Dead-End Job or a Stepping Stone?

You may be asking yourself this question. If you aren’t, then your son or son-in-law may be.

I argue that no job is a dead end job. There are dead-end employees. A dead-end job is there to provide a stepping stone for upward-bound employees and also downward bound employees.

Most greeters at Wal-Mart are older. For them, the job is a dead-end job because they are probably retired. They need extra money. They are dead-end employees. They know this. So does the general manager who hired them. I do not see people in their twenties working as Wal-Mart greeters. The younger ones are on the floor, stacking things on shelves, and helping customers to locate the correct aisles. They may also be on the check-out registers, which used to be called cash registers back when people bought things for cash.

Some people are content with their dead-end jobs. They have reached what Lawrence J. Peter called their level of incompetence. They will not be promoted again. Or maybe they are at their level of maximum competence, recognize this, and are not willing to take a promotion.

Because consumers are fickle and always looking for bargains, they change their buying patterns. They shop. This puts pressure on companies to keep ahead of consumer demand, but not too far ahead. Companies are not guaranteed income. So, they don’t offer lifetime employment. They are ready to fire employees, or shut down plants, or eliminate entire layers of middle management. The consumers demand this by their decisions to buy and not buy.

The question you had better answer is this: Is my job a dead-end job?

If it is, then the next question is vital: Should I seek a better job? If the answer is yes, this raises a third question:

Should I move up or out?

A REAL-WORLD DECISION

Recently, I spoke with a man in his late twenties. He has a bachelor’s degree in computer science, which is not marketable in the way it was before the dot-com collapse in March of 2000. He received his degree in December, 1999. Not good timing!

He is working as a one-man computer team for a small company in the insurance field. It provides underwriting services. It deals with retail sellers. It has 35 employees. The company had a policy of not spending money to update its computer system. It got caught by a programmer who made the company’s software dependent on him — a common practice of programmers. The company is paying the new man to cut the umbilical cord to the old system, but without spending much money.

The company’s retail clients keep asking for upgraded services, which means upgraded software. The company refuses, claiming that it has no money to upgrade. The new program it’s using to replace the older one is less effective than the old one, the man says. But the company will not have to pay the original programmer the extra money he was demanding.

From what I can see, it’s a dead-end job. The company itself has some standard marks of looming extinction:

Low capital spendingStagnant or shrinking employee baseFails to respond to clientsDepends on one man for its software/hardware operationPays him a minimal salary

The young man has concluded the same thing.

BREAKING AWAY

His problem is that he needs his entry-level salary. He was out of work for six months in a new city. He lived frugally on his savings. He wants to replenish his savings. This is the correct attitude.

He had worked as a computer repairman before. He was sent out to fix messed-up systems. He grew tired of dealing with people whose computers don’t perform as they expected. Computers are quirky. They stop working for reasons unknown. They are not miracle machines. He found that the users blamed him for the failures of their old systems, their own ignorance, and the complexity of previous undocumented software.

The widespread problem most middle-sized companies face, he says, is this: proprietary software is unique. Companies can’t locate outsiders who understand their in-house system’s problems. There is too much variation.

So, they become dependent on in-house programmers. Then these programmers demand raises or else quit. They have the companies over the barrel. Escape is not easy.

So, the young man wants to break away from his mid-sized company. At the same time, hundreds of local mid-sized companies may want to break away from 100% dependence on an in-house programmer. Is there an opportunity here?

A SOLUTION AT A PRICE

I tried to give the young man advice on how to set up his own company. What mid-sized companies and some small companies need is a preventive maintenance program that is provided by an outside firm of computer geeks. The geeks’ provide preliminary information about looming problems. If they can analyze what’s wrong, they can recommend high-price specialists to come in on a part-time basis to fix the problem. For this, a company pays the geeks a monthly retainer fee of $500 to $1,000. A computer analyst comes in once a month for half a day to check things out, get rid of viruses, worms, etc., and give a warning of trouble brewing. But such geek service companies don’t seem to exist. Is this an opportunity? Or is there some fundamental barrier to entry?

The young man told me this:

“A company can buy a server for under $1,000. But they don’t. It’s too risky. If the server goes down, the company may go down. So, they buy redundancy: levels of back-up. They spend $10,000, not $1,000. But then they become dependent on one in-house technician to run the system. It’s crazy.”

I told him that with this explanation, he had the makings of a direct-mail ad. He should tell this story of reduced-risk back-up for hardware but no back-up for technicians to run this hardware.

Computerized companies face a real-world problem. Anyone who has experienced a computer snafu knows. On Christmas weekend, Comair, a subsidiary of Delta Airlines, had its computer go down. Over 30,000 passengers were stranded. The disaster became the main weekend news story on the networks — the worst advertising possible. Delta was already in financial trouble. This will make things worse.

Delta is big. The industry is dependent on computers. But to the extent that a company is dependent on computers, it ought to spend money to buy back-up. This includes back-up programmers. The more proprietary the software, the more a firm needs back-up programmers who understand the system’s code.

As corporate loyalty has declined, companies have become more dependent on machines and technicians to run them. A programmer can quit for better pay. What happens to the company in the interim? It may take a new programmer six months to become familiar with even the basics of the system.

I told the young man that a good ad might convince 20 companies to pay him $500 to $1,000 a month to serve as an early warning system. The problem is, he says, the enormous diversity of the proprietary systems. One service company can’t supply the repairs.

