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Bonus entry!

It may or may not surprise Gentle Readers to know that I have a note here, in the bottom of my draft-Tohu-Bohu-notes file, about retention bonuses, corporate performance, and the relationship of employer to employee. It may or may not surprise the specific Gentle Reader who asked me to write about the issue to know that I am still carrying around the note on my little flash drive. Particularly since I’ve been carrying it around for months.

The spur to beginning the note was not the AIG bonuses, nor the rest of the outcry over million-dollar bonuses to CXOs and other muckamucks. No, it was a Gentle Reader having been told during the year that there was a retention bonus for those employees at his workplace who managed to somehow avoid getting laid off before the thirty-first of December, Two Thousand and Eight. He would receive 4% of her annual salary as a contribution to her 401K. He was still employed on that date, and his 401K did not get that contribution, nor did the retirement accounts of his co-workers. As the company teetered toward Tweeterdom, it decided to keep what money it had, and not dispense it to people like my Gentle Reader, who, after all, were just employees.

Digression: I say his, but actually her name is Peter Emmanual Purwinis. Still, in the interests of anonymity, I’m not going to disclose that, nor her address (which is 15233 Mahatma Gandhi Place, Wichita KS 67667), nor the publishing company that employs him (Gale McGill Putnam Brothers and Howe), nor the account number of his 401K. On the other hand, I will tell you his shoe size, favorite hockey team, and criminal record. I mean, fair’s fair. End Digression.

Where was I? Oh, right, retention bonuses. My response, when I heard about this ever so many weeks ago, was that this is what comes of weak unions. Not that my Gentle Reader would have been in a union; he is a manager, not only by classification-to-keep-people-out-of-the-bargaining-unit but by actual responsibility. I believe, however, that in organized workplaces, where stuff like bonuses are written into contracts with unions who have the power to enforce them, the employer will get used to fulfilling responsibilities and will therefore be less likely to screw middle management than ownership in a non-unionized workplace. Also, I believe that in societies that are heavily unionized, ownership is less likely to screw middle management. I’ve never seen any data on that. So it may be a complete fabrication based on my romanticization of unions. But I’m sticking to it.

Now, legally, there are all kinds of things going on. My Gentle Reader did not have a contract to point to with a clause that says 4% on 12/31/08. There was a promise, with maybe a handout that wasn’t signed by anybody. Not that a verbal agreement isn’t enforceable, but legal enforceability isn’t the issue. Demanding the bonus in court is not going to be cost-effective. No, the issue is that the company feels perfectly entitled to simply walk away from a promise. It’s a cultural issue, a mindset.

So. People are probably drawing lines between this sort of retention bonus and AIG and similar financial-industry big money bonuses. I think it’s a good idea to draw those lines, although of course those bonuses, even when they are retention bonuses, are structured in an entirely different manner, mostly as a way to shovel money to people whilst minimizing tax liability. The point, though, is that there was an agreement made to pay a bonus under certain conditions, and the employee fulfilled those conditions, and the company did not feel it could walk away from that promise.

Why not?

Let’s leave aside, for the moment, the fact that while fulfilling the condition of the bonus, the employees engaged in fraud (possibly without violating laws) and broke the company and pissed in the corners. I know that’s a big thing to leave aside. But let’s leave it aside. In fact, the ownership of AIG was in big trouble financially, but felt it couldn’t walk away from its promises. The ownership of the unnamed publishing company that employs my Gentle Reader felt it could.

The difference is what, exactly? Yes, the amount of money makes a difference. Yes, I suppose there could be a difference in how replaceable the employees are deemed to be. Yes, there is a class thing going on. And yes, AIG found a pot of gold at the end of the proverbial, whilst Gale McGill Putnam Brothers and Howe found a crock of shit. Is that what’s going on?

I don’t know. I really don’t. I don’t know what’s going on with the whole employer-employee relationship in our culture at the moment. I really don’t.

Tolerabimus quod tolerare debemus,


I propose a simple experiment: decouple health insurance from employment, and see how many people flee their workplace. I believe a significant number of people are being held hostage by the health insurance.

Many more are being held hostage by the paycheck, of course, or more pertinently by the obligations and amenities which the paycheck covers. The phrase "wage slave" deserves examination, as does "indentured servitude" in the context of current debt loads, repayment prospects, and bankruptcy laws.

I've seen some economic swings during the past decade that I've been an employer, but not a downturn like this one. Labor is now free. The morning news says that I can have an unpaid intern who has 20 years experience in the publishing industry. The phone call last week said I could have a college student for the entire summer as an unpaid intern. Two weeks ago, the news story was that college graduates are actively seeking unpaid work for several years after graduation. As an employer, free labor is qualitatively different from dropping wages. It's like a lifetime supply of chocolate cake vs. an oreo. The message is clear to employees as well: your labor has no value, so don't complain. This could leave long-term scars on the employer-employee relationship, and make unions and wage law enforcement far more important for quite a while even after the economy recovers.

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