Saturday, November 19, 2011

68% of the sons of the 1% have worked for Dad !!!!

The Atlantic Monthly is shocked, shocked to learn that 68% of the sons of the top 1% have worked for their father's company. 
It's true.  68% of family-owned businesses actually employ family members. 
It seems that entrepreneurs often start a business so they can provide for their own children, not those of a total stranger in Hobbes, New Mexico.

(Ok, enough of the sarcasm.  Here's the point.....)

My first job was at a family-owned business.  I shoveled mud in my father's rice fields.  He could've, and should've hired a more qualified person, like an unemployed accountant in New Jersey, or a needy interior decorator living in Bangor, Maine.  Instead, he kept the mud-shoveling job in the family.  I still feel guilty about it.  My sisters sometimes drove tractors and flagged for the cropdusters.  We've never spoken about our individual strategies for handling the shame of taking these jobs from others, but the conversation needs to happen.  Perhaps this Christmas.   

(Sorry, the sarcasm isn't going away quietly.) 

During the winters, I worked at another family-owned business, a winery across the river from the farm. 
The owner, Sam Rushing, started his vineyard on some land previously owned by his grandfather, Big Tom Rushing.  (When time permits, Google "Tom Rushen Blues" by the legendary Charlie Patton.  Patton wrote it about Big Tom.)  Not only did Sam hire Big Tom, his grandfather, Sam also hired a woman that he was sleeping with !!!  And he allowed this...this....this harlot to make actual decisions about the operation of the winery !!  And run the little cafe attached to the winery !!!  Just because she was willing to go to bed with him !!!  Yes !!!  Sam Rushing, that selfish bastard, hired his wife !!!

The Rushing Winery should've been surrounded by protesters chanting "No Justice, No Peace".

(Sorry, the sarcasm isn't going away quietly.)

After I moved to Fort Worth from Mississippi, I got a job at Bassham Food Services, loading trucks on the night shift.  Calvin Bassham, the patriarch of the bunch, had started the company by purchasing an egg truck.  He made deliveries to every restaurant and hotel in Fort Worth.  Then, to provide even more for his family, he started selling chickens.  Then other meat.  Next thing you know, Calvin Bassham was providing paper plates, forks, vegetable oil, string beans, corn, stewed tomatoes and such all over the Fort Worth/Dallas area.  He put in 80 hour weeks for years, not to pay more taxes, not to support our local infrastructure, and not to give back to the community. 
He did it for his family. 
He let his wife, Helen, keep the books.  Ronnie (#1 son) did most of the selling with Randy (#2 son).  Wes (#3 son) was in charge of the delivery trucks. 
Were there more qualified accountants than Helen in Fort Worth?  Could I have done a better job than Wes as the dispatcher? 
Yes and yes. 
But Calvin Bassham put in all those 80 hour weeks so he could give those jobs, and the company, to his own family.  The bastard. 

After that, I got another job doing the shipping and freight for Taylors Books.  Martha Taylor was the entrepreneur who started the company.  When her first bookstore in Dallas took off, Henry, her husband, quit his hospital administration job and went to work helping grow the book company.  Mike, their son, eventually took over the whole thing. 
Under Mike's leadership, the company went out of business.  Couldn't someone have seen this coming?  Out of all the retail managers in the world, why did they risk giving their business to Mike? 

I eventually left Taylors Books because of illness and fatigue (they got sick and tired of me).  I went to work for Bookstop, which was eventually purchased by Barnes and Noble. 
Barnes and Noble is owned by Len Riggio.  Years ago, Mr. Riggio hocked everything he owned, took some massive risks, and worked like a dog to grow B&N from a regional chain into a national brand.  He could have lost everything he owned. 
He now employs his little brother Steve Riggio.  Sometimes Steve runs purchasing, sometimes he runs their smaller shopping mall company, B. Dalton.  I've heard that Steve is sometimes allowed to run the whole thing.   
Len Riggio practices shameful nepotism of the worst sort.   

(Sorry, the sarcasm isn't going away quietly.)

When I reference my current employer on this site, I call it Jukt Micronics.  (Google it.) 

Jukt was founded in 1984 by a guy nicknamed Big D. 
We make display fixtures for the grocery and produce industry. 
Big D passed away several years ago, but his wife still comes to work so she can order the office supplies. 
His oldest son is the company president. 
His youngest son runs one of the factories.
The youngest son's college roommate is now our CEO. 
Big D's daughter runs the office at one of the factories.   
Big D's brother, one of the co-founders, retired several years ago.  He didn't like being idle, and now drives one of the local transfer trucks. 
One of the cousins does the bookkeeping. 
A nephew does installations for specialty displays. 
Another cousin works for an unrelated company selling insurance.  Guess who insures our stuff? 
Another cousin is a lawyer.  Guess who we go to for legal advice? 
Ok, this next one gets complicated....   Big D's oldest son's wife's brother now runs the mega-shipping warehouse, the freight brokerage, the trucking company, the local transfer drivers and the wood, metal and plastic shop freight docks.  (That would be me.) 

It seems that the 1% don't start companies so they can provide funding for wars in Libya, Bridges To Nowhere, Cash For Clunkers, African Genital-Washing Programs, Social Security, Medicare, Medicaid, The War On Drugs, military contractors in John Boehner's district, or Nancy Pelosi's air travel. 
They start these companies to provide for their own.  It's part of the glue that holds the world together.   
Everything else is an afterthought. 
No legislation will ever change this. 
Thank you. 

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty. This is known as “bad luck.” - Robert Heinlein


Nick said...

The irony of Heinlein's quote is that it is associated with competing theories of economic growth. Classical growth theory predicts that wages will ultimately fall back to subsistence levels. New (Endogenous) Growth Theory permits a continuing cycle of innovation and growth, but it also posits a substantial role of government in spurring R&D and building human capital.

The former model can't explain the growth we've seen and the improvement of living standards. The latter model doesn't consider the growth destroying aspects of rent seeking or government failure.

The Whited Sepulchre said...

I think the latter model's place for the role of government is now going through a rigorous testing phase.
How do you think it's going to work out?

Becoming a Freight Broker said...

When it comes to family "hiring," the fact is that much of this employment is done "under the table" without the kind of red tape that comes from hiring a formal employee or even a 1099 contractor. Less red tape is a major benefit of keeping business "in the family," but the business leaders have to always evaluate whether their choices are strictly legal according to local, state and federal law.