We Need a Balanced Bottom Line Now
This post was written by Richard Schoenbohm, who asked me to post it.Younger people remind me that the world has changed, and that in the new world, only business profits count. We compete in a world market. Banks, pharmacies and department stores are not locally owned. Labor unions are a shadow of their old selves. The new mantra is less regulation and lower business taxes.1 Corporate profit is said to be the panacea for all. I disagree. Profit must be balanced with the needs of the community and employees. It is the only just and sustainable approach to capitalism. It is the approach that will keep our country strong and working for all of us.
One of the worst effects of considering
only profits is the elimination of millions of full-time jobs while replacing
them with part-time jobs that cannot support a family. For example, the New
York Times reported in 2006 that Wal-Mart – which has 29,514 employees in
Wisconsin - planned to transform its
work force from 20 percent part-time to 40 percent part-time. Walmart is riding a trend. Burt Flickinger III, managing director
of a retail consulting firm reports: “Over the past two decades, many major
retailers went from a quotient of 70 to 80 percent full-time to at least 70
percent part-time across the industry.”2 In the same source, the
Bureau of Labor Statistics says that the retail and wholesale sector, with a
total of 18.6 million jobs, has cut a million full-time jobs since 2006, while
adding more than 500,000 part-time jobs.
This trend, so destructive to working families and our
nation, is driven by obsession with corporate bottom line - regardless of
employee and community needs. Many of
those working part-time desperately want the family-sustaining wages that only come
with a full-time job. In the retailing
and hospitality industries, the number of part-time workers who would prefer to
work full-time has jumped to 3.1 million, two-and-a-half times the 2006 level,2
but there is no place for employee aspirations when profit is the only bottom
line.
They matter to families.
According to the Bureau of Labor
Statistics, part-time workers in service jobs receive average compensation of $10.92
per hour compared to $17.18 per hour for full-time employees.2 Factor
in the fewer hours that the part-time workers get, and difference is huge. A part-time employee working a 25 hours a week
will only gross $273 compared to $687 for a full-time employee.
The effect ripples through the entire community. The reduced purchasing power of part-time
employees starves the business of the hair dresser, the home remodeler, the restaurant
owner, and the car salesman. The
part-time worker, to keep their family’s head above water, turns to government
services, such a food stamps and Badger Care.
As far back as October 2005, Wisconsin Citizen Action estimated that
large corporations, led by Wal-Mart, were costing the state $46 million a year
because participation by their employees in public medical assistance programs. Tax payers, in effect, pay to keep
corporations’ low-paid workers healthy.
The corporate
bottom line keeps the poor poor and transfers the wealth of the middle class to
the very few at the top. The Center on Wisconsin Strategy reports that between
1996 and 2010, the bottom 40% of Wisconsin earners experienced an average
decrease of $2,407 in their adjusted annual gross income.4 The top
20% saw an increase of $17,286 per year, and the top 1% saw a huge annual increase
of $168,773.
The
economy will not be sustainable if the middle class lose their buying power and
are drained by taxes to subsidize corporations’ part-time workers.5 I
support a triple bottom line accounting that takes into account employees and community
in addition to financial performance.
That ain’t old fashion. That’s
progressive.
3. http://www.goodjobsfirst.org/corporate-subsidy-watch/hidden-taxpayer-costs
5. http://www.nytimes.com/2012/09/13/us/us-incomes-dropped-last-year-census-bureau-says.html?_r=0
The idea of "triple bottom line accounting" sounds interesting. Please post something or write a comment that explains it in more detail.
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