Labor Day: We sometimes forget that companies are a convenient illusion. People do the work.

     Here in the United States, we have a holiday called Labor Day. It is close in purpose to the International Workers’ Day. Supported initially by the various States, it became a Federal Holiday in the United States in 1894.

     In spite of some (to me) irrational decisions by the Supreme Court of the United States, companies are NOT people. They are convenient definitions which encompass all the employees and their resources who join their efforts for a common cause (usually commercial).

     Companies use resources to make a product which then brings in money and the income is distributed. The income is distributed to what is called salaries & bonuses, material structures (tools, buildings, utilities, etc), working capital, and (the remainder) profits. All of the amounts, within the capitalist economic structure, are determined by the people who control/”own” the material structures and working capital (called the capital, as a whole).

     These controllers of the capital of a company can be divided among the owner(s), investors/shareholders, and employees. Depending on the legal structure within which the company is organized, specific restrictions may be placed upon the distribution. An “employee-owned” company places the control within the “hands” of the employees who determine salaries & bonuses, what equipment/buildings/land to buy, rent, or lease, and how the remaining amount (profits) are to be distributed. On the other end of such arrangements, a sole ownership private (no public issuance of stocks) company places all of the control within the hands of the owner(s). Investors may have input into decisions according to various agreed-upon contractural requirements. In a “public corporation”, stockholders act as investors and express their input into the decisions through a “corporate board”. And so forth.

     Both capital (material structures and working capital) and employees are needed to make the company function. Neither can be effective without the other. However, the “company” does not truly do anything.

• The company does not produce products.
  The employees produce products making use of the capital

• The company does not create profits.
  The employees create the profits making use of the capital

• Companies do not make decisions.
  The controllers of the capital make the decisions

     And here we come to the crux of Labor Day. (Little of this applies to employee-owned companies.) If more people need work than there are positions within the corporate structure then the controllers of the capital can make the salaries & benefits of employees as small as possible. This can continue until the salary & benefits are so small that no one wants to work for the company. Uncontrolled capitalism places no limits, or restrictions, on the decisions of those controlling the capital. In many ways, it is only a little different from feudalism where the employees/workers are included as part of the property owned by the controllers of the capital.

     As the qualifications, that the employees must meet to be useful, increase the pool of potential employees shrink. If that pool is greater than the number of positions then the controllers of the capital continue to have the same power to control the salaries & benefits of those employees — but the lower limit may have to be higher as the general pool is smaller. If the number of positions is greater than the number of qualified potential employees then the employees determine the minimum salary & benefits they will accept (or they will go to a different company).

     Unions provide an aggregation of influence for potential, and actual, employees. Grouping together, they can determine whether or not products (and profits) can be created. They negotiate with the controllers of capital for conditions for the employees. These conditions may include salaries, tenure, benefits, working conditions, and other items specific to the type of work. The primary method of “leverage” that they can employ is that of the strike — where the employees refuse to continue to work unless guaranteed certain conditions — often concerning wages, working conditions, or benefits.

     Governmental, or legislative, support is needed to make sure that other, non-union, people cannot “volunteer” to become employees without being in the union. “Right to work” laws try to eliminate collective bargaining by requiring that non-union people be allowed to seek work without joining the union. Early unionizing efforts were strongly opposed by existing oligarchs (people who have accumulated both capital and political power) who, in turn, had out-of-proportion influence upon legislators. Much of the conflict ended up violent until laws started moving towards granting protection to the non-capital-possessors (or “labor”).

     Labor Day is directed towards honoring the vast number of workers in the United States, without whom there would be no products, services, or profits. It is directed towards the unions which allow collective aggregation of efforts to maintain influence over the power of the controllers of capital. Although both employees and controllers of capital are required for the system to work, unions and/or legislative support is too often needed to keep that awareness present. A worker who does not make enough to live is unable to live long enough to produce. A well-treated employee provides longer and better service, products, and profits. Short-term views on profits cripple long-term viability.

