Companies Are Moving Their Office Into Your Home

“They’re trying to allow their employees to work from home but trying to maintain a level of security and productivity” says the CEO of a surveillance software firm in a Bloomberg article on March 27th.

On May 21st Facebook explained to employees that they are not only allowed to work from home, but that most of them must.

The epidemic is a shock to employers and employees, and it has exposed some of the functional machinery of the modern corporation. In the era before the virus employers were loath to allow people to work from home for exactly the reasons described above — an employer must monitor and discipline their workforce.

Despite the rhetoric that capitalism is the only force strong enough to drive us all to concentrate and work hard, companies must make a profit and cannot afford to believe this kind of rhetoric. This is borne out by the early move to purchase and implement surveillance software for people forced to work at home as the epidemic kicked in — a practice which was already in full force in the shared office environment.

Companies have been monitoring everything from how often you tap your keyboard to measure “productivity” to employee security pass activity in order to monitor the position and activity of workers at their workplace. After this reapplication of the same surveillance standard from the shared office to the home office, tech companies have become the first of a new wave of workplace conversion: Converting your living space into their office space for good.

The Facebook announcement took the form of a weekly company-wide meeting which Zuckerberg says is being streamed to the public “in case it’s helpful for other orgs out there who are thinking about the future of work and how their companies are going to evolve as well.”

“As a founder one of the things I have learned some appreciation of is that culture is built very carefully over time … culture is built day by day over years and decades.” He continues “We’re not doing this just because it’s a thing that employees have asked for. We’re here to serve the world, and to serve our community, and to try to unlock as much innovation as possible.”

Zuckerberg makes it clear that this is not for worker flexibility, but so that Facebook employees can better serve their country. In 2018 Facebook reported a net profit of $18.49 billion USD.

“The reasons why I think this could be very positive are, one, that it gives us access to a lot of new pools of talent out there.”

This is one of the key decisions that Facebook is making for the business community at large, and for all the employees who will be subject to this trend. Employers will be able to source labour from anywhere. Where globalization generally might have allowed companies to limit what they pay employees in America and the West while outsourcing even cheaper labour from developing countries, this new move to remote work will allow companies to forget about the difference between cities and rural localities. But if you thought this would mean a reassessment of wages in a world of universally available work, get your head out of the clouds and buckle in for the stark reality.

As MarketWatch reports, some of the advantages of this scheme for employees will be a chance to move to a new city, or cut down on commuting costs. Of course “Your company, like Facebook, may insist you take a pay cut to compensate for that.”

If those are the advantages — a situation where none of the company’s savings are passed on to employees — what are the downsides?

It’s not just “missing out on brainstorming sessions” or “office banter” that people will be missing out on, but the ability to improve their work conditions or exercise any control whatsoever.

If you thought that this was a great moment to change how we work, to transition to some libertarian ideal where we work on the things we love and our work is driven by excitement, then you may be confused as to how this development is an innovation in the future of work.

That’s because this is an innovation for companies, not for people.

Facebook is telling its employees that they are public servants — and they are in a sense. Government has been so hollowed out that nothing is provided to Americans to help them live, and their healthcare and ability to purchase food and goods are tied entirely to their employer. This new expanded labour market takes advantage of the new shape of the world — one in which we are all universally trapped behind a screen, but passes on none of the benefits to people. The way you work will remain the same — you will be monitored, prodded if your “productivity” flags, and you will be happy because you toil in service of the nation.

People are being asked to sacrifice their happiness, pride, and well-being so as to provide shareholders with accountable metrics that their workers have their noses to the grindstone — and they will need to work hard if they are to make up for the profits they have already lost thanks to the shutdown; again, profits that absolutely under no circumstances are to be passed on to the workforce.

Facebook will be adjusting pay based on location — taking advantage of the new universal access to workers, while applying the tax law of the old world, and saving the difference. Facebook can now outsource to Indiana just as easily as India, and you will be paid accordingly. Employees who lie about their location will be subject to “severe ramifications.”

The public relations rhetoric that accompanies this push to hogtie an already captive labour market, firmly closing the lid on any hope of workers demanding fair wages, is of course one of diversity and innovation.

As MarketWatch reports of Zuckerberg’s speech: “‘When you limit hiring to people who either live in a small number of big cities or are willing to move there, that cuts out a lot of people who live in different communities, different backgrounds or may have different perspectives,’ he said. ‘Certainly being able to recruit more broadly, especially across the U.S. and Canada to start, is going to open up a lot of new talent that previously wouldn’t have considered moving to a big city.’”

