In These Questionably Impactful Times
You might want to watch this TED Talk with Casey Gerald of nonprofit MBAs Across America, who argues the "gospel of doubt" raises the question, "why?" With all the power that we hold in our hands are people still suffering so bad?
It wasn't the glaring inequality that made me want to cry, it wasn't the thought of hungry, homeless kids, it wasn't rage toward the one percent or pity toward the 99. No, I was disturbed because I had finally realized that I was the dialysis for a country that needed a kidney transplant. I realized that my story stood in for all those who were expected to pick themselves up by their bootstraps, even if they didn't have any boots; that my organization stood in for all the structural, systemic help that never went to Harlem or Appalachia or the Lower 9th Ward; that my voice stood in for all those voices that seemed too unlearned, too unwashed, too unaccommodated.
And the shame of that, that shame washed over me like the shame of sitting in front of the television, watching Peter Jennings announce the new millennium again and again and again. I had been duped,hoodwinked, bamboozled. But this time, the false savior was me...
Because it simply is not true to say that we live in an age of disbelief -- no, we believe today just as much as any time that came before. Some of us may believe in the prophecy of Brené Brown or Tony Robbins.We may believe in the bible of The New Yorker or the Harvard Business Review. We may believe most deeply when we worship right here at the church of TED, but we desperately want to believe, we need to believe. We speak in the tongues of charismatic leaders that promise to solve all our problems. We see suffering as a necessary act of the capitalism that is our god, we take the text of technological progressto be infallible truth. And we hardly realize the human price we pay when we fail to question one brick,because we fear it might shake our whole foundation.
And in other news, Foreign Policy Magazine's Parag Khanna looks at the 25 global companies that have more power than most countries, check out just the top five "corporate nations":
Clever metanationals often have legal domicile in one country, corporate management in another, financial assets in a third, and administrative staff spread over several more. Some of the largest American-born firms — GE, IBM, Microsoft, to name a few — collectively are holding trillions of dollars tax-free offshore by having revenues from overseas markets paid to holding companies incorporated in Switzerland, Luxembourg, the Cayman Islands, or Singapore. In a nice illustration of the tension this trend creates with policymakers, some observers have dubbed the money “stateless income,” while U.S. President Barack Obama has called the companies hoarding it America’s “corporate deserters.”
So um maybe that news is not so good but FastCompany discusses what the future of business could look like, where it is all about not just being good, but doing good:
First, there was philanthropy: Companies made money doing bad things, but then gave some of their earnings to good causes. Second, there was corporate responsibility (or minimizing harm): Companies tried to do fewer bad things. And now companies are working (or should work) on actual solutions: products and services that serve social problems. "The ultimate impact businesses can have is through the business itself," he told Co.Exist last year. "There are huge unmet needs in the world today. The question now is how to get capitalism to operate at its best because capitalism is fundamentally the best way to meet needs. If you can meet needs at a profit, you can scale."
...Today, the goal of social value is still an add-on to what most companies do. They may improve lives as a by-product of making profits. But it's not the explicit goal of the enterprise. And, in many aspects, the relationship between profit-making and social goals is an awkward one in companies. Departments are unaligned. One division makes a climate-conscious product, another makes a climate-negative product. Companies account for their impact on forests and oceans, but still harm forests and oceans. They sell socially useful products, then hand the profits to socially negligent shareholders.
Meanwhile Greenbiz has an article assessing the three dominant frameworks for corporate environment, social and governance reporting standards:
We compared the three dominant EESG reporting frameworks: the Global Reporting Initiative (GRI), the International Integrated Reporting Council IR Framework, and the Sustainability Accounting Standards Board guidelines (SASB).
Each of these frameworks adopts a different definition of materiality, or the principle determining which issues are considered relevant in influencing decision-makers. The GRI G4 indicates that “the report should cover Aspects that 1. reflect the organization’s significant economic, environmental, and social impacts; or 2. substantively influence the assessments and decisions of stakeholders”. The SASB Implementation Guide does not define materiality, but instead refers to the definition set out by the US Supreme Court: “A substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the 'total mix' of information made available.” Finally, the IIRC states that “an integrated report should disclose information about matters that substantively affect the organization’s ability to create value over the short, medium and long term.”
Each emphasizes different elements of the broad ESG universe. While GRI G4 builds its materiality around a multi-stakeholder approach, SASB focuses on investor-centric material ESG information. <IR> materiality relies on value creation across six different 'capitals': financial, manufactured, social and relationship, intellectual, human and natural.
And why don't CEOs like activist investors? Walter Frick in the Harvard Business Review discusses the latest research finding that "activist investors often fire CEOs, change their compensation, and harm their reputations":
I’ve argued before that the backlash against activists represents a battle between two visions of capitalism, one led by managers, the other by shareholders. But Keusch’s paper paints activists as less opposed to the interests of management so much as opposed to the interests of bad management. Total CEO compensation is actually higher after an activist gets involved, and that’s driven by the compensation packages of the CEOs that the activists bring in to replace incumbents.
None of this should let activist hedge funds off the hook in terms of their broader impact on the economy. Yes, on average they tend to be good for profits, productivity, and innovation – even measured several years after the fact. But other research has found that these benefits don’t trickle down to workers’ wages.
