What The System Pays For

PART II: AFTER THE VALUE IS BUILT

Who keeps participating after the value is created?

Via Brick Bank News Network

Part I ended with something strange about the attention economy. An idea can now gather culture, attention, and financial value before there is much of an institution underneath it. A memecoin does not need a factory, a store, employees, revenue, or even much usefulness for a market to form around it. Sometimes the thing being priced is simply what people believe the internet is going to care about next.

The older economy usually starts from the opposite direction. Somebody already built something useful. Workers know how to operate it. Customers trust it. A culture has formed around it. Infrastructure exists. The institution has accumulated years of knowledge, loyalty, relationships, and productive capacity.

Then another question appears.

How much of that value can be taken out before the thing underneath it starts getting worse?

Starbucks is useful here because the company has spent the last two years publicly trying to recover something it admits it lost.

When Brian Niccol took over in 2024, Starbucks said it had drifted from its core. Stores had become too transactional. Menus were complicated. Waits were too long. Handoffs were hectic. The coffeehouse experience that helped turn an ordinary cup of coffee into one of the most recognizable brands in the world had weakened.

That culture was never decoration around the business. It was part of what Starbucks sold.

The people working inside the stores were part of that product too.

That makes the company's compensation structure difficult to ignore. Niccol reported $30,992,773 in compensation for fiscal 2025. Starbucks identified its median employee, a part time United States barista, as earning $17,279. The ratio was 1,794 to 1.

A chief executive obviously carries more responsibility than a barista. A person making decisions for a company worth tens of billions of dollars should be compensated differently from someone working one store.

That explains a difference.

It does not explain every possible size of the difference.

Starbucks regularly points to the value of its broader employee package, including healthcare, tuition assistance, retirement benefits, paid leave, and stock through Bean Stock. Some of those programs are genuinely valuable, and Starbucks has offered benefits uncommon in retail for decades.

They are also not the same thing as income.

A worker cannot pay rent with the estimated value of a tuition program they may never use. An hourly wage only produces a living if enough hours come with it. Many employer benefits also receive favorable tax treatment that ordinary cash wages do not, making total compensation a useful corporate number without making it equivalent to the money entering an employee's bank account.

That distinction becomes especially important when workers are asking for more hours.

In a 2025 survey connected to Starbucks Workers United, nine in ten surveyed baristas and shift supervisors reported understaffing and three quarters described the pace of work as overwhelming. The union has pushed for more predictable schedules, more staffing, more hours for existing workers, and higher take home pay. Starbucks has repeatedly responded that its compensation and benefits rank among the strongest in the industry.

Both statements can be technically true while describing very different realities.

A company can have an expensive benefits package and still have workers struggling to get enough hours. It can pay better than a competitor and still not pay enough for the cost of living around it. It can calculate a high total compensation figure while the person receiving that compensation is still looking at a checking account that does not feel particularly impressive.

What happened next makes the argument harder for Starbucks to dismiss.

The company is now putting more than $500 million into additional labor and staffing as part of its turnaround. Starbucks says more workers are being placed into stores during busy periods, employees are receiving more hours, service is improving, and those investments are helping the business perform better.

The sequence is worth paying attention to.

Workers said stores were understaffed. Customers increasingly experienced a business that felt more transactional and less like the coffeehouse Starbucks had built its reputation around. Management eventually agreed that the experience had drifted. Now the company is spending hundreds of millions of dollars restoring labor capacity and says the investment is improving performance.

Some of what looked like a cost was part of the productive system all along.

That problem goes far beyond Starbucks because businesses are much better at measuring what they remove than what they slowly consume.

Another employee costs money immediately. More training costs money immediately. Better maintenance costs money immediately. Giving workers more time to do something correctly can reduce output during that hour.

Culture does not disappear on the same schedule.

Neither does trust.

An experienced employee can stop caring months before quitting. A customer can notice that a place feels worse without knowing exactly why. Institutional knowledge can disappear in one round of layoffs and take years to rebuild. A company can spend down goodwill accumulated over decades while the spreadsheet records the reduction in cost long before it records what was lost.

That makes extraction look like efficiency for a while.

The pressure becomes stronger when workers feel they cannot easily leave. The Federal Reserve's latest household research found growing anxiety around finding and keeping work, particularly among younger adults. When another job feels easy to find, a worker has leverage. When another job might take months, the same workplace suddenly has much more room to squeeze.

