New York TimesThe Man Who Broke Capitalism: How Jack Welch Gutted the Heartland and Crushed the Soul of Corporate Americaor the past 40 years or so, frontline workers in America have been getting a smaller and smaller slice of the economic pie. As corporate profits and executive compensation packages have soared, employees at many of the country’s biggest companies wound up taking an effective pay cut, year after year.
When Schulman took over PayPal, the online payments company, in 2014, he embraced the idealistic language of Silicon Valley, trumpeting a corporate mission statement that suggested technology could solve all the world’s problems. The next year, PayPal decided to survey its low-paid and entry-level employees, a group that included many men and women working in call centers, and which accounted for about half the company’s workforce.
Schulman was stunned. “What it told me is that for about half our employees, the market wasn’t working. Capitalism wasn’t working.” About half of PayPal employees had an NDI of 4 percent, leaving them with just a small fraction of their paycheck after paying for basic necessities. It was a bleak statistic, but now Schulman had a target. The goal would be to get all PayPal employees to at least an NDI of 20 percent. There wasn’t one silver bullet that would easily accomplish that. Instead, PayPal created a four-part financial wellness program for its lower-paid employees that was unique among big companies.
One surprising finding from financial wellness survey was just how much health care was costing PayPal employees. Each month, workers had to choose between medical care and textbooks, between prescriptions and gas for the car. Health care costs were consuming a meaningful part of their NDI. So Schulman lowered health care costs for the company’s lowest-paid employees by 60 percent.
if it were a state , it would be called communism
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