The 120% Solution
Reprinted with permission from Jason's email list
Many intelligent people I've been speaking with believe that the economic crisis facing our country today is our biggest challenge since America's inception. Intelligent folks can argue the relative risks we faced when confronted with the Civil War, Great Depression, Vietnam, two World Wars and the New Millennium Economic Crisis (what I'm calling what we're going through today), but there is no debating that the current situation is dire.
Extremely dire.
Huge companies are closing or imploding and layoffs are skyrocketing; debt levels and savings are hitting new highs and lows, respectively. It's so bad that even the most intelligent economic minds in the world can't explain what is happening, and almost everything our government does seems ineffective. We're deep into uncharted waters and we don't have a navigator.
Oh yeah, it's going to get worse.
I've been thinking a lot of what got us into this mess and how we might be able to get out of it. What follows are my extremely basic thoughts on what has caused the problem and what the solution might be. These ideas are simple, but problems and solutions typically are. Truth be told, knowing what went wrong and how to fix it is the easy part -- it's implementing the solution that's hard.
There is no silver bullet and my hope here is not to convince you I have one. Instead, my hope is that this missive starts a discussion amongst considered people about how we move our country forward.
The 20% Problem
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When I first learned of Google's 20% time, hours reserved for engineers to pursue technology projects they find personally rewarding, I thought to myself: "Gosh, that's brilliantly self-indulgent." Google's 20% time has served as a way for the company to recruit and inspire some of the greatest minds in our industry.
It has served them well. Who wouldn't want to work for a company that essentially says "do what ever you want every Friday!" However, using 20% of your resources to pursue random projects is highly inefficient. While it it might work well for a company like Google, with absurd margins and free cash flow, it's a fairly crazy strategy for any normal company -- or country -- to employ.*
Well, our entire country has been taking 20% time for at least the past five years. It's time for us, just as The Mighty Google did recently according to the Wall Street Journal, to reconsider.
We've overspent, taken expensive vacations, built absurd homes (in both scale and quantity), run our savings into the ground and skyrocketed our debt to record levels. Our addiction to consumption and our sense of entitlement have killed us. Sure, many of us have lived conservatively, working hard without debt. But, on average, we've:
- Spent well over 20% more than we should have on the price of homes.
- Built homes that are well over 20% larger than they need to be.
- Purchased 20% more consumer electronics than we needed. (In my case, 300%).
- Extended home ownership rates 20% beyond where they should be (to the mid-to-high risk credit folks).
- Gotten 20% fatter than we should be.
The orgy of overspending is over and it's time to move on.
Who's to blame for all this?
Was it the greedy Wall Street Bankers who engineered this huge mess? Yes.
Was it the mid-level mortgage broker pushing high-risk mortgages on clients who should have never had a mortgage to begin with? Yes.
Was it the over-reaching consumer who got in over her head and didn't research and question the mortgage she was signing? Yes.
Was it the government that didn't regulate all the bad actors in this tragedy? Yes.
There's plenty of blame to go around, but we've got to get past the blame stage and into the solution phase. (Holding the folks responsible who behaved criminally, of course. I predict there will be
many white-collar perp walks on CNBC next year, just as there were in 2002.)
* Note: I'm not saying Google's is to blame for any of this, or that 20% time was a bad idea for them. Their 20% time is simply what lead me to thinking about what's wrong with our country. I think Google's a brilliant company, filled with brilliant people who have done brilliant things. That being said, they do need to get more focused -- and they clearly are.
The 120% Solution
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If we're going to have any chance of bringing America back to greatness, we're all going to have to work 20% more than we have been.
I'm suggesting that, until America takes care of its debt, untangles the housing mess and gets unemployment under control, we all commit to working six days a week. Yep, move the standard 35-40 hour work week right up to 48 hours.
For me and my team, this is a non-issue, since we only hire folks who are looking to absolutely kill it, love what they do and don't consider it a job. Of course, positions at a startup company, where stock options make for a great reward if we hit a home run, have certain advantages over normal day jobs. In the technology industry, a 48 hour work week would be, for most, a vacation.
