Memo to All My Valued Employees
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December 29th, 2008 by GreenLight AdvisorTwitter It!
Listening to AM640 here in Toronto today, I heard an excellent discussion about the letter from “The Boss,” a truth-be-told debate about the value of tax-cuts, stimulus and taxation. In the current climate of government intervention, and neo-socialism, the letter is a breath of fresh air for those of us who have made the greatest productive contribution. Thanks to Charles Adler for posting the letter at his blog.
To go one step further, it is reminiscent of the world of Ayn Rand’s “Atlas Shrugged,” in which the story’s heroes, the entrepreneurs, the innovators, the captains of industry, the prime-movers, decide the best remedy is to withdraw, to go on strike, as the world is looted by bureaucrats, socialists, pseudo-intellectuals, and mystics.
Memo to All My Valued Employees
Author: The Boss
There have been rumblings around the office about the future of this company and, more specifically, your job. As you know, the economy has changed for the worse and presents many challenges. The good news, however, is this: The economy doesn’t pose a threat to your job. What does threaten your job, however, is the changing political landscape in this country.
First, while it’s easy to spew rhetoric that casts employers against employees, you have to understand that for every business owner there is a back story. This back story is often neglected and overshadowed by what you see and hear. Sure, you see me park my Mercedes outside. You’ve seen my big home at last year’s Christmas party. I’m sure all these flashy icons of luxury conjure up idealized thoughts about my life. But you don’t see the back story.
I started this company 12 years ago. At that time, I lived in a 300 square foot studio apartment for three years. My entire apartment was converted into an office so I could put forth 100% effort into building a company, which, by the way, would eventually employ you. My diet consisted of noodles because every dollar I spent went back into this company. I drove a rusty Toyota Corolla with a defective transmission. I didn’t have time to date. Often times, I stayed home on weekends, while my friends went out drinking and partying. In fact, I was married to my business — hard work, discipline, and sacrifice.
Meanwhile, my friends got jobs. They worked 40 hours a week and made a modest $50K a year and spent every dime they earned. They drove flashy cars and lived in expensive homes and wore fancy designer clothes. Instead of hitting Nordstrom for the latest fashion item, I trolled through the Goodwill store extracting any clothing item that didn’t look like it was birthed in the ’70s. My friends refinanced their mortgages and lived lives of luxury. I did not. I put my time, my money, and my life into a business with a vision that, some day, I too, would be able to afford the luxuries my friends had.
So, while you physically arrive at the office at 9 a.m., mentally check in at about noon, and then leave at 5 p..m., I don’t. There is no “off” button for me. When you leave the office, you are done and you have a weekend all to yourself. I, unfortunately, do not have that freedom. I eat and breathe this company every minute of the day. There is no rest. There is no weekend. There is no happy hour. Every day this business is attached to my hip like a one-year-old special-needs child. You, of course, only see the fruits of my labor — the nice house, the Mercedes, the vacations. You never realize the back story and the sacrifices I’ve made.
Now the economy is falling apart and the guy who made all the right decisions and saved his money have to bail out all the people who didn’t. The people who overspent their paychecks suddenly feel entitled to the same luxuries that I earned and sacrificed a decade of my life for. Yes, business ownership has its benefits, but the price I’ve paid is steep.
Unfortunately, the cost of running this business and employing you is starting to eclipse the marginal benefit. Let me tell you why:
I am being taxed to death and the government thinks I don’t pay enough. I have state taxes. Federal taxes. Property taxes. Sales and use taxes. Payroll taxes. Workers’ compensation taxes. Unemployment taxes. Taxes on taxes. I have to hire a tax man to manage all these taxes and then, guess what? I have to pay taxes for employing him.
Most of my time is now occupied with government mandates and regulations and all the accounting that goes with them. On October 15th, I wrote a check to the US Treasury for $288,000 for quarterly taxes. You know what my “stimulus” check was? Zero. Nada. Zilch.
The question I have is this: Who’s stimulating the economy? Me, the guy who has provided 14 people good-paying jobs and serves more than 2,200,000 people per year with a flourishing business? Or the single mother sitting at home pregnant with her fourth child waiting for her next welfare check? Obviously, government feels the latter is the economic stimulus of this country.
