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‘Who would take advantage of a pandemic to permanently reduce someone’s salary beyond that pandemic?’

(BUSINESS NEWS) Coronavirus-related downsizing may be necessary, but trash talking laid off employees is not. Grant Wahl deserved better treatment than that.

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wahl firing

The recession caused by the coronavirus outbreak has put a spotlight on employer-employee relations as companies aggressively tighten budgets and layoff millions of workers across the globe.

But where do we draw the line between necessary, albeit painful layoffs to stay in business and ruthless devaluing of worker contributions to protect the bottom line?

Sports Illustrated soccer writer and podcaster Grant Wahl tweeted that he was fired without severance on April 10. Wahl – a New York Times best-selling author and award-winning journalist – has written for SI since 1996.

The conflict between Wahl and leadership at Maven, which purchased SI from Meredith Corp. last year, began publicly when Wahl posted some unflattering reviews of Maven’s leadership on Instagram on April 5.

Wahl complained that SI was attempting to force a permanent salary reduction; non-rhetorically asking, “Who would take advantage of a pandemic to permanently reduce someone’s salary beyond that pandemic? Maven and James Heckman would.”

The conflict quickly became a he-said/she-said fiasco when Heckman sent an internal memo to SI immediately following Wahl’s firing. Heckman claimed Wahl did not volunteer for a salary reduction like the rest of his top-tier salaried peers, and furthermore diminished his contributions to that of a casual staff writer who “infrequently [wrote] stories that generated little meaningful viewership or revenue” for a whopping $350k annual compensation.

As a result, Heckman announced SI “decided to direct what would have been this person’s salary into additional severance pay and health benefits for those laid off who need it the most” (read: deserve it the most).

Maven has projected a $30 million budget shortfall this year as a result of the COVID-inspired recession and the resultant disruption of virtually every major sporting event in the United States including the cancellation of the NCAA March Madness tournament, the suspension of the remaining NBA season, and postponement of the 2020 MLB season.

While layoffs and belt-tightening have become abundantly necessary during this time, the world is watching how large corporations handle the matter. Although Wahl may not be a sympathetic character griping about a 30% salary reduction on six-figure compensation, firing an employee after more than two decades of service without so much as a polite thank you, at a minimum, is not a good look.

Wahl tweeted a thank you message to the SI world with an important reminder to keep things in perspective: “I’m one of 16 million Americans who have lost their jobs in the last three weeks.”

While the reminder is sobering, this does not mean that all workers who remain employed need to grovel at the feet of their employers for their merciful benevolence. The argument that one should be grateful to have a job at all in tough times does not give corporations license to strong arm employees into enduring whatever working conditions it deems necessary to stay in business, including permanent salary reduction.

Heather Buffo is a Cleveland native, a recovering Bostonian, and an Austin newbie. Heather has her Bachelor of Arts in Neurobiology from Harvard University, and is a City Year Boston AmeriCorps alum. When she's not writing for AG, you can find her pouring beers at the Brewtorium, but only one at a time.

Business News

The future of work from home will be a hybrid, says Google CEO

(BUSINESS NEWS) Google is looking to adapt a more flexible, long-term hybrid work model for their employees, which includes partially working from home and partially being on-site.

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Work from home woman at a laptop.

Google, the world’s largest search engine company (yes I know they do other things), is positing that the corporate office will look completely different post-COVID-19.

In September Google’s CEO, Sundar Pichai said that the organization was making changes to its offices that would better support employees in the future. This includes “reconfiguring” office spaces to accommodate “on-sites”, days when employees who regularly work from home will come into the workplace. The move comes after Google was one of the first major tech companies to announce that employees could possibly work from home through next summer.

“I see the future as definitely being more flexible,” Pichai said during a video interview for Time 100, “We firmly believe that in-person, being together, having that sense of community, is super important for whenever you have to solve hard problems, you have to create something new,” he said. “So we don’t see that changing, so we don’t think the future is just 100% remote or something.”

It was reported that Google’s decision to work remotely into mid-2021 was originally in part to help employees whose children might be learning remotely during the coronavirus pandemic. Pichai said that several factors went into the decision, stating that improving productivity was a major concern.

“Early on as this started, I realized it was going to be a period of tremendous uncertainty, so we wanted to lean in and give certainty where we could,” Pichai said. “The reason we made the decision to do work from home until mid of next year is we realized people were trying hard to plan… and it was affecting productivity.”

