Freezing executive pay opens up money for workers

An article in The Guardian earlier this week caught my eye. CareCentrix CEO John Driscoll penned an editorial “We froze the salaries of 20 executives – and it improved the lives of 500 employees.” Driscoll took the reins of this struggling healthcare company, whose financial troubles included a significant amount of staff turnover.

Driscoll worked with his leadership team and Human Resources to make a number of changes, but he felt that was insufficient to right the ship. So, he made a decision to find more money to keep workers who were struggling and working multiple jobs.

As Driscoll wrote in The Guardian, “What that meant for our company was that if we just froze the wages of our most senior team – less than 20 executives – we could radically increase the wages and improve the lives of nearly 500 of our teammates.

The conversation with our executives was straightforward. We were in the midst of a turnaround. We were demanding much from every corner of the company. Small financial sacrifices from those at the top could be life changing for those at the bottom of our wage scale. We needed to do it to build a real sense of Team CareCentrix. They agreed. With joy, we announced in January 2015 that our minimum base pay for employees would go up to $34,000, or the equivalent of $15 per hour.

Raising wages in the midst of a business turnaround was not easy. We needed our executive team to buy into a vision of business success where every employee had a fair shot at success. It worked.

Our business has tripled over the past five years. Our minimum wage is now approaching $16.50 per hour and last year we broadened profit sharing to all levels of the company.”

This caught my attention as the US far exceeds other nations in the ratio of CEO pay to average worker pay and has for some time. Having been a former Compensation & Benefits manager, manager of people and consultant, executive pay is much more upwardly elastic than that of average workers. Average worker pay has a lid placed on it through the budget process – which often overemphasizes past, current or expected troubles. Also, downsizing at the time of annual raises facilitates the lowering trend on average pay increases as folks who would have received little or no increase are let go – so folks that remain receive suppressed increases to make the percent increase in the budget work.

What I like about this CareCentrix example is the thought process and solicited buy-in from rhe executives. Yet, it need not take a burning platform to make needed change. There is a productivity cost to turnover that impacts the bottom line due to constant churning, replacement, recruitment and training of staff. Keeping more people longer is accretive to profits.

Some larger national companies have recognized this and raised their floor pay levels – Bank of America, Wells Fargo, and Walmart are in this group. So, thoughtful discussions are needed, in my view, around these issues irrespective of or along with governmental imposition on increased minimum wages.

Renewable energy has become cheaper than coal

An article in The Guardian caught my eye yesterday, entitled “‘Coal is on the way out’: study finds fossil fuel now pricier than solar or wind.” This is not surprising to me as the production costs of solar and wind energy have significantly dropped over time, yet it likely catches some as a big surprise. Per the article:

“Around three-quarters of US coal production is now more expensive than solar and wind energy in providing electricity to American households, according to a new study.

‘Even without major policy shift we will continue to see coal retire pretty rapidly,’ said Mike O’Boyle, the co-author of the report for Energy Innovation, a renewables analysis firm. ‘Our analysis shows that we can move a lot faster to replace coal with wind and solar. The fact that so much coal could be retired right now shows we are off the pace.'”

When all of the costs are factored in, coal is even more expensive than indicated above. For example, coal energy continues to be costly long after it is burned through ash maintenance, leakage and litigation. Yet, now production costs are largely higher for coal than renewables. As the article notes the decline of coal is passed the tipping point.

But, don’t just take the word of this article. In the first two years of the Trump Presidency, more coal plants have been closed than in the entire first four-year term of Obama’s Presidency. This would have happened anyway regardless of who was President, but I mention Trump as even someone who campaigned on keeping coal plants open cannot stave off this trend.

If that is insufficient, note there are currently more than four times the number of solar jobs than coal jobs in the US. And, the wind energy jobs are growing very quickly in the Midwest, with Texas, Iowa, North Dakota, and Minnesota among others leading the way. In an article called “Will 2019 be the year of the turbine – wind energy continues to surge in Texas” in the Caller Times, in 2017 Texas provided about 15% of its energy through wind and has and will continue to increase that percentage in 2018 and beyond.

