A provocative analysis of how government presence in the workplace has caused diminishing profits for American businesses and has led to increased levels of unemployment. As more and more workers are being placed on unemployment, the need for bold and immediate action is necessary. The proposed solutions offered by politicians will only stifle job growth and economic prosperity for both businesses and affected individuals. The time has come to develop a new system, one that stimulates job growth, helps the unemployed return to work to become productive contributors to the economy, and still leave intact a financially solvent system that can provide benefits to individuals who have lost their jobs. Sinas lays out a viable solution to our unemployment crisis, and takes the government to task for its increasingly destructive intervention in the workplace.
Job Killers
How Government's Increasing Role in the Workplace Reduces Profits and Increases Unemployment ... and the Solution that can Get Americans Back to Work NowBy Dan SinasiUniverse, Inc.
Copyright © 2010 Dan Sinas
All right reserved.ISBN: 978-1-4502-1057-7Contents
Acknowledgements.......................................................viiPrologue...............................................................xiiiThe Critical Role of the Employee......................................1The Pendulum...........................................................6Capitalism Redefined...................................................23The Demise of Personal Achievement.....................................29The Assault on Business Continues......................................40The Unemployment Solution..............................................67Other Recommended Reforms..............................................81At-Will Employment.....................................................82Title VII..............................................................84The Equal Employment Opportunity Commission (EEOC).....................88Conclusion and Call to Action..........................................95
Chapter One
The Critical Role of the Employee
After realizing that in order to stay in school I was going to have to actually study, go to class, and work hard at it, I finally got my act together. I eventually went on to graduate school and received a master's degree in labor and industrial relations from Michigan State University, got married, moved to Texas, and obtained my first job in Dallas working for TRW Optoelectronics Division. My job title was Human Resources Representative, and my primary responsibility was recruiting engineers and other professional employees. Attempting to learn what we actually made and how we made it, I asked one of the engineers who worked there if he could show me around and explain what we manufactured and how it was done. The products we made were essentially computer chips, infrared light-emitting diodes, and other microelectronic devices. I remember being shown how these devices were produced and wondering who had the brainpower to think of such amazingly technical things. During my plant tour, we came upon several areas where the engineer explained how just one little mistake made by an employee in the manufacturing process would result in thousands of computer chips being scrapped and deemed useless. Such an event would cost the company tens of thousands of dollars in lost revenue. One little mistake and the company would suffer serious financial repercussions.
It was an eye-opening experience that taught me the significant relationship between employee performance and business survival. Poor workmanship, lack of concentration, inadequate effort, insufficient training, poor execution, and failure to follow procedures all play a significant factor in whether a business makes a profit. It was then that I realized that my role as a recruiter was essential to our business, because finding, developing, and retaining the very best employees was the key to our company's success. It is just like in sports where teams that possess the greatest amount of talent and consistently demonstrate the strongest work ethic are the teams that regularly compete at the highest levels. In business, the collective skills and abilities of the employees in any given organization will determine whether the enterprise grows or contracts, whether it innovates or follows, and whether it operates profitably or at a loss. Any given business is nothing without employees-whether there are thousands or just one. It is people who make every decision, plot every strategy, execute every sale, create every product, and deliver every service. For every action a business takes, an individual or group of individuals was responsible. From the development of marketing strategies to the sweeping of the floors, such activities are performed by employees. Even when technology is prevalent in a certain business and robotic means are utilized to manufacture products or assist in the delivery of services, there are still humans behind the development of this technology, the programming of the machines, the decision to purchase the technology, and the determination of how it is to be deployed. There is no escaping the human element or the necessity of human influence in any given business activity. Therefore, it is safe to say, without employees, there will be no revenue generated, and without revenue, there can be no profits.
Conversely, human capital is also one of the highest cost elements in any business. Labor cost is normally the highest financial outlay, or, if not the highest, it is a close second to material cost. The cost to hire, train, compensate, develop, and manage a single employee is very high. The price for making hiring mistakes is also significant when you factor in the cost of errors, scrap, rework, production delays, service interruptions, and damaged customer relations. These expenses increase further when you factor in the cost it takes to rehire, retrain, and redevelop a new employee, plus the cost of going without a trained employee for whatever period of time it takes for new employees to become proficient in their position. Therefore, it is imperative that human resources strategies are focused on finding and retaining employees who add value to the organization, not cost. There is no guarantee that the contribution an employee makes to the bottom line surpasses the total cost of employing that individual. I've heard many people in business exclaim that employees are both assets and liabilities. I disagree with that view. I believe any given employee is either an asset or a liability. It's an either-or proposition. In every single employment relationship, in every single company, the employee is either adding value to the bottom line or adding nothing but cost. Determining which employees are value adders and which employees are cost drivers is the key to remaining competitive.