The fact is, if I deducted (read: stole) 50% of your paycheck, you’d quit and you wouldn’t work here. Why should you? That’s nuts. Who wants to get rewarded for only 50% of their hard work? Well, I agree, which is why your job is in jeopardy.
Here is what many of you don’t understand: to stimulate the economy you need to stimulate what runs the economy. Had suddenly government mandated to me that I didn’t need to pay taxes, guess what? Instead of depositing that $288,000 into the Government black-hole, I would have spent it, hired more employees, and generated substantial economic growth. My employees would have enjoyed the wealth of that tax cut in the form of promotions and better salaries. But you can forget it now.
When you have a comatose man on the verge of death, you don’t defibrillate by shocking his thumb to bring him back to life, do you? No. You defibrillate his heart. Business is at the heart of our economy and always has been. To restart it, you must stimulate it, not kill it. Suddenly, the power brokers believe the mud of economy is the essential driver of the economic engine. Nothing could be further from the truth.
So where am I going with all this? It’s quite simple. If any new taxes are levied on me, or my company, my reaction will be swift and simple. I’ll fire you. I’ll fire your co-workers. You can then plead with the government to pay for your mortgage, your SUV, and your child’s future. Frankly, it isn’t my problem anymore.
Then, I will close this company down, move to another country, and retire. You see, I’m done. I’m done with a country that penalizes the productive and gives to the unproductive. My motivation to work and to provide jobs will be destroyed and, with it, will be my citizenship.
While tax cuts to 95% of the people sounds great on paper, don’t forget the back story: If there is no job, there is no income to tax. A tax cut on zero dollars is zero. Who understands the economics of business ownership and who doesn’t? Whose policies will endanger your job?
Answer those questions and you should know who might be the one capable of saving your job. While the media wants to tell you “It’s the economy, stupid,” I’m telling you it isn’t. If you lose your job, it won’t be at the hands of the economy; it will be at the hands of a political hurricane that swept through this country, steamrolled the Constitution, and changed the landscape forever. If that happens, you can find me in South Caribbean sitting on a beach, retired, and with no employees to worry about.
Signed,
Your Boss
Who is John Galt?
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Tags: Ayn Rand, Breath Of Fresh Air, Bureaucrats, Business Owner, Captains Of Industry, Charles Adler, Christmas Party, Flashy Icons, Government Intervention, Innovators, Intellectuals, Mystics, Noodles, Political Landscape, Prime Movers, Productive Contribution, Socialists, Square Foot Studio, Stimulus, Studio Apartment, There Have Been RumblingsPosted in Economy, Markets |
December 30th, 2008 at 9:32 am
One has to seriously question the motivation of a business owner who would send this to his employees. Essentially, this letter is sour grapes bitching to those who can do NOTHING to change the situation. 14 employees are not going to stem the tide of tax law changes about to come in. No way on earth will that happen. Instead, all this fellow has managed to do is to de-moralize his employees and leave them in a state of fearful agitation for the holidays. This is illustrative of a certain sort of behavior common among very small business owners that serves no good purpose and only harms their business and their credibility as worthwhile leaders. The oldest rule in leadership is that bitching runs uphill (hat tip to Saving Private Ryan). The mailroom worker complains to the mailroom manager and he in turn complains to the operations Vice President and so on. All this fellow is doing is showing that he is an inept leader and that he wants everyone to know it. Failure of leadership is really what’s killing this country - at all levels - and this highlights that perfectly.
December 31st, 2008 at 8:17 am
Where does it indicate that this wasn’t a “vent” and was not actually sent anywhere…but like all things landed out here in the internet world?
December 31st, 2008 at 10:03 am
“From each, according to his ability.
To each, according to his need.” - Karl Marx
Whether or not you agree with this anonymous letter, that probably was not actually delivered, and is likely a rant, it makes one point. That those of us in society who stick their entrepreneurial necks out to start a business, and toil within the bounds of risk and sleeplessness (often failing) in order to have their place in the sun, are not given a fair shake, nor the incentives, to do so, nor are they rewarded by society for it.
What price, economic freedom?
January 2nd, 2009 at 2:34 pm
Ok, it is a rant. It makes a point. And it is NOT TRUE that the employees can’t do anything about it. They can vote. They can write to their congressman.
