September 4, 2017

Winston-Salem Is Betting On Herbalife

Happy Labor Day Winston-Salem! Today as you’re enjoying the last hurrah of summer, take a few moments to remember that today is Labor Day.

America has traditionally been a country that is hostile to the interests of laborers. That’s why in this country Labor Day is the first Monday in September instead of May 1, like everywhere else.

Good jobs are hard to find these days. Financialization, mechanization, computers/Artificial Intelligence and old fashion corporate greed have made life difficult for the working man and working woman. Our local and national economy is flush with entry level jobs that lead nowhere, but career path jobs are scarce. Some jobs like Herbalife are a complete scam.

Mayor Joines has set a goal for Winston to become a top 50 metropolitan area by 2020. Reaching that lofty and seemingly unattainable goal would mean creating an additional 7,000 jobs per year on top of the 20,000 jobs that are created organically (Allen Joines, Triad Podcast Network).

Under President of the Winston-Salem Alliance/Mayor Allen Joines, the formula for job growth has been catering to the interests of his employers at the Winston-Salem Alliance and other large institutional players in Winston such as Wake Forest in all its incarnations.

It’s also meant subsidizing companies of dubious integrity simply because they’re willing to relocate to Winston. The very day that the city announced Herbalife would be coming to the former Dell facility on the southeastern edge of Winston (December 20, 2012) was the same day that Bill Ackman publicly declared Herbalife was a pyramid scheme.

For a good overview of Herbalife and Bill Ackman, watch the documentary Betting On Zero.

Over the last few years, Bill Ackman’s crusade against Herbalife has failed disastrously. He may soon have to reverse course. But just because Wall Street continues to stand behind Herbalife, that doesn’t mean that it’s long-term prospects are something that workers in Winston can count on in the long run.

A year ago, in July 2016 Herbalife reached a $200 settlement with the FTC they also made some changes to their business model. But fundamentally they’re still a pyramid scheme in this commentator’s opinion.

What Herbalife really sells is false hope. They’re selling a business opportunity that the majority of Herbalife distributors will not profit on. Worse yet, most of them will go into deep debt acquiring nutrition shakes but will be unable to sell them, even after they pressure their friends and family for sales. Then after a period of months or years they leave Herbalife and sell their pantry full of Herbalife shakes online for pennies on the dollar.

Herbalife is another example of just how broken the American dream is. It’s a graphic example of how the old model, that was always problematic, of corporations providing jobs and a middle-class lifestyle is over.

Tobacco and textile jobs that once employed much of the city are gone and not coming back. Caterpillar has failed to provide jobs. Herbalife has thus far delivered the jobs it promised. But at some point, Herbalife might very well collapse.

Herbalife is somewhat similar to the useless product that Winston-Salem is known for: Cigarettes. Cigarettes are worse than useless, they’re one of the few consumer products that are deadly if used correctly. Perhaps Herbalife would have a brighter future if it’s shakes contained also nicotine.

Co-operatives, non-profits, and small businesses will drive job growth in the future. The City of Winston-Salem is run for and by businesses. It’s a company town, even after many of the prominent companies that are associated with Winston have greatly diminished.

The City of Winston-Salem in invested in a job-growth model that simply isn’t working for the workers who decades ago would have been gainfully employed in manufacturing. As fewer workers are needed to do the physical jobs of yesterday, today’s they’re being drawn into scams like Herbalife.

 

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