(U-WIRE) NASHVILLE, Tenn. – As many of us prepare to enter the “real world” in May, the job market we are encountering does not resemble the job market our predecessors faced when they graduated.
I am not alluding to the economic downturn that seems to be slowly festering in America that all the newspapers, news broadcasts, barbershops and nervous seniors fervently discuss. Nor am I alluding, for once, to the increasing complexity of a global community, although both of these stand at the forefront of our vision.
I am alluding, rather, to questions that have arisen in the wake of Enron’s filing for bankruptcy in the last few months, and the ensuing judicial investigation.
Can the employees of a large corporation trust their management?
Can the employees of such a corporation place their destinies in management’s hands and still expect to make a career and retire with benefits?
Can our government allow corporate executives to operate with impunity?
First, let’s briefly recap aspects of the Enron fiasco. Enron, the seventh-largest corporation in the United States and the largest energy company, overstated its profits by around $600 million from 1997 to 2000, while keeping the executives’ own sideline companies off of the books, according to the BBC.
Once this overstatement became public, the stock plummeted, massive layoffs ensued and many files were to be shredded.
While the Enron stock rose to its zenith price, its management allegedly barred employees from selling their shares of stock while simultaneously liquidating their own shares of Enron stock. This began in 1999 by Enron’s top executives.
Allegedly, more than a dozen top executives made over $30 million each from this practice, with CEO Kenneth Lay allegedly making $10.1 billion.
Since many Enron employees held retirement plans that were extremely heavy in Enron stock, once the stock plummet began, these people were left to be buried under the weight of the collapse.
According to Rep. Henry Waxman (D-Calif.), who is taking part in the investigation, on Aug. 27, Lay sent an e-mail to all Enron employees stating that restoring investor confidence was the highest priority for Enron and that the stocks would soon rise sharply.
Nevertheless, by this juncture the value of a share of Enron had fallen drastically from its high of $90 a share, and Lay had already gotten rid of $40 million in Enron shares just in 2001. Presently, a share of Enron stock is worth less than a dollar.
Back to the first question: can employees afford to trust their management in the future? I wish that I could shout a resounding “of course!” without any doubts in the back of my mind, but that is just not the case.
Obviously, all corporations should not be judged by Enron’s alleged duplicity, and there exists neither a perfect nor a demonic corporation.
Nevertheless, I also do not believe that the energy giant’s top brass are the only top corporate executives that are capable of mismanaging a company for personal gain (assuming that the allegations are true), and this incident may possibly repeat somewhere down the road.
Human nature is inherently fallible, and, unfortunately, this fallibility can run rampant when we allow white-collar crime to fester without accountability.
This question, moreover, becomes even cloudier when we seniors ponder our future jobs in the business world; that is, assuming that many of us in fact will end up in the business sector, which I believe is highly probable. When you accept a job with a business, you assume that you have become part of a team that collectively works for the good and profitability of the company, which includes the good of its employees.
Much of our economic system has depended upon this trend to spread the wealth, somewhat, among a nation’s population through private enterprise.
It will not be equal by any means, but that’s not inherent within our economic system, and we still have one of the most stable societies in the world.
I am not writing this column as a complete damnation of capitalism or the business world. The realm of free enterprise always has and always will be one that adheres to the survival of the fittest.
What I am asking is that we look at the Enron collapse and start raising questions about how we can avoid such a collapse in the future, keeping human fallibility in mind. Also, since many of us will be out of college in the near future, we need to realize that one day we may be caught in such a horrible sweep and need to decipher how to avoid being caught in such a fiasco.
What can be inferred when the seventh-largest corporation in the nation collapses due to alleged despicable actions within its management?
Maybe it is time to get serious about holding white-collar criminals accountable.
Maybe it is time to alter the laws so that a few executives cannot profit from destroying the retirements of thousands and hope to get away with it.
Maybe it is time for us to realize that no system is perfect and we must be constantly vigilant in order to ensure well-being and prosperity for both ourselves and our peers.
What do we tell the thousands of people who had dedicated their careers to and invested their livelihoods in Enron and lost? Do we tell them that “it’s a bummer,” but “you’ll get over it?”
If the allegations concerning Enron’s chief executives prove true, will our judicial system hold them accountable for their actions, even in the eyes of those who lost everything?
These are tough questions whose answers are still unknown, but let’s start asking them.