Sears' huge pension liabilities was cited as one of the main reasons that prevented any possible re-structuring that could have saved the company when it was declining and heading to bankruptcy...
I mean, let's be realistic here. For how long was Sears in this pitiful state?... Getting all that real estate + semi-established brand was a private equity's wet dream, yet nobody ever contemplated that option.
And now that Sears is bankrupt, their pension fund is going into default and passed to the government who will need to fulfill those obligations (thankfully the pension benefit guaranty is not funded with tax revenues).
Of course, I'm not blaming Sears retirees. They deserve their pensions as much as any other person. But the reality is that corporate America learned this lesson a while ago and Sears is just one of many examples.
Is not about pleasing shareholders and fucking up employees as this article claims. It's a problem of business viability and long-term expectations.
Wanna increase salaries and stock grants? Sure, do it. Two quarters later Wall Street will fuck you up because your new shiny compensation model just shaved the company revenue. And guess what, they will punish you at much larger magnitude than your declining revenue.
So that 5% of lost revenue is going to cost you 20% or 30% of market value, and now all those stock grants are 30% less valuable. So your great initiative just put you in a negative spiral. And now your employees will be pissed, and the press will come and write an article claiming that your once frugal company is now a money firepit and that morale is low, completely forgetting their initial narrative on how you used to fuck over your employees.
> Wanna increase salaries and stock grants? Sure, do it. Two quarters later Wall Street will fuck you up because your new shiny compensation model just shaved the company revenue. ... So that 5% of lost revenue is going to cost you 20% or 30% of market value, and now all those stock grants are 30% less valuable. So your great initiative just put you in a negative spiral.
This basically, is what people mean when they say "fuck the system". It's not about some particular greedy bosses or managers or even shareholders. It's that the whole economy is apparently now structured in a way that businesses don't seem to have a choice. (Or at least the managers believe they don't have a choice).
I don’t necessarily disagree with many of your points, but I think drawing attention to the end of Sears’ lifecycle is an unfair thing. Someday Amazon too will have an end of life, and employees and shareholders will get fucked over then too.
The article also draws attention to how workers benefited _in good times_ at Sears, not near the end. And this is where the comparison is most meaningful, where Amazon is more questionable.
Yup, if you're interested in a recent example look at Mellanox vs Starboard capital. We need to break out of the vice-grip Wall Street has on public companies. The Long Term Stock Exchange is one such initiative but I think co-operatives are another way that should be popularized further. Problem is, it becomes really hard to capitalize without Wall Street money.
Sears' huge pension liabilities was cited as one of the main reasons that prevented any possible re-structuring that could have saved the company when it was declining and heading to bankruptcy
This was before or after it had been stripped of assets?
> Is not about pleasing shareholders and fucking up employees as this article claims. It's a problem of business viability and long-term expectations.
Perhaps. Or it could be about competing in a marketplace where pleasing shareholders and fucking up employees makes you more competitive. The problem is not that Sears treated its employees well, rather that its competitors are allowed not to.
In many countries, it is illegal to under-fund your pension scheme for a significant length of time which avoids this problem. At any given time you can close the scheme and switch people to DB without a massive liability overhang that you need to close.
Eddie Lampert whined extensively about how hard the pension problem was making things for him. In a sense that is trivially true - extensive liabilities make it harder to run a profitable company - but it wouldn't have been an issue if they had been properly funding their pension liability all-along.
> It's a problem of business viability and long-term expectations.
Agreed.
But then I am surprised about the whole Wall Street para. People don't like surprises. So a company has to always set expectations correctly, to both employees as well as the markets. If a company is open how the initiative is going to affect revenues there wont be that huge loss of market value.
I agree with you in that that's how things would go nowadays, but maybe we should scrutinize more what Wall Street is contributing to, instead of taking it as "something that happens and there's nothing we can do about it".
Important note: at Sears, different departments fought against each other for years - essentially a dozen of small businesses with the overhead of a large corporation. No way it could have ended well.
