Labor (Long Ramen, BigLaw & Banking, Short Family/Fun?)

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Michael Moritz, a Partner at Sequoia Capital, stirred quite a tizzy this week with his hot take in the Financial Times that Silicon Valley - relative to China - is full of a bunch of whiny snowflakes. And, then, ironically, the whiny snowflakes whined about Mr. Moritz seeming distaste for "work/life balance." His overall message - while delivered in about as insensitive and out-of-touch a manner imaginable - rings true, however, in that China is undeniably a force to be reckoned with; his piece is yet another warning signal that U.S. dominance is being threatened by China's ambitions. 

While fawning over China's work ethic, Mr. Moritz says, "...the pace of work is furious. Here, top managers show up for work at about 8am and frequently don’t leave until 10pm. Most of them will do this six days a week — and there are plenty of examples of people who do this for seven. Engineers have slightly different habits: they will appear about 10am and leave at midnight. Beyond the week-long breaks for Chinese new year and the October national holiday, most will just steal an additional handful of vacation days." To which we reacted, "That's it?" Chinese managers ONLY work from 8am to 10pm? They get a day off every week!? They take a handful of vacation days?! Sh*t. These lionized Chinese engineers would NEVER make it on Wall Street or in BigLaw. 

Or maybe they would. "JPMorgan has changed its pitch to the MBA students it targets for recruitment, focusing more on the quality of the roles available than the generosity of the remuneration package." Indeed, there is now "a stronger emphasis on the quality of life, with guarantees to protect weekend leave and holiday time and the opportunity to swap with counterparts based in offices overseas...." Clearly, Moritz and Jamie Dimon ($JPM) haven't been hanging out. 

Anyway, our favorite reaction to Moritz? This thread by David Heinemeier Hansson: "What a f*cking toad."

Rewind I: Wage Increases Squeeze Profits

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Buffalo Wild Wings & Hersha Hospitality Trust Shine a Light on Jobs

When Toys R Us filed for bankruptcy a few weeks ago, we noted that part of its business plan - which, of course, gave JP Morgan ($JPM) and other DIP lenders comfort that the business is viable - included minimum wage increases to compete with Walmart ($WMT). Notably, Walmart subsequently had the opportunity to raise wages again and opted not to. Back in the beginning of the distressed dining wave, we highlighted, prior to the election, that minimum wage increases were increasingly cited as one of the causes for bankruptcy. Notably, in this week's onslaught of earnings reports, a number of firms - from the very successful Buffalo Wild Wings ($BWLD) to the not-so-much Hersha Hospitality Trust ($HT) - noted that wage increases were squeezing profits. We snarked on Twitter that BWLD's "Fiscal Fitness" program must be the new euphemism for "More Work, Fewer Hours" as the company announced hour curtailments to offset wage rate increases. The Philips Curve is finally kicking in, it seems. Maybe that has something to do with 3% GDP growth.