Market-Based Management®

Do You Have a Bad Job?

Of course, whether you have a bad job or not is not something I can answer, but luckily some folks think they have figured out as to what a “bad” job really is. This article in the Arizona Republic (HT: Coyoteblog and apologies as I basically parrot his post), cites an unnamed study, which classifies 35% of Arizona jobs as “bad,” because they pay less than $17 an hour and offer no benefits. On the other hand, 22% of Arizonans apparently have “good” jobs, which the study defines as making more than $17 an hour with health insurance, retirement plans, and various other unnamed benefits. Unfortunately, as there is no link or naming of this study, I have no way of determining the “goodness” or “badness” of the remaining 43% of Arizona jobs, which exceed $17 an hour but fail to include all the “good” job basket of mystery benefits (however, considering the percentages of insured/uninsured most of these “limbo” jobs presumably come with the big benefit—health insurance). The 43% would also include entrepreneurs and the self-employed who cannot technically offer themselves any benefits. This also begs the question as to whether any of those in "bad" or "limbo" jobs happened to fall under the benefits of parents or spouses with "good" jobs.

Confusion over percentages aside, the whole idea of measuring “good” or “bad” jobs is pointless. For starters, a person’s evaluation of his or her job is their own. I know lots of folks who make great money with fantastic benefits and positively despise their jobs. I know others, who make little and get by without health insurance (usually because they are young and healthy), who are overjoyed by their work and overall existence. Furthermore, as Coyote points out, retirees (and there are a few of them in Arizona) who work part time in leisurely, but relatively low-paying jobs, would still hold “bad” jobs despite possessing insurance coverage through Medicare and probably already well stocked in the retirement plan department. The same goes for teenagers or college students who may work part time while remaining covered under their parents’ health insurance with no real need for a 401(k) or employer subsidized life insurance. The best (see “bad”) job I ever had was in grad school, when I also happened to be flat broke—but living fairly well in my statistical poverty and misery.

There also remains the “compared to what” issue. Ten bucks an hour ain’t a bad racket if you have no skills and may not even speak the language. Had this study been conducted in China, it would have found nothing but “bad,” jobs even though Chinese factory workers may earn wages thirty times better than their previously “bad” job of starving peasant. The lesson here is the power of subjective value. Whether it is compensation, working conditions, music, movies, or dinner, different folks value different things differently, at different times, places, and situations; making defining “good” or “bad” jobs from the standpoint of a third party a waste of time and effort in addition to communicating little useful knowledge.

Who You Calling Stingy?

One of the most frequent charges leveled at market economies is that they promote greed and little care for the less fortunate. This is perhaps one of the greatest falsehoods ever perpetrated in the last 200 years. Not only has economic development (unique to market economies) brought cheap food, clothing, transport, housing, entertainment, luxuries etc., etc. to the masses, but societal wealth actually births a culture of giving. Although many countries often criticize the U.S. government for giving a relatively small percentage of GPD in foreign aid (even though it gives the most in dollar terms—by a factor of 2 to 1 over the number two giver—Japan), they overlook the fact that Americans themselves voluntarily give more to people in other countries than any other nation on the planet. In fact, at $34.8 billion individual Americans choose to give 83% more to foreigners than their own government and more than four times as much as the governments of the next four major donors—Japan, France, the United Kingdom, and Germany.

Even more striking is the apples to apples comparison between private giving. The $34.8 billion given by Americans is nearly 22 times that given by individuals in the United Kingdom, which is home to the world’s next most generous persons with Germany, Canada, and Australia rounding out the top five. While $34.8 billion is a lot, it is further dwarfed by the nearly $295 billion Americans gave in total to charity in 2006—most of which goes to organizations renowned for their effectiveness in stretching dollars for the alleviation of society’s ills.

The purpose of this post is not veneration of the generous, nor castigation of the stingy, but to highlight the fact that market economies are prosperous societies; and prosperous societies are generous societies. Far from reckless and uncaring, “cowboy capitalists” appear more than willing to share the contents of their saddlebags. The more there is; the more there is to share. If this is true in countries that embrace market principles, then it can be true in companies that do the same.

In Praise of Money

I wanted to write about this story months ago, but held my fire because I couldn’t help but feel sorry for Mark Boyle—a man who planned to walk from England to India without any money, relying on the kindness of strangers. He did manage to make it as far as Calais, France, where he discovered to his surprise that people thought he was a wandering freeloader and promptly withheld their charity. Mr. Boyle doesn’t believe in money, and thus adds his name to long tradition of disdain for currency that probably began right after Croesus put his first stamp on a little bead of electrum.

