When More is More

One of the challenges with raising a seven year old is explaining the concept that life is a series of choices, and that there are trade-offs with the choices we make. This is true individually, corporately and nationally.

We set Elizabeth up with an allowance when she entered kindergarten and established certain tasks that she would be responsible for accomplishing each week. Upon entering the second grade and her successful performance, we have raised her allowance. She has been taught to give a portion to the church, save a portion, and that she can spend a portion. Simple rules, but important as a foundation for growing into a responsible adult.

As her discovery of the value of money and her desire for more items has grown, we are working to teach her that she can earn additional money in the neighborhood by dog sitting or other small chores. In other words, if you want more you must do more.

I saw an interesting article (VW, Union Agree to Increase Work Week at Western German Plants to 33 hours, With no Pay Raise, Associated Press, 9/29/06) the other day that reconfirmed a couple of previous experiences with our allies in Europe. Volkswagen (VW) union workers agreed to increase their work week without a pay increase by 4.5 hours to 33 hours a week! I hope no one pulls a muscle or something and is injured with the additional strain this imposes. Currently they only work 28.5 hours per week!

The agreement was necessary to increase VW’s ability to compete worldwide with other automakers.

On the surface, it appears onerous because they won’t receive any additional compensation. What the article didn’t mention is that the alternatives to the agreement would be massive layoffs in order to achieve the necessary production cost reductions.

I saw firsthand the results of an economy that doesn’t fully motivate people to work hard to earn more when I was in the UK a few years ago.

Two associates and I ate a fine meal at a restaurant, but the service was mediocre at best. The education began when the check arrived and I gave the waitress my credit card.

Similar to our bills in the U.S., the food and beverage amount was displayed, and below it was a blank for a tip and a total line. But, instead of the tip and total lines being blank, there was a diagonal line through the tip and the total was the same amount as the sub-total.

I asked the waitress, “Don’t you want a tip?” “No”, she replied. “By the time I pay taxes, I only receive 40%, and the additional paperwork isn’t worth it.”

The revelation that this was a microcosm of a more socialistic economic system than we have in the U.S. was stunning. There was a direct correlation between the shoddy service and the disinterest in earning an additional pittance of income.

Later, our team ate at a different restaurant in London, which was owned by Americans that had excellent service. They had motivated the staff to perform better in exchange for a benefit that the staff would receive and the results were remarkable.

The application in the VW story above is simple. Because there is a lack of monetary incentives in some countries and companies, the best strategy for unions to negotiate is less work for the same money. When times are good it can work. When tougher times appear, it is necessary to retreat in order to survive.

I’m thankful that in spite of the efforts of some, we have not retreated in the U.S. to what some seem as a more enlightened work environment. Individually, corporately and as a nation, we still have the freedom to choose to work or not to work, what work we want to perform, how much we want to work, increase our skills in order to earn higher level positions and grow over a lifetime without restraint by social class.

Our economic freedom is the envy of the world. It is the essential companion to our political freedom that has enabled our representative republic to flourish for 230 years. Teaching each generation the values of these twin freedoms is necessary in order to preserve and sustain them for the future.

We can begin with the simple premise that if you want to have and be more, you must deliver more value; and in the U.S. you have the freedom to do so.

© 2006 Richard V. Battle