Pichai also mentioned that the decision would help the firm embrace the reality that remote working wasn’t going anywhere once things returned to normal. A recent survey at Google found that 62% of employees felt they only need to be in the office on occasion, while 20% felt they didn’t need to be in the office whatsoever. While the work from home trend had already been growing over the past several years, the pandemic accelerated that movement greatly.

With housing costs surging in the San Francisco area, where Google headquarters resides, many employees have been forced to move outside of the city to afford a mortgage. This caused many to commute long hours into the office, something Pichai realized was a problem.

“It’s always made me wonder, when I see people commuting two hours and away from their families and friends, on a Friday, you realize they can’t have plans,” Pichai said. “So I think we can do better.”

It’s too early to tell whether or not Pichai’s vision of a “hybrid model” will be adopted by other companies when the pandemic ends. One thing is for certain though—work will never be what is pre-COVID-19.

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Business News

Cannabis retail trends not as high as you’d expect

(BUSINESS NEWS) Cannabis consumption trends during COVID-19 had been predicted to some degree, but data shows they aren’t what you might expect.

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Cannabis plant grown under pink UV light.

As have nearly all consumer trends, the legal cannabis market has been noticeably affected by the coronavirus pandemic. When the pandemic first started, I heard a lot people in the industry predict sales would skyrocket. These are stressful times for everyone, and people need their vices! Especially since cannabis is considered an essential industry in states where consumption is legal, most predicted an uptick in sales. But the data shows it’s not so cut and dry.

According to a study done by Marijuana Business Daily in late September, which focused on 4 recreational states – California, Colorado, Nevada, and Washington state – it seems that sales are all over the place.

The data shows that while shoppers are spending more on cannabis per visit, they are shopping less in general. In the industry, this is called “basket size”. So yes, basket size is up, but the number of visits and number of baskets sold has generally declined. People are stocking up for safety and/or scheduling reasons, and this trend is certainly not unique to cannabis (Hint: remember toilet paper hoarding?).

One anticipated spike in cannabis sales across the board was on April 13th, when federal stimulus packages went out. For some who don’t have a medical condition alleviated by the effects of the plant, cannabis is not a staple. But if there’s extra cash laying out, you bet your bottom dollar that they’re going to stock up at their local dispensary. Makes sense to me.

Conversely, the lowest sales ever for the industry was in mid-late March, when recreational sales dropped by almost 50%. I’m guessing this was because of the newly implemented shelter-in-place orders, as well as the mass angst and confusion of the early pandemic.

That being said, there was a quick bounce back as cannabis retailers were treated favorably by state governments and were allowed to stay open or provide curbside service. Like other industries, cannabis retailers adapted to the pandemic after some time.

Legal cannabis is a relatively new industry that has grown exponentially since the passing of the 2018 Farm Bill, which removed hemp from the Controlled Substances Act (CSA). Up until the pandemic, cannabis sales have been relatively recession resistant.

This is why I find examining market trends in cannabis so fascinating – it’s a young industry that has only ever been on the up, so it acts as a sort of prism through which we can most accurately detect market trends.

Additionally, there is a new-found appreciation (dare I say, requirement) for mental health and wellness. People are looking for plant-based, not-toxic approaches to combatting their various woes during coronavirus. CBD, hemp, and other non-psychoactive substances are being consumed by new users who were previously uninterested in THC, the active psychoactive compound in the cannabis plant that gets you “high”.

I think if anything, the market will continue to expand into more cannabis-based products, while consumption of the plant will remain relatively steady. But at this point, it’s difficult to predict anything.

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Business News

5 factors driving the reshoring movement in America

(BUSINESS NEWS) As manufacturing jobs return to domestic shores, it’s important to understand the challenges and needs that are encouraging jobs back to the US.

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Manufacturing plant at night across the water with orange and red reflections.

Offshoring has been a staple of the manufacturing industry for decades, but trends have been changing. Over the past few years, reshoring — bringing jobs and processes back to America — has grown steadily. This effort impacts manufacturing as well as the economy as a whole.

Non-durable manufacturing accounts for 4.8% of the GDP and has proved crucial in creating jobs amid COVID-19. That figure doesn’t even account for the entire industry. It’s clear that manufacturing has a considerable impact on the economy, so reshoring in the sector is a big deal.

This effort towards domestic manufacturing isn’t the result of a single factor, but several. As these trends continue to grow, so will their impact on manufacturing. Here are five of the most prevalent.

Automation

Comparatively cheaper production costs in foreign countries are one of the most substantial factors behind offshoring. Now that automation is more widely available for manufacturers, offshoring may no longer be more affordable. The savings from automation allow manufacturers to keep their operations domestic.

