September 4, 2017

To understand rising inequality, consider the janitors at Kodak and Apple, then and now

https://www.nytimes.com/2017/09/03/upshot/to-understand-rising-inequality-consider-the-janitors-at-two-top-companies-then-and-now.html?mcubz=3

"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."

Evans, a janitor at Kodak was a Kodak employee and received all the benefits accorded to Kodak employees. Ramos, a janitor at Apple is not an Apple employee and receives no Apple benefits. Evans was able to move up though Kodak, eventually becoming chief technology officer of the whole company. Ramos can only hope to achieve the position of Team Leader, supervising other janitors for $0.50/hr more.