How McKinsey Destroyed the Middle Class

[JudyM]

... In effect, management consulting is a tool that allows corporations to replace lifetime employees with short-term, part-time, and even subcontracted workers, hired under ever more tightly controlled arrangements, who sell particular skills and even specified outputs, and who manage nothing at all.

... the managerial control stripped from middle managers and production workers has been concentrated in a narrow cadre of executives who monopolize planning and coordination. Mid-century, democratic management empowered ordinary workers and disempowered elite executives, so that a bad CEO could do little to harm a company and a good one little to help it. Today, top executives boast immense powers of command—and, as a result, capture virtually all of management’s economic returns. Whereas at mid-century a typical large-company CEO made 20 times a production worker’s income, today’s CEOs make nearly 300 times as much.


Management consultants insist that meritocracy required the restructuring that they encouraged... Consultants seek, in this way, to legitimate both the job cuts and the explosion of elite pay. Properly understood, the corporate reorganizations were, then, not merely technocratic but ideological. Rather than simply improving management, to make American corporations lean and fit, they fostered hierarchy, making management, in David Gordon’s memorable phrase, “fat and mean.”
...
When restructurings eradicated workplace training and purged the middle rungs of the corporate ladder, they also forced companies to look beyond their walls for managerial talent—to elite colleges, business schools, and (of course) to management-consulting firms. That is to say: The administrative techniques that management consultants invented created a huge demand for precisely the services that the consultants supply.
...

A deeper objection to Buttigieg’s association with McKinsey concerns not whom the firm represents but the central role the consulting revolution has played in fueling the enormous economic inequalities that now threaten to turn the United States into a caste society.

https://www.theatlantic.com/ideas/archive/2020/02/how-mckinsey-destroyed-middle-class/605878/

————————
Posting this not a criticism of Pete, since his choosing McKinsey doesn’t fully define him, but as an interesting angle to think about as we consider the larger issues of repairing society that the next POTUS will face. Which candidate(s) has the insight to tackle this sociological, structural problem? We can’t pretend it doesn’t exist.

My first priority is beating trump like a rug and rolling back everything we can of his monstrous reign. My second priorities are climate and corruption. But we’d be wise to focus also on the importance of fixing these large structural issues that have daily meaning in the lives of masses of voters.

[jalan48]

1. They helped create the gig economy. Downsize and outsource.

[alwaysinasnit]

26. +1

[empedocles]

2. The overabundant labor supply helped a lot.

[dalton99a]

3. Buttigieg is the most corporate-friendly and elite-friendly candidate.

His governing style reflects that attitude

[crimycarny]

16. How so?

I have family from South Bend and they love Buttigieg.

[Uncle Joe]

4. Kicked and recommended.

Thanks for the thread Judy.

[guillaumeb]

5. Recommended for the analysis and visibility.

All part of controlling the 99% for the benefit of the 1%.

[Recursion]

15. Look at the chart. What years was the CEO:worker ratio lowest?

Are those years you would like to repeat?

[guillaumeb]

18. Exactly, and that era corresponds to a time when 35% of US workers were unionized.

That is not a coincidence.

[Recursion]

23. No, I meant 2008-2009

CEO:worker pay ratios go down during recessions.

[guillaumeb]

24. I missed that. eom

[PETRUS]

25. Well, that's not when it was lowest

It was much lower 1995 and earlier. I don't understand how the 2008-2009 comparison is relevant to this discussion.

[DBoon]

28. Hell yes

The 1960s were the pinnacle of the great American middles class. We had a future. It was the "Affluent Society".

I grew up during that time.

[floppyboo]

6. Pete Buttigieg hires former Goldman Sachs executive as national policy director

And there's also this. Note the employment dates leading up to the financial crash. Unfortunate.
https://www.cnbc.com/2019/07/18/buttigieg-hires-former-goldman-sachs-executive-as-policy-director.html

[JudyM]

29. Well that resolves that question.

SMH. I was hoping otherwise, but this is the angle of his experience...

[Celerity]

31. not really, it is a false-framed hit job attempt

I like your posts, you seem a rational and fair person, so please see

https://www.democraticunderground.com/1287485136#post30

[JudyM]

32. Ok, that's good info.

I’ll continue to watch how his campaign develops...

