I’ve noticed a pattern – and I’m not the first one to have seen it. The inspiration for this piece of writing, sadly, comes from the news of the massive layoffs at Blizzard/Activision/King.
Layoffs like these keep happening. Why? The problem is capitalism. Fortunately, there are solutions to this problem that can be implemented in the United States if enough people get together and push for change.
I read “Capitalism is the Problem” on Episode 045 of Words of Jen.
On Tuesday, February 12, 2019, Activision Blizzard laid off around 800 workers. The company had about 9,600 employees across Blizzard, Activision, and King. Most of the layoffs were in non-development sectors.
Earlier that same day, Activision Blizzard announced fourth-quarter and 2018 financial earnings results. There’s a press release you can read if you want to know all the numbers. To me, the most telling part is this:
Bobby Kotick, Chief Executive Officer of Activision Blizzard said, “While our financial results for 2018 were the best in our history, we didn’t realize our full potential. To help us reach our full potential, we have made a number of important leadership changes. These changes should enable us to achieve the many opportunities our industry affords us, especially with our powerful owned franchises, our strong commercial capabilities, our digital connections to hundreds of millions of players, and our extraordinarily talented employees.”
I find it hard to believe that CEO Bobby Kotick truly believes that the company has “extraordinarily talented employees” – because the layoffs began shortly after the fiscal year results of 2018 were made public. His words say he cares about his employees and considers their efforts and talent valuable to the company.
His actions reveal that he doesn’t care about his workers very much at all. This man sat there and told investors that Activision Blizzard’s 2018 financial results were “the best in our history” seconds before about 800 “extraordinarily talented employees” were laid off.
He sent a clear message that he sees his employees – the people who put their heart and soul into their work at what was probably their dream job – as expendable. I imagine that the affected workers were, and are still, hurting very badly over what happened to them.
I’ve been abruptly laid off before. It happened several years ago, it wasn’t my dream job (and had absolutely nothing to do with gaming). I got a letter in the mail informing me that my last day of work would be that same day. It was absolutely devastating. I remember feeling shocked, then sad, then enraged.
Variety reported, on February 14, 2019, that Bobby Kotick makes $30 million in a year as CEO. That number is according to an international grassroots organization of game workers – Game Workers Unite – who are trying to organize unions for their industry.
About a year ago, on February 12, 2018, CNBC reported that Barnes & Noble was laying off lead cashiers, digital leads, and other experienced workers in a company-wide clearing.
The news came abruptly for many workers who showed up Monday morning at various Barnes & Noble locations to be notified that they no longer had a job, the people said. The number of affected workers couldn’t immediately be determined. As of April 29 of last year, Barnes & Noble employed about 26,000 people.
Barnes & Noble fired long-term employees including receiving managers, digital leads, newsstand leads, head cashiers, and bargain leads. The people in those positions are what keeps the store running. I know this because I worked for Barnes & Noble through five, frantic, holiday seasons.
A Tumblr blog called “Brain Fuzzies” has more details about how the layoffs affected people who had worked there for several years, and who loved their jobs. Barnes & Noble did not value its workers. The company considered them expendable. Some workers were told they could apply for an entry-level position (for much less pay and without benefits) if they wanted to.
Publisher’s Weekly reported on February 13, 2018: “After posting disappointing holiday results, Barnes & Noble instituted a round of layoffs yesterday that it says will save the company $40 million annually.”
On March 1, 2018, Barnes & Noble released their Fiscal 2018 Third Quarter Financial Results. Here are a few key pieces of it:
“While we were disappointed with our holiday sales, comparable store sales trends did improve in January,” said Demos Parneros, Chief Executive Officer of Barnes & Noble, Inc. “We have instituted a strategic turnaround plan that is centered on growing our business and enhancing shareholder value. In the short term, we are focused on stabilizing sales, improving productivity and reducing expenses. Achievement of our longer-term goals requires a significant multi-year transformation. We expect our plan to provide consistent improvement beginning in fiscal year 2019 and beyond…
…Beginning in February, Barnes & Noble implemented a companywide expense reduction plan. This plan includes a new store labor model that provides greater flexibility and better customer service by eliminating tasks and allowing booksellers to focus more on customers. The Company estimates that these actions will result in annual cost savings of approximately $40 million”.
