capitalism

We Care A Lot: Profits of Social Entreprenurship

Social Entrepreneurship is often championed as a solution to social problems. As I understand it, social entrepreneurs are ingenious people who use their creativity to help those who suffer from poverty, sickness, lack of education, and whatever other problems catch their attention. Their solutions, because ‘Social Entrepreneurs’ would never question the basic good of capitalism (would they?), are of course only feasible if they return a profit to good-as-angel investors. Let’s ignore that the framing of Social Entrepreneurship, by itself, suggests that other profit seekers are Anti-Social Entrepreneurs (which is probably right). Instead let’s offer a brief critique of social entrepreneurship itself.

Here’s a good example in this morning’s New York Times. Retail monster Walmart is well known to pay its employees a less than livable wage of, on average, $13.85 an hour. One fortunate worker highlighted in the piece, Alexis, earns $19.25 an hour. Trading 30 hours a week with Walmart, she gets in return around $30,000 a year. This would put Alexis and her 4 children just beyond the $28,780 federal poverty guideline for a family of 5 in 2017, but they’re certainly eligible for many forms of assistance. So, this is a paycheck to paycheck life.

Alexis says she’d like to save more, but that’s hard to do with most of your money spent between pay-periods. So, here’s a problem for the Social Entrepreneurs to solve. In this case the solution is an app called Even, cofounded by idealistic young man Jon Schlossberg, to help low-wage workers manage their money. With Even, workers can even withdraw some of their earned cash before the next paycheck. No more pay-day loans with their high interest rates, but rather earlier access to money you’ve earned. Jon is focusing his entrepreneurial energy on helping those in need, which is good. He’s able to do this because he’s already created something very useful for us:

“Before creating Even, one of the firm’s founders, Jon Schlossberg, had developed an app called Knock, which allows phone users to unlock a Mac computer by knocking on their phone.”

Having made his money via this invaluable contribution to society, it was time to do good.

Idealistic and flush with money from the success of Knock, Mr. Schlossberg said
he began studying how a cash shortage affects people’s physical and mental well-being. “It is a fundamental problem with the capitalistic society,” Mr. Schlossberg said in an interview. Mr. Schlossberg, 30, said he set out to create a product that could reduce the stress associated with money problems, joining a crowd of other so-called fintech start-ups seeking to disrupt the traditional banking model.

Sounding like a real Marxist (who conveniently came to understand how awful capitalism is for workers after he’d made his money), Jon identifies how capitalism is fundamentally alienating and destructive of the human person. That’s not good. So, what’s the lesson? Do as any good capitalist would and disrupt! For a profit, of course.

Walmart pays a small fee to Even to allow workers to withdraw their wages
ahead of payday. Workers can take out only a portion of wages that they have already earned during the two-week pay cycle — so technically, Even says, these are not loans.

Walmart is paying Jon. Jon, flush with cash because he made it easier to unlock your computer, is being paid by Walmart so that he can help Walmart employees manage their paycheck to paycheck lives.  Stand-up guy, Jon. But, far from alone in his social entrepreneurial quest for justice, he has partners who share his concern for the struggles of the poor.

“You have earned this money,” said Safwan Shah, founder of PayActiv. “Who
decides you should get paid every two weeks?”

Jon’s comrade Safwan owns a company, missing an ‘e,’ that helps process the transactions between Walmart and its cash poor employees. Safwan understands that workers are the source of wealth, and how unfair it is that the capitalist decides when the worker gets access to the fruit of their labor. He’s going to help by processing a limited number of mid-pay-period transactions for a fee paid by Walmart, or if things get really bad, the employee.

With the new service, every Walmart employee can obtain a portion of his or her
earned wages eight times a year free of charge. For most of the workers, the so-called Instapays will be deducted from their next paycheck. The workers can pay extra if they want more than eight Instapays.

Safwan is also being paid by Walmart, at least indirectly, to help out it’s cash-strapped workers. Walmart is making the “reasonably substantial investment” in Even because C.O.O. Judith McKenna believes it’s “the right thing to do.” Judith says the company will keep “investing in its associates.”

$10.20 an hour Walmart associate Matt Fixel has some input for entrepreneurial justice warriors Jon and Safwan:

“That app sounds helpful,’’ Mr. Fixel said of the Even service, but added, “I
would prefer it if they gave me more hours.”

So, what do you say Jon and Safwan, maybe a campaign for better, more frequent pay for hard-working associates like Alexis and Matt? Of course, the needed changes might put your profits at risk, but you don’t actually care about those, do you? You care about justice.

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I’m not your boss, sir: service worker small talk as class warfare?

