The Parallel Parliament

by Glen Pearson

Tag: corporatism

It’s 2016: Ideas on Implementing Equal Pay

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SPEAKING AT A BUSINESS BREAKFAST LAST WEEK, I fielded a few inquiries in a Q & A session regarding my last week’s blog posts on the issue of equal pay for equal work. Nothing really surprising there; the corporate community increasingly explores evolving issues like social good, living wage, environmental upgrades, and wage parity between the genders. One medium-sized business manager asked how best would a business go about implementing an equal pay strategy.

Obviously I’m no expert (30-year firefighter), but some lessons gleaned from the equal pay movement have a clear and pressing sense to them.

The first thing to remember if you’re thinking of evolving a business into an equal pay employer is that there a clear business case for it. Three important studies came out in the U.S. recently – McKinsey and Company, Ernst & Young, and PriceWaterhouseCoopers – confirming that companies with greater board diversity consistently outperformed competitors who hadn’t made that progression. Initial research has determined that achieving gender parity in the U.S. would initially boost the economy by $4.3 billion annually. These three reports derive from companies that are hardly slackers and their findings deserve some weight.

Secondly, do some of your own internal research. An internal gender pay audit would reveal to more businesses than we can imagine that discrepancies exist between men and women tasked with the same work. Government audits in Canada, the U.S. and in the European Union, revealed cumulative gender biases that will eventually need to be dealt with. Understanding pay disparity is ultimately about learning and knowledge and the best way to move forward is take a deeper look within your own company.

Third, speak with other leaders within your organization about their sense and the possibilities of implementation. It’s likely you’re not alone in wondering as to the responsibilities regarding equal pay for equal work. Put the concept on the table. Assess the likely costs, the ultimate financial benefits, and the place of your company within the community when it comes to leadership.

Fourth, map out a possible map for implementation. It’s not urgent to accomplish something so significant overnight, but it is important to move forward in a timely fashion. The gender equality movement in Canada and elsewhere has taken on more importance in the public, private, and political consciousness – everyone is “in process” on issues of this magnitude and time should be taken to do it effectively.

This last point is crucial in the operation of any business. The corporate world is clearly changing and being challenged by social movements that are increasingly based upon inclusion and law. Governments are progressively responding to citizen pressure and eventually laws will be passed guaranteeing equal pay for equal work between the genders. It’s best to get out ahead of that, or as the CEO of one of the most successful brands in the world put it recently:

“It is not good enough to do what the law says. We need to be in the forefront of those social responsibility issues” … Anders Dahlvig of IKEA

It’s not just about law but democracy, and the need for a better integration between business and citizenship. It’s coming and market share will slowly erode from those companies that refuse to undertake what the rest of the world is pressing for. It’s about leadership, community responsibility, and progress, and, ultimately for many, it is about better business. Or as Peter Robinson, SEO of Mountain Equipment Co-op plainly put it: “Ethics is the new competitive environment.” It is 2016, and time to catch up to consumers and the change they seek.

Value for Money

B-W-Corporate-Sponsorship-GuysBusiness guru, Peter Drucker, continues to drive home the same message: “The purpose of business is to create and keep a customer.”  But how can that happen when citizens themselves continue to downgrade their expectations when it comes to business performance almost across the board?

How can larger corporations and businesses that have fallen so low in public estimation hope to regain citizen trust and community esteem again?  If they are truly serious about the matter, they merely have to look no farther than some of their peers across various industries.

But first they’ll have to stretch out their financial projections and performances if their efforts are to have any success.  Communities live year to year and have growth cycles that sometimes involve decades of investment.  Any company that remains merely interested in the next quarter reviews need not apply for community respect.  This is about the long game.

If companies are truly interested in their reputations and repairing the damage caused by decades of short-term thinking, then they are going to have to take the lead in bringing business and society back together – it’s not enough to just be dragged into community and economic renewal.  We’re not talking about the outdated strategy of “Corporate Social Responsibility” here, but an entirely new construct that puts community responsibility at the very core of the business model and not merely on the periphery.

Business reacts best when one of its own sets the example, and fortunately there are numerous business leaders and their companies developing a new model that, for wants of a better term, has been labeled, “shared value” (something we’ll explore in the next post).  Put in simple terms, it involves creating economic value by addressing the larger issues facing our respective communities.  It forms a new way of linking company success with social progress.  It’s not about charity; nor is it merely retooling businesses with the environment in mind (sustainability), but about creating economic success for all citizens.