Translation: We didn’t make enough money so we fired a bunch of people, without out any warning, who had been working in our stores for several years.
Salary.com reported that CEO Demos Parneros made $5,809,790 in total compensation. Of this total, $1,200,000 was received as a salary, $756,000 was received as a bonus, $0 was received in stock options, $3,599,986 was awarded as stock and $253,804 came from other types of compensation. This information is according to proxy statements filed for the 2018 fiscal year.
The Wall Street Journal reported on October 30, 2018, that CEO of Barnes & Noble Demos Parneros had been fired in early July of 2018 “because he sexually harassed a female employee, bullied other staffers, and undermined the potential sale of the book retailer to an unidentified party earlier this year.” Mr. Parneros did not receive a severance package. (But, he did receive the money Salary.com reported.)
On February 20, 2017, The Wall Street Journal reported that Toys “R” Us “recently laid off between 10% and 15% of its corporate employees”. About 250 jobs were eliminated at the Wayne, N.J-based company. The layoffs were announced a day before the toy industry’s annual convention kicked off in New York.
Salary.com reported that David A. Brandon, Chairman of the Board and CEO at Toys R Us made $4,471,146 in total compensation. Of this total, $3,750,000 was received as salary, $323,550 was received as a bonus, $0 was received on stock options, $0 was awarded as stock, and $397,596 came from other types of compensation. This information is according to proxy statements filed for the 2016 fiscal year.
On February 12, 2019, Forbes reported that Toys “R” Us has rebranded and reappeared as Tru Kids. This happened less than a year after Toys “R” Us liquidated its assets and shuttered all of its hundreds of stores. Forbes reported that Tru Kids is run by Richard Barry.
Salary.com reported that Richard Barry was EVP – Global Merchandising Officer at Toys “R” US. He made $1,136,982 in total compensation. Of this total, $600,000 was received as a salary, $643,140 was received as a bonus, $0 was received in stock options, $0 was award as stock and $73,842 came from other types of compensation. This information is according to proxy statements filed for the 2016 fiscal year.
What about those 30,000 workers that Toys “R” Us laid off? They were let go without severance pay.
Why does this keep happening? The problem is capitalism. It rewards CEOs (and other top level executives) for viewing their workers – not as human beings – but as expendable assets. When layoffs happen, the workers who do the most physical labor, and who hold positions that include high-stress and little or no autonomy, get screwed. The CEO’s are untouched and do not face any consequence for abruptly taking away people’s livelihoods.
The problem is the vindictive, materialistic, cruelty that capitalism encourages and perpetuates. We can change that. We can stop this from happening over and over again.
NJ.com reported that the New Jersey Senate Commerce Committee approved a bill that would require New Jersey employers with at least 100 full-time employees to provide their workers 90 days notice before a large layoff or a plant closing or transfer that will put at least 50 people out of work. Current law requires they give 60 days notice.
The bill also requires businesses to pay their employees one week’s severance pay for every year of service, regardless of whether the employer provided that required notice. In the event an employer doesn’t meet its obligation to give 90 days notice, employees would be entitled to four weeks additional severance.
Other states could implement the same kinds of laws. Ideally, the federal government would create laws that protect workers from the financial and emotional devastation that happens when greedy CEOs use massive layoffs as means of boosting the company’s profits.
Leaving this type of lawmaking up the the states won’t work. It would only create a patchwork of blue states that implement (and enforce) worker protections laws, and a bunch of red states that refuse to provide their people with the same protections. It’s gotta be a nationwide change.
What else can we do to stop the harm that capitalism causes to workers? We can set up a framework that gives workers protections that aren’t tied to their jobs.
Andrew Yang is running for President as a Democrat. He wants to implement a Universal Basic Income called “The Freedom Dividend“. It would give $1,000 a month ($12,000 a year) to every* American adult over the age of 18, regardless of their employment status. The plan would start in January of 2021 (if Andrew Yang becomes President of the United States as a result of the 2020 election).
The * is there so I can provide some clarification.
- If you do not graduate from high school, your Freedom Dividend does not begin until you are age 20.
- The Freedom Dividend is for any adult between 18 and 64 years of age.
Andrew Yang was interviewed by Jeff Schechtman on the WhoWhatWhy podcast. Jeff Schectman asked: What is the nexus if any between this and other welfare and social safety net programs that already exist?