One of my least favorite social interactions is when service workers, often waitstaff, use ‘terms of endearment.’ You know, “what can I get you, hon?” or “there you go, boss.” It makes me uncomfortable. I say service workers because these are the interactions in which I notice it, but surely it happens elsewhere too. Quite frankly, terms of endearment from just about anyone make me uncomfortable, so it may just be that I’m atypically socially distant (I’d buy that). Maybe, but I think there are social patterns here to be considered

First, the phenomenon appears gendered. I’ve never noticed a male waiter call me ‘hon’ or ‘sweetie,’ and I don’t recall a lot of female service workers calling me ‘boss.’ Service workers have an opportunity to do some fun breaching experiments here. I imagine most folks wouldn’t notice if a female worker called them ‘boss,’ but I imagine nearly every male would notice if a male worker called him ‘sweetie.’  Having read about ‘everyday sexism‘, I’d guess women hear a lot more of this sort of small talk than do men, from both women and men. Women are probably uncomfortably called ‘sweetie’ all the time, by everyone. Do male workers call female customers ‘boss’?

Second, why do I find it so uncomfortable? I think the language is too intimate for what are nearly always fleeting relationships in the context of economic transactions. While I’ve never said it, I always think “I’m not your hon,” or “I’m not your boss”  Maybe Donald Black’s theory of Moral Time could help me understand a bit of it. Is the conflict I feel a result of ‘over intimacy?’ That seems reasonable for ‘hon’ and ‘sweetie’ and the like, but maybe not for ‘boss.’ I find ‘boss’ harder to take. I always hear with it a bit of disdain. Maybe it’s a small shot at the inequality of the service relationship? Maybe in this context ‘boss’ is meant to draw attention to the fact that work is being done, for me, by someone who is likely underpaid and under appreciated. Maybe it’s a subtle critique of class privilege? Maybe it’s the expression of completely internalized capitalistic social relations?

How to virtually end the NFL injury epidemic

Yesterday I sent this tweet: “Look at the NFL injury report and then justify being a fan of the league’s product. That league should end.” Here is a summary of this week’s injuries, if you’re interested (beware the autoplay). I don’t think the NFL will ever go away, but below I offer a solution that will virtually remove all serious injuries from a game I actually like.

My tweet didn’t elicit much response, but not very many (of my) tweets do. However, an old friend of mine (maybe trolling), suggested that my tweet implied that we should also ban cars because more people are hurt in auto accidents than tear their ACLs in football games. This is not a good argument. My problem with the NFL is partly the profit that is generated by selling the athletes’ skills to consumers of the league’s product, and what seems like lip service from the league to the risk the players are taking. Nobody is selling my driving ability. The analogy might work better for auto racing, and it would be interesting to see a comparison of injuries between the NFL and NASCAR, and some analysis of how serious the leagues are in protecting their employees on the field and track. (more…)

Coexist with the Darwin Fish

We drove to Pittsburgh last Saturday. As I drove I wondered about a few things. For example, why is I-90 around Buffalo so bumpy? It’s not even bumpy so much as it’s wavy. You feel like you’re on a boat. Also, why do people from Ontario drive so fast? I only see those plates when they pass me on the left. Finally, what is the deal with bumper stickers? This last question came to me when Joy said she’d like one of those Coexist stickers for her car, or maybe the Darwin fish. (more…)

Baseball Salaries and Inequality

Are professional athletes paid too much? It’s pretty common to claim that’s the case, and here is a fairly standard example of the claim from Edward McClelland in today’s Slate. However, maybe the athletes aren’t overpaid, but are rather paid fairly relative to the wealth their labor helps produce for others. Here’s a good example of this argument from baseball writer Craig Calcaterra, which was a direct response to the ‘overpaid’ Slate essay. This is a fun debate to explore in discussions of social inequality. When I teach social inequality, I use this debate to focus in on how we, as a society, determine the value of work. Do we let the free market sort it out and trust that those getting paid the most are most deserving according to its logic? The classic functionalist explanation of economic inequality is that those who get paid the most must be doing the most important things. So, high pay indicates high social value. This explanation has been rightly debunked because it’s easy to point out many inefficiencies and counter examples that demonstrate that our meritocracy doesn’t really work very well. Calcaterra rightly points out these critiques when he writes:

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Certainty means more Mergers, Mergers mean more Uncertainty, Uncertainty means more Crime?

This morning in a criminology seminar we discussed a section of Crime and the American Dream by Richard Rosenfeld and Steven F. Messner (the section in this book). Their “thesis is that the anomic tendencies inherent in the American Dream both produce and are reproduced by an institutional balance of power dominated by the economy” (Rosenfeld and Messner 2011: 179). The dominance of the economy, they argue, weakens other institutions like the family, the government, and education, and the American Dream encourages unrestrained individualism and innovation. The cultural and institutional preferences given to individual economic success, along with the breakdown of other institutions which might foster community oriented values leads to a loss of social control and high levels of criminal behavior.