It was our collective sloth, consumption and sense of entitlement that got us into this mess, and the only thing that will get us out of will be lots of hard work.
If you've got a good job, you should bust your butt to make your company as successful and profitable as possible. That way, salaries can increase, jobs can be created and your products and services become so world class, the phrase "Made in America" will come to mean something other than "not worth buying."
If you're working at a government job, you should be putting in extra hours to reduce government spending. Come in this weekend and make the government more efficient. (Yes, I just told a government worker to come in on Saturday.)
If you've got credit card debt, pay it down if you can.
If you've got a mortgage, pay it off if you can.
If you work in the service industry, try to work 20% faster and come up with ideas to make your team more efficient. (Side note: I was in Japan recently and was amazed at the personal productivity of each
individual when compared to the U.S. workers.)
If you're a rich person looking to take a couple of years off, don't. Instead, start a company that creates an amazingly innovative product that the world -- not just the United States -- needs. Set the goal of
trying to employ 100 Americans.
Seriously, the affluent folks in this country should start businesses now. Drag your ass out of bed and try to make this country great again. It's this country that made you affluent. Yeah, you're rich and you don't need to work, we know. Who cares? Your country needs you right now! Sell your second or third home and start a company!
If you're affluent and you can't start a company then angel invest in a bunch of smart, hard working folks at the very least.
If you're a college student thinking of getting trashed this weekend, or taking a year off, don't. Instead, take an extra class or two, do an internship at a company or get a graduate degree in engineering.
If you're in high school, go work at your parents office or start an online business. (You would be surprised at how many high school students email me every week to share with me their online businesses that make $2-3k a month.)
If you're a lazy and bitter worker who has been screwed by the system, swallow your pride and stop trying to stick it to everyone. Double down and take pride in your work effort, even if your boss is a
complete jerk.
If you're the complete jerk of a boss, check yourself and realize that the folks working for you need the job, and that if everyone doesn't get their act together, we're all going to be out of work. (This is directed specifically at the dysfunctional automakers and airlines, which seem to spend more effort fighting their customers and each other than they do taking on their global competitors!)
Everyone must step up, and we've got to do it now. I've been traveling around the world the past two years, and I can tell you that the work ethic, attitude and productivity of American workers -- white and blue collar -- is half of what I've seen in countries like Japan, China, and Korea.
We're not going to get our asses kicked. We're in the process of getting our asses kicked!
Good debt vs. Bad debt
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One quick point of clarification around debt: While I am advocating everyone pay down-and, in fact, stop-the debt associated with unnecessary consumption, I'm very much in favor of investment in new companies, ideas and eduction. If we're going to take on any more debt, it should into things that pay back at least two dollars for every one dollar invested.
Investment in new technology, technical training, new companies, energy independence, mass transit, high-speed trains, cheap broadband and education are critical in getting us out of this mess.
I'm not against debt; I'm against debt that is wasted. Let's invest in our future.
In summary
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What made America great was our ability to innovate and create world-class products, ideas and services that people around the globe fell in love with and wanted for themselves.
From health care to human rights, from democracy to dishwashers, from windshield wipers to the World Wide Web, from search engines to soda pop, we've accomplished so much by dreaming and rolling up our sleeves.
We need to put down the remote, cut our credit cards in half and start new companies with new ideas. Our entrepreneurial spirit and hard work will get us out of this mess. All we need to do is release them.
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I don't even know where to start.
Here, let's try some graphs to show numbers. The author seems to think that workers are more productive elsewhere in the world. Take a look:
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Okay, so unless there's been some HUGE change in 2007-2008, an American worker is more productive than anybody else. So much for that. Now for the real issue:
Let's look at what the average worker has been getting paid.
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Wow, look at that! OUR PAY HASN'T GONE UP. In fact, if you work for minimum wage, your pay has actually GONE DOWN.
Oh, but wait - did you notice what else was on that last graph? The graph of executive pay.
I dare ANYBODY to look at those numbers and then tell me that _I_ need to work harder. Especially after watching my mother (a teacher who has never made even $40k a year, even after 20 years of teaching) lose FIFTY THOUSAND DOLLARS from her retirement account in the last six months. She's 64 and not in great health, but she can't retire any more!