We can try that for now. IF that continues to not work, then we will have to come up with alternatives. :-)
Ten Questions every US citizen should ask themselves in 2009:
http://www.rfdoc.com
(and the links in the article are very insightful)
March 9th, 2009 at 2:27 pm
In an effort to provide balance, here’s a letter presenting the other side the coin, from the employees on his staff:
Dear Valued Boss:
Thanks for the informative and illustrative letter regarding why I am losing my job, what’s wrong with this country, and why the economy’s current condition may cost not only me my job but everyone else who works for you as well.
You shared your tidbits and your back story with us because you didn’t want to just spew rhetoric. Yeah, I see you park your Mercedes and I’ve seen your grandiloquent house when you were kind enough to invite the lowlifes, er, I mean the employees, to your Christmas party. Yes, you’re right, those flashy icons of luxury do conjure up some idealized thoughts about your life-about what it must be like to make it, to finally get to the point in your life where you can afford some of those things.
So, now that you’ve shared your back story, here’s mine.
When you were starting your company 28 years ago, I was a young teenager just out of high school with no clue what to do with my life. No discipline or drive ever pounded into me to single-mindedly seek a goal no matter what the cost, no matter how many late nights worked away from family and friends. What to do? How do you choose a major or a direction in life when you have no clue what you’re good at or what you want to do with your life because you’ve never had the opportunity to be told that you can do it, that you can make it, that you are worthwhile? And yet, lo and behold, out of the blue comes the idea that maybe you could have your own business, if you just worked hard enough. That’s what they’ve always told us: work hard, pull yourself up by your bootstraps, and you can be or do anything you want. Except sometimes life gets in the way in ways unexpected&.
I’ve lived in that same 300-square foot studio apartment that you did, but I did it with 2 kids, making $14/hour, paying $500/month for rent, $800/month for day care, plus utilities, phone, and, oh yeah, I guess I had to figure out some way to feed the kids and myself in all that also. And I worked evenings at home typing after the kids went to bed so I could make ends meet, and swallowed my pride enough to go on daycare assistance to help pay the long-suffering and long-waiting babysitter who lovingly cared for my kids while I slaved away at your business, despite the fact that I was raised to believe that anyone who went on “assistance” was lazy and shiftless. Imagine trying to reconcile that image and those feelings when you’re trying to get money to pay the bills and still feed your kids.
And I drove a piece of junk that was so used and worn out that I didn’t know if it would run from day to day; a car that I had to start with a wire under the hood because I couldn’t afford to have the dead solenoid replaced, so instead a friend showed me how to start it with the wire. I learned how to strip wires real fast when the old one wore out and wouldn’t start the car anymore! I barely ever had an extra penny to put away in savings, much less the money to start a business of my own. Yes, I made my own bed and lay in it when I married badly, had kids, and ended up divorced, but I worked my fingers to the bone just as much as you did just to survive, provide a good home for my kids, and try to put something away for a rainy day in case anything happened to me or the kids. The thought of losing a job or someone getting hurt was absolutely terrifying.
As for your friends who went out and got jobs, worked only 40 hours per week, and made a modest $50K/year, I would loved to have made that $24/hour that they were making and in only a mere 40 hours/week! I would have loved to have the extra money to occasionally buy NEW clothes instead of going to the Goodwill or Value Village to clothe my children and myself. Luckily for me, those kids were never the type who got snobby about their clothes, nor did they become embarrassed about not wearing more expensive designer-type clothes as they grew older. I would have loved to have the chance to drive a decent car, have the hope of owning a home instead of forever living in Apartment Hell, and maybe, just maybe, take an occasional REAL vacation and not just time off with the kids that was spent in town because I couldn’t afford plane tickets to anywhere much less a hotel or rental car. And back then, who was going to give a credit card with a decent line of credit to a single mother of two making a lousy $14/hour?