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Going to the robots: a shift of workforce

     People sometimes say that we are "going to the dogs" -- well, I would say that we are really "going to the robots". Robots were named in 1920 by the Czech playwright, Karel Čapek, within his hit play "R.U.R" -- or Rossums UniversalRobots. The word robota initially was used to indicate servitude or forced labor. So, in accordance with the original usage, there are quite a few humans who would qualify. Within the play, the manufactured robots were described as soulless humans -- manufactured biological creatures without access to feelings or independent thoughts.
     Current usage applies to non-living mechanisms (with in-betweens of Cyborg and Android). In the past, it has been primarily used for non-living mechanisms which retain the general shape and capabilities of living humans. It has now expanded to mechanical reproduction of actions previously only possible by humans -- "robot arms", ATMs (replace bank tellers), self-check counters (replace cashiers), "humanoid" (adjuncts to healthcare, services -- huge future potential), and so forth. Robots are classified in various ways -- methods of movement, category of use, versatility (programmed for one use, capable of multiple uses, or adaptive (AI)), and others.
     Leaving out definitions of Artificial Intelligence (AI) and potential challenges therein, there are many consequences of a shift of labor to robots. By definition, a robot capable of performing a human duty, or action, displaces the human -- the human is no longer needed for this duty. However, the robot needs to be designed, built, programmed, and maintained. One can put together formulas of sorts. (#Robots * useful lifetime) replace workers (net negative of workers). (#people needed for design, building, programming, and maintenance * time needed) required by robots (net positive of workers). Design, building, and programming takes a finite (limited -- it stops at some point) amount of time and the efforts during that time may create a large number of robots. Maintenance is ongoing but one person might take care of dozens, or even hundreds, or robots.
     The final effect is that robots replace workers but require more highly skilled people for a smaller amount of time. This means that, as robotization of society occurs, people will need more and more education and technical and focused training. And, for each specific number of robots put into the workplace, fewer people are needed for support activities. The more robots, the fewer (but more highly educated and trained) people needed.
     This type of shift of workers occurred in the "Industrial Revolution" (mid 1700s to mid 1800s). Very early robots such as automated looms displaced traditional weavers from their professions. In response, there were riots which were stopped with considerable violence. Eventually, workers learned new trades and shifted up in education to take new roles which developed.
     This same shift will be needed for the new "robotic revolution". Greater amounts of education and training for people but, since fewer people will be needed to attain the same results, fewer hours of work per person. This could conceivably iterate (the process continues with additional, more highly educated, workers displaced) until one has a similar situation as posed by Isaac Asimov in The Naked Sun, where there are plantations of robots with isolated humans having few required tasks.
     I am not ready to anticipate robot plantations as of yet. But, we may very well be entering into a period where active labor is done by fewer and fewer people with higher levels of education and training. If so, there will be a strong need of greater emphasis (and availability and affordability) on continued education, more deliberate labor policy oriented at reducing the number of work hours per worker, and methods of distributing savings and benefits across the entire labor pool.

