Rising Income Inequality, Outsourcing and Sub-Contracting

 

Read the full New York Times article article here

ROCHESTER — Gail Evans and Marta Ramos have one thing in common: They have each cleaned offices for one of the most innovative, profitable and all-around successful companies in the United States.

For Ms. Evans, that meant being a janitor in Building 326 at Eastman Kodak’s campus in Rochester in the early 1980s. For Ms. Ramos, that means cleaning at Apple’s headquarters in Cupertino, Calif., in the present day.

In the 35 years between their jobs as janitors, corporations across America have flocked to a new management theory: Focus on core competence and outsource the rest. The approach has made companies more nimble and more productive, and delivered huge profits for shareholders. It has also fueled inequality and helps explain why many working-class Americans are struggling even in an ostensibly healthy economy.

The $16.60 per hour Ms. Ramos earns as a janitor at Apple works out to about the same in inflation-adjusted terms as what Ms. Evans earned 35 years ago. But that’s where the similarities end.

Read the full New York Times article article here

A 60-cent-an-hour raise this year negotiated by her union, the SEIU United Service Workers West, helped.

There is little chance for building connections at Apple. “Everyone is doing their own thing and has their own assignment, and we don’t see each other outside of work,” said Ms. Ramos in Spanish.

Read the full New York Times article article here

“I look at the big tech companies, and they practice a 21st-century form of welfare capitalism, with foosball tables and free sushi and all that,” Rick Wartzman, senior adviser at the Drucker Institute and author of “The End of Loyalty,” said. “But it’s for a relatively few folks. It’s great if you’re a software engineer. If you’re educated, you’re in command.”

But in the 21st-century economy, many millions of workers find themselves excluded from that select group. Rather than being treated as assets that companies seek to invest in, they have become costs to be minimized.

Read the full New York Times article article here