The
hierarchical management and pay structures which are natural for capitalist
firms do not work for union and employee-owned firms. For union and
employee-owners to get the most out of ownership, they must change their
mindset. Alter profit distribution to fully compensate employees for their
share of the profits of the firm, based on the share of production cost
contributed by labor. Represent union workers specifically on boards to the
extent that their employees own company or ESOP shares. Distribute ESOP shares
to employees equally, rather than as a reflection of income. Start share
accumulation on day one, not after a year. Compensate long-term temps with
shares of the client company. Staffing services must not be used to rob
employees of ownership rights that are due to them. Organized labor then shifts
its culture from contention and worker protection to ownership and innovation.
If union and employee-owned firms out perform traditional firms, traditional
firms either follow or fail.
Management
pay and selection change in the new culture of ownership. Managers bid for
their positions in open auction, with ties settled by a vote of the employees
supervised. Innovations are paid separately after results occur, rather than
including the expectation of innovation up front in management or professional
salaries. The firm also provides education, with salaries paid to students in
training. Shifting the financial risk and training more individuals where there
is a shortage equalizes salaries. Pay and benefits compensate for the supply
cost of labor for young families and older workers. Families with young
children receive higher pay tied to child rearing, while older workers receive
pay for longevity through stock accumulation rather than pay increases, ending
the perverse incentive to fire the most productive employees as their salaries
increase. Financial services, such as payroll lines of credit and employer
financed home mortgages are provided to employee-owners as a retention bonus.
In a perfectly competitive labor market, salaries are equal and allocation
between professions ideal. These structures create that type of market, also
ending discrimination in the workplace.
Housing is
to be provided in different ways to young and to long-term employees. Younger
employees are provided dormitories or apartments. Longer-term employees are
offered environmentally efficient homes with food production facilities and a
shorter day so that they may grow their own food. This philosophy, called
Inter-Independence, establishes an interdependent workplace for the purpose of
making each worker self-sufficient. Employees who grow their own food decide
what they want to eat and grow it. Basement agriculture provides retirees a
productive activity. Technology developed for space colonies is adapted for
home use, including the conversion of waste into grass into fertilizer,
hydroponics and artificial protein synthesis. Small animals are also raised,
especially chickens and sheep. The home produces wool and cotton, which is
processed with automated equipment. Habitat size is adjusted for growing and
shrinking families.
Electric
cars eliminate death due to car smog and auto accidents, provided that central
control and power are supplied through overhead lines with the entire system
partially or fully underground. Fund this system with a combination of public
and private investment and integrate it with mass transit, offering drivers the
best of both worlds. Cleaner burning coal, nuclear fission and emerging fusion
technologies power the system and also provide electricity to individual homes.
After
grade ten, young people either go down a vocational path or an academic path.
Students in vocational training are sponsored by future employers and paid a
salary. At age 20, after receiving a general education, some academic students
enter the workforce, while others seek more advanced study, with training
sponsored by future employers to the graduate level in exchange for a service
requirement. In either case, students in training are provided housing and
enjoy many adult rights, including the right to start a family. Medical
students first train and work as nurses, then work more reasonable hours while
in their post-graduate residencies because of this experience. Hospitals or
health systems sponsor training and enough doctors are trained to influence the
cost of medicine.
Mid-career
workers are compensated with homes with food production facilities. Longevity
compensation is through stock and dividends rather than through salary.
Innovation is awarded through both cash and stock. If worker knowledge becomes
obsolete, mortgage debts are forgiven and retirement funds fully funded so that
retirement begins early. Intervention services are available for employees who
under-perform or who lapse into addiction. Retired workers grow their own food,
consult and continue to vote their stock, although surviving spouses are
required to sell their stock back for an annuity, possibly to be set up through
their house of worship. Young people learning how to grow food assist older
retirees in managing their homes.
