Published on: June 26, 2012
Got some interesting emails yesterday challenging my coverage of and assumptions about a New York Times
story suggesting that perhaps, within the context of how much money Apple makes in its retail stores, employees there could be described as underpaid. The story appeared in the NYT
just days after Apple announced that it would give its store employees raises of as much as 25 percent; the suggestion was that Apple made the move when it learned that the Times
was working on the story. It struck me as interesting that he average Apple Store employee reportedly makes $12 per hour, would total $24,000 a year if they worked eight hours a day, five days a week, 50 weeks a year - which seems a little low for someone generating almost a half-million dollars a year in revenue, which is what the average Apple Store employee generates in annual sales.
I commented, in part:It is interesting that while Apple has been dealing with accusations that its suppliers were exploiting employees in far off nations, the same accusations could be made of its own domestic operations.
Now, there will be those who will say that people with $24,000 a year jobs at this time in our economy ought to be grateful. But what this all goes back to is the subject that we were discussing last week here on MNB - the importance of having employees who feel that they are assets, not costs. Being paid fairly - especially in the context if what they are bringing in - is a big part of it. (Though not all of it ... Apple has been able to pay people less for a long time precisely because it has something else to offer people beside money. "Something else," however, rarely works when one has to pay the rent, or a mortgage.)
Hopefully, Apple - an exemplary company in so many of the products it produces - is learning that it needs to be exemplary in all facets of its business operations. And it'd be nice if other companies learned from Apple's example...
One MNB user replied:It is not any of your business what Apple pays. That is between them and the employee. Only do gooders want to dictate to them. I assume if someone is underpaid they can leave.
And MNB user Robert Hemphill wrote:Apple should be accused of exploiting employees in its domestic operations? Not really. Apple hired thousands of people who agreed to work for the amount they were paid. None of them were forced to take the job, or exploited simply because Apple concluded later that they were underpaid. In what way were they exploited? What is underpaid? It's a perception, not a fact, an opinion, a judgement.
The old trope that employees should be paid fairly runs counter to both common sense and the reality of free market capitalism. As with any un-regulated economic transaction, a "fair" price is the one that's paid for a product or service. The seller and the buyer agree on a price, and likewise the employee agrees to work for the pay that's offered. Those who believe they can define a fair rate of pay can't actually do so. Yes, you can appeal to one's sense of concern for the downtrodden, oppressed, put upon workers. Apple store employees are the cheeriest group of retail salespeople I've ever encountered, time after time.
Is a fair rate for Apple to now pay $15 an hour? Sounds like a better rate of pay than $12 for the worker, but so does $20. Why not $30? Is fairness based on what's needed to pay the rent? Who gets to decide how much that is?
From the business owner's perspective, $9 an hour sounds better than $12. If a business can hire quality workers for that rate, who want the job and don't feel somehow exploited, its probably because they can't get a better paying job, at a company that treats them better. Paying too low a rate in an open marketplace isn't a good strategy, because you'll lose good workers to other companies who pay more. Not that they are more fair by offering higher pay. It's their strategy, and it comes with tradeoffs too. Keeping costs low, and yet finding a way to have high quality results, is a winning strategy that Apple excelled at. Now they're going to pay more than before, without having unions define the required level of wages or government regulations defining what's fair. Sounds like a well considered strategy by the best brand in the world. I'd take that any day over someone's arbitrary calculus or what constitutes fairness versus exploitation.
A couple of things here, if I may respond respectfully.
First of all, if I had it to do over again, I would rewrite the sentence that implied that I thought Apple is "exploiting" its US store employees. That wasn't precisely what I meant; I was trying to suggest that some of the same issues that have been preoccupying Apple in its global sourcing operations seem to be creeping up on them here at home, though hardly at the same level.
If I choose to make what Apple pays its employees my business, I'm damn well going to do so. The whole premise of MNB, if I may be so bold, is that I sort of decide what stories capture my attention, choose the ones that I think make interesting points or will provoke worthwhile discussions, and then I write them up as best I can and see what happens. Everything is my business, as far as I'm concerned.
That was me speaking as a writer. Now, let me talk about consumers...
The reality of doing business in the 21st century is that all this information is out there, and companies are being forced into a level of transparency about their operations that probably makes some of them uncomfortable. But so it goes. Some people - not everyone, but some - are going to make consumption decisions based on how companies source product, treat employees, etc... That's because some people view the whole notion of value within a broader context than others. This doesn't make them right or smarter or even necessarily more ethical. (Well, sometimes it makes them more ethical.) They certainly have a right to make decisions using those criteria, and companies have a right to pay attention or not. Does this make them do-gooders? Perhaps. I know that on the scale of things that I've been called in my life, "do-gooder" is not one that would bother me very much.
I'm a little surprised to learn that "fair pay" is antithetical to common sense and free market capitalism. I would suggest that in an era of transparency - when the internet makes it possible for everybody to know all this stuff, comment about it and even organize responses to policies that people find unacceptable, if such a thing were ever true, it isn't true anymore. If consumers are dissatisfied with a company's behavior, they can make decisions that factor in that dissatisfaction. That's part of the free market, too. It also seems like common sense, if such things matter to the consumer.
Nobody is dictating. We're discussing. Evaluating. Making value judgements. And discussing some more.