Modern capitalism has clearly fumbled the ball when it comes to creating broader value, including the creation and maintaining of jobs, and the creation of community wealth and resources.  Such goals were always within its reach, but capitalism was too busy building quarterly success to notice the long-term damage it was creating.  As a result, trust and confidence even among customers is increasingly broken and an era of low expectations is upon us.

It’s becoming apparent that business and larger society are increasingly being pitted against one another, both in perception and reality.  Somehow we have bought into the idea that if companies were to invest in the broader goals of society that they then would have smaller profit margins.  And so many businesses remain hesitant to hire a larger share of physically or mentally challenged people, to invest in public infrastructure that they in fact would benefit from (roads, sewers, amenities), or to invest in the neighbourhoods in which they are situated because it is perceived that they wouldn’t make as much money.  We have arrived at a situation where businesses are excluded from broader societal responsibilities because it is perceived that their job is to create wealth and that’s it.  Business leaders themselves, trained over the last two decades, have come to believe that economic needs are all that define modern markets.  We are now realizing that financial markets must consider the broader social good if they are to establish and maintain a solid customer base and a loyalty that ensues over the years.

And so we have separated modern society into two groups – the growth and development of the economy (business and corporations) and the care of society’s social needs (governments, charities, and non-profits.)  This is an artificial division that also creates artificial solutions.

Shared value, as many business leaders now view it, isn’t about CEOs being engaged with community, or corporations donating to charity; it’s about expanding the total pool of economic and social value.  In other words, it’s places businesses closer to the centre of social good, with their main task being to expand economies in ways that are more inclusive than the present 99/1% model.  It’s all about companies looking at decisions and opportunities through the lens of shared community value and not just immediate gains.  An increasing number of corporate and societal leaders believe that such an approach will actually generate greater innovation and growth for business, and also greater benefits and resources for society. 

It is vital to note that much of this was common practice in previous eras, before deregulation, anti-labour jargon and practice, and an ever-descending cycle of corporate taxes had their devastating effect.  Yes, such changes meant that even more wealth could be generated, but the wealth was no longer distributed through broader society but to wealthy shareholders and corporate executives.  It has been an almost impossible task to organize citizens effectively enough to demand economic changes or to coax the corporate community to willingly come back to the table to create social good.

But a quick look at our communities now reveals that the great severance between business and social good is resulting in declining communities and the diminishing of hopes.  Time to change that, and some business leaders are urging that this be done sooner rather than later.

It was Einstein who once said, “Try not to become a person of success.  Rather become a person of value.”  The truly effective capitalism of the future can prove that the two aren’t mutually exclusive.

Dreamless Sleep

girl-reflected-in-windowSo it’s out.  No, not about the use of crack cocaine, or a new revelation on the Senate scandal.

Following months of preparation, food banks across Canada have produced their annual HungerCount report.  Some in the media say it’s good news, that with the economy turning a corner we can finally see a decline in poverty.  That’s quite a stretch, and fortunately most of the media reported it for what it was: another indication of the entrenchment of poverty in the Canadian context that refuses to go away regardless of the state of the economy.

The report concludes that food bank use has declined 7% in the last year.  However, much of that is regionally slanted, with many food banks facing continual increases.  Food bank use went up 25% in the past five years says the report, but in London, Ontario that number is just shy of 50%.  While some food banks might have welcomed a slight decline, London’s numbers increased 3% over the same period.

Food banks have lived through three recessions since their presence on the Canadian scene, and following each recovery usage never returned to pre-recession levels.  Their greatest challenge has been faced in the last few years.  While some economists remind us that we are on the road to recovery, food banks numbers remain stubbornly high and will remain so for the foreseeable future.

Increasingly, Canadians are asking why this is so.  Why is it, for instance, that when corporations say that because of competition they are required to slash wages and spending, they are also achieving profits that are at an all-time high?  When such companies say they can’t afford higher wages or the infrastructure costs to run more environmentally sustainable activities, how do they square that with their flushed coffers?  Such success clearly makes it possible to pay workers better and remain in the black, so what’s holding them back from benefitting their community in such a fashion?  These are fundamental common sense questions for which no one is getting an answer.

The HungerCount report provided one very troubling reality.  Of the almost one million people who frequented food banks, 36% were children.  Many continually claim that they sympathize with children in developing nations because the adults and leaders of those nations permit their youngest members to exist in such a state.  They are correct when stating that leaving children in poverty is a systemic problem characterized by a lack of will.  How do Canadians respond to a similar trend in their own country?  Regardless of our ideologies or preferences, none of us desires a future of poverty for our children.  Why then do we permit a situation where kids remain hungry?