Either
established consortia or new startups can use the advanced management practices
presented in the discussions on twenty-first century living. Total Quality
Management’s goal of driving responsibility to the lowest level is best matched
by efforts to equalize pay. Otherwise, workers see through the hypocrisy and
the program is doomed. Advanced recruitment and compensation methods are
applicable to each type of operation, but in different ways. Older firms have
access to capital but have to overcome an entrenched culture. Startups create a
new culture but lack capital and have to compromise to obtain needed financing.
Space exploration is the ideal venue to try 21st century housing, both for
space and land-based personnel. ESOP structures are useful to buy out current
owners or venture capitalists.
Multi-national
firms that become union or employee-owned convert their overseas subsidiaries
out of self-interest. These firms seek out talent missed by the current regime
and generally attract the best workers. This causes entire economies to shift
to 21st Century Economics and a middle class to develop in the developing
world. Union-owned multi-nationals develop a common market basket of goods for
transfer pricing and to expose exploitation in trade and economic policy.
Publishing this information affects currency markets, which stabilizes at a new
equilibrium. Stable currency markets lead to agreements on money supply growth
and make currency conversion possible.
Privatization
in Russia failed because the Oligarchs were able to exploit new owners. The
precepts of this book are useful to gradually restore ownership to Russian
workers. In China, an evolving middle class eventually revolts, leading workers
to demand renewed ownership stolen by party bosses. Firms that have not been
privatized do so by awarding stock in relationship to tenure and holding it in
trust until retirement, with representation on boards by occupational group and
profit distribution for both labor and the ownership of capital. Outside
capital is procured, but in a way that preserves the value of the worker
investment.
Our comprehensive four-part approach:
- A
Value Added Tax (VAT) to fund domestic military spending and domestic
discretionary spending with a rate between 10% and 13%, which makes sure
very American pays something.
- Personal
income surtaxes on joint and widowed filers with net annual incomes of
$100,000 and single filers earning $50,000 per year to fund net interest
payments, debt retirement and overseas and strategic military spending and
other international spending, with graduated rates between 5% and 25%.
- Employee contributions to Old Age and
Survivors Insurance (OASI) with a lower income cap, which allows for lower
payment levels to wealthier retirees without making bend points more
progressive.
- A
VAT-like Net Business Receipts Tax (NBRT), which is essentially a
subtraction VAT with additional tax expenditures for family support, health care and the private delivery of
governmental services, to fund entitlement spending and replace income tax
filing for most people (including people who file without paying), the
corporate income tax, business tax filing through individual income taxes
and the employer contribution to OASI, all payroll taxes for hospital
insurance, disability insurance, unemployment insurance and survivors
under age 60.
The
solutions to the Social Security crisis offered by both parties involve
increasing the savings rate, although the Republicans divert funds from Social
Security taxes to do so while the Democrats offer incentives for additional
savings and investment. Neither solution works in the long term, as the nature
of the Social Security crisis is demographic rather than financial. To put the
program on an even keel and to end the tragedy of abortion, alter the tax code
to take the financial hardship out of having children and shift the responsibility
for funding college from parents to future employers.
If
President Bush had been serious about reforming Social Security he would have
compromised to get his reforms past the Senate. Several of the possible
compromises improve the program, although they would have alienated his base.
First, link the employer contribution to average income, rather than individual
personal income, and credit it equally for each full-time worker. Second, give
workers the option of investing their personal retirement accounts in an
Employee Stock Ownership Plan, rather than in an index fund, and require that representation
on ESOP trusts and corporate boards includes factional representation for each
type of employee (union, management, professional). Third, let Unions, rather
than government sponsored brokers, manage the Personal Retirement Accounts of
their members. Finally, since transition costs are most likely to be borne by
wealthier taxpayers, either the personal income tax must be raised or the
income cap on contributions to the trust fund eliminated.