After class I opened up nytimes.com and this was the lead story: “Confidence on Upswing, Mergers Make Comeback.

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Working on a Holiday: Honoring Martin Luther King Jr.’s Dream?

Holidays might be used as an indicator of those ideals a country values above all others. For example, in the U.S. we have 10 federal holidays, including Independence Day, Memorial Day, and Veterans Day. Those holidays, as I understand them, are set apart from typical days to honor the foundational American value of freedom, and those who established and defend that freedom. Today is Martin Luther King Jr. Day, a federal holiday, as well as Inauguration Day. Martin Luther King Jr. certainly fought for freedom, and not just for African Americans, but for all Americans whose lives were burdened not only by racism, but also by poverty and voicelessness. MLK’s vision of America requires not only racial equality, but also economic fairness. Inauguration Day is a day we celebrate the functioning of our political system. It’s a day that we observe a peaceful transition of power, the voice of the voters, and perhaps think about unity with those whom we disagree with politically. It makes good sense to me that these should be federal holidays. We should set this day aside and honor these values. It’s not an ordinary day.

Regardless, many people I know are at work. In fact, when I look at that list of federal holidays, I can’t help but notice that a lot of people have to work many or most of those days. But, it’s not all of us who have to work most of those days. In fact, it’s the working poor who have to work most, really all, of those days. The waitresses serving breakfast to the hung-over on New Year’s Day, those working the Memorial Day sales at the mall (all those days have sales by now, right?), or the hotel staff cleaning your sheets and towels when you’re off to visit family on Thanksgiving. As I write this on MLK Day, neighbors on my block are rushing to get their trash to the curb for pick-up I’m sure they expected would be delayed, but isn’t. Some won’t get the trash out because they are at work. In fact, many people who are solidly in the middle class work many of those days, and certainly on Martin Luther King Jr. Day. Teachers are teaching, lawyers are lawyering, and the pharmacist was there to fill my prescription this morning. It’s a holiday, we all know it, but almost everybody is working. You can’t help but wonder what values our actions represent.

When MLK Day was proposed as a federal holiday, shortly after his assassination, it was not widely supported. Senator Jesse Helms famously argued that he wasn’t worthy of such an honor, and was in fact a dangerous, communist radical. It took until 1983, 15 years after his death, for the day to become a national holiday. It wasn’t until 1986 that the holiday was first observed, and not until 2000 that it was officially observed in all 50 states. When President Reagan reluctantly signed the bill in 1983, he did so despite his own concerns about what it would cost in economic productivity (I take him at his word). But, like so many of the holidays, almost everybody is working today. So, maybe it’s not costing that much? If one celebrates Martin Luther King Jr.’s vision of American society free of racism and poverty, and guided by a sense of economic justice, then one must do so with a keen awareness that there is much work to be done. The poor celebrate the day at their less-than living-wage jobs, and most of the middle class is at work producing for the corporate powers that be. For many, it’s only a day off of work if they spend one of their limited personal or vacation days. Our calandars and speeches give honor to the dreams of MLK, but our actions seem to speak to a different set of economic values.

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Yes, I’ve got the day off. Le Moyne’s spring semester starts tomorrow. A few years ago I taught on Veterans Day, November 11th. The class before, a student and veteran of the war in Iraq approached me in shock that classes would be held on Veteran’s Day. I told him he was welcome to honor the day and miss lecture, but that we would be in class according to college policy.

Wealth in daily life

Adam Davidson’s NY Times magazine essay about Edward Conard’s view of wealth has been on my mind for a few days. There is much to criticize here, not the least of which is Conard’s application of a discredited functionalist model of society that says stratification is a function of occupational importance, such that the most important players receive the most lavish rewards.  Clearly this is Conard’s argument, and he would like more inequality because he believes it would generate the motivation for those who are currently ‘wasting’ their talents on things like art to move into other, more productive lines of work.

In particular I’ve been thinking about the primary players in Conard’s model of investor driven capitalism, which I take to be ‘investors,’ and ‘consumers,’ and the relations between these actors.  In this model, the risks of investors pay off in better lives for consumers.  Another category of actor which is really only hinted at is ‘workers.’  Workers in Conard’s ideal capitalism appear to serve at the pleasure of investors who are driven to improve the lives of consumers.  Conard shared an example of improvements to soda cans which make all of us richer because increased efficiency means each can costs a few cents less.  He also shared examples from computing technology, Davidson himself writing that even progressive economists believe the economic success of companies like Google spreads ‘value’ throughout the economy. (more…)