I feel for the coal miners, but they are owed the truth and help in retraining for new jobs and some transitional financial support. In the same areas where coal is found, the wind blows and sun shines. I implore legislators to help invest in the new economy in these areas. This should have been happening all along as this trend is not new.

 

 

Just a thought

Where do you get your information? I ask this because our President seems to get his information from less than reliable sources and then criticizes more legitimate sources for disagreeing with him.

Here are a few questions to ask of your sources:

– if a source of information screams at his audience while his head is turning a very scary shade of red, he might not be a good source of information.
– if a source of information has such a raspy voice from shouting at the wind and name calls everyone who he deems appropriate, then he might not be a good source of information.
– if you get your information from Facebook or Twitter, you need to look carefully at sources cited and use the Twitter feed for headlines only to cause you to dig further on more legitimate sources.
– if you are getting your information from a source that must advertise they are fair and balanced to make up for their bias and inconsistent veracity, then you might want to consider another source for validation.
– if you are getting your information from the current President, stop because he is an unreliable source and has been most of his life.

I encourage you to check multiple sources. I am often asked where I get my information. Several places – PBS Newshour, BBC World News America, NPR, Reuters, and The Guardian. I read articles from my browser feed which come from The Wall Street Journal, The Washington Post, New York Times, Newsweek, Time, etc. And, my local paper, The Charlotte Observee is a good source for local and state news.

A good sign a news source is reputable is they print errata or correct portions of stories that prove to be inaccurate. Admitting mistakes is a sign of intelligence.

I would also ask people who say inane things about their sources. Our President cites a couple of sources that are known for making things up or creating conspiracies. He even put one on the White House. And, he has actually appeared on one where the host is on record that the Sandy Hook massacre was staged, as an example of his lack of veracity.

Before someone claims fake news, he needs to make sure the things he is saying are legitimate whether it is about his electoral college landslide, voter fraud or unemployment or crime rates.

A few suggestions for a better 2017

As many blogs have highlighted, 2016 has been the most interesting of years. My biggest concerns go beyond any electoral issues. They are the decrease in civil discourse and the increase in fake news and misinformation.

On the lack of civil discourse, we must start listening to each other and not just to respond. We need to listen to understand the other’s point of view. We need to decrease the decibel level and the use of name-calling and labeling.

The louder people are and the more shortcuts they use by labels show their argument is poor. I personally find labels to be a lazy form of argument to dismiss the other’s point of view. I have been called a tree hugger for this purpose, but I usually counter that I am also a capitalist to make that person think a little more.

On the fake news and biased news sites, we must do a better job of labeling the veracity of these entities. If you are going to call yourself a news source, then you need to be doing what it takes to be right far more than you are wrong. And, you need to have an errata where corrections are made public. We must also do our part to understand the veracity of our news sources.

So, what can we do better in 2017? Treat others like we wanted to be treated would be a huge plus. Listen and provide feedback like you want to receive it. Also, know the following statements:

– neither political party has all the good ideas and both have some that are not so good or don’t factor in the holistic causes of the problem.

– political incorrectness does not give anyone license to lie or be a jerk. One can be candid without taking someone’s head off.

As for the fake news sites, be on your guard. If it reads like a tabloid, then that is a sure sign. If mainstream news is not covering an issue, but this source is, check out its veracity. If it says Sponsored Advertisement on it, that is opinion, not news. If you are getting your news from shock jock entertainers, that is opinion. Also, be guarded of Facebook forwarding of news and even blogs on this source (by the way, my site is not news and represent the opinions of its user).

These fake news creators are very good as they make a nice profit through advertisements. They can afford to be good at it. So, it does take effort and homework on our part.  I read a variety of sources, Reuters, The Guardian, Wall Street Journal, news summaries and watch or listen to several others – PBS Newshour, BBC World News America, NPR, some mainstream news, etc.

Our issues are hard enough without us debating over the facts. We must gain common ground, listening and asking questions. Otherwise, we will solve the wrong problem.