It’s time to ask ourselves if we expect way too little of businesses. Even when businesses fail — or engage in criminal behavior as Wells Fargo did — the golden parachutes for those at the top are commitments the law largely protects. Remember: the bank opened 2 million phony accounts without customer authorization and then profited through fees and penalties levied on customers. Top Wells Fargo executives were not jailed. They walked away with millions. And they continue to fight the partial clawbacks of their ill-gotten wealth.
Unfortunately we don’t see the same readiness among most business leaders to fight for a living wage for ordinary workers so that they can afford the basic necessities. Why is any effort to advance this idea generally cast as liberal activism that threatens the viability of businesses? Why is the Chamber of Commerce and the Tax Foundation almost always opposed to raising wages for workers but have nothing to say about the 300:1 ratio of top CEO to worker pay? In 1965 that ratio was 20: 1. The Economic Policy Institute, a nonpartisan think tank reports that between 1978 to 2014, CEO compensation increased by nearly 1000 percent while a typical worker’s annual compensation grew by less than 11 percent
Why is it the norm that businesses lay people off to improve the bottom line? Why do we never consider that lowering executive compensation and raising wages for rank and file workers might help us address the disgrace of houselessness?
At the recent Better Business Bureau Torch Awards, keynote speaker Stephen M. R. Covey, bestselling author of “The SPEED of Trust” made the case for why businesses must build on a foundation of trust, not just because it is the right thing to do but also because it is the smart thing to do. Trust – one word for adhering to the standards for fair, honest and ethical business practices advanced by the Better Business Bureau — builds prosperity both for the business and the community.
Drawing on the examples of this year’s Torch Award winners, Covey made the case repeatedly that trust is a reciprocal relationship. The erosion of trust in management reflects the failure of too many business leaders to treat their employees and their customers ethically.
Businesses are quick with the banal promises. “Your call is very important to us” rings hollow when it is impossible to connect to a human being after numerous automated commands. The friendly skies of United Airlines are decidedly unfriendly. But the more serious affliction is our acceptance as a community of the immoral disparity between what businesses think their top executives deserve and the unacceptably low wages paid to those on whose labors those businesses depend. Reducing the extreme disparity between CEO pay and worker’s wages would be a good step towards laying the foundations of trust.
How many times have we heard executives declare that “our people are our most important asset?” The statement washes over us the way cliches always do. What does it really mean? Workers are assets — until we need to shed them to bulk up the bottom line?
It’s more than 100 years since Henry Ford unilaterally doubled the wages of his workers, not because he was pious, but because he knew it would help them buy his cars.
This high-cost state of Hawaii has just about the lowest wages in the nation. Sure, some businesses in this state pay their workers well. But too often, institutions that represent business oppose tax credits, wage increases for low income earners, or consumer protection measures.
What if the Business Roundtable or the Chamber took the lead in saying we need to do better? That we need to pay workers a living wage, for starters?
We have business leaders with the capacity to demonstrate the kind of leadership Ford did.
Will they step forward?
Dawn Morais Webster, an independent issues advocate, also is an adjunct professor at the University of Hawaii-Manoa and serves on the Better Business Bureau-Hawaii board. The views expressed here are her own.