Of course, there is something very natural about disliking the institution of money—people will assault, maim, and even kill for it. However, money is the handiest of inventions and paradoxically the very thing that makes the charity that Mr. Boyle so desperately needed to make his pilgrimage possible. Money is not something imposed on people, but an institution that arises naturally in society. Even if there are no notes or coins available, people will find something—anything—to act as a medium of exchange in order to compare apples to oranges. Native Americans (often erroneously cited as examples of non-market societies) used sea shells. Constantly starved for cash by the British, American colonists traded receipts for tobacco. Gold and silver are traditional favorites, but they have occasionally been supplanted by such commodities as salt, beaver pelts, peppercorns, and even chocolate. My personal favorite spontaneous money supply is the curious bi-commodic system of cognac (used for large purchases) and cigarettes (used for smaller transactions and to make change), which prevailed in Western Europe following World War II.

While disdain for money is certainly understandable, those who hold such views mistakenly forget why money exists. Strangely, money’s critics usually champion some sort of barter system, which is exactly what money is—a system of barter through a mutually agreed upon medium of exchange. Money allows division of labor and ease of exchange essential to prosperous society, and only a prosperous society can afford charity (or welfare for that matter, which is an institution unique to countries with market economies). Mr. Boyle may make it to India eventually, and he might even do so without any money; but he will not be able to do so unless the institution he despises paves the way with prosperity.

In case you wondered if prices really do guide behavior...

The Department of Transportation reported Friday that Americans are driving 4.3% less from this time last year (that's 11 billion fewer miles). 

Ford Motor Company's Mark Fields (President of the Americas) says, "Rapidly rising commodity prices -- particularly steel prices -- and higher gasoline prices that are accelerating consumers' shift away from large trucks and SUVs together are having a tremendous impact on our sales, our manufacturing operations and our profitability as we look to 2009."

Just before the Memorial Day weekend I overheard some interesting conversations in the elevator...  One person saying she had been planning to drive to Savannah to visit friends and hang out - but now she'll stay in town and do other things instead.  Another person complained about the price a car dealership bid on his used SUV tradein - he said, "I can't afford to swap out to a hybrid - their offer on my trade-in doesn't even cover the loan I have on it."  A friend offered, "you could ride MARTA - aren't you near the Chamblee station?"

If you are interested, here is a very well done presentation on what's driving gasoline prices and where they might be headed in the future.  But in decisions where gasoline looms as a key driver, you (and everyone else) already have what you need to make a good one - its price. 

People who "Know" are People who "No."

In Border's recently, randomly wandering the aisles, a title caught my eye: Think Better: An Innovator's Guide to Productive Thinking by Tim Hurson.  Unfortunately it is not available yet on the Kindle (my latest omg-you-have-to-have-this), so I sat down with a cup of coffee and browsed... which led to reading... and the next thing I knew it was late and I'd finished it. 

There's nothing "breakthrough" in the text - but it does nicely consolidate into one place an easy-to-read introduction to the general steps that tend to lead towards more effective thinking and problem solving and offers up several interesting tools to facilitate them.  What made the book enjoyable to me, however, were his discussions about the ways we sabotage ourselves as we attempt to solve problems and innovate.  He makes good use of examples and humor.  There are some real Yogi-Berra-ish gems of turns of phrase (like the one above in the title) that make some of the more insightful concepts memorable.

In On Being Certain: Believing you are Right Even When You're Not, Robert Burton takes entire chapters to delve into the medical evidence, biology, metaphysics, phenomenology and epistemology behind Hurson's quip and gives sound reasons to use it as a memory hook.  He shows you the big difference between a feeling of knowing and actually possessing knowledge. 

Much of the stuff in Hurson's text was like that - it neatly summarized in easily digestible chunks with strong memory hooks a substantial volume of books and articles in any specific area or topic on problem solving, thinking, or innovation and gave practical steps and tools to experiment with if you and your team want to improve.  It is not a replacement for the MBM Problem Solving Process - but rather gives you some thought-provoking ideas and tools that might improve your ability to apply it.

I'd be curious to hear from others what books or articles they've found particularly insightful in this regard.  Please use the comment section.