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Pundit's Mailbag — Pundit’s Critique Of New York Times’ Reporter Annie Lowrey’s Piece About Abe Gorelick And The Plight Of The ‘Long-term Unemployed’ Draws Notice Of Produce Industry Pros

Jim Prevor’s Perishable Pundit, May 11, 2014

Our piece, A STORY HALF TOLD: Putting A Spin On The Long-term Unemployed, dealt with a New York Times report on a person named Abe Gorelick, who was part of the “long-term unemployed” after losing his job at age 57. We questioned if we were being told the whole story and pointed out that this man and his wife, both with Ivy League business degrees and top-tier graduate educations, seemed particularly unsympathetic candidates for federal assistance. The piece brought many letters, including these:

Thank you for the mention in your article, "A Story Half Told," on Abe Gorelick. I was 3 weeks short of 57 when I left Safeway, and you were right on that I would have stayed with the company. Things happen, and you pick up and use the talents you have acquired over the years to move forward, and that is exactly what I did.  It has been a very good living and I was able to stay in the business I love.

Thanks for the mention and including me with Peterson, DiPiazza and Griffin.

— Dick Spezzano
Spezzano Consulting Service, Inc.
Monrovia, California

We appreciate Dick’s letter and think it raises an important point in any discussion of unemployment — especially this issue of experienced people not able to find a job.

There is a sense in which jobs are often spoken of as something that someone else creates. The idea seems to be that a person can only sit passively and wait for someone else to offer him a job.

We were writing in the context of an experienced marketing executive and pointed out that he, if he had a good reputation, should have no problem running a small marketing agency out of his home. With his low overhead, he could under-price his competition and still make a living.

But the truth is that the point goes well beyond this specific situation. The world is moving to value entrepreneurial skill to a greater degree than in the past. With the internet, everyone has access to everyone, so anyone can more easily establish a micro-business. We have no delusions… not everyone can start Apple or Microsoft, but to run a babysitting service, a dog walking service and similar work is well in the means of many.

We mentioned Spezzano and others because their example raised an obvious point: If you are 57 and for some reason lose your job, if you have conducted yourself in the right way, lots of people should think working with you would be an asset. We criticized the reporter because, obviously, the elephant in the room was why nobody — his Ivy League classmates, his lifetime business associates, his friends or family — wanted to help him.

If nothing else, the story was a good reminder that smart people always conduct themselves on the assumption that they will need another opportunity one day and that you can never know who will give it to you, so you better impress everyone you can…

As you and your staff do so frequently, you have been generous in your title and treatment, perhaps to a fault.  While none of us can know all the details of someone else’s life or circumstance, it is a safe bet that many of the “incidentals” you call into question in your article would provide so much color that there would be no story, from the author’s or the New York Times' perspective, left to tell. Warning: all news “reporting” is editorial!

—Daniel L. Barth
Manager
Super King Markets
Los Angeles, California

We do try and be generous, in writing and in life. Maybe Mr. Gorelick wouldn’t be in this predicament had he been more generous? Who knows? The article, though, didn’t mention any people who Mr. Gorelick had helped during his career who were now turning their back on him.

We would tend to agree with Mr. Barth that a thorough examination of the issues we raised would have made The New York Times piece seem ridiculous. In actuality, though, we thought the prima facie case was weak. If the best case a New York Times reporter could find to justify more long-term unemployment payments is a couple that A) both went to Wharton undergrad, B) both have relevant top notch graduate degrees, him an MBA from Chicago and his wife, a law degree from NYU, C) owns a functioning business D) has a home with equity that could be sold, D) feels they can afford a place in Florida at least part of the year to be snowbirds, and E) has a son attending an expensive private college, then this is a weak case indeed.

Great piece on the NYT story about “long term unemployed”.

If words mean things, why is someone holding down three jobs referred to as ‘unemployed’?  Wouldn’t a better term be “long term unfulfilled” (but then, that would blunt the Times’ emotional story)? 

While working three jobs, Mr. Gorelick is certainly creating some value and being compensated — which separates him by a wide margin from those who do neither.  My sympathies to Mr. Gorelick, of course, for losing his job.  All your points are well-taken, and the glaring omissions you point out in the writer’s treatment of this subject are so typical of the NYT’s advocacy journalism.

All the other considerations you raised to the side, I wonder if Mr. Gorelick — ‘unemployed’ at age 57 — has found the same unspoken rejection due to his age that I have felt.  I undertook an active and energetic career search at age 60, and experienced the dawning realization that — my skills and experience notwithstanding — potential employers are placing youth higher on their priority list than other values. 