Another advantage Zuckerberg points out is that they can now retain employees who otherwise would have quit because they were moving away from cities where Facebook had a presence. Now Facebook has a presence everywhere — any of your property can just as easily be theirs. After all, what does it mean to have your own property or privacy if Facebook monitors you in your home? This is an unrecognizable form of freedom. But Zuckerberg makes it clear that this “retention” of employees is valuable, because these workers are already “ramped up” on the “context” and “culture” of the company.

Company culture comes up again and again in the speech, and for good reason. The culture in terms of nation or government does not matter, that sort of culture is intangible and has very little effect on people’s lives. Only 55.7% of potential voters showed up to vote in the United States in 2016. What really matters is the place you spend your work day — your company. And now that place is also your home. It’s not either or anymore, it’s both — and your company is the one surveilling you. That’s the short end of the stick, and Facebook is telling you how it will be, not asking you.

This inability for citizens to control any aspect of their economic or political well-being will allow companies to vastly widen their selection of workers, and then tell them how to behave in order to best please their shareholders and produce growth for the company, and profit for the shareholders. One way to get growth is to “innovate”, but a more efficient way to get growth is to cut costs — Facebook is leading the charge to suck that extra growth directly out of their employees.

Facebook is asking people to engage in Orwellian “doublethink” — to believe one thing while they do another, to celebrate their wages being cut, their opportunities being diminished, and their labour harnessed more effectively in the service of shareholder profit.

This contradictory rhetoric/reality divide is illustrated perfectly by the discussion around the productivity/wage gap. As worker productivity continues to increase over time, worker wages continue to fall behind by a very large margin.

In a fascinating case study in this type of delusion, a Bloomberg article titled “ Workers Get Nothing When They Produce More? Wrong” explains to us that this is not really a problem, even though it looks bad.

The author asks: “If productivity improvements don’t actually get translated into wages, what’s the point of making the economy more efficient?” Some might conclude that if workers are not paid more for doing more work, then something is broken and should be fixed.

This rhetorical question is quickly answered: “But this would be a mistake. Jumping from the graph above to the conclusion that productivity doesn’t lift wages means falling victim to the most common fallacy of all — assuming correlation equals causation. It’s perfectly possible that, all else equal, raising productivity does translate to higher wages, but that all else isn’t equal. There could have been countervailing forces holding compensation in check, even as productivity tried to push it up.”

The suggestion is that productivity might be stimulating wage growth after all — how could it not — but that something else is happening which is causing that money to not reach workers.

“So why didn’t wages rise as much as they should have? The reason is there were forces pushing in the other direction. Most important was the increase in wage inequality, which limited gains in the median worker’s pay since the mid-1970s even as average pay continued to climb amid pay increases at the top. Also important was the increase in capital’s share of national income, which sent more money flowing to shareholders, bondholders and landlords, leaving less for workers of all stripes. As for why these things happened, economists continue to debate — they could be due to technological change, to monopoly power, to trade, to reduced worker bargaining power, or to some combination thereof. Identifying and combating whatever forces are holding wages down should be an important goal of both economics research and public policy.”

The author first identifies the gender gap in wages — as more women entered the work force and were paid less, this caused some perturbations in the measurements. It’s the second point that should make your hair stand up:

“Also important was the increase in capital’s share of national income, which sent more money flowing to shareholders, bondholders and landlords, leaving less for workers of all stripes.”

Journalist Matt Taibbi has written an article detailing why exactly this is, and it has to do with the changing of a U.S. Securities and Exchange Commission (S.E.C.) rule which was spearheaded by the Reagan administration in 1982. This rule change allowed companies to permit stock buybacks, which means that shareholders can pull money out of the companies they’ve invested in via this mechanism. The idea is that a company can buy shares in itself, which decreases the number of shares available overall, thus increasing the value of each remaining individual share. Everyone who owns some of those remaining shares makes a profit, despite having done nothing.

Apple infamously made the news in 2018 for funneling their actual profits away to offshore tax havens, and funding part of their $100 billion USD stock buyback with money saved by paying low taxes. In turn they pay lower taxes because the profit generated by the stock buyback is itself not taxed. This “annual profit” masked a lack of real growth, but nonetheless produced the most important thing of all: Money for shareholders. Apple made the news, but nearly everyone is doing it.