> Wanna increase salaries and stock grants? Sure, do it. Two quarters later Wall Street will fuck you up because your new shiny compensation model just shaved the company revenue. And guess what, they will punish you at much larger magnitude than your declining revenue. So that 5% of lost revenue is going to cost you 20% or 30% of market value, and now all those stock grants are 30% less valuable. So your great initiative just put you in a negative spiral. And now your employees will be pissed, and the press will come and write an article claiming that your once frugal company is now a money firepit and that morale is low, completely forgetting their initial narrative on how you used to fuck over your employees.
This, in a nutshell, is why capitalism is fundamentally incompatible with human flourishing. Because of the process you just described, the only possibility is an end state with a very small number of capital holders prospering and grinding the rest under their boot.
I think tech workers at Amazon are closer to the Sears workers than fulfillment center folks are.
My friends working at Amazon as tech workers are making money hand over fist right now. 100+ stocks each grant.
On the flipside, Amazon has a "projected total comp" which they keep you at, and if you're over projected, they don't give you more which is fucked. Google gives you 80k in stock and doesn't tie your future say to it.
It's not just Amazon, techies at most tech companies get generous stock grants as there is a considerable talent war going on. Even non major players like Priceline group now give equity.
Yeah I remember Bernie Sanders praised Amazon's decision in a tweet, but only later did people and the media realize that increasing the minimum wage came at a cost to other things, such as stock compensation. no free lunch guys.
Nobody asked for a "free lunch", those people already work very hard for what they get.
So, it's not much "no free lunch", but "I'll do a token gesture of giving you more while taking your money from elsewhere, because I'm a hypocrite greedy bastard".
Amazon realized that they kept getting a black eye because of their wages so of course they pivoted. Now some workers are probably worse off. I blame the media for only caring about sensationalist headlines.
If you're making 30k / year, having any kind of equity in lieu of traditional compensation (bonuses, wage increases) is an extremely risky affair. Amazon's stock has increased x6, but that is not normal, nor is it indicative of future performance. For those living paycheck to paycheck, there are far better methods of compensation that will ensure a higher quality of life without huge amounts of risk. An increase of just $1-2 per hour would easily make up the difference.
White collar workers can absorb the risk in the case of a market downturn, but I'm not sure that blue collar workers can.
Why does the article keep comparing warehouse workers at Amazon with salespeople at Sears? Those don't seem like comparable positions (sales comp is often very performance based) and thus, compensation wouldn't be the same.
Maybe compare the salespeople at Sears with account managers or some similar position at Amazon?
> “Most of these people retired with a good pension,” said Jon White, who worked at Sears for 38 years, most recently as a manager in a store in Lithonia, Ga., before retiring in 2008. “Most of them are comfortable for the most part — cashiers, clerks, replenishers, all kinds of workers.”
I don’t know that the NYT has it out for Bezos, but he’s a very easy target. He has a long reputation of treating employees badly while amassing enormous wealth.
Lets Occam's razor this shit. Is Amazon a megacorp with the ability to throw their weight around and have a large impact on the world? Or are they a little mom-and-pop operation that have wondered into the crosshairs of newsmen conspiring against them because Bozos is the owner of a rival paper? In an era where NYT would like nothing more than to stop the bleeding from papers to online, and migration from NYT to Wapo isn't even on their radar?
Dunno; maybe because its fronted by the world's richest man, treats its workers badly, and has a bunch of sweet deals with the CIA? Or maybe it's because Bezos owns a rival paper.
I think the Times is awful, venal, half tabloid, and generally doesn't go after the powerful enough, but I don't think they look at WaPo as 'rivals.' They're basically the same thing, owned by a different set of oligarchs.
I've noticed that the NYT has it out for anything remotely related to capitalism. Didn't they put out a article a while back about how Jeff Bezos becoming so rich is terrible, and they purposely neglected to mention the millions of Americans that also gained in wealth due to Jeff's actions.
These days the NYT is doing some very biased reporting.
During their best years, when Sears was a genre-defining behemoth, workers owned 25% of the company, and a warehouse worker could get the same kind of retirement package a salesman could if they had the seniority.
They build an empire that lasted over a century, and flourished.
Sears' downturn didn't come until two decades after they phased out worker-friendly policies like profit sharing, and their decline was based on poor strategic decisions, not the profit-sharing that had existed decades earlier.
In other words, being excellent to their employees worked out great for Sears.