The Luddite effect -- when the new does not transition the old

    In the eighteenth and nineteenth centuries in London, as part of the "Industrial Revolution", a group of workers in the textile industry started gathering together to fight against technical replacements for their labor. Their fear was based in reality. The textile industry in England was a large one within which a considerable portion of the workers earned their living. A mechanized loom might replace the manual efforts of dozens of women and men.
    Similar to the situations that often exist today, these people were hard-working and had developed their skills over their lifetimes and, sometimes literally overnight, there was no longer any market for those skills. The response -- a losing battle -- was to destroy machines, make threats to those who were instigating the changes, and disrupt the ability for the new factories to produce. Some historical accounts indicate that the leaders of the workers recognized that there was no way to defeat the change but wanted better leverage to provide retraining and support of the unemployed.
    Government response was primarily organized around protecting the new factories, their owners, and products. Severe laws were passed and a number of "show trials" were held with death or penal transportation/exile as potential penalties. These laws, in effect, did succeed in breaking the movement.
    Other areas of skilled labor were also displaced within the context of the Industrial Revolution. Although history books usually focus on the improved ability to manufacture goods (and decrease of prices for the average consumer), they do not often indicate the huge labor displacement which was a direct effect of the change.
    The Luddites provide a practical history lesson. Change is difficult for societies to adopt and it is particularly hard on those who have invested much time and effort on the old. If change is to happen (and it is difficult to avoid it) then the process of moving away from the old must be kept in mind.
    There are a number of changes currently going on in current times. One is semi-involuntary, one is semi-voluntary, and another is fully voluntary.
    Climate change is semi-involuntary. This is because it was probably avoidable but made difficult to avoid because of inertia of old methods of business. Although there is still the chance to make the change less severe, it has already made significant changes to the world. The Great Barrier Reef is close-to-death largely because of the increase in global water temperature. The glaciers continue to shrink around the world -- this is especially important in the Asian subcontinent where winter storage of water in snowpacks and glaciers provide water to billions of people. "100-year-floods" and "100-year-storms" are occurring more often as the water temperature rises.
    A semi-voluntary area of change is the shift from non-renewable energy sources. Since the change has to be encouraged, and pushed for, it falls into the voluntary category. It is reaching the tipping point where it is almost easier to use new, renewable, energy sources than to keep using the old ones. However, just as happened in the textile industry, it is very important to recognize, and assist, the people and families dedicated to the old energy systems. Solar panel factories located at old coal mines to allow easier transitions?
    A full voluntary area of change is the strong push towards greater and greater independent automation. Phones get smaller and more powerful. Robots can take over more manual labor in a programmable fashion (as opposed to dedicated design such as in the textile mills). Innovation and extensive education becomes more and more necessary for general job positions.
    Whether voluntary, involuntary, or a mixture of such, change requires preparation and assistance in moving from the old. The is a necessity for the change and, when it is forgotten, much suffering can occur as well as rebellion (isolated or global).
    What happens to the old when the new comes? This is an age old question but, with more rapid change comes the need to actively address the needs for migration, retraining, and restructuring.

A divergent possibility : Reuse or Recycle is a fork in the road

    The three "R"s include the areas of Reduction, Reuse, and Recycling (with the addition of the preliminary "Rethink" of the Houseboat philosophy). But how is a decision made whether to resuse an article or to recycle it?

    Generally, this is a matter of how easy is it to do one or another. To reuse, it must be able to be used -- it must be in working order. A book is presumably able to be reused easily unless it is damaged. An old sofa might be moderately damaged -- needing a hole to be repaired or a leg put back on. A piece of electronic equipment may require a diagnosis followed by repair. There is a sliding scale of ease of reuse. No work is needed up to potentially quite a bit of work (perhaps as much as creating the item originally).

    Sometimes, repair can become part of a hobby or enterprise. People may take great pleasure in the work needed to repair a vintage car -- and the parts and labor can be considered an investment. The same can be true for people who buy a house in need of repair and succeed in renovating it such that it can be lived in, or resold, in a much better condition (and higher price).

    But, what about a toaster? There are some "vintage" toasters that can rise in value -- but most of them are "commodities" -- able to be replaced easily or replaced with "improved" characteristics. Is it worthwhile to repair? Is it a part of an internal enjoyment to repair? Possibly for some but for most it is not worthwhile. So, we hit an economic tradeoff which is very dependent on the local cost of merchandise and the local cost of labor.

    Let's say that a new working toaster is priced at $30. A used working toaster can bring $5 at a flea market or local swapmeet. If the cost of labor to repair toasters is $20/hour and it takes two hours to repair it, then making a non-working toaster able to be sold would cost $40 and only sell for $5 giving a net loss of $35. Who would decide to do that? Hopefully, the person would find a good place to recycle the toaster.

    However, if we are in another place where a new working toaster is priced at $20 and a used working toaster can bring $7, we may have a different situation. What if labor costs are only $2/hour? A non-working toaster can be repaired for $4 and sold for $7 -- giving a total profit of $3. We can see that the local prices and local labor costs make a big difference as to whether something is reused.

    Another factor that comes into play for reuse versus recycling is convenience. If I have a paperbook that is not severely damaged I have a choice for reuse by taking it to a used bookstore or recycling it via a curbside pick up. If it takes me 40 minutes (roundtrip) to take that book to the bookstore then recycling becomes an attractive option. If I have a box of books, however, the time needed to take them to the used bookstore becomes less of an overhead. Convenience and net savings come into play -- plus the value one gives to their own time.

