In following the produce industry, I’ve always been impressed by the large number of family businesses and the commitment that they display.
We think of family businesses as good and nepotism as bad. Yet the family business is based on nepotism.
Matthew Staiger, a scientist at Opportunity Insights, Harvard’s economic mobility research and policy institute, has been investigating nepotism—aka hiring in the family—and its social effects, according to a recent article in Harvard magazine.
Nepotistic hiring, Staiger contends, is for the most part a blue-collar phenomenon, especially prevalent in manufacturing.
Staiger found, not surprisingly, that people are 200 times more likely to work for a parent’s firm than for a similar company in the same region. In an impressive example of redundancy, he observes, “the tendency to work for a parent’s firm is explained by the use of social connections.”
At least according to this article, Staiger has little good to say about nepotism, contending that it leads to inequality of income, low rates of economic mobility, and disadvantages for the less privileged, chiefly benefiting people who are well-off.
Staiger concedes that nepotistic hires stay at their jobs longer than other employees but says that often it’s simply because they couldn’t get a job anywhere else. As a result, the company isn’t necessarily getting the best workers.
Of course, there is some truth to this claim: the stupid boss’s son that the company has to do something with, no matter how useless he may be, is a stock figure. But Staiger overlooks the fact that a family member is more likely to care about the company’s reputation, which should lead to a higher commitment to quality and values.
“Equality of opportunity is this key American ideal. And the fact that some people are getting access to jobs via the connections of their parents, and some aren’t contradicts this ideal,” Staiger contends.
Equal opportunity is a desirable ideal that is always destined to remain an ideal. It is impossible to imagine a society in which parents do not do everything they can to advance their children’s interests.
To cite extreme cases, in the twentieth century, communist Russia and China exterminated their ruling classes in an attempt to promote universal equality. Yet in both the old Soviet Union and present-day China, it eventually proved that children of high-ranking party cadres would get preferments. One prominent example is the current Chinese leader, Xi Jinping, the son of communist revolutionary Xi Zhongxun. https://en.wikipedia.org/wiki/Xi_Jinping
I don’t have a family business of a sort that requires employees, and my sons are young enough so I have no idea of their likely interests in adult life.
But if I had such a business and my children were at all promising, I would certainly give them preference over everybody else. My impression of the produce industry is that many companies have benefited and thrived from exactly such behavior—often for generations.