The sears salesmen directly drove revenue. He was being incentivized to increase revenue. The warehouse worker is not directly driving revenue at Amazon. The developers do...and they are being incentived to keep doing so.
I joined Amazon as an SDE 1 in early 2015. I was promoted to an SDE 2 in q4 2016. I just was promoted this year to SDE 3.
Hard work, navigating to the right projects, and managing both upwards and down... senior and junior people on my part... I feel a bit ripped off. I'm not sure I would have wanted to get promoted knowing where my comp now falls.
The thing I'm unhappy about is that my target comp isn't actually that much more than where it already was as an SDE 2.
Without going into specific numbers, what Amazon does is if the stock value goes up, you only reap the benefits insofar as your existing grants are worth more. That means if you're above the target comp they assigned you, then you get no additional stock.
My job role as an SDE 3 has changed. I have more responsibilities and the influence I built as an SDE 2 has solidified. It's not easy by any means.
I'm going to just a bit longer as there is some initial vest that's wrapping up early next year... and then I go somewhere else.
My total comp this year is upwards of $250k because of the stock appreciation, but basically I got shafted with the promo raise. My salary and total comp didn't increase. I'm just reaping a higher stock price of vested shares.
Edit
In response to the article
>A warehouse worker hired now at Amazon who stays until retirement would leave with a fraction of that.
A buddy of mine works at the NYT in a tech role. NYT isn't doing anything different than Amazon. It takes a lot of nerve to write these kinds of articles... Hypocrisy at its finest.
First, back up a second and appreciate your position. You were an SDE 1 in 2015, and you're an SDE 3 now. You're making over a quarter million a year. Your career is on a rocket trajectory. Most SDEs don't ever even make it to 3.
Should you leave? Yeah, probably, but only because that's my general advise to most Amazon SDEs. Many (but certainly not all) of the teams there are not super fun to work for. Odds are you'd be happier at any given alternative. Maybe your team's great, but you seem pretty unsatisfied, so yeah, leave.
Should you leave because of the money? Probably not, no. You're at the bottom of a new pay grade. You'll probably be making more over the next couple of years, and if you're on track to Principal, whoo boy is there money there. On the other hand, they say a recent promotion is a great time to quit. Go interview with Facebook or whoever and see if they'll pay more for an Amazon SDE 3 than Amazon will. Who knows, maybe they'll even buy you your unvested shares.
Generally, every American who makes less money than they deserve, has two choices:
(1) Find a way to make more money.
(2) Appeal to the sense of fairness to get sympathy from the community.
Sadly, according to US federal law (4 U.S.C. §§ 888), anyone who earned a total compensation in excess of 7 times national average individual median income, loses the right to option (2). Any attempt to exercise it will result in penalties such as heavy downvoting and ridicule on social media.
If not for these harsh legal restrictions, I would have offered you my very sincere sympathy and words of support.
The good news is that with your fast career progression at Amazon, and willingness to work hard, you will likely significantly increase your compensation when you enter the job market again.
Curious about how many hours you would say you work each week? Or how many total hours per year? A normal 40 hours per week is usually seen as about 2000 hours per year.
[+] [-] whoisjuan|7 years ago|reply
And now that Sears is bankrupt, their pension fund is going into default and passed to the government who will need to fulfill those obligations (thankfully the pension benefit guaranty is not funded with tax revenues).
Of course, I'm not blaming Sears retirees. They deserve their pensions as much as any other person. But the reality is that corporate America learned this lesson a while ago and Sears is just one of many examples.
Is not about pleasing shareholders and fucking up employees as this article claims. It's a problem of business viability and long-term expectations.
Wanna increase salaries and stock grants? Sure, do it. Two quarters later Wall Street will fuck you up because your new shiny compensation model just shaved the company revenue. And guess what, they will punish you at much larger magnitude than your declining revenue. So that 5% of lost revenue is going to cost you 20% or 30% of market value, and now all those stock grants are 30% less valuable. So your great initiative just put you in a negative spiral. And now your employees will be pissed, and the press will come and write an article claiming that your once frugal company is now a money firepit and that morale is low, completely forgetting their initial narrative on how you used to fuck over your employees.
