Fiending for the Recession

"It's a big club and you ain't in it. You and I are not in the big club." -George Carlin

Oh boy. If you're still not convinced that Workplace Feudalism is real, buckle up.

The internet recently raged against a leaked email that speaks volumes about the conversations that happen behind closed doors.

Key topics:

✔️ Will Corporate America keep wages high to help you cope with the coming recession? 😆 Hell no.
✔️ For every icky conversation we learn about, I bet there's hundreds more we don't hear. And that should scare you.
✔️ In many companies, the so-called "culture" is a veneer. It may be bandied about to get you in the door, but it's important to find a place that practices what they preach.
✔️As with cults, poo poo companies and poo poo managers don't always roll out a neon sign that says, "Hey there! This is a bad friggin' place to be. You wanna come in?" Caveat emptor. 

Links I discuss in this episode:

https://www.inc.com/minda-zetlin/applebees-wayne-pankratz-email-reddit-gas-prices-lower-wages.html

https://www.reddit.com/r/LateStageCapitalism/comments/tmpey2/wayne_pankratz_of_applebees_says_that_higher_gas/

https://www.businessinsider.com/applebees-franchise-exec-fired-saying-higher-gas-prices-less-pay-2022-3

https://www.buzzsprout.com/1125110/6785926

https://causeyconsultingllc.com/2022/04/22/thx-wayne/


Need more? Email me: https://causeyconsultingllc.com/contact-causey/

Transcript

0:15

Welcome to the Causey consulting podcast. You can find us online anytime at CauseyConsultingLLC.com. And now, here's your host, Sara Causey. Hello, Hello, and thanks for tuning in. Ah, deep heavy sigh. Wow. Every so often, although it seems to be happening more often these days, someone will lob a Molotov cocktail into the market, either. They think they're being funny or clever. They're not self aware of how something is landing. They're tone deaf or you know, in some cases, maybe they just don't care. I do think it's becoming clear to people. The idea that fat cats and power brokers and CEOs really do not care about them as the little guy. I've talked before about George Carlin's quotation, it's one big club and you are not in it. You and I are not in it. And I think it's becoming clear to people, just how profound of a gap that really is. Yeah, I certainly think back to the better.com firing that took place, I think it was the end of last year over a dam zoom call. I'm not even going to go down that rabbit hole. I've already talked before about how much I loathe zoom and any kind of forced video calling platform. I think they can be used as a tool for evil more often than they're used as a tool for good. But I know it had to smart to get laid off over a zoom call. And then there was some kind of leaked memo where he was flipping out about the Scotties in the office telling people they were too damn slow. They were dumb dolphins, they were an embarrassment. And it's like, oh my god. You ever heard of the phrase? When you find yourself in a hole? stop digging, like, hello? How much worse can this get? In a similar WTF moment. There was recently an individual that was somehow connected to Applebee's. I don't know that he actually worked for Applebee's, but maybe like a subsidiary of some kind. In any event, as of the recording in this podcast episode, he's already been terminated and is no longer with the company whether it was Applebee's or it was some subsidiary company of theirs, he go. But I want to if you're not familiar with the story, I want to give you some background information on it. And I will read from an ink.com article of course, I'll drop a link to it in the write up so that you can check it out for yourself. But I'll read from this article so that you can get a little background information and a quick little tidy summary here. Before I get into the nuts and bolts of what I want to talk about. Wayne Pankratz who I want to refer to as Wayne Pack Rats, Wayne Pankratz a top executive at an Applebee's franchise chain sent a blast email to his colleagues this month crowing that rising gas prices were an advantage for the chain. He reasoned that cash strapped people would have no choice but to take food service jobs even if the chain lowered its wages, which he encouraged his colleagues to do. The email made its way onto Reddit where it quickly became a major embarrassment for Applebee's and for AFC brands, which operates 121, Applebee's and Taco Bell franchises and where Pam Kratz is Executive Director of Operations at least for now. I'll break in long enough to say, Hmm, not now. There's a lot that a smart leader can learn from this incident. It's easy to see why people were angered by Pan Kratz his message. Most of our employee base and potential employee base lives paycheck to paycheck, he wrote, stimulus payments and Pandemic unemployment payments have both ended leaving them with reduced incomes just as prices are rapidly rising. This benefits us he wrote it will force people back into the workforce and quote, about a week ago I published a blog post about this very email in this very situation. I will also drop a link to it in the write up so that you can check it out if you choose to. You can find the entirety of the email on Reddit as well as on Twitter via at vote