Guest Opinions

Salute businesses doing right by workers

Jerry Brady
Jerry Brady

On Aug. 19, the heads of some of America’s largest companies declared that business must henceforth benefit its employees, the environment and suppliers and not solely its shareholders.

Leaders from Apple, Walmart, Pepsi, Bank of America, JPMorgan Chase, Amazon, General Motors and nearly 200 other corporations said American companies can no longer follow only the gospel according to economist Milton Friedman that the sole purpose of business is to make a profit.

Critics were quick to say this group should put its money where its mouth is, advocating for a much higher minimum wage and reducing their own outrageously high compensation. But at least they’re on the record; their words will surely be played back to them many times in the future.

So here is a specific question for them and their Idaho counterparts: How will you defend American workers from being displaced by robots and artificial intelligence, as is happening at such an accelerating pace? How will the net number of American jobs be increased? What, exactly, do you mean about giving workers a stake in the business somewhat similar to shareholders?

These are the huge questions of our time.

Yuval Noah Harari, an Israeli futurist and best-selling writer, has coined the phrase “the useless class” to describe what he says will be the hundreds of millions of people who will soon be displaced by robots and artificial intelligence, including hordes in the United States. Writers at Microsoft Research have also introduced us to what they call “ghost workers,” tens of millions connected through the worldwide web who bid for work on a per-task basis, much like the piecework practice during the Industrial Revolution (which brought on the creation of Labor Day in 1894). We know nothing about this threat going on largely in Asia except that it requires a pretty good education, of which there is a lot in Asian countries.

Projections of jobs lost or gained are all over the map, but listen to this warning from the dean of Wharton School of Business issued when he welcomed a new MBA class on Aug. 13:

“Notwithstanding that past technological revolutions have improved both the quality of life and the world of work, the combination of robots and AI threatens to destroy more jobs that it creates, undermining the foundation of a good life based on a good job,” Geoffrey Garrett said. Overall, he said, “In my darkest moments I fear that 2019 is looking more like 1929.”

It is interesting that Amazon’s Jeff Bezos was among the CEOs speaking out for the welfare of workers, because Amazon is expected to open a fulfillment center in Nampa in the next two years which could employ up to 3,000. Assuming work is being automated to the max, that’s a lot of people to employ.

Amazon recently said it will spend $700 million to train its workforce, presumably the advanced education and training called for by the Aug. 19 bunch. Might we get a front row seat for one way technology and decent jobs could come together?

In truth, businesses that benefit owners, workers and the environment already exist under our noses here in Idaho. They are called B Corporations. They are specifically chartered to serve owners, workers and the environment/community. One of them is IndieDwell, the company building homes out of shipping containers which is gaining so much attention and is expanding rapidly.

Co-founder Pete Gombert says offering workers a full package of benefits and a stake in the company’s success is a big reason IndieDwell has gotten off to such a fast start.

Other Idaho companies are enjoying success after workers purchase all or a portion of the company through employee stock ownership plans — obviously one way to benefit workers.

Here are the CEOs of three Boise-based companies, all of them 40-50 years old, whose founders chose to sell to their employees:

Jim Kissler of Norco. Norco is a highly successful supplier of medical oxygen, industrial gases and a wide variety of medical supplies in six western states — the nation’s largest in its category. When its founder, Jim’s father, retired in 2015, employees bought a portion of the company. Three years later, they are beginning to act like owners, Kissler says, becoming more efficient, better at customer care and achieving higher sales per employee.

“In June employees saw a nice 31 percent bump in the value of their stock,” Kissler says. For him, the big difference is in recruitment and retention. “That’s how we hire, and it’s why employees think twice about leaving.”

Sid Sullivan, Ace Precision. Ace builds and repairs complex, high-precision machines for technology companies such as Intel. Employees bought out Ace’s two founders in 2011 when sales were $15 million. Today its 188 employees generate $50 million in sales.

“Ours is a very demanding business. Much of what we build and repair did not exist in 2011,” Sullivan says. “Our employees think differently now. They are more inventive and more customer-focused.” Growth has been so robust, a new Ace headquarters will soon come out of the ground east of the Broadway exit from the Interstate.

Rick Lierz, Franklin Building Supplies. Franklin is the leading provider of home-building supplies in southern Idaho and the immediate region. Working out of 17 locations, its 675 workers generated $200 million in 2018 income.

Less than four years into employee ownership, Lierz says excitement is slowly building as realization sinks in that “this is my company.” “It’s a patient process, but we’re beginning to take better care of one another,” Lierz says.

Other employee-owned companies include D and A Glass, Sletten Construction and the granddaddy of them all, highly successful Winco, which has been employee-owned since the mid-l980s.

It would be a a good bet that they, at least, will use artificial intelligence and robots to benefit both employees and the company, as well as it can be done. We salute them and every company doing right by its employees.

Jerry Brady was president of the Post Company in Idaho Falls, a media company that was one-third employee-owned at the time of its sale in 2015.