    As an umbrella over the choices is the priority one gives to the environment. Reduce, Reuse, Recycle are the three rules but they only apply to people who care about the effects of NOT doing these things. Some may care because of the money involved with not doing it -- some may care because of the environmental costs -- and some may not care at all. What is my time worth in choices needed to help maintain a good environment? Do I care about the state of my surroundings when the next generation is growing up? These are underlying questions with individual answers.

Processed Foods: The good, the bad, and the ugly

   The first step in processing foods is the act of harvesting. So, saying that a person doesn't like processed foods is a bit on the silly side. Picking an apple off of a tree or shucking an ear of corn is processing the food.

   The next stage of processing involves changing the food physically. Food is cut up. It is ground. It is juiced. It is shredded. If it doesn't look the same as when it was harvested, then it has been changed physically.

   Now we come to the part that involves chemical change. This isn't always what people consider to be chemical change. Drying something in the sun will involve chemical (and physical) changes. Fermenting a juice into an altered liquid that contains alcohol is a chemical change. Applying heat and cooking a food is a chemical change. Putting something in a different substance (even water) will often -- but not always -- initiate a chemical change.

   Processing food makes it easier to eat -- or more interesting to eat -- or makes it easier to store for longer periods of time. These are not bad goals. So, what is the big deal about processed foods? Why would anyone object to processed foods.

   As usual, the problems arise out of the details -- the hows, whats, and whys. Harvesting isn't usually considered a big problem -- unless it is done in a way that has "side-effects". For example, some foods are most easily harvested by starting a big fire and sifting through the remains. Other foods might be harvested by killing the main plant when only a small part is going to be used for food. Finally, there is the background issue (not to be discussed at length here) of production which is necessary for harvesting to occur.

   Physical processing takes energy. If physically preparing food is part of the daily routine then it is a closed system -- energy given by eating the foods is used in the preparation of those same foods. However, when we buy something already processed then we are also requiring energy to be used for the preparation as well as transport. That energy is likely to include non-renewable energy sources.

   Now comes the most controversial part of processed foods -- chemical changes. The previously mentioned changes would usually be considered "natural" (although they are not all likely to occur without some intervention by some other living entity). When "artificial" processing (as mentioned in another blog, these terms don't have as distinct of a difference as people often seem to think) is involved, the food will change in ways that cannot always be predicted.

   Edible items (we'll continue to call them foods) can be produced from inorganic (not originally alive) components. During the processing of foods, additives can be included that change flavors (this can include spices and herbs -- but also inorganic chemicals) or make the food last longer (usually called preservatives), or become more addictive (added sugars, salt, certain chemical substances) to increase marketing and sales. These types of processing can make the food less healthy -- and this is the big deal about processed foods. Commercially prepared processed foods are often less healthy than fresh or personally processed foods.

   So, why do people buy processed foods -- and why are people buying a larger and larger percentage of their food in the form of processed foods? I would categorize that in the regions of time, convenience, marketing susceptibility, and (for many items) monetary savings. Using processed foods saves time -- it reduces the time to prepare, the time to consider the recipe, and usually time to cook or put on the table.

   In the case of processed fresh fruits and vegetables, you will probably be paying quite a bit extra to have someone process them for you -- but you may save, if you are single, because you are only buying the amount that you will eat. This is a cost trade-off.

   In the case of stored (frozen, refrigerated, canned, or packaged) processed foods, it is often true that it will cost you less to buy processed food from the store. This is because the food processing company pays less for the ingredients because they buy in huge quantities and because the energy costs in labor and machinery are less than what it would take for you to prepare. The actual costs of the food may amount to 1/4 of what you would have to spend to prepare it personally. With the markups of transportation, storage, and profits at different stages, the final price is still often less than what you could realistically prepare. So, it ends up being a choice concerning time and quality.

   Marketing susceptibility is a huge topic (and one on which I have briefly discussed in other blogs). This is buying products that you KNOW are not good for you and which may not even taste as good as healthier alternatives -- but if convinced that it is the popular thing to eat (in the popular quantities) then you may choose to buy and consume it.