Fair? No.  But life is not fair.  And I agree that if Mr. Gorelick hasn’t made accommodations to his location and salary requirements in his job search that he is largely responsible for his current circumstances.  I have heard many excuses from people who were not willing to relocate – network of friends, community, church, proximity to children/grandchildren – which all come down to the job-seeker placing a higher value on things other than their career and salary.  Fine, now stop complaining that you can’t find a job that suits your resume.

Always a good read, Jim.  Keep it coming.

—Doug Stoiber
Vice President, Produce Transportation Operations
L&M Transportation Services, Inc.
Raleigh, North Carolina

Actually, consistent large scale irrational discrimination, in the absence of legal protections, is just impossible. Imagine if all the supermarkets wanted to discriminate against, say, blue-eyed people. The lack of demand for their services would lead blue-eyed people to lower their wage demands. Some new market entrants would be able to staff their supermarkets with labor costs, say, 30% below other supermarkets. The new entrants would quickly be able to underprice other supermarkets and be more profitable. They would quickly grow.

In fact, such things have happened. When Amadeo Giannini founded the Bank of America, it was specifically in response to a perception that Italian Americans were being discriminated against in loan availability.

What this means, unfortunately, is that whatever problems Doug encountered getting back into the labor force were probably not due to irrational discrimination.

There are lots of possibilities:

1) All new hires require training, even if it is induction into the corporate culture. If it takes two years to get up to 100%, maybe the average amount of time one gets from a new hire to defray that training and orientation is less if the new employee is 60.

2) Sometimes employers discriminate because others in society discriminate. So if, for example, customers are kinder to young whippersnappers, seeing in them reminders of their own youth, then a younger employee who performs less well than an older one might still be more beneficial to the company as customers will forgive the young guy’s errors, but not the older persons.

3) We live under some useful fictions, but smart employers figure them out. Many employers self-insure on large portions of their health insurance liability. The odds that a 60-year-old, most likely with a spouse in that range, will incur significant health insurance costs are much higher than the chance that a 23-year-old will incur such expenses.  Even if a particular company does not self-insure, insurance companies base their rates on either experience with a particular group or the cost of a particular pool; this is all impacted by the age of hires a company makes.

4) If one hires 100 23-year-old customer service workers, one may be de facto hiring 20 salespeople for five years from now, five sales managers for 10 years from now, two vice presidents for 15 years  from now and a new CEO for 20 years from now. There is value in steeping these people in corporate culture, their gaining of deep institutional knowledge, etc. Plus there are the savings on recruitment costs, including mistakes in hiring when one is forced to go with unknowns because one doesn’t have any internal candidates available.

5) Older candidates tend to come from well-paid senior positions.  They may not always realize it, but one of the reasons they are profitable to their employers is that long term involvement with a company allows them to build up knowledge and a web of personal relationships that allows them to get things done. In other words, they are effective because they know who to call and what arguments will be persuasive to cut through corporate bureaucracy and delight customers, do profitable ventures, etc. A 60-year-old who moves from Kroger to Wal-Mart loses what, say, 40 years of working through the ranks at Kroger produced — a web of relationships and knowledge internally that made him effective. Yet paying someone less than they had been earning can create resentment, and many employers just want to avoid the negativity.

6) Many people get paid “extra” just so the companies they work for can avoid the risk that comes with change. Think of a TV show, when the star’s contract is up, the show could just replace the actor and that might work, but the risk is high that it won’t, so if that TV show is generating $20 million a year in profits, throwing a million extra at the star to avoid rocking the boat is probably worth it. But that doesn’t mean that the actor’s “value” to a new TV show is an extra million. It’s the same thing in all business. If a guy runs your potato division and his salary is $200,000 a year and the division makes five million a year, paying him an extra $300,000 a year, raising his compensation to a half a million to avoid the risk that comes with change, is sensible. But that doesn’t mean the person is “worth” half a million to all employers.

7) Many employers don’t simply want to have effective people; they want people who drink the Kool-Aid, who believe deeply in the company, its mission and its ways of doing things.  A young person entering without skills or methods can be taught the “company way” — older established people have their own ways.

One could go on. Of course, there is another side and, in fact, hiring experienced, knowledgeable, well-connected people is often the only way to grow quickly. Experienced people also moderate risk.  After a lifetime working with Sysco and US Foods, we are pleased that Doug was able to find a home at L&M Transportation Services. We wish him and L&M a long and productive collaboration.

******

Many thanks to Dick Spezzano, Daniel Barth and Doug Stoiber for weighing in on this important issue.

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