There is a third perspective from which to view the employee. Employees can also expose companies to significant legal liability. The myriad of employment laws, many of which will be subsequently discussed, create a tremendous amount of potential liability for the employer. The sheer number of employment laws that have been enacted, and the system of enforcement agencies to monitor the workplace, increases significantly the chances of being sued by a current, past, or prospective employee. Under any given employment law, the regulation requires the employer to engage in certain actions or behaviors, or prohibits the employer from engaging in certain actions or behaviors, and many times, they do both. Employees and applicants may sue their employers for any alleged violation of these laws, and often do so even when there has been no illegal conduct. The costs of defending employment claims are immense, and once the charges are filed, the business is forced to spend significant amounts of money to defend itself, regardless of its guilt or innocence. The system is tilted in favor of the employee by facilitating legal action against employers, yet provides little to no relief for employers when defending themselves against unfounded claims, frivolous lawsuits, and/or charges that have no merit. When a disgruntled employee-terminated for poor performance, unsatisfactory attendance, or any other justifiable reason-alleges illegalities, the employer must respond to these charges, invest a great deal of time and energy in crafting its response, and spend significant amounts of money trying to prove its actions were legal. If the employer "wins" and the charges are dropped, the employee simply walks away from the proceedings, without having suffered any financial loss. The "winner" has no means to recoup the monetary losses related to its defense and also faces the possibility of having to repair its image to its staff, associates, and customers.
Consider also the fact that employees essentially have "two bites at the apple" when it comes to charging an employer with wrongdoing. First, the employee can file a charge with the Equal Employment Opportunity Commission (EEOC) alleging discrimination. The EEOC then will begin an investigation into the charges by demanding from the defendant company the submission of records, files, statistics, position statements, and any additional documents they deem necessary to make a determination of the merits of the charge. This process can take anywhere from a couple months to a couple years. The EEOC can choose to sue the employer on behalf of the employee (or similarly situated employees), they can attempt some sort of settlement from the employer, or they can issue a "no cause" finding, meaning they will not pursue the matter any further. At this point, the EEOC issues a "right to sue" letter to the complainant, indicating the employee can pursue civil litigation through the courts by suing the employer on his own.
The employee, therefore, has two options: utilize a governmental regulatory agency to pursue a legal claim against an employer; or, if the governmental investigation results in no action against that employer (presumably for lack of evidence of any wrongdoing) the employee can then take those same allegations to an attorney. At this stage, the employee has the right to, once again, bring action against the employer, trying one more time to extract some financial settlement. If settlement demands don't bear enough fruit, the employee may elect to take the case to trial. Unlike our criminal justice system that prohibits an individual from being charged twice for the same offense under the "double jeopardy" rule, it's perfectly legal to file the same charges twice against an employer. Realize also that when attorneys take these cases, they almost always accept them on a contingency basis, meaning the employee pays nothing to the attorney unless there is an award or settlement in the favor of the employee. This means the employee has spent nothing to require the government to investigate the allegation of wrongdoing, and if that agency finds no wrongdoing on the part of the employer, the employee then has the second "double jeopardy" opportunity to utilize our court system for the same purpose, all the while not paying a single penny to get these charges pursued.
Unfortunately, the employer, on the other hand, has to spend thousands of dollars answering these charges, not just once to the government, but also in many cases a second time to the retained plaintiff's attorney. And if the employer "wins," they are still deep in the till paying to defend their actions, while the employee, who was a two-time "loser," has paid nothing ... not a single penny. This system is inherently unfair to the business owner as there are no possible financial repercussions for the employee if their case is found to be without merit, or even frivolous, not once, but twice. This unbalanced system does nothing but encourage and facilitate litigation. There is no apparent concern for the significant negative impact these legal proceedings have on employers, or the resulting damage incurred in terms of lost revenue, exorbitant expenses, demoralized staff, damaged image, and overall bitterness that boils when accused of something that is just not true. We have a system that basically says, "Go ahead and file a charge, or sue, because you have nothing to lose and much to gain." This is a purposely designed system that tilts the scales of justice against the employer and in favor of the employee.