I would argue that it seems obvious that Apple realized it had a problem in terms of Apple Store pay scales, which is why it announced the raises. Was this precipitated by the Times
story? Maybe, maybe not. Doesn't really matter. They saw a problem and addressed it. For which I give them credit, regardless of the motivation. And suggesting that if $12 or $15 is fair, $25 or $30 an hour would be fairer - at least according to what you say is flawed logic - is itself a specious argument. It sounds good, because it goes to an extreme to prove a point. But nobody was suggesting the extreme.
I thought the Times
story was interesting, because it raised an issue that businesses - especially retailers - need to consider. And I'm not really talking about money, though cash is always a good way to show appreciation. Businesses often forget that the people on the front lines - the ones that the customers deal with on a day to day basis, who are the face and heart and soul of the company - are among their most important assets. They sometimes say it, they put it in their annual reports, and maybe even on a sign in the employee cafeteria. But often it is just lip service, and they think that the people in the corporate offices - who customers often don't see or know or have any connection to - are the most important.
It seems to me that Apple has some wonderful assets. it has a culture of innovation. Fabulous marketing. Game changing products. And, it has the people who work in its stores, who make the difference in thousands of lives each day
Have these people been fairly compensated over the years? I don't know how to answer that question, because it is highly subjective. You're right about that.
I do know that I was in an Apple Store yesterday, being taken care of by a very smart, very customer service oriented fellow. And he told me that as much as he loves Apple, as much as he loves the store and the people he works with, if the Microsoft Store tried to hire him away for more money, he'd have to go. "The Apple Store is a cool place to work," he said. "But cool doesn't pay the rent."
Now, let's be clear. Apple can pay this guy whatever it wants to. He can stay or leave. He is, to be sure, replaceable. And Microsoft can offer whatever it wants when trying to poach Apple Store employees. (Which, according to reports, it is.) You're right. This is a free market.
The questions I would ask is this: Is Apple putting too little of a premium on the importance of keeping people like this, people who make its stores a success? Is this a sustainable strategy? (And I ask these questions as someone who bows to nobody in his enthusiasm for Apple's culture and products.)
I concede that there are different answers to these questions. However, I feel strongly - and would tell any young person interested in my opinion - that wherever they work, they should work for people and companies that put the highest value on the front line personnel, for people and companies that treat employees as assets to be nurtured rather than as cost and/or liabilities. I think that compensation is part of this ... but hardly the only part, and not even the most important part.
I'm not sure - considering the various stories and my personal discussions with Apple employees - that Apple's retail operations necessarily get the highest marks in this area. But my sense is that they know that this is an area where they need to improve, and they are taking steps.
Feel free to disagree. But I continue to believe that this is an interesting story and a worthwhile discussion. And entirely my business.
I love it when I get emails like this one, from MNB user Gail Nickel-Kailing:I provide marketing services to small artisan food processors - cheese, flour, grains, primarily - and occasionally spend time sampling products in one of the stores carrying them. Last Friday I was in Metropolitan Market's West Seattle store for 4 hours (3-7PM) and was amazed and encouraged at the number of staff members on the floor. They were not just stocking products - many were actually stationed in various sections to assist customers, answer questions, and locate products for them. Even in my logo'd T-shirt and apron, I was asked by 3 different people if I needed assistance in finding anything as I was purchasing items needed for my sampling.
Met Market does a great job of making the customer feel "coddled" and the West Seattle store is one of their best. Compare that with Walmart where you can't find anyone to actually help you with anything... Yes, Met Market is going to be more expensive than Walmart, but the number of customers I saw shopping there was remarkable. And the checkout lines were manageable and fast.
I think you've visited them here in Seattle - they deserve another look as a fine example!
Responding to yesterday's story about research showing that Walmart is cheaper than Amazon in a number of categories, MNB user Tom Robbins wrote:KC, this research is really no surprise. What continues to amaze me is your bias in favor Amazon. It shines through in most of your commentaries.
No question - I have an Amazon bias. For good reason, I think. I believe it is an amazing, game-changing company. And I'm very up-front about having this opinion - which is why they call it commentary
. (This would only be a problem, I think, if I claimed to be unbiased.)
Also got email about my piece yesterday about the growth of so-called "breastaurants." MNB user Russell Thomas wrote:We were in Orlando one year, desperate for a late lunch, when I spotted a Hooters. The wife and I went in with three young sons. We had a nice lunch and left. A year later my middle son, then nine, said from out of the blue that he “really liked that place in Florida with the owls.
You didn't know that "owls" is a euphemism?
And I got the following, incredibly kind email from MNB user John McHugh:I have been reading MorningNewsBeat for several years now. It is the only daily news I read faithfully and always find value in what you write. I, along with my entire Training Department, have read “The Big Picture.”
I have always been impressed with your personal stand on issues that relate to ethical matters. As the person who trains “Ethical Leadership” for a Convenience Chain of 10,000 coworkers, I always find your perspective refreshing and encouraging. Today, however, I felt compelled to write and compliment you. Your editorial about not taking your son to Hooters while in Baltimore impressed me. I am not a prude by stretch of the imagination but do believe places like that are demeaning to both sexes.
Your writing is excellent, your insights always right on, and your ethical perspective is what our world needs. Thanks for what you do. You may not know it, but every day you improve the quality of life in our world. The world needs more people like you. Keep up the great work!
I'm blushing. And grateful. Thanks.