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Money Talks: Getting a Seat at the Bargaining Table

June 26, 2012 By Lee Egerstrom, Economic Development Fellow

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Individually Minnesota’s workers, Main Street merchants, and other community stakeholders can’t change the Wall Street, quick-profit culture dominating global enterprise. However, working together and forcing companies to better align stakeholder and shareholder interests these groups can accrue a more equitable share of America’s wealth.

Minnesota 2020's report, Money Talks: Getting a Seat at the Bargaining Table, looks at how deregulation, globalization, automation and anti-worker policies have undermined employee bargaining power, driving down wages and eroding workplace rights. This has had a devastating impact on Minnesota’s middle class, with the state’s median household income falling by $5,000 over the last decade to $55,459, when adjusting for inflation.

 

 

The report explores the conflicting goals that ultimately help quick profit seekers keep stakeholders divided. For example, local merchants want quality roads and infrastructure. Yet, some tend to join with big businesses in advocating for lower taxes. Globalization might enhance a corporation’s sales force, designers and engineers’ job security while their colleagues on the factory floor would lose jobs to outsourcing.

Compounding competitive business pressure on stakeholders is a two-pronged legislative assault on workers’ rights and basic civil rights fueled by the business lobby, ALEC, and Citizens United. Conservative policy advocates want to keep progressives busy with social distractions, such as Minnesota’s Voter ID and Marriage amendment. Doing so shifts progressives’ focus from strengthening workers rights, advocating for affordable health care, enhancing public transit, and investing in education.

Fortunately, and perhaps quite ironically, Minnesota’s major companies have provided the framework to help stakeholder groups take back their workplace and piece of the American dream.

Minnesota companies along with counterparts in Canada, Germany and Japan have traditionally worked to align the interests of stakeholders and shareholders. Some nations have written stakeholder protections into law. Others, like Japan, have incorporated them into widely accepted business practices. However, in today’s business climate, most U.S. corporations won’t adopt such stakeholder benefits unless compelled by law or overwhelming public pressure.

Minnesota 2020 proposes the following actions as a starting point to better align stakeholder and shareholder interests:

  • Since consumer demand drives 70 percent of U.S. Gross Domestic Product, Minnesota must raise its minimum wage rate and explore “living wage” compensation to stimulate the economy and lift more Minnesota families out of poverty. For example the 1968 “Great Society” federal minimum wage was $1.60 per hour, which translates to $10.80 per hour in 2012 dollars. The current federal minimum wage is only $7.25 per hour.
  • State policy makers should explore ways to support and encourage childcare providers, adult care providers, and health care programs to help people get back into the workforce and lift families out of poverty. This would help Minnesotans provide for basic human needs and at the same time stimulate the economy for all retailers and service providers.
  • Shareholders/owners of businesses should identify their primary stakeholders and jointly assess self-interests for corporate social responsibility (CSR) actions. Similarly, stakeholders should assess where corporate behavior may be negating any benefits of existing CSR actions, such as campaign spending that leads to weakening the jobs market, adds to poverty and reduces household purchasing power.

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