Many people cite automation as a threat to American jobs, but it may actually create more. General Motors brought more than 15,000 jobs back to the U.S. in a period of massive digitization. Even though the auto industry uses more robots than any other manufacturing sector, it also leads the field in job creation.

Without the savings advantages of automation, manufacturers may outsource entire factories to foreign nations. An automated factory may mean fewer jobs than a traditional one, but it does provide more local jobs than offshoring. Counterintuitive as it may seem, the industrial world’s trend towards automation can help increase American jobs.

The Amazon Effect

Changing customer expectations are also influencing the manufacturing industry’s move towards domestic production. One of the most substantial changes is something called the Amazon Effect, where consumers expect faster service. Since Amazon delivers fast shipping and has exploded in popularity, people expect the same from all sources.

Companies need to fulfill orders fast, so products have to move from the factory to the logistics chain quickly. Manufacturers that have to ship parts and products from overseas are at an obvious disadvantage here. Domestic manufacturing enables companies to move fast enough to account for the Amazon Effect.

The Amazon Effect is about more than just fast shipping, too. It also entails adapting to sudden market shifts. Shorter lead times from domestic manufacturing enable factories to keep smaller inventories, which improves flexibility. They can then shift to making new products and meeting new demands faster than an offshoring company.

Global supply chain issues

Over the past few years, international tensions have been rising, especially between the U.S. and China. As Americans have grown more suspicious of China, it casts doubt over products outsourced there. That, combined with global supply chain disruptions from COVID-19, is starting to impact manufacturing.

China was the United States’ primary source of medical PPE but had to reduce PPE exports to address COVID-19 in their country. As a result, the need for American-made PPE became all the more clear. As more companies faced supply chain disruptions from shutdowns overseas, it revealed the shortcomings of offshoring.

Domestic production is more reliable in a crisis, especially one as impactful as COVID-19. On top of that, negative views towards China have risen sharply among U.S. citizens recently. As the nation grows more distrusting of China, manufacturers who don’t offshore there become more appealing.

Production quality

Another prominent issue fueling the domestic manufacturing movement is product quality. Many foreign nations could offer lower material costs because the materials were of lower quality. Similarly, production was often affordable because these countries didn’t hold manufacturers to the same standards.

While these factors made outsourced manufacturing affordable, they typically led to poor-quality products. As American consumers adopted higher quality standards, these cheap products became less desirable. If these goods don’t sell well, then any cost savings from outsourced production don’t matter as much.

Just 35% of Baby Boomers say they’d pay more for high-quality products, but 55% of Millennials would. As millennials and like-minded Gen-Zers make up a more substantial portion of the market, these opinions impact manufacturing. Companies that want to appeal more to modern consumers have to ensure higher-quality goods, which is easier with domestic manufacturing.

Environmentalism

When talking about industry trends impacting reshoring, it’s hard not to mention environmentalism. Across the past few years, environmental concerns have grown, both in severity and in public awareness. As consumers become more concerned about sustainability, manufacturing in countries with lower environmental standards becomes less favorable.

While U.S. CO2 emissions have decreased since 2006, China’s emissions have grown, making Chinese-made products less eco-friendly. Offshoring’s environmental impact goes beyond national differences in emission levels, too. A longer supply chain means more transportation, so even sustainably made goods can lead to higher emissions thanks to shipping.

An impressive 73% of Millennial consumers say they’re willing to pay more for a sustainable product. That’s too considerable an advantage for manufacturers to ignore. Manufacturers that want more success with today’s consumers have to be more eco-friendly, and outsourced manufacturing is far from sustainable.

Government environmental laws aside, it’s more challenging to regulate a factory that’s thousands of miles away. Similarly, while manufacturers can access clean power for facilities in the U.S., green transportation isn’t available at scale yet. Considering all of these challenges, it’s far more sustainable to make goods in the U.S.

The reshoring movement shows no signs of stopping

The manufacturing industry’s move back to America has been growing steadily over the past decade. In 2014, the U.S. saw a net gain of 10,000 reshored jobs for the first time in 20 years. Since then, these factors that drive the movement have only grown, leading to more manufacturers favoring domestic production.

Automation, the Amazon Effect, quality standards, distrust of the global supply chain and environmentalism are still growing. As these trends continue to rise, the domestic manufacturing movement will do the same, bringing jobs with it. Offshoring may have been the industry standard for years, but it won’t be for much longer.

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