Fear does not even have to produce better work to become useful to management.

Research on workplace fear has associated it with worse long term performance, more stress, and less willingness to go beyond basic job requirements. It can still create short term compliance. Someone worried about losing a job may accept another assignment, stop challenging an unrealistic target, tolerate a schedule they cannot sustain, or keep quiet about a problem that should have been raised.

The immediate number can improve while the institution gets weaker underneath it.

Global competition makes the problem harder because the pressure is real. A company that voluntarily carries more workers, pays more, keeps more production local, maintains extra capacity, spends more on durability, and refuses certain forms of monetization may be competing against another company willing to do none of those things.

That creates a race nobody has to organize.

One business squeezes labor because a competitor operates cheaper. Another moves production because somebody overseas can make it for less. Governments subsidize industries because competing countries already do. Investors move capital toward whoever can produce the strongest return.

Every decision can make sense from the position of the person making it.

The combined result can still hollow out the productive system.

Private equity gives a harder version of the same problem because the financial claim can become unusually separated from the health of the institution underneath it.

There are private equity firms that improve companies, provide needed capital, rescue distressed businesses, and create better organizations. The structure itself is not proof of abuse.

Healthcare shows what happens when the incentives go badly.

Research examining private equity ownership of nursing homes found increased short term mortality alongside declines in staffing and care quality. Another study examining hospitals after private equity acquisition found hospital acquired adverse conditions increased by roughly 25 percent.

The important point is not that every private investor destroys what they buy.

It is that the owner can sometimes succeed financially while the productive institution fails in ways that matter to everyone else.

That should not be possible to dismiss as an unfortunate side effect of efficiency.

A hospital exists to produce healthcare. A coffeehouse exists to serve customers. A company needs profits because without them the institution eventually dies. Capital is valuable precisely because productive systems need resources to grow.

The problem begins when the financial structure becomes better at extracting value from the institution than maintaining whatever created the value in the first place.

There is a reason the word enshittification escaped the technology industry where Cory Doctorow coined it and started sounding familiar almost everywhere. His original argument described platforms that first created enormous value for users, then gradually shifted more of that value toward themselves as users became harder to leave behind.

The exact mechanics differ across industries, but the pattern is recognizable.

Build something people love. Accumulate trust. Build habits around it. Develop a culture. Become difficult to replace.

Then discover how much of that accumulated goodness can be removed without losing the customer immediately.

A company can survive surprisingly long on yesterday's reputation.

That is not creation. It is spending down something somebody already created.

Bad incentive structures explain why this happens, but explanation cannot become absolution. There are decisions where leadership knows the cheaper option will make life worse for workers or customers and chooses it anyway because the financial reward arrives sooner than the damage.

Being responsible for an institution has to mean more than taking every return the structure makes legally available.

Sometimes stewardship costs money.

Sometimes the right number of workers is more than the smallest number capable of finishing today's work. Sometimes a profitable product should remain private instead of becoming another source of customer data. Sometimes a company should accept a smaller margin because the alternative consumes the people, culture, infrastructure, or trust that made the margin possible.

Markets need profit. They need competition. Builders should be allowed to become extraordinarily successful when they build extraordinary things.

None of that requires treating ownership as sovereignty over everything that helped create the success.

Part I looked at an economy where financial value can appear before usefulness. Part II shows another possibility. Financial value can continue being extracted after the useful thing underneath it has started getting worse.

Those look like opposite problems, but they lead toward the same place.

The price and the productive value underneath it can come apart.

Crypto makes that separation obvious because a token can acquire a market before anything useful exists at all. The older economy hides it better because the productive institution may have spent decades accumulating enough culture, trust, infrastructure, and labor to survive years of extraction.

The harder question is what happens in between.

Can capital help turn ideas into useful things without eventually treating those useful things as something to consume?

That is where this story goes next.

CONTINUES TOMORROW

Part I followed an idea into an economy built around attention. Part II followed the older economy in the other direction, into institutions where something useful already existed and the financial system learned how to extract from what had been built.

Tomorrow, BBNN returns to crypto.

Because the next financial rails are already being built, and for once we can still see many of the rules before they become normal.

Part III of What The System Pays For

Tomorrow at 9 PM ET

BBNN