Those executives whose pay went up 298% while ours went up 4%? TELL THEM TO WORK HARDER. The rest of us already have been, and have nothing but a trashed economy to show for it.
So, your "simple solution" is to produce more but consume less?
Believe me...I have yet to meet any one on this site that really understands the most basic concepts of economics. That is why they are taken in by slick pols like Obama and others.
What basic economics are you talking about?
As far as I can tell, if you don't pay workers well, then you don't have a base of people who have money to spend on your consumer economy. That seems pretty straightforward.
Is this aritcle satire? I hate when I can't tell.
Has anyone fact checked this claim that the productivity of American workers is half of that of other countries? I seem to recall that that is a pile of crap.
Agree - I sure hope it's satire.
According to this graph I was looking at, yes, it's a pile of crap.
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Jason, this is a well-written article, but I respectfully do not agree with you.
I believe that we are enduring 'this mess' largely because we have been robbed. We have paid thousands of dollars to banks that they do not deserve because they knowingly rig the payment-system ... how about "$14 Billion last year in 'fees and penalties' " ... and because the rates they charge for money are what used to be called "usury" (which was illegal). We have also been robbed by the "high finance" leprechaun.
There are many, many reasons why we do not need to give away our lives in order to save our lives and our livelihoods. "Working harder" at a game that continues to be fraudulent will only push up health-care costs for those who don't have insurance anyway.
No, Jason, I think that the answer we are missing is simply called, "law enforcemen
Jason is known for being inflammatory, etc. bt I have to agree with Sundialsvc4. What's a company likely to do if it finds its employees being 20% more productive? Leverage that to develop the company? Perhaps. Or it may simply cut 20% of them - no good deed goes unpunished.
It is already a problem in our society that so many of us are asked to perform like superstars NOT to excel at a career but to enjoy basic financial security.
Many segments of business love a sluggish economy because it keeps the help from getting uppity. If you're grateful to have a job, any job, you're less likely to stubbornly insist on having a life.
Oh, and congrats on able to populate your company entirely with people who (have been able to convince you that they) would do your business for free. Surely you must realize how fortunate you are in that, and how absurd that is for many, many jobs in the country that need doing. Frankly, just how passionate do you have the right to expect, say, a cable installer to be about her job?
There are some good ideas in this piece (Entrepreneurs, Invest in New Jobs; College students, Don't get trashed; Everybody, be more productive and responsible with debt and spending..
However, the idea of changing the standard work week from 40 to 48 hours (presumably without additional pay) is flawed.
One, it assumes that people with jobs would be willing to take a 20% pay cut to work longer hours, especially if they are already paid at the margin and are demoralized when they walk out the door to work everyday.
Two, it assumes that the "little people" who work for low wages to support those who work the extra hours would be willing to do the same.
Three, it assumes that the added costs of child or elder care are inconsequential. If everyone works an extra eight hours a week and if even just 25% of them would need extra support, well that's a whole lot of money, unless the author is also suggesting that nannies, home health aides and visiting nurses should also work for nothing.
Four, it overlooks the fact that if there is 20% more work to be done, for every five workers who work the extra hours without pay, one potential new job is lost.
If the author is suggesting that people should be managed and encouraged to be more productive on their jobs and get 10--20% more done in the time they work, well that's a good idea.
Totally agree. Forty hours plus a commute is already difficult to balance with children, aging parents, a role in your community/
Hmm, how about we do something about stagnant wages and Gilded Age levels of income inequality. That way people would be able to afford to buy things again and the economy would improve. Everyone has a solution but none of them involves throwing a bone to us great unwashed masses.
Well, it appears there are many of us out here in the same boat. I agree in theory with some of the article's points, but I don't think the world really works that way. My recent reality is a 20% paycut and being told I had to increase my work hours from 40 to 60 if I wanted to keep any job at all. Everybody at the company has bucked up and done what was necessary, and are hoarding paychecks like crazy. And, as Fedupinpa so aptly states, we are having a little trouble understanding how this is benefitting the larger good instead of the big, bloated employer. We work for an oil company.
