Tribune Publishing Company

Today’s case study comes from the Tribune Publishing Company, the owner and operator of the Chicago Tribune, Baltimore Sun, and the New York Daily News (amongst others).

The print media industry was already in secular decline before the coronavirus pandemic, which further devastated advertising revenues. In response, Tribune announced temporary furloughs and permanent pay cuts to many of their employees. Not more than two months ago, the company felt comfortable maintaining a $0.25 dividend per share.1TPCO Dividend History (NASDAQ)

On April 29, a coordinated protest by over 100 employees took place on an internal Slack channel. Employees talked about the financial pain caused by the Tribune’s actions. Other themes, such as fairness and hard work, arose. Although common and understandable, such sentiments are hopelessly naïve. Instead, let’s look at the most salient employment commandments at play:

Establish a !@#$ you fund

Several employees said that losing three weeks’ pay would adversely impact their ability to meet basic financial obligations. Not only do these employees lack a !@#$ you fund; they don’t even have a run-of-the-mill emergency fund. Three to six months of living expenses is probably not enough to comfortably tell a bad employer to !@#$ off, but at least it affords you some breathing room.

A common reason that an employee might need their employer is money. However, the level of need varies from employee to employee: from the least (a financially independent person who works for the fun of it) to the most (someone who will be on the street if Friday’s check doesn’t clear).

5th Commandment of Employment

While a !@#$ you fund is a nice-to-have, emergency funds are not optional. Not having an emergency fund is a bona fide emergency. If you don’t have an emergency fund, building one should be a high priority objective. Otherwise, you’re dooming yourself to indentured servitude while playing Russian roulette with your financial future.

No company loyalty

An employee asked, “Is Tribune really doing what it can to preserve newsrooms before preserving the pockets of its shareholders?” Perhaps the question was rhetorical, but just in case – the answer is of course not. Newsflash: a publicly traded company’s first and foremost objective is preserving the pockets of its shareholders. I don’t care what kind of flowery bullshit they spew to the contrary. As an employee, you are a cost of doing business. They are not paying you out of the goodness of their hearts.

A company’s main purpose has always been to make money; that has not changed. What has changed is the time preference of management (decreased) and the rate of change itself (increased). Both have combined to shift the paradigm from viewing employees as lifetime investments to disposable cost centers. A faster rate of change naturally rewards companies that stay nimble, particularly with its workforce, and a manager that can save money through short term cost cutting will be rewarded long before any negative ramifications are felt.

8th Commandment of Employment

The employer is usually the more powerful one in an employer-employee relationship. Thus, it is incumbent on them to demonstrate their loyalty to you first. Unless they consistently prove that they have your back in sickness and in health, you should assume that they’re looking out for themselves and act accordingly.2Note that, unlike Tribune, Hearst is privately owned.

Know your value

Another employee wrote, “Been here for 28 years and like most of my few remaining colleagues I’ve had one raise in the last 10, while the cost of living continues to increase.” Yes, that’s unfortunate. That employee has my sympathies. But if you stayed at the company anyway, your employer didn’t have to pay you more to keep you, did they?

Each employee’s compensation represents the firm’s opinion of his or her value to the firm. By signing on the dotted line, you effectively agree to this valuation.

1st Commandment of Employment

Knowing your value is vital even if you conclude that your value is low. There are many ways to increase your value as an employee. And if you cannot, a large enough group of low value employees can increase their collective value by unionizing.

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