What is needed, I said, is an intermediary service company that can supply routine procedures for several companies on a monthly basis, with a list of independent specialists for emergency repairs. The service company could get a finder’s fee for the specialist’s contract — say 20%. Maybe only 10%. But something.

PAYING TO RELIEVE FEAR

Basically, a service company is like an insurance policy: it is there in a crisis. Most people won’t pay a service fee for preventive maintenance in most areas of their lives. It would be too expensive. There are a few exceptions. Local motor oil-changing companies sell what is in effect preventive maintenance. Going to the dentist is another. But how often do we go to a dentist? We usually avoid it until a tooth starts hurting.

If a company refuses to hire in-house back-up computer personnel, then it had better outsource this service. In every area in which a system failure could bankrupt the company, it had better have fail-safe procedures, either in-house or outsourced.

Consider your employer’s vulnerability to a system failure. Does it have back-up? If it depends for its existence on one person in the IT department, does it treat that person with deference and money? It had better do this, because its survival depends on this man.

I, for one, would want a back-up person who knows the entire system. This subordinate must be paid well, just as a company pays lots of extra money for hardware back-up — or had better.

You may think that you are immune from such failures. You may have great faith that your boss has considered all this and has taken steps to protect the company and therefore your job. But unless you verify this for yourself, you are staking your financial future on faith, which is defined in the New Testament as “the substance of things hoped for, the evidence of things unseen” (Hebrews 11:1). I recommend against exercising this much faith. A few discreet inquiries as to the state of the company’s back-up systems is in order.

If your employer is cutting costs by refusing to insure against a major breakdown, then he is rolling the dice. As your employer, he is rolling your dice, too. To the extent that your lifestyle is dependent on your job, your employer’s decision to be penny-wise is pound-foolish.

The refusal of top management to spend money systematically to upgrade technology, which includes the technical staff to maintain the technology, is an indicator of short-term thinking. It’s management on a wing and a prayer. It is indicative of a deeper problem: the failure to develop a long-term marketing strategy.

The young man I counselled is working for a company that displays this weakness. In my view, he would be unwise to consider this company as anything more than a port in a storm. But if that’s true for its employees, it’s equally true of its clients. The clients should start looking for alternative suppliers of the service.

That’s why you need to investigate the condition of your employer. If things are excessively uncertain for the employees, the same is true for the clients. If the clients depart for greener pastures, you will be forced to do the same.

That’s why it’s important for you to find out the condition of your company. It’s self-interested behavior to investigate the degree of risk that your employer is willing to take, because he is accepting this degree of risk on your behalf. If you are a crewman on a ship, you had better be ready to jump ship if the crucial systems don’t have back-up.

THE STORY OF DAN ROGERS

I heard about Dan Rogers when I read Blind Man’s Bluff (1999), a history of the use of America’s nuclear submarines in Cold War espionage. The book includes a chapter on the sinking of the Scorpion in 1968, one of the two worst disasters in American submarine history.

Dan Rogers was an electrical technician’s mate on the Scorpion. He began to have doubts about its safety. He resigned his post in late 1967. He saw his shipmates off at Norfolk, on Feb. 15, 1968. They never returned.

In a 1999 Nova show on PBS, they interviewed Rogers. This interview stands as a warning against exercising excessive faith in the decisions of senior management.

In 1993, the Navy finally offered a theory of a defective torpedo, activated on board, which was then released from the ship, followed it, and sank it. Doubts about this theory were raised almost from the day the official report was issued.

NARRATOR: Dan Rogers doesn’t believe the torpedo story either. He transferred off Scorpion just before her final voyage because he believed inadequate maintenance made the submarine unsafe.

ROGERS: I really didn’t want to be there. I was really that concerned about the condition of that boat, especially the material condition of the boat.

NARRATOR: Eventually, Rogers shared his doubts with Steve Johnson, an investigative reporter for the Houston Chronicle. Johnson found letters from other crew members that showed they too were concerned about the mechanical condition of the sub. He tracked down Ross Saxon, whose doubts about the torpedo theory encouraged him to keep digging. Then, after years of effort, he unearthed a critical piece of Scorpion’s past.

JOHNSON: I obtained several thousand pages related to the Scorpion’s maintenance history from the Atlantic submarine fleet. I’d sent out a half a dozen requests under the Freedom of Information Act, and it just so happens they found these documents that they thought had been destroyed, buried amid thousands of pages, and it was the day-by-day history of how the Scorpion was selected in a secret program that drastically reduced the maintenance that it would have ordinarily received.

NARRATOR: To save time, the Navy had cut back on Scorpion’s last overhaul. Scorpion was in the shipyard eight months, though an average overhaul took twenty-four. They spent just $3 million, a fraction of the norm.

Rogers had placed his career in jeopardy by requesting a transfer from the Scorpion. He was publicly breaking with the senior officers and Navy brass about the safety of this high-tech showcase. Who was he to make such a judgment? Answer: the lone survivor.

He won no praise after the disaster. The Navy did not come to him to get his opinions on the safety of the ship. Instead, the Navy covered up the story for a quarter century, then released a misleading report about the cause.

But he survived.

CONCLUSION

If you are in a dead-end job in a competitive company, you may not care. It may fit your career objectives. But if you are in a dead-end job in a dead-end company, you had better start looking for an exit strategy.

December 29, 2004

Gary North [send him mail] is the author of Mises on Money. Visit http://www.freebooks.com.

Copyright © 2004 LewRockwell.com

Political Theatre

LRC Blog

LRC Podcasts