   The "ugliest" part of commercially processed foods is the addictive parts. Processed sugar (including High Fructose Corn Syrup) is an addictive and unhealthy substance. It can be found in many processed foods including canned vegetables. Check the ingredient list! Salt is a flavor enhancer but, for some people, it can be hard on the body in excessive amounts. Governmental control agencies have stopped the addition of such substances as cocaine, coca leaves, and other known addictive chemicals (yes, they did use such at one time) into foods but there isn't enough oversight to make sure that other newer chemicals do not have addictive or destructive effects.

   The bottom line is that processing food is a long, and reasonable, thing. Local processing is probably always healthier than commercial processing but there are reasons why people choose to buy commercially processed foods -- and why they take more and more shelf space in the supermarkets and grocery stores.

   Do you make use of processed foods? What kinds do you purchase? Do you check the ingredient lists when you make choices? Does it matter to you if you are preparing for one or two versus preparing for a large family gathering?

Regulations create level playing fields for businesses

   It seems to be fairly "normal" for businesses to complain about, and fight, every new regulation that is proposed or enacted. This isn't unreasonable as it will be true that a new regulation will require different procedures (and probably additional paperwork). However, that is not the same as saying that regulations are bad for businesses -- but it can be a difficult balancing act within the global economy.

   Regulations are a way to tell businesses what practices are acceptable to the society in which they function. They fall into three general categories (actually, almost anything can be broken up into however many categories as are desired -- I am choosing three). These categories are economics, labor, and environment. There is also a fourth category which involves product regulations -- for the product quality and safety of the consumer but that does not directly apply to this blog.

   Economic regulations involve the way the products of a company become part of the general economy. This will involve taxes. Generally, businesses want to pay fewer taxes and the general population wants them to pay more taxes. It will also involve tariffs -- both import and export. Tariffs are special taxes that are involved with the movement of products and money across country borders. This is a part of the balancing act.

   Let us say that Country A, as part of the standards for their society, requires all businesses to ensure that any water used by the business to be cleaned to drinking standards before being released back to the environment. This requirement (or regulation) adds 5% to the cost of doing business in Country A. Country B does NOT have such a requirement and, thus, businesses can produce the same product for 5% less. This puts businesses in Country A at a price disadvantage. A tariff on products imported from country B gives the businesses a more equal competitive situation. (Note that the tariff does not help the environment in country B.)

   Regulations may also be in the category of labor use. Minimum wage laws (or "living wage" laws whenever they start being enacted) say that people cannot officially be employed without a certain level of pay. Restrictions on number of hours worked per day, or week, directly affect the number of people employed. "Child Labor laws" restrict the age of workers and the number of hours per day that they can work at what ages. Mandatory sick days allowed (paid or unpaid) create a situation where workers are not compelled to work even when sick (this also benefits the general population when the food industry is involved). Vacation days, holidays, and other types of paid, or unpaid, absences help the overall health of the people who work for a business.

   Environmental regulations are basically a matter of how businesses are allowed to affect the environment. Usually a person thinks of manufacturing companies for this. However, the requirement that a business have, and maintain, a parking garage would also be an example of an environmental regulation as it reduces the amount of land that cannot be used for vegetation. Another non-manufacturing law might be a requirement to turn off 70% of the lighting during non-working hours.

   Of course, environmental regulations apply more directly to manufacturing businesses. It is similar to teaching a child to "clean up their own mess". A business would, naturally, prefer other people to take care of their messes. Note that not having environmental regulations does NOT decrease the cost to clean up -- it moves it from the business to the general public. In fact, it probably costs less for the mess to be cleaned up at the site of creation of the mess than after it has dispersed and damaged other parts of the environment.

   It would be completely possible for a business to do everything well on their own initiative. They can treat their people well, be good to the environment, and be a good neighbor within their communities. There are many small businesses that strive hard to do such and other, larger, businesses that recognize that there are inherent benefits (lower turnover of staff, better public image, etc.) to do such. However, businesses that do NOT behave well can have financial advantages over their competitors -- and this does not help society as a whole.

   Regulations provide a framework that is acceptable to the local society that allows businesses to compete without having uneven costs of providing services.