And in Medium, Village Capital's Ross Baird and Lenny Mendonca have had enough of Silicon Valley's attitude toward inequality and tech innovation:
Silicon Valley frequently worries, for example, that if self-driving cars are commercialized, truck and taxi drivers will be out of work. As such, a universal basic income will ensure that they’ll be happy and society will be successful. It’s a seductive idea, but they are asking the wrong questions. The idea here is borne from an underlying assumption that capitalism has winners and losers, and the victors have a responsibility to take care of the rest. Instead, we’d posit that many of the “winners” in Silicon Valley are part of a faux meritocracy — being born into the right city or social network.
Silicon Valley seems to be worried that the rest of the world won’t find its way...We need to figure out how to make the system work for everyone in the face of technological changes. We need policymakers to incentivize regional and industry diversity in our innovation, and entrepreneurs to focus on the larger, thornier questions related to building businesses that share the wealth better among those who create them — not design a system to spread the crumbs a little better.
(*Two snaps and a circle* for Ross and Lenny.)
In this week's election update we have a pair of stories on both the Democratic and Republican challenges with the middle class. In the Atlantic, Anu Partanen looks at why Democratic contender Bernie Sanders is "pushing his vision of a Nordic-like socialist utopia for America" and wonders what people are so worried about:
From my Nordic-American perspective, I’m actually surprised by how many Americans discount Bernie Sanders’s policy proposals because at their root they’re no different from what the Nordic countries have already proven works. I understand why Sanders supporters believe in his vision, and I can assure them that they are not being the least bit naive.
The problem is the way Sanders has talked about it. The way he’s embraced the term socialist has reinforced the American misunderstanding that universal social policies always require sacrifice for the good of others, and that such policies are anathema to the entrepreneurial, individualistic American spirit. It’s actually the other way around. For people to support a Nordic-style approach is not an act of altruism but of self-promotion. It’s also the future.
Meanwhile GOP front-runner Donald Trump penned an op-ed in USA Today on why the U.S. middle class needs a better deal on trade and specifically taking on the Trans-Pacific Partnership:
An Economic Policy Institute (EPI) analysis found that Ohio has already lost more than 100,000 jobs to TPP countries. If the deal is enacted as Kasich has urged, those numbers will skyrocket.
TPP is the biggest betrayal in a long line of betrayals where politicians have sold out U.S. workers. America’s politicians — beholden to global corporate interests who profit from offshoring — have enabled jobs theft in every imaginable way. They have tolerated foreign trade cheating while enacting trade deals that encourage companies to shift production overseas...
If we bring back these jobs, and close this trade deficit, we will create millions of jobs, boost government revenue, shrink our deficit, rebuild our infrastructure and communities, and send wages soaring upwards.
ICMYI: In 2014, Heron posted a blog looking at reshoring jobs from China and the thinner prospects for workers thanks to automation.
Over at Brookings, a look at how high school dropout rates and inequality coincide:
In the Atlantic, Alana Semuels looks at the legacy of highways that gutted urban areas and increased poverty and what can be done now:
[M]any cities across America have parts that aren’t doing very well. But there are regions that are trying to become healthier by coming together, rather than pulling apart. Tearing down a highway can be one way to do this. But it’s not the only way. My colleague Derek Thompson has written about the miracle of Minneapolis, where high-income communities share tax revenues and real estate with lower-income communities to spread prosperity. A year ago, I visited Louisville, where a court ordered the county and city to combine their school districts in order to integrate their schools. Today, Louisville is still trying to keep its county and city schools integrated, even after the Supreme Court told the city it no longer had to do so. In Chicago, a regional housing authority that covers eight counties, including Cook County, is working to move families from the inner city to higher-opportunity neighborhoods. Some cities use inclusive zoning, in which all new construction must include a certain percentage of housing for low-income residents, which means that the wealthy can’t separate themselves from the poor.
These cities have tried to tear down barriers that prevent all of their residents from reaching their full opportunity.
Over at TalkPoverty, Dean Baker discusses why full employment is a tool for fighting poverty:
We got a chance to see this story in practice in the boom of the late 1990s, when the unemployment rate fell to its lowest levels in almost three decades, settling at a year-round average of four percent in 2000, the peak year of the boom. In this period, wages rose rapidly at all points along the income distribution, with workers at the bottom of the ladder actually achieving the largest gains...
But even if we accept that full employment is especially important for the most disadvantaged groups, there is still the question of how we get there. At present, the biggest obstacle to higher levels of employment is inadequate demand for goods and services in the economy. If there were more demand, we would see more people employed.
But Myles Uland over at Business Insider looks at recent analysis showing the labor market still has issues, check out this chart:
Bespoke adds that this chart "implies that labor markets are not yet fully normalized; employers aren't able or willing to raise wages and fill openings, or there is a large group of people who aren't able to find work period due to an unwillingness to take a lower wage, inadequate skills, or some other reason."
Also does full employment come with dead-end "crap jobs and wages"? CNNMoney's Heather Long looks at the job market trends look to voters now. "The economy is the No. 1 issue on voters' minds even though America is growing, unemployment is incredibly low (4.9%) and gas is cheap," she writes.
You might also be interested in this Nonprofit Quarterly article on employment in the nonprofit sector.