THE MORNING RANT: It’s Time to Stop Blaming HR for Woke Corporations; Corporate Hostility to Any Labor Expense

There are a couple of theses related to woke corporations I’ve been meaning to write about, but I’m not sure I have an entire essay worth of thoughts about either, so I’ll just throw them out right now, with just a few additional comments.

1) Left Wing HR reps are not to blame for wokeness in corporate America; Woke executives are to blame.

It has become a cliché among many of us on the right that HR (Human Resources) is to blame for corporate wokeness. While HR may have been one of the first outposts in corporate office suites that was more likely to vote Democrat, HR staff are not influencing the left-wing activism emanating from corporate C-Suites.

In general, HR representatives are little different from other corporate desk jockeys who are moving stuff along the workflow that must be performed. The policies and legal compliance that HR reps must administer have been assigned to them by corporate executives, and a great many corporations now outsource most of their HR work.

I have worked with plenty of HR people over the years, most of whom have been women, and most of whom have been delightful. Not one of them spoke with the woke, activist, political passion that I have heard from white, male executives with Ivy League degrees.

2) There is an emerging corporate / private equity attitude that Salary & Wage Expense is a huge affront to a business’ financial objectives, and that only “mind jobs” should even pay middle-class wages.

This is dangerous territory, as I know I’m treading very close to the left-wing phrase, “living wage,” but I’m going to walk the tightrope. Of course, entry level jobs and unskilled, high turnover jobs are going to be low wage, but there are classes of jobs in service industries and manufacturing that require knowledge, experience and skill, but there is a disturbing corporate hostility to paying much above entry-level wages for these positions.

My opinions have not necessarily changed, but they have evolved. From my years of working in the auto industry, I had developed a hardened, anti-union attitude. I would state the obligatory comments about unions having perhaps served a purpose at one time early on in the industrial revolution, but my main gripe was that the unions seemed to be fighting for members to be paid and to receive benefits for not working (early retirement, idle labor pools, etc), which is obviously not sustainable for the corporations paying the employees not to work.

Much has shaken out, with union membership having plummeted, and too many corporations (especially those controlled by private equity) now looking at any level of Salary & Wage Expense on their Income Statement as a problematic cost that is eating into profit. Outsourcing and offshoring led to the general corporate acceptance of using foreign labor that is exploited in a way that is offensive to western sensibilities. Those same woke executives teaching us to “look inside ourselves and at our nation’s troubled history” each Juneteenth are often supporters of 21st century slavery – in third world countries - if it will reduce their cost of labor.

In other words, the pendulum swung WAY too far the other direction, from unions demanding compensation without providing labor, to corporations expecting labor without much compensation.

In addition, there seems to be an attitude that any job that doesn’t require sitting at a desk with a computer monitor and spreadsheets is not worthy of a middle-class wage. That is, only “mind jobs” are worth paying a middle-class wage.

I don’t buy suits from department stores any longer because they replaced professional clothiers with high turnover check-out clerks. The executives want the same premium price as ever for a suit but without the labor cost of someone who can assist me. I know of high-end hotels that have followed this model too. They still charge the luxury price, but they’ve attempted to replace career service professionals with low-wage, high-turnover staff, causing a loss of luxury service for the guests.

When my father had to go to a skilled nursing facility, we paid a premium for a nice facility. There was crown moulding and wall sconces and all sorts of nice flourishes, but it was still understaffed with high-turnover, low-wage employees. The “luxury” for which we wanted to pay a premium was experienced, high-quality staffing, not crown moulding.

There are so many examples like this. These important front-line jobs can’t be outsourced so they are treated as little more than fast food jobs.

Between tariffs, China edging closer to war against American interests, international shipping lanes being choked off, etc, a lot of manufacturing is likely to return to the U.S. A contemptuous attitude by corporate executives and private equity groups toward labor as a necessary operating expense will likely have the effect of making unions seem more attractive again. Or maybe they can make up for higher labor costs of non-“mind jobs” by replacing the laptop workers with AI.

Attorney Mark Pulliam is a must-read for me at his Misrule of Law blog. His latest piece (first published at the Law & Liberty website) is a review of Charles Gasparino’s new book “Go Woke, Go Broke.”

I intend to read the book (ahem, Santa) but until I do, this is a nice summary of Gasparino’s book as written in Pulliam’s excellent prose.

The trend toward corporate wokeness began in the late 1980s and the 1990s, and became “official” in 2019, when JP Morgan CEO Jamie Dimon, as head of the Business Roundtable, declared that “shareholder capitalism” was dead, to be replaced by a new standard of corporate responsibility, styled “stakeholder capitalism.” This new model of corporate governance represents an all-encompassing embrace of progressivism, Gasparino argues: “hiring, firing, investing, even advertising. In stakeholder capitalism, the corporation doesn’t place ads to sell products, it advertises to sell woke politics.”

The other factors contributing to corporate America’s abandonment of free-market principles include an overall cultural shift away from rewarding merit; employing a cohort of indoctrinated graduates from woke universities; litigation equating “disparate impact” with intentional discrimination; the Occupy Wall Street protests that directly confronted traders and bankers in Manhattan; the ascendancy of Critical Race Theory and the notion of “anti-racism” (a remunerative grift invented by Ibram Kendi); the #MeToo movement and the accompanying cancel culture; the death of George Floyd and the resulting riots; the psychic consequences of the Covid shut down; the imposition of mandatory diversity on corporate boards through Nasdaq listing standards; the emergence of a new breed of CEO catering to social trends through left-wing virtue signaling rather than focusing on financial performance; and politicized institutional investors such as state pension funds. Woke CEOs are more likely to genuflect to the World Economic Forum than the Mont Pelerin Society.

Mark is a friend, so I’ll have to check in with him about my thoughts on HR departments versus his. In his review he notes how HR is the enforcer of corporate wokeism, but as detailed above, the progenitor of the woke policies is upstream in the C-Suites and at the WEF.

[buck.throckmorton at protonmail dot com]

posted by Buck Throckmorton at 11:00 AM

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