[+] [-] xg15|7 years ago|reply
This basically, is what people mean when they say "fuck the system". It's not about some particular greedy bosses or managers or even shareholders. It's that the whole economy is apparently now structured in a way that businesses don't seem to have a choice. (Or at least the managers believe they don't have a choice).
[+] [-] mlthoughts2018|7 years ago|reply
The article also draws attention to how workers benefited _in good times_ at Sears, not near the end. And this is where the comparison is most meaningful, where Amazon is more questionable.
[+] [-] tinktank|7 years ago|reply
[+] [-] rhizome|7 years ago|reply
This was before or after it had been stripped of assets?
[+] [-] lucideer|7 years ago|reply
Perhaps. Or it could be about competing in a marketplace where pleasing shareholders and fucking up employees makes you more competitive. The problem is not that Sears treated its employees well, rather that its competitors are allowed not to.
[+] [-] Mvandenbergh|7 years ago|reply
Eddie Lampert whined extensively about how hard the pension problem was making things for him. In a sense that is trivially true - extensive liabilities make it harder to run a profitable company - but it wouldn't have been an issue if they had been properly funding their pension liability all-along.
[+] [-] chrisseaton|7 years ago|reply
Who funds it then?
[+] [-] thisisit|7 years ago|reply
Agreed.
But then I am surprised about the whole Wall Street para. People don't like surprises. So a company has to always set expectations correctly, to both employees as well as the markets. If a company is open how the initiative is going to affect revenues there wont be that huge loss of market value.
[+] [-] Aloha|7 years ago|reply
[+] [-] sgt101|7 years ago|reply
Otherwise eventually looters force liabilities onto taxpayers. Human liabilities, or material ones.
For capitalism to work it needs rules, transparency and infrastructure. Our choice is simple : Brazil or Norway.
[+] [-] otikik|7 years ago|reply
[+] [-] simonebrunozzi|7 years ago|reply
That's the main reason why Sears went this way.
[+] [-] jimbokun|7 years ago|reply
This, in a nutshell, is why capitalism is fundamentally incompatible with human flourishing. Because of the process you just described, the only possibility is an end state with a very small number of capital holders prospering and grinding the rest under their boot.
[+] [-] cheeze|7 years ago|reply
My friends working at Amazon as tech workers are making money hand over fist right now. 100+ stocks each grant.
On the flipside, Amazon has a "projected total comp" which they keep you at, and if you're over projected, they don't give you more which is fucked. Google gives you 80k in stock and doesn't tie your future say to it.
[+] [-] jorblumesea|7 years ago|reply
[+] [-] philipodonnell|7 years ago|reply
[+] [-] paulpauper|7 years ago|reply
[+] [-] coldtea|7 years ago|reply
Nobody asked for a "free lunch", those people already work very hard for what they get.
So, it's not much "no free lunch", but "I'll do a token gesture of giving you more while taking your money from elsewhere, because I'm a hypocrite greedy bastard".
[+] [-] steve19|7 years ago|reply
[+] [-] Tsubasachan|7 years ago|reply
[+] [-] SmellyGeekBoy|7 years ago|reply
[+] [-] jorblumesea|7 years ago|reply
White collar workers can absorb the risk in the case of a market downturn, but I'm not sure that blue collar workers can.
[+] [-] refurb|7 years ago|reply
Maybe compare the salespeople at Sears with account managers or some similar position at Amazon?
[+] [-] s_trumpet|7 years ago|reply
[+] [-] michaelmrose|7 years ago|reply
[+] [-] jpatokal|7 years ago|reply
HN discussion: https://news.ycombinator.com/item?id=18276937
[+] [-] partycoder|7 years ago|reply
It's not that he is Scrooge McDuck and all his money is in cash.
[+] [-] TylerE|7 years ago|reply
Workers are drones to be squeezed for all they have and then discarded.
[+] [-] huffmsa|7 years ago|reply
They're enot Amazon's main employees, developers are.
The warehouse staff will be mostly replaced by machines in the next 5-10 years.
[+] [-] arentiright|7 years ago|reply
[+] [-] ryanhuff|7 years ago|reply
[+] [-] finnthehuman|7 years ago|reply
Lets Occam's razor this shit. Is Amazon a megacorp with the ability to throw their weight around and have a large impact on the world? Or are they a little mom-and-pop operation that have wondered into the crosshairs of newsmen conspiring against them because Bozos is the owner of a rival paper? In an era where NYT would like nothing more than to stop the bleeding from papers to online, and migration from NYT to Wapo isn't even on their radar?
