A Grocery Store Company Lobbies for Special Status during the Coronavirus Pandemic While Falling Short

In early April, 2020, Albertsons Companies, which at the time owned Safeway, ACME Markets, Jewel-Osco, Vons, Pavilions and Albertsons grocery stores, joined with United Food and Commercial Workers International Union (UFCW) to get American governments to designate the workers as first responders. The joint statement reads in part, “The temporary designation of first responder or emergency personnel status would help ensure these incredible grocery workers access to priority testing, have access to personal protection equipment, like masks and gloves, as well as other workplace protections necessary to keep themselves and the customers they serve safe and healthy.”[1] Although keeping grocery workers healthy was important, the focus on testing and equipment can be viewed as problematic in that the company’s management was falling short on more crucial safety measures.

If the masks being sought were merely surgical masks—and in shopping in Safeway stores I saw many employees already wearing them—it is important to remember that that type of mask (i.e., without a respirator) does not keep the virus out; rather, the masks are designed to stop water droplets from getting out so the risk of infection to other people nearby is reduced as such droplets can carry virus. However, the virus can still go through and around a mask even just by the person breathing. Stopping that would (hopefully obviously) be worse than catching the disease.

I suspect that the typical worker was not aware that the mask does nothing to stop the wearer from getting infected; the purpose is more altruistic—namely, reducing the risk that the wearer infects other people. Because  I did not see any Safeway workers going out of their way to keep at a physical distance from customers even after more than a month, I don’t believe that the workers wore masks for the good of the customers. Furthermore, I can say that Safeway’s management extending down to the store level was shirking the responsibility to keep customers as well as employees as safe as possible. 

Why would a store manager watch employees pay little heed to keeping a distance from customers when such distance was possible? Why would an employee not even "hug" the other side of a hallway while passing a customer? Perhaps the employees, being used to putting policies to customers, took offense when the roles were reversed, with customers even just reminding employees of the store policy (and government guideline). I suspect that the employees were reacting to the reversal in power. When I asked employees to keep a distance, I saw facial expressions saying, in effect, I don’t have to take orders from you. 

Regarding the store managers, they were doubtlessly not used to being embarrassed by customers pointing to blatant employee noncompliance. Perhaps the managers were not used to confronting noncompliant customers; perhaps the managers were scared. Perhaps the managers were not comfortable taking an active role with employees and customers in the stores. Perhaps the managers were used to the weaker form, passive management, even when they knew that noncompliance was ubiquitous. Such a situation would require a real manager, rather than a person behind a curtain.  

One day in late March, I suggested to a store manager that he make an announcement reminding employees as well as customers that maintaining a physical distance was a store policy and government guideline. “Maybe I’ll have a store meeting on that,” he replied. Lest this be thought to be a sign of bureaucracy, I submit that the discretion involved rendered the choice a sign of weakness. No announcement for the customers ensued even as employees were clustering around customers at the cashier area where the manager was standing! Focusing on masks and testing can be viewed as of much less importance. In fact, the managerial judgment that prioritizes such a focus over keeping employees and customers safe in the first place is severely faulty. 

So too is the judgment of a store manager who refuses to intervene when a customer insults another customer for asking for some physical distance between them. In mid-April, I observed a store manager refuse to intervene to ask two people to observe physical distancing, as they had been violating it, and even to confront them when he heard them insulting another customer for having asked them to keep at a distance rather than pass close by. This was a case of disgustingly incompetent, impotent store management.

Meanwhile, store employees were walking closely by customers with impunity and even lie, "I'm trying" to offended customers. Actually trying would mean keeping to the other side of an aisle or hallway rather than walking down the center. Real trying would mean not walking directly at customers, expecting them to back away. During the first months of the pandemic, I did not see one employee pause, back up, or take even a slight detour so to maintain physical spacing. The presumption that the customers should move out of the way if they want to take precautions is so toxic that the supervising management can also be condemned; the attitude is that bad.