Andrew Yang answered:
We spend $500 billion right now on welfare and income support and the plan would be to allow people who are currently receiving benefits to opt out. Say you’re receiving $1,000 in food stamps, housing assistance, and other things, and then we say, “Would you prefer $1,000 cash, no questions asked, no case manager, no paperwork, no nothing?” Obviously most anyone who’s receiving anywhere close to the $1,000 line will opt in for the freedom dividend, but if you prefer your benefits, or perhaps you’re getting a little bit more than $1,000 in benefits, then you can keep them. We would end up replacing a lot of the cumbersome bureaucracy but the goal would be to allow people to opt in because people have obviously a very strong reliance on these existing programs and we don’t want to go and try and make wholesale changes immediately.
Can Universal Basic Income work in the United States? YES! It already is working in Alaska. U.S. News reported on May 3, 2018:
The Alaska Permanent Fund is one of the closest examples of functional universal basic income in place today. It ensures every resident of that state gets a fixed income from state oil revenues, and reached a record payout of more than $2,000 per person in 2015 (in 2017, every Alaskan received $1,100.) Payments began in 1982 and the effects so far have been positive, economists say, and contrary to fears that Alaskans would quit work altogether, some have only opted for working fewer hours, and it may actually have sparked job growth in certain sectors.
How would we pay for Universal Basic Income? Andrew Yang provides the answer:
…Andrew proposes funding UBI by consolidating some welfare programs and implementing a Value-Added Tax (VAT) of 10% . Current welfare and social program beneficiaries would be given a choice between their current benefits or $1,000 cash unconditionally – most would prefer cash with no restriction.
A Value-Added Tax (VAT) is a tax on the production of goods or services a business produces. It is a fair tax and it makes it much harder for large corporations, who are experts at hiding profits and income, to avoid paying their fair share. A VAT is nothing new. 160 out of 193 countries in the world already have a Value-Added Tax or something similar, including all of Europe which has an average VAT of 20 percent….
…Our economy is now incredibly vast at $19 trillion, up $4 trillion in the last 10 years alone. A VAT at half the European level would generate $800 billion in new revenue. A VAT will become more and more important as technology improves because you cannot collect income tax from robots or software.
…Putting money into the hands of American consumers would grow the economy. The Roosevelt Institute projected that the economy would grow by approximately $2.5 trillion and create 4.6 million new jobs. This would generate approximately $500-600 billion in new revenue and economic growth…
In short, Andrew Yang’s Freedom Dividend (or Universal Basic Income plan) would improve people’s lives. It would provide a cushion if the person is affected by a layoff. It would give people the opportunity to save up for an emergency plan and to put money back into the local economy.
When the robots come to take your jobs, you won’t be stuck without an income. The companies who replaced you with robots will be paying a Value-Added Tax that pays for the Freedom Dividend.
Universal Basic Income gives people the opportunity to consider taking a job that is the right fit for them – instead of a desperation job that does not pay a livable wage. This gives workers some power – instead of consolidating the power in the hands of CEOs.
People who have jobs do not lose their Freedom Dividend. Therefore, there is no reason to assume that people would quit their jobs in favor of collecting the Freedom Dividend. The $1,000 a month is on top of whatever the person makes at work.
As a side note, if you honestly believe that it is possible for an American to live off of only $1,000 a month – then you, my friend, have obviously never been in a situation where you had to try living that way. It’s impossible.
What else can we do to fix the problem of capitalism? We can institute Universal Health Care.
It might be called Universal Health Care, Medicare For All, Medicaid for All, or Single-Payer Health Care. It is already working in Australia, Canada, France, Germany, Singapore, Switzerland, and the United Kingdom.
There are various plans, in various stages of completion, being considered. The most detailed explanation I’ve seen about how Universal Health Care would work comes from Andrew Yang.
…With a shift to single-payer, costs can be controlled by setting prices provided for medical services. The best approach is highlighted by the top-rank Cleveland Clinic. There, doctors are paid a flat salary instead of a price-for-service model. This shift has led to a hospital where costs are visible and under control. Redundant tests are at a minimum, and physician turnover is much lower than at comparable hospitals.
