As corporations blow record sums repurchasing their stock to inflate CEO pay, Congress is advancing a tax aimed at curbing this harmful practice.
Google’s well-known motto, “Don’t be Evil,” might imply the company expects employees will use their moral compass. Then again, maybe not. The National Labor Relations Board (NLRB) recently reviewed a case regarding Google’s termination of several employees for applying their conscience at work. What the NLRB decides will have major implications for workplace rights.
But something more is at stake. The protesting employees, known as the “Thanksgiving Four,” were terminated the day before Thanksgiving in 2019. Their offense: objecting to Google’s bid on a contract with U.S. Customs and Border Patrol (CBP) at a time when CBP’s separation of migrant children from their parents was a national issue. They say they were terminated for their stance on human rights and corporate ethics, consistent with the company’s “Don’t be Evil” directive. The company argues its employees’ freedom of expression on civic matters is not protected at work. The NLRB case is a battle over employees’ First Amendment right to dissent with a company’s position on matters of national interest.
When employees are socialized to accept a chilling environment at work, what effect does this have on their role as citizens? A little-noticed debate in the European Parliament recently took on this important topic. Europe, like the United States, faces the threat of rising right-wing populism amidst rising inequality at home and pressures of immigration from abroad. For most citizens struggling with the economic shocks of the past year, bread and butter issues take precedence over longer-term threats such as the rollback of civil rights. It can be easier to scapegoat other communities than take on what seem like intractable forces driving further inequality. In the United States, right-wing politicians have goaded citizens who feel the loss of economic power to vigilantism rather than civic engagement, adding further stress to an already weakened social fabric.
What’s good for GM (or Google) is no longer good for America. If corporate decision-making continues to be limited to the narrow perspective and interests of firm leaders, national decision-making may follow suit.
Goaded by their conviction that firms are no longer capable of considering the best interests of the public, over 6,000 economists worldwide signed a manifesto last year arguing that to save democracy, we must democratize firms. In early September, the European Parliament took up a report over a bold set of proposals to achieve that aim. If these proposals advance, U.S. democracy activists should take note.
What’s good for GM (or Google) is no longer good for America. If corporate decision-making continues to be limited to the narrow perspective and interests of firm leaders, national decision-making may follow suit. Positions on important policy matters are increasingly guided by calculations of short-term gains for a small handful of executives and investors.
With rising capital concentration, corporate executives and the political leaders they support are increasingly distanced from the pocketbook issues of most citizens. Sociological research suggests that people in positions of great wealth and power, such as corporate CEOs, may be subject to empathy deficits, preventing them from perceiving or taking seriously the harm their actions may cause to others. This suggests that the executive class are the wrong people to entrust with an expanded vision of “corporate purpose.” As Isabelle Ferreras, a leader of the Democratizing Work movement has put it, “Capitalism can no longer be left in the hands of capitalists alone.”
Yet CEOs have an outsized say in American democracy, thanks to a Supreme Court ruling protecting corporate political spending, while their own employees are deterred from participating in these same important policy debates. Some European polities are on the same trajectory. This is why revision of a little-known EU directive may be so important. As Ferreras put it, “The European vision for democracy needs to be rooted in the economy, where people experience most of their life.” In a recent interview, she praised the EU committee report, explaining:
“This is not the moment to be ‘realistic’ or engage in business as usual and politics as usual. We know we are not going to get out of this crisis without really ambitious thinking. If we can deal with this crisis successfully it will be because workers invest in their jobs no matter what service they are performing. There is momentum to recognize that, to align the way our economic system is structured, to grant workers the right to weigh in on the governance of their own work life. It is so important, so obvious that this will lead to an economic system that meets their needs and expectations.”
Meanwhile, across the Atlantic, the Biden administration has made commitments not only to strengthen protections for workers at home, but to a foreign policy for the middle class. As the U.S. administration plans for an ambitious Summit for Democracy at the end of this year, engaging beleaguered allies in the EU and elsewhere, democratizing work ought to be on the table.
Unfortunately the administration may be hamstrung by its own base. The U.S. labor movement has been steadily losing ground in recent decades. And while other left-leaning groups are quick to call on workers to support progressive causes, they are slow to mobilize to support labor organizing. The result has been a weakening of organized labor to pre-World War II levels, even while more young Americans than ever say they would join a union at work. As a result, organized labor is not in a position to address the challenge of rising corporate capture of public policy.
