NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Wednesday, July 16, 2014

Is it naïve to expect corporations to assist in addressing the social, economic and environmental challenges of the day?

In 1929, several years before Social Security and the National Labor Relations Act cemented pensions and labor rights in law, workers at the Eastman Kodak Company already enjoyed profit-sharing, retirement bonuses and a pension plan. They had sickness benefits and accident insurance.

In 1914, Henry Ford decided to raise wages to $5 a day, doubling, in one stroke, most of his workers’ pay. “We were building for the future,” he later explained. “A low-wage business is always insecure.”

Almost half a century later, Coca-Cola’s chairman, William E. Robinson, argued that a corporate executive served not just stockholders, but also workers, customers and the community. “The neglect of the customers and his labor relations will seal his doom far faster than an avaricious quick-dollar stockholder or director,” he said.

Today, we live in a different world. Energy companies both recognize that climate change is a problem and actively lobby against efforts to combat it. The nation’s half a million fast-food cooks earn, on average,$9.07 an hour, which even on a full-time basis is not enough to keep a family of four out of poverty. Yet fast-food behemoths like McDonald’s and Wendy’s fight tooth and nail against efforts to raise wages.