Doctors also report being more involved with their patients. Since they’re salaried, there’s no need to churn through patient after patient. Instead, they can spend the proper amount of time to ensure that each patient receives their undivided attention and empathy.
Outside of a shift to a single-payer system with salaried doctors, we can look to the South-central Foundation for another important shift necessary in the way we treat patients: holistic approaches. At this treatment center for Native Alaskans, mental and physical problems are both investigated, and, unsurprisingly, the two are often linked. By referring patients to psychologists during routine physicals, doctors are able to treat, for example, both the symptoms of obesity and the underlying mental health issues that is often related to the issue…
…By providing holistic healthcare to all our citizens we’ll drastically increase the average quality of life, extend life expectancies, and treat issues that often go untreated. We’ll also be able to bring costs under control and outcomes up, as most other industrialized nations have…
…Finally, being tied to an employer so that you don’t lose your healthcare prevents economic mobility. It’s important that people feel free to seek out new opportunities, and our current employee-provided healthcare system prevents that.
My interpretation of Andrew Yang’s plan is that it would also prevent other problems caused by capitalism. Put his plan in place, and it takes away the power that health insurance companies and pharmaceutical companies have over the price they charge for health care and medicine. It also prevents health insurance companies from getting to decide whether or not they will cover the health care that you (or a loved one) needs.
I want to see an America that has an actual Universal Health Care system. I want to see an America where people do not have to use GoFundMe in a desperate attempt to gather enough money to pay for the health care and medicine they need.
What else can we do to stop the problems that capitalism causes? We can vote!
If you are eligible to vote, you really need to register to vote. Once you are registered, you need to actually take the time to vote. In some places, this is harder to do than in others – especially for people who live in states that drastically cut the opportunities for people to cast their vote.
Before you vote, it is vitally important that you do some research to find out the values of the person you are considering voting for. Pick one that is going to do good things for people. Take the politicians who have a history of hurting people out of office.
Not sure where to start? Here’s a checklist:
You Should Vote For Candidates who:
- Protect voters rights and ability to vote
- Fight against gerrymandering
- Have actually done things that have helped people afford to access the health care they need
- Have created policies like Universal Basic Income, Universal Health Care, and other things that keep poor people alive and improve the lives of everyone
- Believe in climate change and are actively implementing plans (or have created plans) that will help prevent things from getting worse
- Have a history of protecting the rights of workers to form an union
- Have a history of protecting the rights of LGBTQ people (to marry, to adopt children, to raise their own children, to access health care, to NOT be fired from their jobs because they are LGBTQ, to use the bathroom that matches their gender, etc.)
- Who are NOT receiving money from industries that the candidate is promising to reform
These are some great places to start when considering a candidate to vote for. You should vote against (or vote out) politicians who have shown a clear interest in helping corporations hurt actual, living, breathing, people.
What if you are already filthy rich and don’t need this help affording universal health care?
Good news! Universal Basic Income and Universal Health Care are two things that can benefit all Americans – not just poor folks. Andrew Yang’s plans are the most specific I’ve seen, and it those plans don’t have an upper end income limit that cuts off people who make more than that amount.
There’s another benefit that comes from Universal Basic Income that rich people will definitely want to see happen. When regular people have more money, they actually go out and spend some of it. The Freedom Dividend enables people to go out and buy some of the products and services that corporations make.
Corporations do the opposite – and that’s a problem caused by capitalism that must be stopped. NBC News reported on June 26, 2018, that the tax reform package that was supposed to raise wages and spur hiring instead funded a record stock buyback, a dividend spree, benefiting investors over workers.
However, companies have instead used the extra cash to spend billions of dollars buying back their own stock, boosting the value of shares held by investors. Buybacks reduce the number of shares on the market, immediately increasing the value of the shares that investors already hold.
Capitalism encourages greed. It encourages people to think in terms of scarcity, and the need to grab everything they can before other people get any of it.
In reality, the United States is one of the richest nations on the planet. We need to shift to the mindset of abundance. Universal Basic Income and Universal Health Care are two ways to spread the abundance around in a way that can and will improve people’s lives.
It’s time for capitalism – as it exists right now – to die. We need to replace it with more human-centered systems.
Capitalism is the Problem is a post written by Jen Thorpe on Book of Jen and is not allowed to be copied to other sites.
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