In incessantly interrupting and failing even to acknowledge that her subordinate had provided bad customer service, the manager over that department demonstrated the attitude to me in early April. I had asked the subordinate at the desk to call another store to ask whether it had toilet paper. “No I won’t call,” the subordinate had stubbornly replied, “because I know what they will say.” It was still early in the morning, and she had not contacted the other store yet that morning, so she told me she would call. She quickly went into the back office. When she came out of the small office only seconds later, she told me that she had had a conversation with the manager inside instead. In the conversation that lasted just a few seconds, the manager told her subordinate that all of the stores would get deliveries of the product that night. "But that doesn't mean that the other store is out of the product now, which is why I asked you to call," I replied. Because the employee didn't understand how she had not answered my question (which alone is telling), I asked to speak with the manager.

 
The forthcoming conversation was even worse. After I stated that just because all the stores in the district would get shipments that night, we can't assume from this that the other store was out. Rather than attending to my point, the manager went into a monologue on how much of every other product impacted by the hoarding was doing in the store. 

In retrospect, I would realize that the lack of concern for customers connected the bad customer service with the attitude of the management toward enforcing distance on the employees and reminding customers to keep a distance from each other. The failure or refusal to enforce physical distancing on employees demonstrates a lack of concern for not only them, but also the customers. So too does not making sufficient store announcements to customers when most are not maintaining physical distance from each other. Were physical distancing a priority of the store managers, then getting more masks and tests would have been much less necessary. 

  
Proper management of employees and genuine concern for customers in real time (i.e., even stopping a noncomplying customer from lashing out at other customers who had asked for more physical space from that customer) would have done a lot more than lobbying for masks, which do not prevent the employee-wearer from being infected, and tests after-the-fact. If the company’s management was really concerned about employees, the distance policy would have been enforced. Lest the company's management tout corporate social responsibility programs in order to deflect attention from a lack of genuine responsibility for employees and customers, a peripheral program does not trump social responsibility directly in the line of business operations because the latter has more of an effect on customers and employees, who are more central to a business than are societal problems.

 

I suspect that in American politics too, enabled by the media, secondary issues gain focus even at the expense of vital issues. Within an issue, symptoms or manifestations get more attention than does removing the cause. Redressing the cause of an illness is better than merely alleviating symptoms. As in the case of Albertsons Companies, focusing on a peripheral rather than a more central matter can be relatively easy and easier to problem-solve. Focusing on peripheral matters can thus make companies and governments look better than they actually are. How a company or government is actually falling short in more crucial ways is not transparent when the organizational and societal focus is on what the company or government is doing even to make up for its falling short. 

On Nietzsche's thought on weak management, see Skip Worden, On the Arrogance of False Entitlement: A Nietzshean Critique of Business Ethics and Management.

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1. Aine Cain and Hayley Peterson, “A Major Grocer Is Pushing to Classify Its Employees as First Responders, Giving Them Priority for Testing and Protective Gear,” Business Insider, April 7, 2020 (accessed April 8, 2020).

Wealth as a Societal Value in the E.U. and U.S.: The Case of Financial Reform

The E.U. and U.S differ markedly in the degree to which the interests of big business are etched in the respective societies and polities. That is to say, the difference goes beyond the question of the relative influences of the lobbyists. I contend that the relative proclivity societally in favor of business in the U.S. tilts the political playing-field excessively in the direction of the financial interests at the expense of the public good, which I take to be well represented generally by a full, equally-weighted spectrum of views. I further contend that influence is easier for financial-sector lobbyists in the United States than in the European  Union because the societal values in the former lean more in their favor. By analogy,  it is easier to run downhill than even on a flat surface.
These points can be discerned from the respective financial reforms in the E.U. and U.S. in the wake of the financial crisis of 2008. Because the financial sector was viewed as culpable in both societies, the ensuing respective financial reforms would be expected to be at the expense of the banks rather than conducive to their interests.