for Rob Gill. I highly recommend that you check it out and read it for yourself. If for no other reason, then I really want you to know what kinds of discussions go on behind closed doors. And for every one of them that gets exposed and faces internet backlash. I have to believe there are hundreds more that we don't know about. But please understand that the CEOs, the power brokers, big wigs, and I'm not talking just to be clear, I'm not talking about the CEO or the president of a small mom and pop shop. I'm not talking about somebody that's like a very big fish in a very little pond. I'm talking about the real actual power brokers, the people like George Carlin is talking about the politicians and the corporate bigwigs and the people that run the global conglomerates. They're one big club, and you and I are not in it. And it's important to understand the kind of thinking the kind of squeeze the little guy to get as much blood from the stone as you possibly can. You need to know and understand that that's what's going on behind the scenes. And so I want to read this email to you that Wayne wrote, and it looks like it was sent on Wednesday, March 9 of this year. So here we go. The subject line reads why gas increase is good for hiring team, everyone has heard that gas prices continue to rise. The advantage this has for us is that it will increase application flow. And it has the potential to lower our average wage, how you ask most of our employee base and potential employee base live paycheck to paycheck, any increase in gas price cuts into their disposable income as inflation. I'm so sorry, I'm just going to have to break in here for just a second. What disposable income. I've lived paycheck to paycheck before and not all that long ago. I've done it several times in my life. And I can remember when I had no disposable income there, it just it literally didn't exist. And I can remember other times where my disposable income might have been like $10, you know, I can remember going to like the value menu at a fast food restaurant and then going to the matinee showing at the movie theater, or going to one of the like really offbeat less than desirable times to have like a $1 movie showing there's a theater not far from me. And they don't do it anymore because of inflation, I'm sure kind of combined with the pandemic shutting everything down. But they would have times where it'd be like if you are willing to do the extreme early bird special and go see a movie at nine o'clock in the morning, you could get in for $1. And they have other times where it was like if you brought in if you went in an offbeat time and you brought in at least one can good for the food bank, you could get in for like a quarter or for 50 cents. And so we would have to do that. Because the only disposable income was coming from like me looking under the floorboards in my car for loose change or being going through old coat pockets to see if I could find anything. So when he was talking about the increase in gas prices cutting into the disposable income, I just want to really be clear here that for some of these people, there is no disposable income. You know, I'm channeling the same energy here as Ultron. When he pops up and goes there is no man in charge. Anyway, let me read. As inflation continues to climb and gas prices continue to go up. That means more hours employees will need to work to maintain their current level of living. I'm going to break in and break in again to say and don't think the people at the top don't know that I'll read. We are no longer competing with the government when it comes to hiring stimulus money is no more supplemental unemployment is no more. This benefits us as prices rise. People who were relying on unemployment money simply will have less money to spend, it will force people back into the workforce. Furthermore, other competitors, especially Mom and Pop companies or smaller businesses will have to either raise prices, cut employee hours or pay employees less hourly to hit their profit margins. Some businesses will not be able to hold on. This is going to drive more potential employees into the hiring pool. We all competed to hire out of the limited applicant pool and there was a wage war we all saw businesses hiring team members at 18 to $20 an hour, they will no longer be able to afford to do this. Trucking is the backbone of America and as fuel costs rise, so will the charges for shipping. If those costs cannot be passed on to the customer in terms of menu price, the only area they can cut, sizeable costs will be in labor. The labor market is about to turn in our favor. What can you do besides hiring employees in at a lower wage to decrease our labor when able make sure you have a pulse on the morale of your employees. Your employees that live check to check are impacted more than the people reading this email. While he's not wrong there. Be conscious of that many will need to work more hours or get a second job. Do things to make sure you are the employer of choice. Get schedules completed early so they can plan their other jobs around yours. Most importantly, have the culture and environment that will attract people and quote I'm just going to pause for a second and let you kind of digest that if this is