Therefore, it is extremely important for a company to be continually mindful of the potential cost of noncompliance. There is an undeniable link between employees and the bottom line. The common denominator for business success, job growth, economic expansion, and generous tax receipts is a high-performing employee. Organizations that have the ability to recruit and retain top talent will be at an advantage. Just as critical, organizations must also have in place a system that facilitates the identification of poor performers who add cost, but no significant value to the business, and then eliminate them from the organization. When we understand the relationship between employee performance and business success, and when we understand the link between business success and economic vitality, we should be driven to formulate policy at the national level that encourages businesses to hire and retain top-level performers. We should also have a system of laws that do not act as barriers to businesses that wish to eliminate employees who underperform. Unfortunately, that is exactly what is not happening. Government has assumed a much more active role in the workplace and has continued to steadily increase its intervention in the private sector over the last twenty years. While some of the laws that have been enacted are reasonable, many are excessively far-reaching, overly complex, and counterproductive to business productivity and economic performance. But it is evident that Congress does not see things quite that way.
The Pendulum
Government intervention in the workplace is expanding at an ever-increasing rate, and the legislation that has been passed over the last twenty years has been increasingly burdensome on businesses, especially small businesses. Such laws have the effect of curtailing the rights of the business owner to hire, fire, and utilize the employees in a manner that best suits the needs of the business. There is a need for certain legal restraints on employers, and I am in no way advocating the elimination of employment laws or proposing we give businesses unencumbered rights to do as they please. But there needs to be a balance. We should enact laws that protect employees from abuse and exploitation, while at the same time provide businesses with protections from unnecessary governmental interference that acts to harm the ability to be profitable. The pendulum of regulation needs to be centered, neither too inclined to protect employees nor too inclined to protect businesses. When the pendulum swings too far to the side of business, the likelihood of abuse and exploitation by the employer increases, which exposes employees to potentially harmful behaviors. When the regulatory pendulum swings too far to the side of employees, undeserving individuals frequently obtain undue financial gains, and businesses are often forced to incur the cost of burdensome legal proceedings, unnecessary litigation, and steep legal defense expenses. Neither of these extremes is beneficial to our nation's workplace or our nation's economy.
If we look at the historical record of congressional activism in the workplace, we see where there were many instances where employment laws were indeed necessary to curtail abuse and exploitation of the worker. Looking back in our country's history, we find many different ways in which the workplace has been structured and managed, and we see varying degrees of government intervention and control. If one was to view the relationship of the extent of government control against the freedom of the business owner to do as he or she pleases, they are in inverse proportion. The more the government intervenes, the less the business owner controls. For example, total absence of government control or intervention in the workplace would be what characterized slavery. There were no restraints on the business owner over his employees. As a matter of fact, slaves were not even considered employees but property to be bought and sold as the owner deemed necessary. Eventually, such abusive and abhorrent work relationships were eradicated and made illegal. It is certainly an example of the type of governmental intervention that was not only necessary, but morally justified on all fronts. We as a nation could simply not allow the enslavement of other human beings. Making such practices illegal was the only way to eradicate slavery, and we were right and just to do so. It was also the beginning of the notion that if governmental intervention worked to eradicate an insidious practice such as slavery, then government could also be used to effectuate other changes in the workplace that are deemed morally reprehensible practices as well, and that became the standard used to justify passage of future laws that further regulated the workplace.
Decades later, the Industrial Revolution was beginning to transform America in ways that were never imagined. We were steadily shifting from an agrarian culture to an industrialized economy. There was massive migration from rural areas to urban centers where jobs were abundant. The early decades of the 1900s brought us innovative manufacturing systems and mass production capabilities that required employment of thousands of employees in the auto, steel, construction, and related industries. This workforce migration, however, soon led to our next moral outrage: the abusive work practices and exploitation of the blue-collar worker. Long work hours, unsafe and insufferable working conditions, low wages, lack of benefits, frequent workplace injuries or fatalities, and exploitation of child labor soon became associated with the business world.
In response to these horrible working conditions, the birth of unions sprang forth. Collective action against abusive employers was viewed as the only way to protect employee interests. The labor movement was volatile, often violent, and frequently combative. Most employers wanted nothing to do with unions, as they were viewed as threats to production and profits. Union sympathizers were labeled communists, radicals, extremists, troublemakers, traitors, thugs, and thieves. Labor disputes often ended with strong-arm tactics and violent actions against employees, and workers were often fired, beaten, or killed if they were involved in the labor movement. Significant portions of the business community were engaging in reprehensible actions that were being viewed as morally repugnant as were the slave owners' actions.
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Excerpted from Job Killersby Dan Sinas Copyright © 2010 by Dan Sinas. Excerpted by permission.
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