On March 10, 2010, the E.U. Parliament adopted a Resolution (536 votes in favour to 80 against) calling for the financial sector to contribute fairly towards economic recovery since the costs of the crisis are being borne by taxpayers. On 25 March, Members of Parliament’s special “Financial, Economic and Social Crisis Committee” debated the rationale behind a possible financial transaction tax. Stephan Schulmeister of the Austrian Institute for Economic Research in Vienna said short-term financial transactions can make short-term prices of currencies and other financial products such as derivatives and shares vary wildly. Schulmeister claimed that a tax on financial transactions of just 0.05% would eliminate these short-term transactions, bring greater stability and bring €300 billion of additional revenues to the E.U. While the tax would undoubtedly bring in revenue, it is not clear to me that short-term transactions would be eliminated, as they can be worthwhile even with such a tax. Moreover, the financial crisis of 2008 shows us that the volitility can come from the market mechanism itself (in so far as it magnifies irrational exuberance). At any rate, even as there was division on the matter of such a tax in the parliament, that the proposal had been made distiguishes the legislative body of the E.U. from the Congress in the U.S., where such a proposal would undoubted have been blocked. Indeed, the E.U. Parliament went ever further.

On July 7, 2010, the EU Parliament approved some of the strictest rules in the world on bankers’ bonuses. In the legislation, caps were imposed on upfront cash bonuses and at least half of any bonus had  to be paid in contingent capital and shares. The legislative chamber also toughened rules on the capital reserves that banks had to hold to guard against any risks from their trading activities and from their exposure to highly complex securities. “Two years on from the global financial crisis, these tough new rules on bonuses will transform the bonus culture and end incentives for excessive risk-taking. A high-risk and short-term bonus culture wrought havoc with the global economy and taxpayers paid the price. Since banks have failed to reform we are now doing the job for them,” said MEP Arlene McCarthy. Upfront cash bonuses were capped at 30% of the total bonus and to 20% for particularly large bonuses. Between 40% and 60% of any bonus had to be deferred for at least three years and could be recovered if investments did not perform as expected. Moreover at least 50% of the total bonus had to be paid as “contingent capital” (funds to be called upon first in case of bank difficulties) and shares. Bonuses also had to be capped as a proportion of salary. Each bank had to establish limits on bonuses related to salaries, on the basis of E.U.-wide guidelines, to help bring down the overall, disproportionate, role played by bonuses in the financial sector. Finally, bonus-like pensions were also covered. Exceptional pension payments had to be held back in instruments such as contingent capital that link their final value to the overall strength of the bank. This was to avoid situations similar to those experienced in the wake of the financial crisis of 2008 in which some bankers retired with substantial pensions unaffected by the crisis their bank was facing. The rules applied to foreign banks operating in the E.U.and to subsidiaries of E.U. banks operating abroad. The law gave state regulators binding powers to take action against banks that failed to comply with the new rules. In contrast, the U.S. went after Arizona for trying to enforce US immigration law.

Clearly, the U.S. financial reform did not go nearly as far; it did not put nearly as much crimp in the American banks. This is no accident. The feeling among big bankers in the US was that they dodged a bullet concerning what could have been in the American bill. No “too big to fail” limit was put on a bank’s capital or size , or on the bankers’ compensation. The American media and President Obama were strangely silent on why. In the case of the health reform, the President silently removed his objection to an insurance mandate and dropped his desire for a public option after the lobbyist for the American health insurance companies told him that her support was contingent on these changes. 
My point is simply this: Were not American society leaning in a pro-business direction (e.g., economic liberty being salient in how liberty itself is viewed), the President might not have felt the need, or pressure without a sufficient countervailing wind, to bend in the banking lobbyists' direction. That is to say, the lobbyist would not have had so much leverage. Wall Street no doubt had massive influence in the crafting of the financial reform as it was making its way through Congress (even though the banks were culpable in the financial crisis—which is itself telling). I submit that the reasons go beyond the sheer power of money to unquestioned societal values.

