A conversation in the newly-formed LinkedIn group, The Bigger Badder Conversation, had me thinking over the weekend about my staunchly held and often mulled belief that the truly beneficial acts are inevitably beneficial far beyond the enactor, and vice versa – that acts that harm some inevitably harm the enactor as well.
It’s a concept that I’m sure people have talked about throughout time and in a variety of ways (someday, I’ll finally actually study philosophy); so far, my mulling has produced an abundance of certainty and dearth of language to explain.
Then, during a rare moment of listening to podcasts this weekend, I heard a fantastic example of just this thing.
In episode six of the first season of How to Citizen with Baratunde – Making Work Work for Everyone – guest Saru Jayaraman, founder of the labor-advocacy group One Fair Wage, described the 300% turnover rate in the restaurant industry – that means each position is filled by three different people in a single year. Why is there so much turnover? Because waitstaff is paid $2.13 an hour by the restaurant and the rest of minimum wage (or, fingers crossed, more) is expected in tips. It leads to a dynamic in which restaurant managers have little loyalty to the employees because turn-over is an industry standard – there will always be someone else to plug into the position – and employees have little loyalty because, really, what would keep them from moving into a space where they might make a good bit more than minimum wage either due to higher menu prices, more customer turnover (more tables means more chances to get tipped), or a combination of the two?
Even while the National Restaurant Association lobbies with big bucks to keep this status quo in place – this norm of restaurants hardly having to pay a significant segment of their core labor – the policies ultimately harm everyone involved. I’ll pass the mic to Jayaraman to explain. From the podcast:
“They spend millions of dollars each year on rehiring and retraining and employee morale being low because they pay so little. So it hurts employers themselves. Even it hurts shareholders… It hurts consumers because we end up bearing the brunt of the public health disaster that occurs when tipped workers cannot enforce [coronavirus-related] rules, because they have to rely on tips. But it also hurts consumers because consumers are footing the bill for multibillion dollar corporations by paying their workers’ wages in tips. You know, we as consumers and taxpayers, we subsidize multibillion dollar corporations like Darden, which is Olive Garden’s parent company, and IHop and Denny’s, we subsidize them through our tips paying their workers’ wages [through our] tips, but we also subsidize them to the tune of 16.5 billion with a B dollars annually in taxpayer-funded public assistance. This is, you know, workers having to use Medicare or Medicaid – workers, you know, using various forms of emergency room care, I mean, just all kinds of public assistance.”
Okay, let’s contrast this with Costco, the poster child for defying corporate norms and making it look good. For example, Costco:
- Marks up their products less than the average grocery or retail store (no more than 15% versus 25-50%)
- Offers fewer options (which runs counter to our Amazon-shaped expectations of endless variety and is in alignment with research that shows more selection actually leads to more analysis paralysis rather than more purchases – that is, people freeze because they’re overwhelmed with choices and ultimately ditch the purchase altogether)
- Pays their employees an average of 40% more than its competitors – in March of this year, it raised its minimum wage to $16/hour though its average hourly rate is closer to $20 – and provides more comprehensive health and retirement benefits than most
All that and its shareholders saw an average return of 26% in 2019 and 2020. And that’s without even getting into the strategy of the $1.50 hotdog and soda combo. When I think about all these wins, it surprises me not one bit that Marcus, the Greensboro, NC, gas station attendant who told me 15 years ago that working at Costco was better for him than anything he could find with his history degree, continues to share his signature five-minute deep-dive conversations with my siblings who are still members, all these years later.
The point of all this, though, was not really about business models. That was just an accessible example. It’s easier to connect the dots in our web of interconnection in business because we have actual metrics to compare and contrast.
I have yet to run the thought-experiment, though, where when I zoom out of a situation – even one with immediate pain – I don’t find that true benefits build on one another and expand out, and harm boomerangs back around. How about you?
It’s true – I am a business and empowerment coach. If you’re curious about how you might build your business, grow your career, or reshape either to be lucrative while in alignment with your core values, let’s talk.