Yes, there are numerous solutions being bandied about to provide programs and incentives for low-income families, but wouldn’t it make more sense to take on that one great task that might have the greatest effect: protect and enhance the middle class?  A number of well-intentioned initiatives designed to lift children out of hunger and poverty could never measure up to this one great endeavour poised before the Canadian people, their businesses, and their governments.

It has been said that poverty, once experienced, becomes a prison, a trap from which one can’t escape.  But surely that can’t be so because at one point in our journey as humans we were virtually all impoverished.  Over centuries, we developed mechanisms – legal, economic, ethical, and social – that began the great process of freeing the human race from oppressive poverty.  The largest part of that adventure remains unfinished.  Poverty, regardless of its oppressive circumstances, is mostly a state of mind that refuses to create the conditions necessary for the economic liberation of the greatest number of citizens or simply mindlessly acquiesces to the status quo.  We can’t keep blaming the politicians alone, regardless of what we are enduring at present.  A country’s dreams are established in its people, not just its leaders, and the fact that we continue to accept poverty in such high numbers is merely a sign that we have instead fallen into a dreamless sleep.

Continuum

awww-img-irw_awww_taxes_631px330“An economist,” Laurence Peter says, “is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today.”  He was the famous inventor of the Peter Principle – the belief that once a labourer rises to a position over his head, he will become incompetent.  Many of our modern day economists have been around a while, long enough for us to begin to question the present direction of modern capitalism, our financial markets, and the need for political systems to depend increasingly on economic growth for their validity.

For a long time the belief that each successive generation can be more prosperous than the last has driven much of the policy and financial apparatus in everything from interest rates to social programs.  It was never an exact science – perhaps best displayed whenever frequent recessions dashed our economic prospects with cold water for a time.  Yet we always seemed to bounce back and, over time, became more adroit at both predicting and preventing the worst of recessionary times.  It’s a continuum – perpetual growth – that has infused almost every major institution with the idea that economic expansion is a natural as breathing.

Well, these days we’re panting pretty hard.  For decades, even as global economies grew at dynamic rates, we were slowly coming to the understanding that the future of employment wasn’t a sure thing anymore.  Poverty, and the cost of maintaining it, was becoming a growing concern.  Even in the heyday of the environmental movement (it’s had a few), we were never able to land on firm policies or resolve how to reign in climate change because we were constantly being barraged with economic analyses claiming we couldn’t afford it.  The decline in middle-class purchasing power was largely masked by the flood of cheap products filling the global marketplace, but we are now coming to terms with the reality that consumption depends more on income than the prevalence of cheap items and with unemployment running at all-time highs, the middle class can’t spend like it used to.

Occasionally certain economists, like John Kenneth Galbraith, or more recently Paul Krugman or Robert Reich, have questioned policies structured on the belief of endless growth.  In the main, economists promote minimalist roles for governments.  That’s why we’re seeing the endless rounds of calls for austerity measures on both sides of the Atlantic, and occasionally across the Pacific.  The best way to stimulate economies, the traditional rationale goes, is to decrease public debt, relax regulations, and permit the free market to do what it does best.

Well, what is that exactly – its best effort, I mean?  The economic meltdown from this last recession still leaves a bitter taste in our mouths and the massive financial institutions still remain the easiest targets.  Ironically, trillions of public dollars were used to bail out financial institutions that showed little care for communities or the welfare of citizens.

But it goes deeper than that.  Small and medium-sized businesses are experiencing significant problems getting started or keeping going.  While parents still leave generous legacy gifts to their children, they have also left a public policy wasteland behind that provides decreasing investments in public holdings and institutions.  We have yet to see any credible environmental policies enacted by governments even as global warming attains a tighter grip around our collective throat.  Many companies that are actually leading the way in environmental reform nevertheless call for increasingly limited roles for governments in the climate change challenge. 

Businesses are permitted to acquire massive debts while at the same time calling on governments to tighten their purse strings.  Yet the irony of all this is slowly coming in from the periphery among citizens and their traditional trust in prolonged progress or even the advice of economists is becoming increasingly suspect.

And yet we go on.  In a world where billions of dollars are accumulated in mere hours we can no longer afford university, catastrophic drugs, higher employment, carbon taxes, even a home.  There is no longer a sense of confidence that the usual set of rules imposed on financial systems can generate similar outcomes to those of the past.  We have grown out of work, out of environmental sustainability, out of health, education, welfare, and precariously out of time.  We have grown and grown to the point that we no longer create the kind of jobs that can generously purchase commodities.  We have grown so much in the historic model that we have an abundance of supply that can no longer be purchased on the demand side because they can’t be afforded.  And in that one area where supply is increasingly limited – oil – we have no effective plans of what to do when supplies run out or when fossil fuel emissions alarmingly limit the possibilities for our children.

