Working Class Alpha, Part I

Its damned hard generating alpha as a working man. Alpha, as an individual's return beyond the average or expected return, is how a fella evaluates where he is. As a futures trader back in the day I had a lot of alpha. I shit alpha for fun. For years I traded no more than a couple hours a day, netted a few grand, and pickled my liver and watched the Yankees. Its not like that anymore. This working life kick I'm on now is something else. 

They've made it damned hard for a working man to make any money. He's got no defense against the MBA cost cutters. The unions are broken or irrelevant. Foreign labor will work for less, accept very low standards of living, and the borders for cheap labor have been opened internationally. Labor is a cost input and the banks and holders of assets expect ever increasing returns. And it is labor that has born that sacrifice to make these returns possible. 

At Home Depot I discovered the only way to save any money was to sleep in your car. You could get a 24 hr gym membership for showers and exercise. To really earn as a minimum wage man you also needed overtime. Running two or more minimum wage jobs was hell (I watched a few guys dying from that along with their alimony payments) and getting from one job to the other reduced essential sleep time (and time for reading and writing). This led to my realization that the ideal minimum wage job would have the potential for overtime but more importantly would pay for room and board. 

It was then that I discovered cannery work in Alaska. A good 3 month salmon season meant 18 hour days without a day off. Alaska's overtime laws are not ideal compared to the Lower 48, but food (as bad as it is) and housing (also poor) are provided to cannery workers. 

Like all of today's minimum wage jobs, these cannery jobs were once lucrative and excellent. Only Alaskans did them. But private equity hit commercial fishing and its all changed. While still a good deal relative to Lower 48 minimum wage work, because food and housing is provided, no Alaskan will work for those wages. Alaska is expensive, and you can't survive the winter when work is limited to minimum wage pay during the short summer. So its only foreigners and Lower 48 rejects who do that work now. For me, it ended up being a good deal while I did it: working summers in Alaska and saving the money for living the rest of the year in Colombia. Throw in six months of unemployment payments from AK and it was an even sweeter arbitrage. 

But now I'm living full time in the Lower 48. Expenses are up, though at least Texas has no state tax. I realized here there was really only one other way to work and have my housing paid for: commercial trucking. 

But OTR truck driving has also gone to hell. The foreigners have been brought in and pay per mile has dropped, despite there being a driver shortage (what a great opportunity for the Teamsters or some union--incredible that drivers can't band together to improve their pay). But as with cannery work I was drawn to truck driving because housing is paid for: you sleep in your truck. 

ZIRP and NIRP (zero interest and negative interest rate central bank policies) have greatly increased the values of assets, especially housing. All this while wages for working men have been stagnant or dropped. A working man now has to sacrifice if he is to get ahead, and housing is that essential sacrifice. A fella interested in getting ahead cannot afford to pay rent. To generate alpha this critical expense on the liability side of the balance sheet must be reduced or eliminated. As working men make so little, alpha generation must come not from income, but from liability reduction. 

And other sacrifices must be made. Health insurance must be eliminated. Fortunately, Obamacare penalties are basically cheap put options for the opportunity to buy insurance if one becomes ill. If you're young and physically training these puts are dirt cheap and insurance is really irrelevant. Anyway, its likely if a younger healthy working man gets sick he's got a bitch of a sickness and probably on his way out, insurance or not.  

OTR truck driving offers the chance to drive up to 70 hours every 8 days, as per DOT regulations. Pay is by the mile and a beginning driver can start to calculate that he has a chance at some decent money. But then he discovers the regulations: no more than 11 hours of drive time daily; no more than 14 hours of drive and and on duty time daily; a mandatory 10 hour break off duty between driving periods; a mandatory 34 hour off duty period to reset his 8 day 70 hour clock; etc. etc. 

Then there are the restrictions of your company, such as an engine governor that stops you from driving faster than 60 mph despite Texas highway speeds of up to 80mph. They've outfitted the truck with all sorts of electronics that report on a driver and restrict him. Then the new driver discovers he's blowing drive time off his 14 hour clock while sitting through 3 hours live unloads of his trailer. 

He starts to think he's bitched. He's forced to drive 20 mph under the speed limit because of the company governor and that, he calculates, is costing him 200 miles a day in paid miles. He's stuck loading and unloading trailers with slow moving hourly and salaried workers who could care less about his DOT clock ticking down. He loses drive time there. He's dealing with Trans Flo and bill of lading paperwork, updating permit books, evaluating a truck and trailer mechanically for possible problems and potential DOT inspection fines, the scaling loads at CAT scales--all this unpaid and reducing his drive time and sleep time. 

But if you sit a man in a truck, with hours and hours to think as he drives across the country on the highways, he will think up ways around the DOT clock, ways around the company truck's restrictions ... (Part II to come)

Home Depot Profiles In Courage

New Preface

These stories are the result of some years working on the overnight freight team at a Home Depot. There is much, however, that wasn't written and won't appear in this book. For some things are too hard to write and others you save for another occasion even if you cannot be sure that it will come.

There is nothing of Felicia and her years of crack addiction in Detroit, her molestations and rape while living in the streets; nor of Heather, Doug’s wife, who worked the cash registers and didn’t understand when a customer gave her extra coins in order to receive a bill as change ― she looked at the coins strangely, then thrust them back saying it wasn’t right and threatened to call a manager; nor is there anything about the man in the white Mercedes who parked behind the garden area and shot himself in the face. Corey found him, his jaw and nose shot off, blood splaying everywhere, holding where his face had been, hopping around and moaning ― But he’s got a white Mercedes, Doug said. Why should he want to kill himself? They were still discussing it in the lunchroom when the man died a week later.

Neither is there anything about Robert the Jew, who ate whoever’s lunch he wanted from the refrigerator, one time even offering Puerto Rican Dave a bite of his own sandwich. When someone caught him with their food or there wasn’t anything he wanted, Robert didn’t hesitate to root through the garbage. I once watched him pull up from the bottom of the trash bin a blackened, days-old bagel and quickly consume it.

And what of old Jay the ex-con, who had nubs for fingers on both his hands and was rumored to be the disowned son of the Kraft family. Jay moved slowly on his crutches, coughing, and smoking whenever he had the chance, the cancer slowly destroying him. He told fantastic stories about pointing handguns at sheriffs and beating up train conductors, all of them ending in clever escapes or police escorts back to his home with never any charge. Jay was an alcoholic and disappeared for months at a time into treatment centers.

Nor is there mention of 'Slick' Nick, big and slow-moving, who was run over by a car at 16 and spent two years in a coma. If you didn’t see him for a week he forgot who you were. Slick worked the parking lot pushing carts but regularly disappeared to prune the calluses on the soles of his feet. They grew quickly and required weekly attention, he said, and when they had grown too large or he had trimmed them too deeply, Nick claimed he was unable to work. The sight of Nick in the electrical aisle with his shoes off, hacking at his calluses with a penknife, had caused a number of customers to complain to management.

It might have been a better book if these other characters had appeared in it but this will have to do for now. To some readers the truth of these stories will be manifest, while to others, perhaps too educated and financially fortunate, they will only be regarded as fiction.


Bogota, Colombia

March 2012