Thursday, 13 February 2014

An Abundancy of Redundancy (aka An Embarrassment of Poverty) But Does It Have To Be Like This?

Visiting my widowed mother in Ireland last week, I happened upon a dusty but trashy looking old paperback in a bookcase called 'How To Be Rich' by J. Paul Getty. I picked it up and was surprised to find it a riveting read, elegant in its straight talking economy of words, as it detailed Mr Getty's rise to success from his early wildcatting days as an oil (black gold rush) seeker in early 20th century California through all his subsequent triumphs and failures along the way, refreshingly devoid of business bullsh*t speak, but sharing his business wisdom with all who wished to learn.

Naturally I had heard of Mr Getty (one of the world's wealthiest men), but I had never paid much heed to him or his life, except to recall he was also renowned as a miser, even turning his house phone into a payphone to deter guests from taking advantage.

Yet reading his book, one of the most startling passages of all went as follows:

'Labor costs are also high but I've often observed that the man who complains the loudest about excessive wages is the same one who spends fortunes on advertising and sales campaigns to sell his products to the millions. How on earth he expects the workers who form the bulk of those millions to buy his chinaware, garden furniture or whirling spray garden sprinklers unless they are well paid is beyond my comprehension. Labour is entitled to good pay, to its share of the wealth it helps to produce. Unless there is a prosperous 'working class' there can be no mass markets and no mass sales for merchants or manufacturers - and there will be precious little prosperity for anyone.'

How has Britain so seemingly neglected this absolute bedrock of a truth to eat out its own heart? Everywhere around me I see working class jobs disappearing fastest of all as shops either close down or become self-automated and once-safe council clerk jobs, librarian jobs and bank jobs are also being shed by the thousand. Customer feedback surveys such as the easyJet one I just completed are evidently geared towards dispensing with the check-in staff and reducing the number of flight attendants. Even Tourist Information offices are suddenly closing as if to say. 'Sod off tourists - you've all got smartphones so you don't need human beings to welcome you to this area and assist you any more!' Yet who do the powers that be think they are catering for if not the normal average-earning individual whom they are so quick to shed?

And where are all these people going to go and what are they supposed to do for the rest of their lives? Claim benefits? Emigrate? I know I've written similar postings in the past, but there are few subjects that remind you of them on a virtually daily basis quite like this subject does. Since I have been away for a week two of my favourite stores have closed down. Meanwhile in Ireland my old once-prosperous hometown of Ballymena is looking increasingly ragged round the edges and the poor old county town of Antrim has been decimated altogether, its once-gleaming and bustling 'Castle Centre' now like the Marie Celeste!

The top 10% of UK households are now said to be 850 times wealthier than the bottom 50% and the wealth inequalities continue to widen.

At the top end of the scale company director salaries have increased from the traditional 8 x the average worker's salary to 25 x and beyond, the justification being that 'you can't get the best for less', despite some spectacular and even criminal falls from grace by selfsame 'top' company directors and bankers. This also fails to take into account the inevitable drop in morale, and therefore productivity in the staff under such an overpaid chief, not least if they are being treated in a way engineered to subsidise the cost to the concern of this director's (and sometimes co-horts) salary, whilst simultaneously being patronised by company literature and events pretending they are valued. In the last fortnight it has emerged that the chief of Save the Children is earning £234,000pa, a fact which has outraged donors and the many volunteers who work for the charity for free and naturally consider a great deal more per £ should be going to children. It is all very well some pundits commenting 'Well you can't have a muppet running an international charity', but who is to say that someone who did it for say a quarter of that salary would be a muppet? Or any more of a muppet than the individual currently running it? On this basis I hereby allow my name to be put forward to do at least as good a job of saving children at a fraction of the salary...

While Mr Getty may well have been a miser on the personal front, he took his responsibilities as an employer generating wealth and employment very seriously it seems, and never lost sight of the bigger picture. In his view too, managers were there to 'direct' operations, not dictate or micromanage them, and imaginative thinking was always encouraged in employees, as was the feeling they had a personal stake in the success or failure of the company which inspired them to think of their own efficiencies and improved ways of doing things. He also found that formal education was little indicator of what made the best employees and was never scared of competing internationally, decades before most companies began to think globally. Could that be why so many of his companies and enterprises still exist and thrive today, nearly 40 years after his death? 


Steve said...

We need to be working less hours but earning more money. We are the donkeys of Europe and it shows. More money and more leisure time would mean a stronger, more buoyant economy. And I'm not just saying that because I want a holiday.

Marginalia said...

I think very many of have the unsettling feeling that something is not quite right. For a few, there is a race to the top. For an increasing number it is a race to the bottom.

I see little difficulty in a bank making huge profits if the government prints money and hands it over to banks a give away price. It doesn't require a managerial genius to set up a plant in a low wage country, close down the plant here and double the profits.

It takes some vision, courage and leadership to resist the neo-liberal dominance of our economy by big money. National interest is not the same as big businesses interest.Governments need to challenge the power of 10% and instead seek to improve the lot of the 90%. Not complacently see just growth in GDP, as the goal without some sense of fairness and redistribution.

Marx and Mr Getty have more in common than they'd be comfortable with.

Wisewebwoman said...

Great post Laura. I, for one, am much, much poorer than before. Even though, to my great relief, poor is not my frame of mind, per se. Which saves me from despair.

I've seen shocking changes in our world in my life time. The greed of the (actually much less than 1%) is without bounds. The (more than) 99% suffer and trudge on.

The future holds absolutely no hope.


The Poet Laura-eate said...
This comment has been removed by the author.
The Poet Laura-eate said...

Steve - quite so. There's little point having the leisure time if one doesn't have sufficient money to enjoy it.

Isn't that just he irony Marginalia? One would expect a better system under neo-liberalism but they seem to be steering us in an even worse direction than the tories! Strange indeed that Mr Getty probably had more in common with Marx than he'd have cared to admit (than most paid-up Marxists!)

WWW - sorry to hear that you are so much poorer than you used to be. Thank goodness for all the other riches in your life, eh? I fear you are right about the way things are going.