your first time hearing this bullshit. I just Want to give you a little bit of space here to, to digest at all as best that you can. There are so many things to unpack so many topics just from that one email that we could get into, we could be here all day, a few sort of key takeaways. He's definitely not wrong when he says that people living paycheck to paycheck are going to be impacted differently by the upcoming changes in the market than the ones reading that email. I mean, anybody that's on an executive team, somewhere in a large company, more than likely is not living paycheck to paycheck. Now, it could be that they're mortgaged to the nth degree, they may not live within their means they may have credit card debt through the roof, I don't know. But I suspect he's not wrong when he says that the people living paycheck to paycheck working in their restaurants are in a completely different situation than the executive team reading that email. So I'm sure he's not wrong there. But we're talking about a person saying, all right, these people are about to get squeezed. And he seems to be taking some kind of weird Schatten Freida from that, it reminds me of Mr. Burns on The Simpsons. I mean, can't you just see him penning an email like this and finding it really exciting, you know, how much can we squeeze out of these people like a Python just gonna be squeezed them for the energy around that just feel so wrong and diabolical to me gleefully. Looking forward to being able to reduce wages, oh, we had to hire team members at 18 to 20 an hour. And that was just awful. But we can't wait to cut them now. Make sure that you're hiring them in as low as you can possibly go. But then at the same time, make sure that you create a veneer of company culture so that we become their employer of choice, and their second, third, fourth and fifth jobs that they have to work to not starve. You know, we want those jobs to be on the backburner in comparison to us. We want to make sure that they're gonna show up for us. And if they lose some other job, well let it be some of the other work but you know, not not not us. We want to be the priority. And it's like, God, no wonder the internet lashed out against this guy. I mean, one has to believe that he just assumed no one would ever find out he I'm sure he thought that he was being a good steward of the company's money. And that nobody would ever see this email, it would be private forever, and that he wouldn't be heckled roundly, all across the interwebs. But Surprise, surprise, here we are. In fairness to the argument, I do want to read the statement that was released by Applebee's. You can find this on business insider.com. And I'll also drop a link to it. This is the opinion of an individual not Applebee's said Kevin Carroll Chief Operations Officer at Applebee's. In a statement to Insider, the individual has been terminated by the franchisee, who owns and operates the restaurants in this market. Our team members are the lifeblood of our restaurants. And our franchisees are always looking to reward and incentivize team members, new and current to remain within the Applebee's family and quote, so take from that what you will. Allegedly it was Machiavelli, who first made the observation that you should never waste an opportunity offered by a good crisis. And it's important that you kind of peek behind the curtain here and understand that corporate America just like your government knows and understands that factor. Do you think that corporate America intends to keep wages high to help you make it through the coming recession? Hell no. And what Wayne is saying in this email is what I'm sure that countless others in corporate America have already WarGames out in private. Let's just sit back and wait for the recession let's let's let the inflation take the prices higher. Let's let the housing bubble burst. Let's watch things kind of get to more of a panic stricken mode. So then we can squeeze the workers they're going to have to come crawling back. They're going to have to keep whatever job they're in when the bottom drops out. So then we'll give them pay cuts and make sure that they stay wage slaves here. If you think that those kinds of discussions are not going on behind closed doors, I beg to differ. And this email chain is proof positive that those discussions are going on behind closed doors. We just happen to find out about one of them. And when he's talking about some businesses will not be able to hold on I would really say whenever possible, try to support small business. If the mom and pop shops go away, then we'll just be left with nothing but the global conglomerates. I mean, we're all already so dependent on them anyway, if we have absolutely no other alternative sources either to purchase goods and services or potential workplaces potential clients, we may all be screwed. The people that live paycheck to paycheck, it's like he's essentially saying, we want to make sure that we take priority over their other jobs. Not we want to pay them enough so that they don't have to go out and work other jobs. We just want to make sure that we're the priority in their life, which is super gross. Have the culture that attracts people. Hmm, what culture you know, it reminds me of the meme