Is there anything good at all about largecorp?
I think you would agree that I have painted a bleak picture of largecorp. It is fuelled by greed through obscene executive compensation. This involves fleecing shareholders and exploiting employees to the point of burning and spitting them out. Through the business schools of management, it has created and holds in its pockets an ideology that promotes, legitimizes and excuses its abuses.
In fact, corporate funding chokes these “schools of management” from any true degree of academic impartiality to the extent that MBA professors and graduates are the pimps and hookers for largecorp. If Trump has created the terms “fake news” these schools of economics have created “fake economics”. In the crudest terms the MBA graduates are Stalinist “Young Pioneers” of largecorp. Just look at how these management institutes describe themselves! Always named after some largecorp philanthropist. The same applies to hospital wings. Steal from shareholders and employees yet the press burbles and burps over generosity of the biggest exploiters. And just where did they get all this money from? The Senior Management Team and Putin have many similarities.
So, can largecorp create any good in society? I rather doubt it. But let’s try to be innovative here.
First of all, let’s say that largecorp does employ many people which is positive sounding to many an economist. However, it unemploys many people particularly in the last twenty years with unceasing outsourcing. It also subjects many of its workers to mentally unsafe working conditions. Many largecorps exploit cheap labour abroad when they outsource to foreign jurisdictions. Employment quality ought to take precedence over simple employment. If a clothing factory creates a thousand jobs in Bangladesh under horrifically dangerous conditions at ultra low wages how valid is the creation of employment. In an attempt to create new terms I say that largecorp specializes in creating negative rather than positive employment whether it be domestically or internationally. And let us not forget the ultimate goal of largecorp is to utilize artificial intelligence to eliminate as many jobs as possible.
I can say with some conviction largecorp offers to many of its employees’ decent employee benefits such as health and dental care and some sort of retirement income pension plan. We are now at the point that the majority of Canadian workers have no pension plan. Working for a largecorp just about guarantees a pension plan. How generous it is rather reliant on how the Senior Management Team calculates its own liability for not offering one or improperly administering the pension plan. Believe you me the SMT members responsible for administering the pension plan treat it as a landmine of personal liability.
In the early days of largecorp, employees were often in defined benefit plans which meant although both employee and largecorp would contribute to the pension plan the employee would receive a pension payment based on some formula whether it be on career average earnings or best year’s earnings. Assuming a solvent employer and accurate actuarial calculations the employee would receive a “guaranteed and calculable” amount as a pension. largecorp bore the risk of delivering the promised benefit. It bore the risk of poor investment returns and claims that it mismanaged the pension fund or plan.
Many largecorps have realized recently upon actuarial advice, that these defined benefit plans have left them with huge “pension deficits and unfunded liabilities”. In other words, the SMT has been sucking up so much in executive compensation, engaging in share buy-backs and increasing dividends to shareholders to the extent that it has ignored properly funding its defined benefit plans so that huge deficits have arisen forcing largecorp to lobby politicians and have legislation passed permitting them temporarily to maintain underfunded pension plans by posting letters of credit to the pension fund. This means in simple terms they are excused from funding what is necessary to fund promised pension benefits. Largecorp employees in peril while largecorp executive compensation rages out of control. Sound like familiar SOP for largecorp? Why did the politicians bend over backwards to placate largecorp’s begging for a temporary halt to pension fund contributions?
It is a bit of a useless pissing match to whine and complain what largecorp has done to protect its interests concerning defined benefit plans because it has been mercilessly converting its defined benefit plans to defined contribution benefit plans. It won’t be long before there are no defined contribution pension plans sponsored by largecorp. The land of milk and honey defined benefit plans will be in the purview of government bureaucracies.
In a defined contribution pension plan the employee and employer contribute to the pension plan fund but the pension benefit funding beyond mandatory employer contributions is no longer a concern of the employer but rather based solely on the performance of funds the employee has selected! This is a very attractive reason to convert defined benefit pension plans to defined contribution pension plans. Largecorp is still on the hook for the defined benefit promises for pension benefits it has promised prior to the conversion to a defined contribution pension plan but on a moving forward basis it is off the hook for pension benefits arising out of a defined contribution pension plan. It has a legal obligation to administer the pension plan in a proper fashion and making its contributions to it in a timely manner as required under pension benefits legislation but once it has done those things it is no longer responsible for payment of the pension benefit.
There are very few employees In Canada that benefit from defined benefit pension plans. The exceptions are government employees and some highly unionized largecorp workplaces but even in the latter the switch to defined contribution plans is in high gear.
At the end of the day the Millennials are facing a defined contribution landscape if they are fortunate enough to even have a pension plan but it is certainly better than having no pension plan. My Millennial daughter Lexia works for a largecorp in Toronto and to my great shock she has no pension plan!
Before patting largecorp on the back we should see how the SMT treats itself! It benefits from whatever the pension plan offers but it then offers the higher ranking SMT” Retirement Compensation Arrangements” (“RCA’s”). As a big earner there is only so much you can contribute from your “earned income” to your pension plan as permitted under Canadian tax legislation. However, you can set up an RCA for the SMT high earners which permits the SMT to exceed in percentage what salary as “earned income” can be contributed under tax legislation into their pension plan into RCA’s. RCA’s impose a punishing tax on largecorp contributions made to it which is borne by shareholders and ultimately employees. The SMT in effect ravishes its revenue to “legitimately” line their pockets by the creation of these tax punishing RCA’s. And of course, the employee benefit consulting firms retained by largecorp legitimize this corporate looting as being justified by market competitiveness and a part of key “retention of management” strategy. And wasn’t it Justin Trudeau who promised the Canadian electorate to protect the interests of the “middle class”? The existing tax legislation pertaining to RCA’s favours the 1%. Why hasn’t it been repealed?
Working for largecorp offers employees knowledge and experience on how to survive in their next largecorp after they are inevitably terminated from largecorp. As the folks who run largecorp like to say,” We are offering you skills for life not a job for life”. Working for largecorp is a life sustaining skill!
Please remember I am a bit of a discontent. There are countless largecorp employees who fall hook, line and sinker for the largecorp experience and like countless sheep throughout history bleat the largecorp ideology and persuade themselves they are content, happy and challenged. Some are promoted but most never reach the golden arches of the SMT. As they say there are plenty of suckers out there.
In conclusion for a thinking and discerning person largecorp throws out chum bait to its employees and admirers with a minority swallowing it while the majority try to grin and bear it to keep the funds rolling in.
Any benefits bestowed by largecorp to its employees are essentially token, diminutive and a pittance of how the SMT stuffs their own wallets. At best the employee is rewarded with a paycheque and a somewhat decent benefits package.
At the end of the day largecorp employees are expense centres to be calculated, sliced and diced and often thrown into the street in the name of efficiency and cost reduction. The SMT rises above this crudity unless a particularly greedy, sociopathic and quasi-criminal cadre engineers a hit of its own taking out fellow members of the SMT thereby increasing a bigger slice of the pie for remaining SMT members.
Although I would not exactly characterize this as “good” one should understand that largecorp often targets older workers in downsizings and in selective hits. This cull clears the way to hire younger and cheaper replacements therefore giving some mobility to the younger employees of largecorp. I am all for mandatory retirement at 65 which I see as mercy rather than ageism.