An experiment

The unfortunate passing of a brother has left me in a fortunate position. I am now majority owner of a business. I won’t say anything about its name or location for sake of privacy, though those who know me will know.

I urged my brother over the years (as did another brother) to treat his hired help with more respect and dignity. But, GRHS, my brother thought that hires were a drag on profit, rather than part of its source. Over the years, he refused to offer higher wages, eliminated benefits, and refused to even consider offering more hours than demand justified. He built a nice cushion to insulate himself from downturns, but no one else benefited. GRHS.

So I come in, and find two loyal but distrusting employees. I need them, as I know little of the nuts and bolts of this business. It so happens they are a married couple.

I tell them “We’re adults. Let’s work together. I trust you, you trust me.” But it’s not that simple. They stand on a rug, and expect that my power to pull it will leave them in constant insecurity.

I tell the wife, who answers phone and cleans and helps as help is needed that she will receive a check every Tuesday. Whether she is there or not, they have guaranteed income. The amount is a risk, as rain or shine, it will be paid. They need some security. Paying her rather than him is a way of avoiding some legal problems in his basket.

He is a different sort of animal, infected with submissiveness and not used to flexing his muscles. He was paid $14 per hour, no benefits, and my brother made sure that there were no fluff hours. I raise him to $20, not out of line for a craftsman. Then I hit him with the unexpected. I ask him to go out and get a health insurance policy for both of them.

I don’t hear anything back. So I ask him about the health insurance, and he says that he looked into it, and Blue Cross quoted him $637 a month! He walked away. I told him that that is not out of line in our country, and to go back and sign up, and the company will pay the premium. He’s a little nonplused, but follows through.

In our country we depend on employers to provide health care benefits, and here we have employees so beaten down that they don’t even have expectations. And employers know they can elect simply not to offer that benefit. That’s nuts.

In the meantime, we need money coming in the front door. We are capital intensive, that is, the investment in equipment over the years has been significant. I do not depend on the company for livelihood, and my co-owners are principled and support me. But I put myself on the payroll for accounting and management. I’ll make less than the help at this time, as we need them as much as they need us. But we are not a charity.

We have to rebuild our reputation. At this point, headed into winter, we have enough money in the bank to get us through to spring, but oddly, right now, we have more money in the bank than when I inherited my share (58%) of this business. My friend/employee is making calls, keeping his eyes out, bidding on jobs. I delight each time I talk to his wife, as she is happy to hear from me. She is getting that check every week, and suspects that I am sincere. We want to expand to a neighbor city, and I have suggested that we need to knock off some mileage charges just to bring in business and build up a reputation. We need a larger market.

We got a call from a competitor down the highway who wanted to get in touch with me, obviously to discuss buying us out. (My five kids each own 1/12 of this business, so I am also working for them.) Our employee refused to give him my number. That is that damned insecurity, so afraid I will pull the rug.

I have insisted that he not work weekends, but when I see him on Monday, I will tell him that I guarantee him six months income if we sell, and a bye-bye bonus
to boot. After all, even though my family owns the equipment, without him, it just sits there.

He has got some more surprises in store, such as the Christmas bonus, the paid vacation. We are not Santa Clause, but the essential underlying truth is that without these employees, we have no cash flow. Yes, we own the capital investment, and yes, without that their efforts do not produce revenue. Truth is, we need each other. If I treat them with respect, and cut them their fair share, they will be optimistic about their future, work hard, build up some savings and even enjoy their lives. They will have some coins in their pocket. And us too.

It’s an experiment. I have a sneaking hunch that wealth creation is far more about workers than owners. We’ll see.