of like, our culture is so important to us. And it shows a cube farm with a dim fluorescent lighting and a sad office chair like what what kind of culture is that? You want everybody to come on back to the office or work some kind of hybrid schedule to sit but in seat and a depressing office chair in a dimly lit cube farm listening to that or hum of fluorescent lighting? The hell is that? You know, I think back to a podcast episode that I recorded about the Nexium cult. If you haven't checked it out, I'll drop a link to it in the write up for this one. Here's the thing kids, cults do not roll out a red carpet and a bunch of neon flashing lights that say, hey, hey, you over there. Yeah, we're a cult. We're a religious cult, or we're a sex cult or we're a business cult. We'll put you into slavery. We will ruin your life will milk you for all the money that we can get out of you. We are totally and completely a cult Do you want to join? They don't do that. It's much more surreptitious and sneaky than all that. In the case of Nexium, in particular, they operated like a business slash self improvement course that they call the executive Success program. That sounds so benign, and so harmless, I mean, executive Success program. There's nothing about that where you go, Oh, my God is the sex cult, people are going to get branded, they're going to all be expected to have sex with the Vanguard. No, you wouldn't. You would never glean that kind of information from something called the executive Success program. And I think for some companies, and for some organizations, what they're calling culture is, in many cases, just a complete BS veneer. It's a magnet, it's a lure, that they're putting in the water to get the fishies to come up. But it's not something that they actually live by. And I think is more office workers have gone work from home or completely remote, they've really realized that like, Hmm, I wasn't really in a culture, or the culture I was in before was completely toxic. And, frankly, I'm glad to be out of it. So to sum up, what other things besides kind of you pulling the curtain back and understanding what really goes on behind closed doors with these executive teams? What can we take from it? Well, for one thing, I really do believe that the market is going to change. We're already seeing the power brokers telling us, hey, a recession is looming. And I think when you get a heads up when you get a warning, you know, it's like the old advice about dating, when someone shows you who they are, believe them, listen to them. If someone tells you that they're a commitment phobe, and they don't want to be in a monogamous relationship, like you should listen to that because you're not going to change them magically, you need to pay attention to what they tell you. So we're being told quite clearly that yes, we are in a housing bubble, and it's going to pop a recession is coming. Inflation is at least eight and a half percent. I suspect it's probably double that. I mean, just in kind of looking at the gas prices and the the price of goods and how much more it is to live exactly the same way that you did last year. I think it's probably about double what they're telling us that it actually is. I'm not an all seeing Oracle. I can't predict everything that's coming down the pike. I'm just kind of looking at the data and using my spidey senses and past life experiences, to know like, Okay, I've been here before, I remember what the Great Recession of 2008 was like, I've been through multiple boom bust cycles of the oil and gas market. When the bottom drops out, this could get really hairy. And you don't want to be at the mercy of people like Wayne, you don't want to be at the mercy of anybody who is standing back and waiting to exploit you and to exploit a dire economic situation. So generally speaking, prepare, don't get caught with your pants down. Don't think that the great recession or excuse me, the great resignation is going to last forever and that we'll never see something like the great recession in our lifetimes ever again. It could totally happen. live beneath your means where you can I have lived paycheck to paycheck before. I know that that can be easier said than done, believe me. Just do what you can to try to keep your debt to income ratio low and really look hard and clear at your financial situation while you can and then also find a good place to hunker down and weather out the storm, the better you can be going into a recession, the better that you can weather the storm. So if you're sitting there listening to this and you're at a job that you hate or you're grossly underpaid, before we lose the momentum and the steam of the great resignation while we are still in such a powerful candidate driven, employee driven market, this would be the time to get a game plan together and figure out where you want to be when the bottom drops out. And we certainly none of us listening I'm sure would want to be at the mercy of someone who is sitting back rubbing their hands like Mr. Burns, waiting to exploit us. No, thanks. We hope you enjoyed today's episode. If you haven't already, please take a quick second to subscribe to this podcast and share it with your friends. Thanks for tuning in. We'll see you next time.