Your Biggest Threat of Disruption For the Next Decade is NOT What You Think!

Disruptions are on the rise. It’s a fact, and if you want proof, just visit the World Economic Forum and check out their Global Value Chain Barometer. While some categories of disruptions are holding steady, disruptions are on the rise overall and not a single category is declining.

If asked what the biggest source of disruptions are, depending on where you are located in the world and what industry you are in, you’re likely to say that the biggest sources of disruption are either
a) war and conflict,
b) natural disasters, or
c) cyberattacks.
And while those have traditionally been (among) the highest sources of disruptions, you’d be wrong. The biggest source of disruptions this year have been strikes and walkouts globally. And as the brilliant Robert Reich will tell you, despite the large number of strikes we’ve seen over the last year, workforce revolts are just getting started.

When you consider

  • the rapid rise in inflation globally, especially around necessities (food, housing, healthcare),
  • the fact that, despite the almost two decades of low inflation, intermixed with short periods of stagflation, the majority of the population in many first world countries were financially struggling before inflation came back, especially given that many were out of work for part or all of COVID and didn’t get near enough financial aid to keep their heads above water, and
  • they’re all scared of AI taking their jobs

Many people are near their breaking point. Strikes are going to keep happening, and repeat every 2 to 4 years (depending on the union contract length) until the underlying issue is fixed. But it’s not going to be fixed!

Why? As the brilliant Robert Reich points out, it’s because of the vast inequality between the (super) wealthy and the average person. In the past 45 years, CEO pay has skyrocketed 1,460% while the typical worker saw a pay increase of just 18%. This has led to a vast inequality between a small group of very wealthy people in a mid-size or large company and the average employee. Until this gap is narrowed, the situation is only going to worsen as more and more laborers reach the point where they’re already broke and have nothing to lose by walking off the job, and strikes are going to become much more common than they were in the past 40 years.

The situation could be fixed easily if CEOs and Boards increased worker’s pay each year a few % above the average rate of inflation for the next few years, a move that would cost most companies only a small fraction of their profit (and still keep the differential pay increase between the average worker and the CEO above a 1000% differential using the same baseline), but it’s obvious this is not going to happen (even though that would still be a ridiculous divide). This fact is best illustrated by the current writers’ and actors’ strike that every single person in the world is aware of where the executives have simply decided to do nothing because the unions will come around when the majority of writers and actors (where 99% don’t make enough to pay their rent and eat without side-jobs) get to the point where they are at risk of losing, or have lost, their sh!tty apartments. (And trust me when I say that they are sh!tty apartments! There are two sides to Hollywood, the side you see, and the run down slums you don’t see where the majority of actors and writers live by doing side gigs while waiting for their big break, which won’t come for over 90% of them.)

It’s an utterly ridiculous situation, especially when it would be trivially simple for any government to fix with a one page bill. (For example, it could be solved if all first world governments were to simply pass a law that, in any company with more than ten employees,
1] No single person in the company can earn more than 100 times the lowest paid worker on an hourly basis during a year across all company payouts including, but not limited to, salary, bonuses, stock grants, share grants, and company paid benefits where the definition of worker would include all employees, contractors, and contractor employees doing any work for the company, which would prevent the company from shifting all low paid employees to a subsidiary to try and get around the law;
2] Any individuals found in violation of this rule would get fined $2 for every $1 in excess of their maximum allowed remuneration for the year;
3] Any officers responsible for compensation who knowingly violated this law could be criminally charged and serve jail time; and
4] These Companies would be required to submit a financial statement of compliance listing the full effective compensation of every worker (down to the janitor in the contracted cleaning firm) as part of their tax returns. Just these four simple rules would prevent most CEOs and their overpaid C-Suites from earning more than 1,500 an hour or 3 Million a year as these mega corps have plenty of minimum wage employees under current remuneration models.)

Furthermore, if a reasonable fix was made (in law) that limited executive pay to more than reasonable levels and thus limited the ability of these executives to grow their wealth to ridiculous levels unless they:

  1. paid their workers more,
  2. increased their net company value (to increase the values of the shares and stock options they earned in prior years), or
  3. started or invested in other companies

… the truth is that such a fix would all be fantastic for the economy as it would force a return to classic growth scenarios (and not the current focus of make money today to please Wall Street, even if it bankrupts the company tomorrow), which would create a much more sustainable economy in the long run. (Markets only crash when they are run up to unsustainable levels. This is a result of Wall Street pushing companies beyond sustainable growth levels.)

But it will never happen, because all the Billionaires would simply spend whatever amount of money they needed to buy enough senators and congress representatives to prevent it from happening (or enough judges to find it an unconstitutional law).

Thus, in the interim, across all industries (not just the entertainment industry the news is fixated on) you will have the greedy out-of-touch Billionaires, whose loss of income from a strike event is so negligible they won’t notice it, starving out union workers until they cave to a new union contract below inflation (while giving themselves a big year end bonus for their trouble). This will not only cause you additional disruptions you weren’t planning for (as strikes linger on for weeks and months), but will increase the inequality gap even further (while the workers get even poorer due to pay raises less than inflation), which, in turn, will set the stage for a whole new round of strikes (and disruptions to your supply chain) in two to four years when the contracts end (that the Billionaire executives will deal with in the same way).

Now, don’t get me wrong, I’m not saying Billionaires are bad (because I shouldn’t need to say it), I’m saying that the actions of the ridiculously overpaid super rich and their sole focus on the almighty dollar have set the stage for the first decade in our lifetime where strike-based disruption events will exceed natural disasters, even though natural disasters have almost tripled in the same time frame (and will continue to increase as long as global warming continues to increase).

the doctor would wish you luck, but even that can’t combat greed!