Corporate Responsibility

Things have shifted dramatically in my lifetime. The responsibilities that corporations take for their associates/employees quite possibly peaked when I was a kid (up considerably from the industrial revolution), and have been regressing ever since. If you walk into a corporate job today, directly out of college, you will be expected to partially fund your health insurance, fund the majority of your retirement account, and carry the entire load of dental, disability, and vision. Less than 10% of corporations offer pensions to new employees.

Much can said about why this has occured? Constant pressure to maximize corporate returns, an inability for current profits to cover recurring non-revenue generating expenses...GM publishes that every dime of their profit is offset by the health care of their retired pension holders...that is mind blowing for the 24th largest economy in the world.

I bring this topic up because a friend of mine recently sold his business. I was also very close with several long term employees (20+ year men). One of these 20 year men pulled me aside and asked..."what about me?" - refering to the business sale and potentially sharing the wealth. The funny thing was his first look was at the new owner...he told me he approached the new owner and said..."Um, excuse me boss, but you just paid $$$ for this business to my old boss. I helped build this business, is there a little something due me too?" After I recovered from the naivity of his question, and realized he was relaying this to me because he was serious, I asked him to explain further...so he did...

"I am a major reason the business was able to garner the sale price it was, I think I am due some of the proceeds from the sale."

I explained to him that his beef, if he had one, is really with the seller. Theoretically, he drove up the value of the business through his efforts, and if he is due some "pot of gold at the end of the rainbow" it is due from the seller, not the buyer.

I went on to explain that technically he was compensated for his efforts every step of the way during the life cycle of the business, and that he was really due nothing. I used as stock purchase as an example...if I buy 100 shares of GE stock for $10 per share (that's $1000 for my non-math pastor friends), and sell it 5 years later for $3000, I'm not expected to divy up a portion of my $2000 earnings among the 100,000 GE employees. Am I?

So, here's the dealio. Corporate responsibility to individuals peaked about 30 years ago. It is clearly on a down swing. Where does it bottom out? As a business owner, how far do I let it go? Do I follow big business, like I've been doing so far...which has been pretty easy because that direction means more profits? If it swings back up, do I follow quite as easily? Will the labor market ultimately decide what i do? (probably)

So this is what I'm thinking today.