to employees because they "deserve some of the rewards". They do it because it's difficult to attract and retain top talent, especially for speculative start-ups. That's not the case for blue-collar jobs.
hackuser 10y ago
A theory: The ability to capture the rewards depends to a large extent on political power within the organization (i.e. rather than merit and market value). Management has great political power, naturally; that's why in some organizations even failing managers get massive bonuses, golden parachutes, etc.. For workers to have power they need to organize themselves, and that is what unions are: Political power for workers. People complain that unions are corrupt, which of course some are and to different degrees. That's also true of managers and anyone else with political power.
- bunderbunder 10y ago
  Yep. That's exactly why the idea of unions being necessary goes all the way back to the beginning of capitalist economic thinking. The first person to make a version of that observation was Adam Smith himself.
draw_down 10y ago
I used to have a boss who grew up and lived most of his life in Russia. Many times he would say to me: "that's capitalism, baby." I think it's a quote from a movie, he often spoke in movie quotes.
yummyfajitas 10y ago
As an alternative, perhaps Hostess could have paid their employees with $10/hour worth of equity and no cash. Would that have made you happier? I suspect the workers would not have liked it. They preferred cash to illiquid equity in a questionable company, and received it.
- owyn 10y ago
  That's not a realistic choice, so it's not a compelling argument. The workers in this case don't "prefer" cash, it is the only option. However, if there was a basic income in this country, I think workers in a situation could indeed make that choice. If it was $10 basic wage + $10 equity OR + $10 wage now there's something to discuss because that's a more interesting trade off. (((edit to clarify based on comments: yes I meant a $10 basic income + either ( $10 equity or $10 wage ) I didn't even comment on the parts of the story that actually made me unhappy, which was the ridiculous debt financing deal, the blatant union crushing, skipping out on pension commitments, and ultimately laying off 90% of the original work force in order to "extract value" from a mediocre junk food company which is just going to end up in bankruptcy again when they're done with it.
  - poikniok 10y ago
    How is $10 basic wage + $10 equity vs + $10 wage a tradeoff? You seem to be missing the point.
    - Avshalom 10y ago
      10+(10|10) not (10+10)|10
  - harryh 10y ago
    If we're talking about a basic income for just working aged Americans (because kids don't need it and the elderly are already covered by other programs) we're talking about roughly 200M people. 200M * 2000/hours per year * $10 hour = 4 trillion dollars a year. For comparisons sake the current federal budget is about 3.8T.
diogenescynic 10y ago
The same could be said about Walmart and the Waltons who do very little to help their employees or give back to society in any meaningful way.
nommm-nommm 10y ago
>it seems like only in the tech industry is it assumed that the people doing the work deserve some of the rewards. https://www.nceo.org/articles/employee-ownership-100 https://www.nceo.org/articles/employee-ownership-100 That's the largest employee owned companies in America. There's a disproportionate number of grocery stores.

by owyn 10y ago

jjoonathan 10y ago

> only in the tech industry is it assumed that the people doing the work deserve some of the rewards That's only because the supply/demand situation of tech laborers gives us bargaining power at the moment. It won't last forever.

vinceguidry 10y ago
> That's only because the supply/demand situation of tech laborers gives us bargaining power at the moment. It won't last forever. Tech is unique in the job market in that it's much easier to move up the value chain relative to other types of jobs. There is very much a tech underclass of easily-replaced workers. As time goes on, more and more of these sectors become commodified. IT workers used to be really highly paid, now they're replaceable. PHP was once in high demand, now it's only a little better than being a IT worker. The question here is whether there will always be a sector for tech workers to move to where they can easily leverage themselves a seat at the table. I find it hard to believe that it'll suddenly go away anytime soon.
jdavis703 10y ago
Even non techies get large stock option grants, while an outlier the chef at Google made millions when they IPO'ed. At other places I've worked writers, designers, HR, tech support etc have all gotten options. Is this not typical?

zenkat 10y ago

Tech companies don't give options to employees because they "deserve some of the rewards". They do it because it's difficult to attract and retain top talent, especially for speculative start-ups. That's not the case for blue-collar jobs.

hackuser 10y ago

A theory: The ability to capture the rewards depends to a large extent on political power within the organization (i.e. rather than merit and market value). Management has great political power, naturally; that's why in some organizations even failing managers get massive bonuses, golden parachutes, etc.. For workers to have power they need to organize themselves, and that is what unions are: Political power for workers. People complain that unions are corrupt, which of course some are and to different degrees. That's also true of managers and anyone else with political power.

bunderbunder 10y ago
Yep. That's exactly why the idea of unions being necessary goes all the way back to the beginning of capitalist economic thinking. The first person to make a version of that observation was Adam Smith himself.

draw_down 10y ago

I used to have a boss who grew up and lived most of his life in Russia. Many times he would say to me: "that's capitalism, baby." I think it's a quote from a movie, he often spoke in movie quotes.

yummyfajitas 10y ago

As an alternative, perhaps Hostess could have paid their employees with $10/hour worth of equity and no cash. Would that have made you happier? I suspect the workers would not have liked it. They preferred cash to illiquid equity in a questionable company, and received it.

owyn 10y ago
That's not a realistic choice, so it's not a compelling argument. The workers in this case don't "prefer" cash, it is the only option. However, if there was a basic income in this country, I think workers in a situation could indeed make that choice. If it was $10 basic wage + $10 equity OR + $10 wage now there's something to discuss because that's a more interesting trade off. (((edit to clarify based on comments: yes I meant a $10 basic income + either ( $10 equity or $10 wage ) I didn't even comment on the parts of the story that actually made me unhappy, which was the ridiculous debt financing deal, the blatant union crushing, skipping out on pension commitments, and ultimately laying off 90% of the original work force in order to "extract value" from a mediocre junk food company which is just going to end up in bankruptcy again when they're done with it.
- poikniok 10y ago
  How is $10 basic wage + $10 equity vs + $10 wage a tradeoff? You seem to be missing the point.
  - Avshalom 10y ago
    10+(10|10) not (10+10)|10
- harryh 10y ago
  If we're talking about a basic income for just working aged Americans (because kids don't need it and the elderly are already covered by other programs) we're talking about roughly 200M people. 200M * 2000/hours per year * $10 hour = 4 trillion dollars a year. For comparisons sake the current federal budget is about 3.8T.

diogenescynic 10y ago

The same could be said about Walmart and the Waltons who do very little to help their employees or give back to society in any meaningful way.

nommm-nommm 10y ago

>it seems like only in the tech industry is it assumed that the people doing the work deserve some of the rewards. https://www.nceo.org/articles/employee-ownership-100 https://www.nceo.org/articles/employee-ownership-100 That's the largest employee owned companies in America. There's a disproportionate number of grocery stores.