The Management Racket Is Ending

The Management Racket Is Ending
(Studio Romantic/ShutterStock)
Jeffrey A. Tucker

When I was 15, I had a wonderful time working at a local fish restaurant. I was a busboy and dishwasher and was super proud of my job. Scrubbing pots and wiping down tables was a job of enormous responsibility. Leaving grease and sticky stuff on plates and seats was a sure way to drive off customers. I was thrilled to be entrusted with the tasks.

One day, the boss came in and inspected the kitchen. He found that the steel under the dishwashing sinks was quite dirty. My coworkers and I had neglected that part of the sinks, wrongly. He grabbed a hard brush with some Clorox bleach powder and got on his hands and knees and started scrubbing and explaining. Once he got started, he couldn’t stop, and he did this for a good 30 minutes while the rest of us busied ourselves with other tasks.

We never again neglected the underside of the sinks.

Awesome. Massive respect. That’s my kind of manager. He also happened to be the owner.

Truly, he could perform most of the tasks in the kitchen with more efficiency and scrupulosity than any of the workers. I came to realize that day what my role was. I was there to achieve what he would do if he didn’t have other tasks in which he was a greater specialist. This is precisely the best kind of boss: one super-involved in the nitty gritty of the life of the business, ready to do anything.

I was reminded of this yesterday when I visited my favorite Halal grocery store that specializes in foods for a demographic mostly from the Middle East region. The owner is the boss, and the boss is the main worker. When I walked in, he was mopping the floor. He put down the mop to come over and run the cash register to ring up some spices I was buying.

This is the kind of enterprise that thrives in our time. They’re growing, not cutting. That’s because the management is integrated with the workers, and there’s no one who works there who isn’t actually doing valuable things. Everyone is essential. And happy.

That doesn’t describe corporate America today. Not in the slightest. Here’s a place where they imagine that there’s this thing called “management” that’s entirely disconnected from the work of the company. If you read any textbook on management, this is also what you find. It’s an imaginary world in which there are planners and dictators and people underneath them in the pecking order who do their bidding even though the management layer couldn’t competently perform or even describe the work being done.

As time went on in my professional life, I encountered ever more of these people, individuals who imagine that their skill is entirely to be in charge, without actually having the competence to do anything else. Truly, I saw many occasions when an enterprise would have operated vastly better in their absence, but they kept their jobs and never stopped making amazing messes because the resources were there.

One guy I knew had only one skill: making spreadsheets for workers he oversaw. Every employee was presented with a huge sheet of things they were supposed to do. His job, as he saw it, was ensuring that they all did the things he said they should do within the time that he said it should be done. He could do none of those things himself and had no idea of their value either way, but he would tolerate no pushback from anyone. He locked himself in a room and stacked his spreadsheets. That was the beginning and end of what he did. He was a manager. Everyone knew he was superfluous, but no one could do anything about it because he had one other skill: convincing his own boss that he was personally responsible for achieving everything in his division. And yes, he was widely hated.

This is unsustainable in any good company operating under normal market conditions. But normal market conditions haven’t characterized the industrial sector, to say nothing of the nonprofit sector in most parts of the world for the better part of a decade and a half or more.

There is a reason why the Dilbert comic strip became so popular. It well describes this horrifying reality. There’s also a reason that shows such as “The Office” became so popular. It put on display a microcosm of what professional life has become for so many workers.

As expected, more companies that expanded during the COVID-19 pandemic response and before are laying off workers. And not just any workers. It’s management that’s under fire—management and the huge bureaucracies that surround them. This problem affects not just government but large swaths of the private sector as well.

To be sure, there are now plenty of jobs available for people who know how to do actual things that need to be done. But among the do-nothing, screen-staring elites who make huge salaries pretending to oversee things, the jobs are getting harder to get and keep.

Human resources departments are being purged of excess and Lord knows there’s excess. But it also affects every other frothy area of companies, from marketing to social-justice divisions to media departments. Some of this is necessary, but it’s the layer upon layer that’s the problem.

It’s not just that in purging these layers that companies save labor costs. They’re finding that getting rid of whole classes of workers actually improves functioning. When Elon Musk tossed out 4 of 5 workers from Twitter, to great shock and amazement, the whole of the corporate world watched what would happen. What happened is that Twitter got better.

That sent a serious signal.

FedEx heard it. It’s firing tens of thousands, including 10 percent of its management and director spots. In the end, what makes the company actually work well are the people who do stuff: build and run the technology, drive the trucks, fly the planes, and actually pick up and deliver the packages. Incredibly, it’s typically the case that the people telling the workers what to do couldn’t do these jobs themselves.

The trend is hitting the whole of the corporate elite in tech, finance, and media: Goldman Sachs, Salesforce, Coinbase, Meta/Facebook, Microsoft, CNN, The New York Times, Alphabet/Google, Amazon, PayPal, Spotify, Wayfair, Vox, Newell, and all the rest, with no end in sight. This will be the year that the froth is sliced off the top in ever-deeper layers so that the companies can survive.

The same trend affects job openings as well. In leisure and hospitality, where people actually work and have skills, opportunities are rising. But in professional business services, they’re falling.

(Data: Federal Reserve Economic Data [FRED], St. Louis Fed; Chart: Jeffrey A. Tucker)
(Data: Federal Reserve Economic Data [FRED], St. Louis Fed; Chart: Jeffrey A. Tucker)

Once the Federal Reserve started raising interest rates, the entire financial and economic calculus started to change. The new policy reversed 15 years of zero-percent interest that massively distorted production structures and fed speculative corporate ventures far more capital than the free market would otherwise have channeled their way.

The result was a gradually developing economic and cultural calamity, as companies expanded without limit based on high stock valuations and a seemingly endless stream of venture funding. It all seemed like magic. Without the pressure of accounting basics and stockholder oversight, management layers ballooned.

Fantasy replaced reality, and dopey social missions replaced basic profitability metrics. It was also a period in which benefits packages for employment grew in ways that make no sense. Unlimited time off! Family time! Free yoga! Psychiatrists for everyone! The phrase “work-life balance” began to trip off the tongues of the whole managerial elite, simply as an excuse to do less and less.

Somehow, they got away with it, until recently. Mercifully, this is gradually going away as the industrial sector finds its way back to rationality and sanity. There’s an entire generation or two of workers who might have to find their way back to the work ethic and having actual skills, as unthinkable as that sounds to multitudes of credentialed professionals. For those who thrived so much during lockdowns and lived off their resumes and ability to bamboozle their bosses, who themselves are living a lie, reality is finally setting in.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
Jeffrey A. Tucker is the founder and president of the Brownstone Institute and the author of many thousands of articles in the scholarly and popular press, as well as 10 books in five languages, most recently “Liberty or Lockdown.” He is also the editor of “The Best of Ludwig von Mises.” He writes a daily column on economics for The Epoch Times and speaks widely on the topics of economics, technology, social philosophy, and culture.
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