Yadda,.. yadda,... yadda,... yadda,...
I already work 5 days a week full time,... and my Saturdays are spent teaching a class with laboratory at the locak Communty College.
I take pride in my work (both jobs), and this last year was given high evaluation ratings from my full-time job for completing work on both my research projects ahead of time and under budget, and one other unofficial ad hoc project done better than expected on a shoestring budget.
I pay my mortgage on time every month, and my credit card and student loan debt is already slowly starting to ratchet down.
Those that can work, are already doing so (for the most part). Those that can pay off their debt are able to do so ONLY because they are already working their assses off.
The only good part of this article was the bits telling the rich to get off their arses and do something positive for the country.
Well, I'd love to put in some OT - I really miss it! But, my employer's 2 biggest customers are Ford and GM. We work at their schedule. If they're not putting in OT; neither will we. Most people I know (includes yours truly) will snatch up every second of OT offered. Many of us have built our lifestyle - not on the easy availability of credit, but on the promise of almost unlimited OT . Most of us have been putting in 50+ hours a week for years! Now that businesses are cutting back, there goes the OT and the worker's standard of living falls; bills go unpaid and mortgages go into default.
Get a second job? Great idea! But a second job pays pennies compared with OT and requires way more time for travel if nothing else. And what happens when you and your spouse are already working a full 40 hour week with one getting some OT here and there? What about quality-time with the family? What about the added expense of childcare?
Trust me, I've been a two-job person for a good deal of my adult life; you hit a point of diminshing returns real fast.
Suppose my point is that many of us have been doing the 120% thing for years and years with nothing to show for it. Working even more is not the answer. Changing the corporate mindset and enforcing a certain level of responsibility at the top is a better solution.
Hmmm-- I think you have to have a job-- and/or business/clients (if you are self-employed) to work six days a week.
And I agree with the blogger who noted that would make many people sick. I did it to survive being a single mom with her own business for many, many years-- only to hit a wall physically with double pneumonia for six months- 1 year which my body was too exhausted to deal with. Then just as I got on my feet and had enough energy to work again, my industry and the economy crashes.
I woke up this morning tired at just the thought of coping with Reality as it stands these days. Now tell me I have to work six days a week again.
This author certainly is not pro-family. If moms and dads are working more, who is nurturing their children?
Robots don't have children. This article was advice for robots right?
Hahahahaha, thanks for the laugh. :-)
As I said above, I suspect he deals either with younger tech workers who don't yet have adult responsibilities, or with highly paid execs with stay-at-ho
Or maybe he thinks the world is too overpopulated and hates "breeders.
I see a problem with that.. Working that much a week will make us sick. When we get sick, we are on our own, which means we cant pay our bills if we cant work...Unt
I work 7 days a week at 2 jobs already.
When I worked for the federal government, we weren't allowed, because of tort cases, to start work before 8 a.m., so I'm certain you wouldn't be allowed to work an extra day on the weekend for free. In other words, your silly idea isn't based in reality.
"We" didn't overspend, "we" didn't but a bigger house than we can afford, so please don't generalize. I'm not sure who you are talking to in this article, but as a "professional", I already put in well above the 40 hour work week and quite frankly, it is making me sick and tired. I am also working on a graduate degree and have a child at home.
This issue isn't that we need to work more. The issue is that we are already workaholics because we work harder, have to do more with less, and still don't get anywhere while the fat cat CEOs and oil companies rake in billions.
I think the real solution is a 4-day work week. Give people time to de-stress, be less neurotic, enjoy their families and friends, and have an extra day to spend their hard-earned money. With more demanding jobs, e-mail, blackberries, and instant accessibility, we get little to no downtime as it is!
Who of us doesn't already work that much???
thats what i was gonna say.
Yes, many of us, work far beyond our stated work hours and have since the initial downsizings of the '80s. If we were to work only the hours we are being paid for, there will be more work for the unemployed, who would be paid from reductions in pay to those who are grossly overpaid at the top of the employment pyramid.
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