And, where in the world do people still get to arrive at work at 9 and leave at 5, which makes me think you are giving your employees a paid lunch? I’d kill for a position like that! I’d love to have the luxury of arriving for work at 9 am and sleep in another hour in the morning. Then I might not be so drag-my-butt tired. And while it may seem to you that I arrive at 9, mentally check in at noon, and then leave at 5 pm, what you don’t take the time to see is that I’m doing the best I can to make it through a full day of work for you because I have worked so hard at the other end of the day-when you don’t see me-to make ends meet. In all of this, where am I going to have the time to go back to school to get a better paying job? Oh yeah, and the money for the tuition? As the Sopranos liked to say so much, Fugeddaboutit! I’ve often heard where administrators go back to school in the evenings to get their masters degrees online. Well, that’s nice if you have the extra time that comes with not having to moonlight and if you have the money to actually do that. Plus there really aren’t too many scholarships for women in my age bracket with two kids making the “astounding” amount of money that I do. Can you imagine the idea that someone who makes only $14/hour makes too much for some scholarships?!
The other thing you often don’t see is that, although this is your company, many of your employees will often feel like it is their company too. Given half the chance, a decent income, and a little trust, they’d give their left arm for you, work overtime without pay, and be just as concerned as you about the business when the economy tanks. All too often, the folks at the top don’t see the fact that the folks at the bottom consider the place they work to be an extension of their LIVES just like the employer does. In that rare alignment of company, culture, and employees, there can actually be such a thing as concern for the company on the part of the employees, with just as much concern as the owner has. However, color-blind glasses prevent this simple thing from being seen and, therefore, prevent the employers from building that bridge that allows both sides to work together towards the common goal and which allows both sides to worry together and put their heads together to brainstorm ideas for running the company more efficiently for less expense.
So, instead a divide develops. You stand on your side saying, “You don’t understand me and you never will. All you care about is what you can get from me” And the employee stands on the other side, saying, “You don’t understand me and you never will. All you care about is how you can get by without me.”
But, where in the grand scheme of your business do you think you’d be making even half the money that you are without all the people who do the myriad of little things that you can’t do all by yourself? If you’ve got excess staff on the payroll for the amount of income you’ve got coming in, by all means you have to trim down to become more in line with income and output; that’s just basic business. But don’t blame taxes on the reason that you’re going to close shop. We’d all love to run away from taxes, but taxes are a fact of life. They pay for your basic infrastructure: the lovely paved streets, the snowplowing in the wintertime, those FREE schools that all kids get to go to regardless of class/parental income/or any other criteria, unlike many places in the world. Your taxes also pay for fire and police services, EMT service for when you are in a car wreck on a slippery, snowy day. I could go on and on. In the paraphrased words of Benjamin Franklin, in this world nothing is certain but death and taxes.
And somewhere along the way to writing your back story, you forgot about the fact that we’re all in this together and we have a duty to help our fellow man. If that means giving them a job that suits your needs as well as theirs and paying taxes along the way to pay for all the basic services that make your modern life more, well, modern and comfortable, so be it.
And, just for the record, yes, in a rare alignment of luck and hope, I was briefly self-employed when I tried to have a go of running my own business and yes, at the time I paid what seemed like the god-awful high taxes that were required of me, including the self-employment portion of my tax-the part that most employees don’t fully understand or ever see. But you know what killed me? I was too cheap to hire someone to help me out! Because, like you, that business was attached to my hip like a 1-year old special needs child whom I thought no one else could care for besides me. So, instead I ran it myself and ran myself into the ground because I failed to realize the one essential thing: just how important employees are in the flourishing of many businesses.
So, why not just agree to disagree and continue living in the host/symbiont relationship in which we both need each other for differing reasons in order to get what we want and need. You might also say we’re both like light and darkness, we can’t have one without the other and we need each other to be complete and run this business together. You can run off, stick your head in the sand, and close your business if you really are tired of it all, but I’ll tell you what, no matter where you go, you’ll run into taxes and you’ll run into the host/symbiont relationship no matter where you go, even if you’re retired; it’ll just present itself in a new form.
And closing your business won’t solve any problems; it’ll only allow the problem to continue spiraling down. Now closing a business because it is failing and is not viable is one thing. But closing a business because you’re tired of paying taxes, something which we all must do whether we’re the employer or the employee, is just plain nonsense and, in the end, is rather selfish. All you’re doing is contributing to the myth that you seem to think your employees have created about you: that you were born rich and have never cared about a soul except yourself. And thus begins anew the reason for this whole debate.
Signed,
Your humble and worthless employee