The 2001
tax cut and the collapse of the tech boom have led to a financial crisis at the
state and local level. This shows the inadequacy of state and local tax
arrangements. In the future, align taxes more closely with the social purpose
of spending programs. Income taxes, which are redistributional, fund
redistributional activities like education, aid to families, social services
and even corrections. Sales taxes fund services to business, including a
portion of public safety, and urban revitalization, while property taxes fund
infrastructure and a portion of public safety. This proposal is particularly
useful in Virginia, where taxes are generally inadequate to fund needed
services. Linking taxing and spending demonstrates this. Business income/value
added taxes are another alternative to replace income and sales taxes,
especially if the federal government acts first. In Virginia, taking the lead
on this reform requires a state constitutional amendment and repeal of the
anti-Catholic Blaine amendment barring direct support for religious schools.
Giving
federal managers more discretion to promote non-competitively ends the extreme
waste of time many applicants go through in applying for positions where the
winning candidate is already pre-selected by management. Another reform
designed to increase recruitment is to delete questions on past drug use from
the Personal Security Questionnaire while pre-employment drug testing is be
made universal. Failing a drug test leads to treatment, not to dismissal. The
current drug-testing program is draconian. Sick leave rules are modified, with
the introduction of disability insurance, so that employees do not build up
huge leave balances in this area. Annual leave is brought more in line with the
private sector, with a lowering of the leave entitlement and the introduction
of holidays in the week between Christmas and New Years. Armistice Day is
replaced with Black Friday and Columbus Day is abandoned. Finally, it is past
time to mirror industry and reduce the workday for federal employees and
contractors to 37.5 hours a week and eventually 35.
Later Topics
Professional
Sports Teams and the Entertainment Industry
Celebrities
still make big money in Cooperativism. The purpose of increasing equality is
not to tear down the stars but to raise up new talent and support personnel.
Teams are be bought out by their current and retired players in partnership
with their home cities, to the extent that they play in publicly financed
venues. Employee-ownership and a stronger team ethic increase pay equity. The
entertainment industry also benefits from employee-ownership in the same way. A
business income/value added tax credit is established for contributions to
broad-based arts education, as well as for the training of up and coming
talent. Ownership also helps prevent young talent from being exploited.
Education,
Welfare and Religion
To
effectively educate children, first make sure the parents are literate. All
adults have a basic human right to literacy and to full financial support while
they attain it. Tie public assistance to the pursuit of education, with social
services available only through the schools. A system of Catholic adult education
and vocational high schools can best provide these services. Vouchers are not
the answer to school reform. The secret to reform is to organize the public
school system the way that private schools are organized, with autonomous
Principals reporting to school boards for each institution. Most functions are
to be decentralized. Once this reform is enacted, private religious charter
schools are funded through an increase in income taxes. School prayer in
charter schools will be less of an issue, as will teaching of the “Intelligent
Design” theory. This paradigm is more about religion than science (and is
taught there with private funding). Teaching it in science class brings the
debate on the interpretation of the scriptures to the realm of public decision,
where the religious right will not really want it to be given the Sumeric
origins of the creation myth found in Genesis.
Drugs,
Mental Health and Crime
The War on
Drugs is waged as much for cultural reasons as for public health. Like alcohol
prohibition, it has not worked. A better alternative is mandatory treatment for
addicts, as well as for the mentally ill. Mandatory treatment is preferable to
using the prison system as the largest provider of mental health care services.
Most crime has its roots in addiction, mental illness or illiteracy and is
better treated in those arenas. Replace the insanity defense with a plea of
guilty by reason of insanity. Non-acceptance of this plea by the prosecution
must be reviewable. The state has proven itself incapable of providing mental
health services. The Catholic Health Care system is a natural choice to step
into the void, bidding as the prime contractor for private prison contracts for
non-violent drug offenders and for the criminally insane.
Proof of
God
We first
examine the proofs of the existence of God that I find most convincing. The
surest proof of God is on a personal level, the experience of grace. While this
cannot be offered as evidence to another, if enough individuals share such a
common experience it is best not to ignore it. Of course, all proofs come down
to a personal choice as to whether the universe can exist on its own or is
created, moment-to-moment, by a God who sustains existence itself.
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