Sources:
http://www.europarl.europa.eu/news/public/story_page/044-71441-088-03-14-907-20100329STO71433-2010-29-03-2010/default_en.htm

http://www.europarl.europa.eu/news/public/focus_page/008-76988-176-06-26-901-20100625FCS76850-25-06-2010-2010/default_p001c011_en.

An Anti-Obesity, Anti-Poverty Philanthropist Joins PepsiCo.’s Board: A Case of Reform from Within

In October 2016, Darren Walker, president of the Ford Foundation, became the newest member of PepsiCo’s board of directors. Whereas Walker worked at the time for a more just and equitable society, Pepsi was making the bulk of its money by selling sugary drinks and fatty snacks and there being a well-established link between obesity and economic inequality. Would he be working at cross-purposes? “There’s a risk that he will be viewed as inconsistent,” said Michael Edwards, a former Ford Foundation executive at the time.[1] The company itself could also be viewed as being inconsistent—lobbying against anti-obesity public-health legislation while putting Walker on the board of directors.

To be sure, the Ford Foundation had not funded organizations working to combat obesity or diabetes, so there does not seem to be a direct conflict of interest for Walker.[2] Yet he did acknowledge, “I know that my own credibility and the credibility of the Ford Foundation is tied to this decision. Those of us in philanthropy have to be discerning about the corporate boards we join, and be discriminating to ensure that our service on a board is aligned with our values.”[3]

So rather than there being a conflict of interest, the issue for Walker was whether he could act as a reformer from within. Even though he planned bring the perspective of a social-justice organization and his own perspective “as someone who is deeply concerned about the welfare of people in poor and vulnerable communities,” he would still bear responsibility should PepsiCo’s board go in another direction.[4] He would not, in other words, be chairman of the board. That the company had just pledged to further reduce the amount of sugar, fat, and salt in its products by 2025, however, suggests an appetite for accommodation with Walker’s perspective. Additionally, Walker would not be responsible for the company’s past unethical lobbying against anti-obesity legislation, use of unethical suppliers of palm oil, and deceptive marketing, and the company had since taken steps to remedy these ethical problems.[5]

As in politics, the matter for Walker and the other board-members concerning would be whether together they could wield compromises taking into account both Walker’s vantage-point and the legal and ethical fiduciary duty to act as faithful stewards of the stockholders’ capital. Reform from “the inside,” moreover, can be more productive than merely staying in the philanthropic sphere. In terms of American politics, the analogue would be moving from the Green Party, for instance, to the Democratic Party so as to work toward reform that could actually manifest in legislation. Admittedly, idealism is tested in such a strategy, but consequentialism tells us that even 50% of 10 is more than 0% of 10.

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1. David Gelles, “An Activist for the Poor Joins Pepsi’s Board. Is That Ethical?,” The New York Times, October 28, 2016.

2. Ibid.

3. Ibid.

4. Ibid.

5. Ibid.

E.U. Presses Italy to Tax Church Businesses

One of the chief benefits of federalism is the ability of one system of government to check another within the overall federal system. In the European Union, the state governments have so much power at the federal level—in the E.U. institutions—that it is difficult for the E.U. Government to check excesses and abuses in the state governments. E.U. law, regulation and directives rely on the state governments, albeit to varying extents. In the United States, the case is the reverse. The U.S. Government holds so many of the cards that the state governments cannot act to check abuses in the federal government. Actually, for all of the power that the U.S. Government has amassed, it does a horrible job in aiding citizens against abuses in their own state governments. Fortunately, we can look to Europe for a bright spot: the E.U. Commission and Italy, á grace de Mario Monti who is both governor of the state of Italy and a former commissioner in the E.U. Commission (the E.U.’s executive branch).

The full essay is at "Essays on the E.U. Political Economy," available at Amazon.