Stock buybacks were originally intended to allow investors to reacquire their funds from a company that agreed the shareholders would have a better idea as to how to use that money than the company, but in fact they have been used to fund what are essentially corporate bank runs. This money is not re-invested, but is squirreled away — safe from taxes and out of the economy. According to a senior economist from the Roosevelt Institute, a liberal think tank, who testified on this subject in the U.S. Congress:

“Stock buybacks have reached record volume: Corporations spent roughly $900 billion on them in 2018, and projections for 2019 predict an even higher scale. To put this into perspective, that is nearly a third of our national spending on health care. The volume of stock buybacks explains why more money has flowed out of our public capital markets than has flowed back in, for the nonfinancial sector, in almost all of the last 20 years. Their magnitude explains why even many on Wall Street are ringing warning bells, saying that executives are prioritizing stock price highs over the kinds of true investment that will lead to long-term prosperity. Congress and the Securities Exchange Commission (SEC) recognized decades ago that this kind of practice could manipulate the stock market, and before 1982, open-market stock buybacks were functionally impermissible. Rule 10b-18, the stock buyback ‘safe harbor,’ was a sharp departure from the proposals made by the SEC in the 1970s that clearly recognized that a large volume of stock buybacks would manipulate the market. Rule 10b-18 leaves stock buybacks virtually unregulated, allowing companies to spend billions a year with no oversight or accountability. This is out of step with the spirit of our securities laws, which is to ‘insure the maintenance of fair and honest markets.’ This committee is well aware of the long-term stagnation of wages for typical workers, widening wealth gaps, and the continual rise of executive compensation. To give some context to who benefits from stock buybacks: According to the Federal Reserve’s Distributional Financial Accounts, in the first quarter of 2019, the richest 10 percent of households owns 86.8 percent of corporate equities; while the bottom 50 percent owns just 0.8-less than 1 percent of the total value of the stock market. Meanwhile, companies spending billions on buybacks claim that they cannot afford to pay family-supporting wages to their employees, who largely create the value that allows businesses to conduct stock buybacks in the first place.”

Companies have been pulling so much money out of the economy in the past few years that one study found certain sectors were spending over 100% of their annual profits on stock buybacks. To illustrate, Home Depot could have afforded to give employees an annual raise of $18,000 USD and remained profitable — but that money went to shareholders instead.

The situation is so dire that one market analysis firm reported: “It’s a fair critique of corporate earnings to say that earnings ‘growth’ in 2019 is a bit deceptive as the value is being financially engineered by corporate finance departments, not organic, core-business growth”.

This is a widely reported, widely discussed topic in finance. This has been going on to some degree since 1982 and has accelerated to unheard of degrees in the past few years.

Yet Noah Smith writes for Bloomberg: “So it’s wrong to dismiss ideas about how to raise productivity, efficiency and growth. It does make sense to examine the probable impact of policy proposals on both efficiency and equality — for example, tax cuts or careless deregulation might give productivity a small fillip while hurting the median worker. But when it comes to ideas like skilled immigration, research spending, urban density, infrastructure, better education and other potential productivity boosters, there’s far more reason for hope than caution. Productivity isn’t the only thing that helps workers, but it’s good anyway.”

When Smith identifies the “increase in capital’s share of national income, which sent more money flowing to shareholders”, he states it as one simple factor in wage stagnation, while being aware that it is a corporate policy — lobbied for by corporations and being responsible for the intentional hollowing out of national economies. Smith is telling you, with a straight face, that there is no productivity/wage gap problem — they’re just stealing your money. But since you can’t stop the theft — theft is normal and allowed — you might as well keep improving your productivity and hope for the best.

Zuckerberg’s intentions don’t matter — he knows what he’s doing functionally, economically, and he knows that he’s not the only company doing this. He also knows that Facebook’s decision will sway other companies and encourage them to follow his lead — he made that meeting public so as to share his vision of “the future of work.” He even called Facebook a “North Star” which is to say that he hopes other “orgs” will look to Facebook for direction when implementing their new remote work policies.

The future of work will look like this: You will work from home, and that home will be monitored by your employer to ensure that you maintain a high and regular level of productivity throughout the work day, however long or “flexible” that day becomes. The gains produced by your productivity will be absorbed by the shareholders of the company you work for, who will funnel those earnings into their private bank accounts, tax free. Sound good? It better, because your opinion doesn’t matter either way. Expect no share in the equity of your labour, no share of the savings from cost-cutting measures, and expect to work harder and harder for less return. That is the future of work if the environment does not radically change.

Originally published at https://reeducation.substack.com.