It’s socialism to treat employees well?

You may have heard about Dan Price, the millionaire who set up Gravity Payments, a credit-card processing company, in his teens. Five years ago, it sunk in how hard it was for his staff to make ends meet, so he cut his own salary and raised theirs to $70,000 across the board. This worked out well: Price got a lot of good press, his employees were more committed and productive and their personal lives blossomed (more of them have decided they can afford babies; one was able to buy a home and slash his 90 minute one-way commute). But I want to look at the bad press.

Several other Seattle businesses got upset with Price, complaining he was setting a standard they couldn’t meet. Two senior managers resigned, feeling it was unfair to give the lower-ranked, low-performing (in their opinion) employees salaries comparable to their own, and convinced this would lead to laziness. Some speculated staff would blow all the money (they didn’t). And Rush Limbaugh branded Price a communist: “I hope this company is a case study in MBA programs on how socialism does not work, because it’s going to fail.” (it did a lot better, actually).

The negative reactions are telling. Free-market supporters have insisted for years that a rising tide lifts all boats: if CEOs and owners do well, the employees benefit. That we should rely on private charity to help people out, not government aid. And that even if you don’t like a CEO making 1,000 times the average employee, that’s none of your business. Yet apparently having someone treat their employees well and see that employees do benefit from the company’s success has Limbaugh and other business owners on edge, instead of celebrating how the free market works!

This is not new. Conservatives celebrated Costco as a great way for real Americans to save money until they discovered it pays its workers better than the bare minimum, at which point it became the “arugula of chain stores” (not meant as a compliment). One economist complained that Costco didn’t have the right to pay its workers more than the absolute minimum it needed to stay staffed — management was stealing money that belonged to the stockholders!

Some of the opposition to Price (and CostCo, and other businesses that I’ve seen get this flak) can be explained by managers and owners who really hate the idea of anyone paying employees more than the minimum because it puts pressure on them. And there’s the double-think we have about how giving the working class more money will make them lazy, whereas rich people will go Galt if their income drops by a fraction (nobody suggests Price and other million-dollar CEOs will kick back and coast because they’re paid so much).

I suspect for Limbaugh and other conservatives, it’s also instinctive to side with the rich, much the way a British conservative might have sneered at peasants demanding something from the nobility. And also, that a lot of conservatives just love authoritarian shits (as Robert Altemeyer says, this isn’t unique to the right-wing, but they score high in this trait).

A lot of right-wingers despised Obama because he apologized for American actions and didn’t claim we were the absolute bestest nation that there ever was. Putin, by contrast, was a great leader: a big, tough, macho who crushes his enemies and has zero empathy or compassion (like aliens in a bad SF movie, some conservatives seem born to sneer “Your compassion makes you weak.”). Obama’s soft and feminine; Putin’s a real man! Limbaugh, for example, said recently that he didn’t want to make the Medal of Freedom ceremony because it conflicted with treatment for his cancer, but Trump insisted on overriding the doctors — and Limbaugh’s impressed by this. I suspect the same attitude is at play regarding Price. A boss who treats his people like shit is a strong leader; one who makes sacrifices to make his crew happy, even if it makes the company work better, is just too weak to make someone like Limbaugh happy.

But Price still got a lot of positive responses, so I’ll take that as a sign of hope.

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Filed under economics, Politics

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