It's a Matter of Value

There Is No Added, Measureable Value to the Corporation in Demonstrating Social Responsibility.

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Walt BoyesBy Walt Boyes, Editor in Chief

Times are tough. If we have a job, we worry about keeping it. If we have debt, we're worrying about paying it off. The recession is over, they tell us. Yeah, sure. The economy stinks. In Aurora, Ill., the second largest city in Illinois (yes, Chicago is waaay bigger), the IBEW (electricians) union local is nearing bankruptcy and takeover by the international tional union because none of its members are working. The union hall sits about six miles from a very large Caterpillar plant and a Dial soap plant. Apparently neither plant hires union electricians and automation technicians.

The problem with the economy, they say, is that consumer spending is down, so manufacturers are reluctant to hire because demand for goods and services is down. You may see where this is going. Consumer spending is down because all of us consumers are consumed with worry about the economy, our jobs, the negative value of our houses and whether we will have enough savings to retire on. So we're suddenly saving like squirrels.

For decades now, the jobs to which we devoted more than 110% effort have been going south or west—and offshore.  The average consumer's income is flat or down over the last decade, while manufacturers and sources of capital like banks are reporting record profits.

The government (all governments around the world) bailed out banks and large corporations in 2009, but did nothing to bail out the consumers. Terrified, consumers are fighting back the only way they know how. They're trying to become savers after two generations of profligate spending. The more savings you have, the less likely you are to be eating canned cat food when you retire. And remember, we Baby Boomers are retiring in droves right now, with our retirement planning in tatters and our investments in shreds. So consumers aren't consuming, and companies are retrenching into another recession which, of course, will make consumers consume even less.

According to a recent study by the Institute for Policy Studies (www.ips-dc.org/campaigns/tax-dodging-ceos/index.php), the top 25 U.S. companies paid more to their CEOs than they paid in both federal and state taxes.

There have been two grass roots movements in manufacturing and general business in the past decade or longer. The first is sustainability, which has gotten a great deal of traction. The other is corporate social responsibility, which has not.

It is obvious why sustainability has "legs."

Not only is it good public relations, but also it produces measurable value in the savings and productivity improvements.
It is also very easy to see why the corporate social responsibility movement has gained so little traction: There is no added, measureable value to the corporation in demonstrating social responsibility.

I think a lot of us way down here in the middle class see what's going on, and that's what is spurring a whole set of previously wildly spending consumers to transform nearly overnight into desperate people trying to save as much of their income as they can.

It seems to me that there's a vicious cycle here. Companies have completely different priorities and perceived values than their employees. They believe that they can simply move offshore to a new group of profligate consumers in China and India and Brazil, letting their U.S. workers fall by the wayside. That way, the CEOs won't have to give up their lifestyles for the sake of corporate social responsibility.

If you want to keep your job, your savings, your retirement and your health care benefits, it is certainly time to make your voice heard. We can transform the vicious cycle into a virtuous cycle by making corporate social responsibility as important as sustainability. It's a matter of value.

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