We have filled our world with growth concepts until we have run out of room to expand.  Economists ask us to hold tight, don’t borrow so much, pay off our debts, limit our public expenditures as a people, and collectively tighten our belts.  Yet they often fail to turn their sights on a corporate world that is draining the very resources we require as a people to tackle our greatest problems.

Worst of all, political parties across the board can’t break with that narrative, and this for one key reason: citizens vote against their own best aspirations.  The continuum drags on, with modern citizens the only ones who can bring about change but who refuse to bring economics back into the peoples’ hands lest it cost too much.

Labour Pains (8) – Concentration

Almost 50 years ago, economic guru Milton Friedman made an observation that was destined to have dramatic results: “Every act of government intervention limits the area of individual freedom directly and threatens the preservation of freedom indirectly.” Thus began the great campaign to begin the undermining of government’s reach and to offer capitalist forces a clear and open field for the redefining of democracy. One of the offshoots of that great transition, intended or not, was the redefining of what it really meant to be a citizen.

The age of privatization was upon us, as the belief expanded that private industry could extend our powers much farther than government itself. And for a time it appeared to work, as the ability for the average citizen to acquire more products than ever before grew exponentially. The citizen learned to double-clutch and shift gears quickly from the role of active citizen to passive consumer. The grand construct of the post-World War Two boom, and government’s vital role in its founding and expansive success, quickly gave way to a world where individual pursuits overtook the collective will of Canada.

These words are from a blog I wrote on citizenship last summer and they immediately sprang to mind as I thought of the Electro Motive situation in London and the crude lockout of its workers. Across North America there does seem to be a groundswell of support building against these rather dramatic attacks on working people. The corporate barons likely watch this with mild alarm, confident that their resources and political connections should carry the day.

The days when a person could get an education, find meaningful work, raise a family, afford a mortgage and build a community are quickly fading. From speaking with many, I am discovering that this passing of a way of life that has done Canada so well is not going to go quietly into the night. There is a general acknowledgement that the corporate and financial elite have used the economic crisis – created by their own making – to strip away from workers income and job protections and increase exploitation. While record profits are being accrued, along with significant financial reserves, corporate executives are using the yield to up personal bonuses. But we knew all this already, right?

The Caterpillar fiasco in London isn’t merely about one company’s decision to play hardball; it’s an opening salvo intended to put a final nail in an increasingly fragile way of life. When Milton Friedman (quoted above) talked about undermining government’s reach, he wasn’t just talking about gaining control of the political system to favour a corporate agenda, he was also talking putting in politicians who would actually resist any effort of government to at least take an energetic interest in the turbulent places like London. Corporations understand well enough that the only force that can curtail their future are governments willing to use legislative powers to reduce income disparity. To do all that they needed citizens and we obliged.

Because we live and function in a democracy we now find ourselves in the precarious situation where enough Canadians voted in a government at the federal level that openly supports the ongoing lowering of corporate taxes and the rights of corporations to do whatever they wish to do. That would work at a time when corporations invested long-term in communities and hammered out fair negotiations within a civic and economic context. Caterpillar is reminding us that those days are quickly passing, and for two reasons. The first is that it has the benign support of a federal government. The second is that citizens in Canada have let all this unfold, slowly building on their own watch, and aren’t likely inclined to kick up a fuss by either showing solidarity with the workers or by opting for new governments that would seek to address the present economic disparity – or both. In other words, they’re counting on you to keep the status quo.

This has been a plan a half-century in the making and after decades of trench warfare it has finally broken out into the open field. By co-opting governments and seducing citizens with things rather than long-term values of sustainable success, the corporate agenda has arrived at it glory days, and it’s not about to give it up. It asks only that we get used to it – part-time employment, few benefits, no security, the environment be damned, government as cheerleader. It changes employees like we change tires on a car and it has little concern for how they are disposed of.

Along with anger over what has transpired at Caterpillar, we also require a dose of humility. This all took place in a democracy, where the vote matters, and where citizens can look out for their future. But we grew so distracted by the baubles that corporatism provided us in the early years that we didn’t realize it was stealing our souls in the process.  It is we – citizens – who permitted this entire structure to be built on shifting sand. Goods replaced the good society. The opposite of distraction is focus, and it’s time we all centered our efforts in London to begin the decade-long process of turning back the tide. It will take concentration and a willingness to sacrifice for others – something our materialism has been slowly taking from us. We, too, must have a collective plan and be just as dedicated to its success – our success.

Tomorrow – What Can Be Done?

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