FacebookTwitterRedditEmail

Business Leaders Agree: Inequality Hurts The Bottom Line

For decades, big business leaders have warned that redistributing wealth is bad for business. Taxing the rich to pay for infrastructure and education, they say, will kill the goose that lays the golden egg.

But what if it’s the opposite? What if decades of stagnant wages and growing inequality are scrambling the golden egg and stifling the economy?

A growing body of research suggests that’s exactly what’s happening. And a growing number of business leaders now agree.

Jim Sinegal, the retired CEO of Costco, famously fended off Wall Street pressure to cut wages and made an eloquent case for a higher federal minimum wage. “The more people make, the better lives they’re going to have and the better consumers they’re going to be,” Sinegal told the Washington Post years ago.

“Our country needs less inequality and more opportunity,” agreed former Stride Rite CEO Arnold Hiatt in 2015. “Instead, we’re moving toward a society that will be economically and politically dominated by the sons and daughters of the Forbes 400.”

One of the clearest voices on the business risks of growing inequality is Peter Georgescu, a retired ad man from one of the world’s largest marketing firms. His new bookCapitalists Arise: End Economic Inequality, Grow the Middle Class, Heal the Nation, is a stinging indictment of the way business has been done in our country.

“For the past four decades, capitalism has been slowly committing suicide,” he writes — especially shareholder capitalism, where businesses operate for the benefit of shareholders and no one else.

“Shareholder primacy has become a kind of cancer that needs to be eradicated before it destroys our way of life,” Georgescu warns.

Those views were recently echoed in a letter written to CEOs by Larry Fink, chairman of the investing giant Blackrock.

In January, Fink called on the companies Blackrock invests in to “understand the societal impact of your business as well as the ways that broad, structural trends — from slow wage growth to rising automation to climate change — affect your potential for growth.”

Businesses, Fink exhorted, need a social purpose other than making money.

Reversing inequality will require robust government action at all levels. This includes boosting the minimum wage, fairly taxing big businesses and the rich, and making robust public investments in education, infrastructure, and individual opportunity.

We also need government to crack down on wage theft and discrimination, and to protect the right to organize. Unions and activists have demanded these changes for years.

So what can supportive businesses do? Everything.

They can encourage more employees to be owners. Employees already have an ownership stake at companies such as Publix supermarkets and Southwest Airlines.

They can raise their wage floor to close the monstrous pay gap between top management and average workers — a policy long supported by business guru Peter Drucker. And they can publicly speak out in favor of policies that reduce inequality.

If nothing else, they can stop paying dues to business associations that lobby against sensible taxes and labor protections — like the U.S. Chamber of Commerce and the National Federation of Independent Businesses, which tend to be much more conservative than their members.

Can more business leaders “wake up and take action,” Georgescu challenges? Or will they “continue doing business the ways it’s been done… until the whole system risks falling apart?”

Corporate leaders should stand with ordinary Americans to push for serious public policy to halt the nation’s slide towards greater inequality.

More articles by:

bernie-the-sandernistas-cover-344x550

Weekend Edition
April 19, 2019
Friday - Sunday
Andrew Levine
What Will It Take For Trump to Get His Due?
Roy Eidelson
Is the American Psychological Association Addicted to Militarism and War?
Jeffrey St. Clair
Roaming Charges: Time is Blind, Man is Stupid
Joshua Frank
Top 20 Mueller Report “Findings”
Rob Urie
Why Russiagate Will Never Go Away
Paul Street
Stephen Moore Gets Something Right: It’s Capitalism vs. Democracy
Russell Mokhiber
Why Boeing and Its Executives Should be Prosecuted for Manslaughter
T.J. Coles
The Battle for Latin America: How the U.S. Helped Destroy the “Pink Tide”
Ron Jacobs
Ho Chi Minh City: Nguyen Thai Binh Street
Dean Baker
Fun Fictions in Economics
David Rosen
Trump’s One-Dimensional Gender Identity
Kenn Orphan
Notre Dame: We Have Always Belonged to Her
Robert Hunziker
The Blue Ocean Event and Collapsing Ecosystems
Theodore C. Van Alst, Jr.
Paddy Wagon
Brett Wilkins
Jimmy Carter: US ‘Most Warlike Nation in History of the World’
John W. Whitehead
From Jesus Christ to Julian Assange: When Dissidents Become Enemies of the State
Nick Pemberton
To Never Forget or Never Remember
Stephen Cooper
My Unforgettable College Stabbings
Louis Proyect
A Leftist Rejoinder to the “Capitalist Miracle”
Louisa Willcox
Aldo Leopold’s Land Ethic and the Need for a New Approach to Managing Wildlife
Brian Cloughley
Britain Shakes a Futile Fist and Germany Behaves Sensibly
Jessicah Pierre
A Revolutionary Idea to Close the Racial Wealth Divide
George Burchett
Revolutionary Journalism
Dan Bacher
U.S. Senate Confirms Oil Lobbyist David Bernhardt as Interior Secretary
Nicky Reid
The Strange Success of Russiagate
Chris Gilbert
Defending Venezuela: Two Approaches
Todd Larsen
The Planetary Cost of Amazon’s Convenience
Kelly Martin
How the White House is Spinning Earth Day
Nino Pagliccia
Cuba and Venezuela: Killing Two Birds With a Stone
Matthew Stevenson
Pacific Odyssey: Guadalcanal and Bloody Ridge, Solomon Islands
David Kattenburg
Trudeau’s Long Winter
Gary Olson
A Few Comments on the recent PBS Series: Reconstruction: America After the Civil War
Ellen Lindeen
What Does it Mean to Teach Peace?
Adewale Maye and Eileen Appelbaum
Paid Family and Medical Leave: a Bargain Even Low-Wage Workers Can Afford
Ramzy Baroud
War Versus Peace: Israel Has Decided and So Should We
Ann Garrison
Vets for Peace to Barbara Lee: Support Manning and Assange
Thomas Knapp
The Mueller Report Changed my Mind on Term Limits
Jill Richardson
Why is Going Green So Hard? Because the System Isn’t
Mallika Khanna
The Greenwashing of Earth Day
Arshad Khan
Do the Harmless Pangolins Have to Become Extinct?
Paul Armentano
Pushing Marijuana Legalization Across the Finish Line
B. R. Gowani
Surreal Realities: Pelosi, Maneka Gandhi, Pompeo, Trump
Paul Buhle
Using the Law to Build a Socialist Society
David Yearsley
Call Saul
Elliot Sperber
Ecology Over Economy 
FacebookTwitterRedditEmail