Why do Managers Exist?

Earlier this year, a paper published by the NBER gained national attention. In essence, it revealed that many companies were classifying their minimum wage workers as managers, despite lacking any managerial responsibilities. This classification allowed companies to avoid paying overtime. Notable companies like Panera, Verizon, JPMorgan, Publix, Walmart, Facebook, Staples, Lowe's, McDonald's, KFC, and Pizza Hut were all implicated in this practice at some point.

While we can collectively agree that this is another troubling corporate tactic, it sparked my curiosity about the evolving role of managers. The term seems to have lost its original significance.I'd like to explore the historical purposes of management, or rather, the multiple purposes it has served over time.

Management, as a distinct career with defined responsibilities and privileges, only emerged a little over a century ago. Sociologists argue that this codification of management occurred as a response to the challenges faced by the capitalist ruling class in justifying their system. During the early 20th century, there was a surge in organized socialist movements, with workers forming powerful unions and political parties. This period witnessed significant social unrest, strikes, and the establishment of socialist states like the Soviet Union.

In an effort to survive criticism and potential revolution, the capitalist ruling class adopted management as a tool to address societal concerns. Management became a way to maintain the existing power structure while appeasing the growing discontent. It offered the illusion of meritocracy, allowing individuals to climb the corporate ladder based on merit rather than hereditary privilege.

By creating a managerial class, capitalists aimed to divert the anger of lower-class workers away from the ownership class. Managers became a buffer, absorbing the frustration and dissent of workers. This strategy worked for a while, especially with the introduction of New Deal policies in the 1930s, addressing some criticisms from the left.

However, as the 1960s unfolded, new forms of discontent emerged. Critiques extended beyond issues of exploitation and poverty to include mass production, consumerism, alienation, and rigid hierarchies. In response, capitalism absorbed and co-opted these criticisms through the advent of neoliberalism.

Neoliberalism transformed the critique of hierarchy into a conservative neoliberal critique of government. In the workplace, it manifested as self-management, open spaces, and flexible career trajectories. The emphasis shifted from being a middle-class worker to the freedom of individual autonomy. The government played a role in ensuring adherence to this vision of freedom through neoliberal policies such as deregulation and weakened collective rights.

In the present day, the role of managers seems to be in flux. Many companies install spyware to monitor employees, and workers often find themselves managing their own tasks within a project-based framework. The traditional role of managers as supervisors is diminishing, and the study mentioned earlier reveals how some companies mislabel minimum wage workers as managers to avoid overtime payments.

Ultimately, no matter how much capitalist rhetoric evolves or managerial roles change, the fundamental relationship between the ruling class and the working class remains unchanged. To achieve true freedom, financial security, and a meaningful life, capitalism needs to be replaced. The call to action is to join movements and organizations that advocate for systemic change.