[Celerity]

30. Sonal Shah was Obama's Director of the Office of Social Innovation and Civic Participation

https://en.wikipedia.org/wiki/Sonal_Shah_(economist)#Public_service

Shah held a variety of U.S. Department of Treasury positions from 1995 until 2001. She was the director of the office overseeing strategy and programs for sub-Saharan Africa, which included debt relief, development programs and World Bank/International Monetary Fund strategies. She worked with the Ministries of Finance in Bosnia and Kosovo to design the post-war banking system. During the Asian financial crisis, she served as a senior adviser to U.S. Treasury officials who were coordinating the U.S. response.

In 2004, Shah joined Goldman Sachs as a Vice President, where she worked on green initiatives, which included informing clients and bankers on alternative energy opportunities and advising them on how to implement environmental, social and governance criteria for all investments.

On April 2009, Shah was appointed director of the newly created White House Office of Social Innovation and Civic Participation. The objective of this office is to coordinate governmental efforts to aid innovative nonprofit groups and social entrepreneurs to address pressing social problems. Shah is also working with the National Security Council to bring a global perspective to these efforts.

Weak smear attempt via dodgy guilt by association positings using a disingenuous framing tactic.

[crimycarny]

7. From 2008-2009 (at McKinsey) he worked with non-profits to try to combat climate change

Does that count? Or are we only looking at what we think is the "bad stuff" he did at McKinsey--a job he held from 2007-2010 right after college. 3 whole years.

https://www.vox.com/policy-and-politics/2019/12/11/21010731/what-we-know-about-pete-buttigieg-mckinsey

2008-2009

Buttigieg worked for a collection of environmental nonprofits, public utilities and the EPA and Department of Energy, researching how energy efficiency could reduce climate change. Buttigieg’s report from that is publicly available.

Though I realize you wrote that your post was not meant as a criticism of Pete, there does seem to be an implication of that in your wording: "his choosing of McKinsey doesn't fully define him."

Personally I think forewarned is forearmed. I think Pete having insight into how these corporations work, while having progressive values, is a good thing. His knowledge will only serve to help combat the sneaky ways corporations try to rip off the middle class, IMO.

[JudyM]

13. I'd love to hear him talk about that.

I’ve been listening to him to understand more, especially the last few days.

[crimycarny]

17. Agree

Personally I think it's pretty impressive that Pete was working to combat climate change 12 years ago, way before it was widely seen as the threat it is.

[Recursion]

8. The ratio went up when real incomes were going up

and down when real incomes were going down.

In fact, the sharpest drop of that ratio was between 2008 and 2009. Are you saying that the economy was doing something right at that point?

[JudyM]

11. 220 times the typical worker salary is not the economy doing something right, no.

Not when ~80% of working families live paycheck to paycheck, struggling to afford childcare, etc.

[Recursion]

14. Again: it was lower during the recession. Were those times better?

Would you rather have lower real incomes as long as that particular ratio is lower?

[Scurrilous]

9. We're doing this again? Yay!!

Trying to remember the funny one I saw at commondreams.

What was it? Hmmmm...'His work at McKinsey was a Kissinger level war crime.' Yes. That's it! That's the one!

Kudos for the promptness. Pete wins the shit comes out!

That reminds me. Check out commondreams and see how they're dealing with loss

[JudyM]

12. You seem not to have read the post.

[IronLionZion]

10. So it was management consultants and executives, not those foreigners stealing our jobs?

My mind is blown.

[mathematic]

19. It went up 50% in the 60s/70s & unchanged in the last 2 decades

Looks like we've finally solved the problem of increasing CEO pay relative to typical workers.

[JudyM]

20. It skyrocketed through the 90's

The more recent (relative) leveling out is an interesting point. Why do you suppose that is?

Out of hand top compensation is still a huge problem when corporate profits aren’t being shared with the workforce, though.

[mathematic]

22. It's probably a bunch of things

These are all guesses. I haven't looked into it.

1) The value added by executive management has stopped growing.
2) Better board oversight for compensation committees have begun to reign in excesses.
3) Fewer high growth companies going public or staying public.
4) Wage growth for typical workers has increased faster in the last two decades than in the prior four decades.

I think one of the interesting things about the recent stability is that it's happening during an extremely strong stock market and that used to mean a huge spike in CEO pay.

I'm curious to hear other possible reasons why executive pay has remained approximately stable over the last two decades.

[The Mouth]

21. "Consult" "Con" + "Insult" EOM

[Kurt V.]

27. can we get this to the greatest page for the posters commentary alone?

[JudyM]

33. That's very kind, thanks Kurt!

I want to understand mor about Pete.