Open letter to the Enterprise C?O

Is the employer/employee social contract doomed?

"May we live in interesting times" might be considered an understatement these days.? The challenges of the C-Suite are many and varied.? There are forces acting on your bottom-line and your top-line.? The stock market is roaring and yet enterprises are (opertunistically?) cutting their workforces in order to reduce costs and fortify themselves against future turmoil.

I freely acknowledge that running an enterprise is not an altruistic endeavor.? However, unless you don't need employees, it's in your interests to provide a set of incentives that motivates them to your goals.?

Whether you acknowledge it or not, your enterprise likely takes advantage of the plight in which your employees find themselves.? They need money to provide food and shelter and hopefully what's left over is saved.? They are in essence trading way their labor, skill, creativity and time for the benefit of your enterprise.? In the best of times this is a natural and agreed upon exchange.? You provide the opportunity and means and they provide the energy and effort.

However, things have gotten tight at the margins.? This implied social contract is more and more strained.? In this situation you have to start wondering if you're getting the most productive effort out of your employees.? Let me let you in on a little secret...?

Your employees are scared as hell and probably not nearly as productive as they could be because they are forced to spend their attention looking for plan B and potentially plan C.? Unlike in previous depressions that largely affected the "blue collar" worker, this time the "white collar" working segment is seeing their companies peers laying off like never before so "jumping ship" to another ship is less and less an option.? Nobody wants to stand in the unemployment line even if there is one to stand in let alone be a burden to their family or the state.? But how did we get here?

Rise of fringe benefits and defined contribution plans:

In the 1930s as the Great Depression was was solidifying it's grip on the US, there was no consistent concept of retirement.? Most people worked well into their elder years as much as they could and family and charitable organizations picked up the slack.? As part of Roosevelt's New Deal, the Social Secuity Act of 1935 was passed that effectively transferred that responsibility to the government.? Since at the beginning working age folks were contributing into the system while there were initially very few qualified to benefit, today that's no longer the case.? With the baby-boomers now reaching retirement, the demographic situation has flipped and the solvency of the program is constantly being raised as a major concern for future workers.

Pension plans emerged during WW2 when the government enacted wage and price freezes under the National War Labor Board in 1942 in order to control inflation during the war.? In particular, when the government forced employers to pay a set wage and no more, the employer were then faced with the dilemma of how to attract the best talent.? The answer came with the leveraging of pension plans to "sweeten the pot".? Even after wage controls were lifted, the pension plans stayed since they had been adopted widely.?

The security in defined benefit(pension) plans gave way to defined payment(401K) plans in the 1980s.? Now the employee was left to decide how their retirement money was deducted and invested instead of the employer, but how is an employee supposed to know the best way to keep ahead of inflation and when they might die?

As companies continued to fight for the best employees, they continued to add benefits such as paying for healthcare premiums, dental, eye, travel insurance, health savings account matching, oncology support, diabetes and hypertension support, life insurance, accidental dismemberment, short-term disability, adoption, surrogacy assistance, breast milk storage/delivery, tuition reimbursement, financial counseling,? psychological counseling, subsidized lunch at the cafeteria, daycare, fitness facilities, a whole plethora of wellness programs.? I'm not making this up as I actually took the list from my own company's HR benefits page.? And when we consider the run-up to the dot-boom, foosball, ping-pong, quiet rooms, catered dinner, cappachino machines,? and various massage/chiropractic/yoga services.?

Add to this long list the fact that modern employees want their work environment to be free of conflict, inclusive, diverse, renewable, socially conscience, and support their political views with action committees that support whatever flavor of the month it happens to be in fashion.? What happened to coming to work, doing the work and living your own life on your own terms outside of work??

And now just this week the re-establishment of controls on the time your employees can work and how much they can't work is again being sponsored as Bernie Sanders unveils his 32-hour workweek bill.

We seem to be attacking the wrong problem.? Instead of acting like the government and providing everything outside of the core function of a work environment we should be encouraging our employees to take responsibility for their own existence and that starts not with how we're compensating them? but what we're compensating them with.

A change in compensation paradigm:

What if you could rewrite the employer/employee contract in a more meaningful way?

• No retirement plan, no healthcare, no dental/vision/disability/etc.
• No stock options or matching incentives.
• No paid time off, sick days, personal days, maternity days.
• No social favoritism, no office of inclusion, no talk of religion/politics, no lobbying, no supporting this or that cause.
• No misc perks (foosball, paid lunches, comfy safe spaces, massage, mental health day)

Just pay your employees with sound money and expect them to take care of themselves in whatever way they deem appropriate, just not at work.? It's not your business what they do with their free time just as it's not any of their business what you do with yours.

How does this fundamentally change the relationship between you and your employees?

You need to provide compelling work to keep their interest.? As the purchasing power of what you've paid out covers a larger and larger portion of your employees future needs(even extending into "retirement"), you need to keep them interested and engaged.? Maybe your'e the only employer that's picking up this new approach, but that won't be novel forever.? The work itself needs to be complelling.? Are you building something that's deemed worthwhile?? How do you evolve?

Employer soveriegnty vs. Employee sovereignty? golden handcuffs?

But sound money such as gold is cumbersome for this purpose, but Bitcoin doesn't have to be.

Bitcoin is growing into a recognized asset class.? Now that the ETFs are launched and the interest is becoming proven, the likelihood that bitcoin goes away is receding further and further.? Your reputational risk of allocating some small percent of your treasury to BTC is fading and you may find that not considering it might will soon put you into the minority.? Fidelity is now being used as an allocation for other ETFs and that should tell you something.? It's not going away no matter what nation states say.? The question is becoming how will you use it in your enterprise?? Most will keep it as a hedge in their treasury.? Some will take it into self custody to eliminate any counter-party risk.? What if you go beyond and leverage it for compensation?

But there are downsides.? When used as compensation, the IRS still requires withholding for wages in USD.? But as we know all to well, employees look at the net of their paychecks not at the gross.? If you create a payroll situation where it's easiest for the employee, they will have to take effort to convert part of their earnings to USD for their own expenses.? True this is getting easier and easier(assuming the government doesn't close off all the off-ramps) and the remainder sits as unconfiscatable, inflation resistant savings.

You'll have to tell your employees that they are going to get a wage "adjustment" (as denominated in BTC) every year.? This will have to be figured out until the US declares BTC as a legal tender.? Assuming that happens, the "salary" can stabilize.? Your employees will know what they are getting into the future and will be able to plan much better.? Right now, how do you know what to put away for your retirement??

For you, this new contract(implied or otherwise) is much cleaner.? Do the work and get paid.

Now I don't pretend that operating in this way will be easy for an enterprise.? First off your payroll department will have a fit but that doesn't mean starting down this path would pay off for you and your enterprise.? In the meantime you can start by devoting some of your treasury to the new Bitcoin spot ETFs if you're not into self custodying your own Bitcoin.? But it would be nice to have a inexpensively acquired accumulation for when the payroll department comes around.

Sovereign treasury begets Sovereign enterprise which supports sovereign employees which promotes a better society for all.