There is the old adage that “the rich get richer and the poor get poorer”. Time has tested that axiom and found it to be true. Corporate profits have registered an almost 300-percentage gain in recent years. There is a need to reintroduce the often-omitted concepts of corporate responsibility and sustainability. When profits soar and resources are hoarded, monetary circulation is limited to a small segment of our economy. Continuing current economic trends, means that we are not sustaining a workforce possessing strong purchasing powers in the future.
We can applaud the goodness in reviewing our burgeoning retirement instruments, our 401K’s are signaling, for a few, a good life to come, a repayment for years of arduous labor. Our budgets create room for that $5 dollar lunch so we can eat Michelin for dinner. Yet we ignore the labor force that makes this possible. They are the marginalized low wage earners. We can go on and on retelling the millions of stories describing whom and why these people labor in poverty. The tales would be as numerous and diverse as the people who live them. The point is why is there a debate about raising the minimum wage? Will it drive up corporate overhead thereby diminishing profits? Will big business take the rose-colored blinders off and acknowledge that they are ignoring the loss of future gains and accountability to owners or stockholders? The opposing ideologues of Keynes and Friedman can find common ground here.
“There is one and only one social responsibility of business — to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.” -Milton Friedman, New York Times Magazine, September 1970
Minimum wage earners do not limit monetary circulation by way of investments or savings. Their meager purchasing power is relegated to goods and services needed for survival. It is no fluke in the design of urban economics that big cities own the larger share of the marginalized workforce. These capitals of commerce have the largest labor populace therefore the biggest demand on goods and services. In addition, they are the most expensive places to live. A worker in Decatur Georgia making $9 per hour is better off than making the same wage in New York.
The needful good sense in assuming accountability for the enrichment of a quality workforce expands the pocket books of shareholders for generations.
In terms of nominal wealth and as an important resource, human capital should compose 62% of a sovereign’s stated GDP. An educated workforce sustained with healthcare programs and accessible education systems adds to the overall GNP. Ignoring the brain drain is to ignore the need for corporate accountability in assuring that every worker achieves a place as a medium income earner.
Commerce must engage in activities that will achieve sustainability therefore fulfill its promises for future success.