To Understand Rising Inequality, Consider these Exemplary Janitors at Kodak & Apple Companies, Then and Now | NYT

To Understand Rising Inequality, Consider the Janitors at Two Top Companies, Then and Now; Neil Irwin; In The New York Times (NYT); 2017-09-05.
Teaser: Focusing on core competence and outsourcing the rest has made U.S. companies lean, nimble and productive. It has also left lots of people worse off.

tl;dr → Rochester Model, the Golden Age, was good. Cupertino Model, the Modern Age, is bad.

Exemplars

Gail Evans
Age ??. Staff, “$16.60/hr” in 1980 dollars (maybe). (ex-)janitor, Building 326, Eastman Kodak, Rochester NY, circa “the 1980s.” (thirty five years ago)
Currently: Chief Technology Officer (CTO), Mercer (outsourced HR, staff 20,500, 40 countries, Jimi Wales Wiki).
c.f. Gail Evans’ Unconventional Journey to the C-Suite; Anita Borg Institute.
Marta Ramos
Contractor, $16.60/hr, servicing Apple, Cupertino CA, contemporaneously.
Claim: Marta Ramos can only aspire upwards to be a supervisor of her “team,” which pays but $17.10/hr = 0.50/hr + $16.60/hr

Mentions

  • Core Competence, a theory of business operation.
  • Community, a theory of business obligation.

Claims

  • Kodak was the Apple of its day.
  • Kodak gave back to the community of Rochester.
  • Kodak was “middle class,” a salubrious intersectionality.
  • Apple, is the Apple of its day.
  • Apple does not give back to the community of Cupertino, not really.
  • Apple is “average salary comfortably in the six figures,” whatever that means, it was intended as an epithet.
Verifiable
  • Kodak filed for bankruptcy protection 2012-01-19, aged 131 years.

Exemplars

Old, Northeast
…and were good
  • Kodak, bankruptcy 2012.
  • IBM, consent decree 1956; near death experience, starting in the 1983, continual downsizing, shedding lines-of-business; reoriented as a service bureau, under the Watson brand.
  • AT&T, breakup 1982-01-08; various downsizings, divestures, dis-synergies, etc.; reorganized, & reconstituted.
New, West Coast
…and are bad.
  • Apple
  • Alphabet
  • Citigroup [east coast]
  • Facebook
  • Federal Express [east coast]
  • Google
  • JPMorgan [east coast]

Pantheon

  • George Eastman
  • Steve Jobs

Quoted

  • Some staff worker, a specimen, at Kodak, drove forklifts, now retired; ex-Navy
  • Some contract worker, a specimen, at a supplier to Apple, doing Quality Assurance on maps <ahem?>executing test plans?<ahem?>, currently employed; no education cited.
  • Someone from an HR firm.
  • J. Adam Cobb, the Wharton professor.
  • Rick Wartzman, senior adviser at the Drucker Institute and author of “The End of Loyalty,” sa
  • Someone from an HR firm.

Quotes

<quote>But a generation ago, big companies also more often directly employed people who installed products, moved goods around warehouses, worked as security guards and performed many of the other jobs needed to get products into the hands of consumers.
In part, fewer of these kinds of workers are needed in an era when software plays such a big role. The lines of code that make an iPhone’s camera work can be created once, then instantly transmitted across the globe, whereas each roll of film had to be manufactured and physically shipped. And companies face brutal global competition; if they don’t keep their work force lean, they risk losing to a competitor that does.</quote>

<quote>But major companies have also chosen to bifurcate their work force, contracting out much of the labor that goes into their products to other companies, which compete by lowering costs. It’s not just janitors and security guards. In Silicon Valley, the people who test operating systems for bugs, review social media posts that may violate guidelines, and screen thousands of job applications are unlikely to receive a paycheck directly from the company they are ultimately working for.</quote>

<quote>Firms in the United States are legally required to offer the same health insurance options and 401(k) match to all employees — meaning if those programs are made extra generous to attract top engineers, a company that doesn’t outsource will have to pay them for everyone.</quote>

<quote>There is plenty of logic behind the idea that companies should focus on their core competence and outsource the rest. By this logic, Apple executives should focus on building great phones and computers, not hiring and overseeing janitors. And companies should outsource work when the need for staff is lumpy, such as for software companies that may need dozens of quality-assurance testers ahead of a major release but not once the product is out.</quote>

Referenced

  • An Opinion-Editorial; Larry Summers; In The Washington Post; 2011-11-20.
    Larry Summers, faculty, Harvard.
  • Study. That. Shows. Michael Mandel, Progressive Policy Institute. 2017-09.
  • Arindrajit Dube (University of Massachusetts-Amherst), Ethan Kaplan (Stockholm University) Study. That. Shows.. working paper? 2010.
  • J. Adam Cobb (Wharton School, University of Pennsylvania), Ken-Hou Lin (University of Texas); Study. That. Shows.; In Their Blog; 2017-02.

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