[+] [-] scottlocklin|7 years ago|reply
I think the Times is awful, venal, half tabloid, and generally doesn't go after the powerful enough, but I don't think they look at WaPo as 'rivals.' They're basically the same thing, owned by a different set of oligarchs.
[+] [-] josephagoss|7 years ago|reply
These days the NYT is doing some very biased reporting.
[+] [-] donatj|7 years ago|reply
[+] [-] jaysonelliot|7 years ago|reply
They build an empire that lasted over a century, and flourished.
Sears' downturn didn't come until two decades after they phased out worker-friendly policies like profit sharing, and their decline was based on poor strategic decisions, not the profit-sharing that had existed decades earlier.
In other words, being excellent to their employees worked out great for Sears.
[+] [-] jimktrains2|7 years ago|reply
Let's talk in 2106.
[+] [-] airstrike|7 years ago|reply
[+] [-] purple-again|7 years ago|reply
The world changed, business stayed the same.
[+] [-] massaman|7 years ago|reply
[+] [-] asaph|7 years ago|reply
[+] [-] afterburner|7 years ago|reply
[+] [-] stella_r|7 years ago|reply
Hard work, navigating to the right projects, and managing both upwards and down... senior and junior people on my part... I feel a bit ripped off. I'm not sure I would have wanted to get promoted knowing where my comp now falls.
The thing I'm unhappy about is that my target comp isn't actually that much more than where it already was as an SDE 2.
Without going into specific numbers, what Amazon does is if the stock value goes up, you only reap the benefits insofar as your existing grants are worth more. That means if you're above the target comp they assigned you, then you get no additional stock.
My job role as an SDE 3 has changed. I have more responsibilities and the influence I built as an SDE 2 has solidified. It's not easy by any means.
I'm going to just a bit longer as there is some initial vest that's wrapping up early next year... and then I go somewhere else.
My total comp this year is upwards of $250k because of the stock appreciation, but basically I got shafted with the promo raise. My salary and total comp didn't increase. I'm just reaping a higher stock price of vested shares.
Edit In response to the article >A warehouse worker hired now at Amazon who stays until retirement would leave with a fraction of that.
A buddy of mine works at the NYT in a tech role. NYT isn't doing anything different than Amazon. It takes a lot of nerve to write these kinds of articles... Hypocrisy at its finest.
[+] [-] CobrastanJorji|7 years ago|reply
Should you leave? Yeah, probably, but only because that's my general advise to most Amazon SDEs. Many (but certainly not all) of the teams there are not super fun to work for. Odds are you'd be happier at any given alternative. Maybe your team's great, but you seem pretty unsatisfied, so yeah, leave.
Should you leave because of the money? Probably not, no. You're at the bottom of a new pay grade. You'll probably be making more over the next couple of years, and if you're on track to Principal, whoo boy is there money there. On the other hand, they say a recent promotion is a great time to quit. Go interview with Facebook or whoever and see if they'll pay more for an Amazon SDE 3 than Amazon will. Who knows, maybe they'll even buy you your unvested shares.
[+] [-] jrmg|7 years ago|reply
Only in our industry...
[+] [-] _cs2017_|7 years ago|reply
(1) Find a way to make more money.
(2) Appeal to the sense of fairness to get sympathy from the community.
Sadly, according to US federal law (4 U.S.C. §§ 888), anyone who earned a total compensation in excess of 7 times national average individual median income, loses the right to option (2). Any attempt to exercise it will result in penalties such as heavy downvoting and ridicule on social media.
If not for these harsh legal restrictions, I would have offered you my very sincere sympathy and words of support.
The good news is that with your fast career progression at Amazon, and willingness to work hard, you will likely significantly increase your compensation when you enter the job market again.
[+] [-] kkarakk|7 years ago|reply
[+] [-] patrickg_zill|7 years ago|reply
[+] [-] biocomputation|7 years ago|reply
This attitude is why there's been so much pushback against tech in places like San Francisco and Seattle.