Many within the labor movement are recognizing that old fashioned industrial union structures badly need a refresh. The Clean Slate Project has proposed several reforms fit for the 21st century economy, among them the idea of co-governance. These proposals have been given a boost from a new Aspen Institute report which attempts to reach a broad swath of the political spectrum. And it makes a compelling case for why what’s good for GM or Google’s employees may in fact be good for America.
For example, in January 2021, Twitter and Facebook employees were instrumental in convincing CEOs to de-platform President Trump due to incendiary speech in violation of the company’s terms. Employees are capable of providing important insights on critical issues. But they must risk losing their jobs if they bring those perspectives forward. The report also notes the case of 8,000 Amazon employees in 2019 who wrote to company shareholders to ask that company strategy be aligned with climate mitigation goals. The company issued a well-publicized climate pledge. But the organizers of the letter were fired.
And this brings us back to the case of the Google “Thanksgiving Four.” Google employees had pointed out contradictions between firm actions and U.S. human rights objectives prior to this case. In late 2018, thousands of Google employees protested against projects that enabled surveillance and repression, including the Dragonfly project enabling Chinese government censorship and surveillance. And prior to the actions that finally resulted in Facebook’s 2021 Trump ban, in 2019, hundreds of Facebook employees signed an open letter published in the New York Times urging the company to prohibit outright lies in political advertising.
America’s corporations may prove to be the deciding factor when it comes to peaceful elections and transitions of power in the future.
Employees arguably are better positioned than chief executives or boards to understand what stakeholders and communities might perceive as ethical or unethical. What if these employees had had more explicit power to force corporate executives to engage in a serious governance decision at that time? Would events challenging U.S. election certification have unfolded differently in January 2021?
It’s long been the case that employees serve as an important first defense against safety hazards that can affect the general public. This is why whistleblower protections have been so important over the years. But protection of public interest would not rely so heavily on whistleblowers if workers had regular channels by which they could engage in management decisions. As the Aspen report argues, this would enhance the long-term decision-making ability of firms. Workers have a self-interest in flagging risk, particularly the sort of moral hazards that may be perfectly obvious to average working people, but less so to executives in their filtered bubbles.
Workers may also prove less likely than shareholders or CEOs to negotiate against the long-term interests of the company, since they have a stake in long-term, stable employment. In contrast, thanks to decades of fixation on quarterly returns, leading executives or board members may only be able to take a short-term and self-interested view of firm interests. An obvious example, recently documented in the Wall Street Journal, are executives’ decisions to push for excess overtime during a worker shortage. This has cost firms more even in the short term, let alone medium term, due to strikes and turnover. Making decisions with employees would likely have helped these firms achieve their targets more efficiently.
In the much bigger picture, workers and their representative organizations have a far greater interest in a sustainable economic recovery to the current, pandemic-induced crisis. Corporate leaders, on the other hand, are opposing an economically necessary stimulus bill, one which would surely benefit all firms by restoring purchasing power and consumer confidence. They are even continuing to support politicians who oppose raising the debt ceiling, threatening a national default.
And Facebook has famously refused to share data that would elucidate its role in perpetuating the ongoing Covid-19 crisis by enabling anti-vaccine disinformation, to the detriment of its own employees and the greater citizenry. If employees were involved in corporate governance they would likely force firms to reckon with solipsistic executive decision making, which may be providing short term windfalls to a limited few today, but no long term growth. At a minimum, firms would be having a more honest debate on the pros and cons of their positions on important policy matters.
The European Parliament report is explicit in its understanding that democracy at work is essential to addressing overall inequities in society at large. It rightly notes that people learn how to exercise their voice in the institutions closest to their day-to-day lives and that the erosion of worker voice at the workplace level has given rise to a wave of resentment that is undermining the sense of a social contract throughout Europe. This in turn gives rise to sectarianism.
So what does the report propose? It calls for ambitious thresholds for a minimum EU standard of board-level representation for workers’ representatives. And it makes clear that the purpose of such representation is “for the establishment of strategies agreed with workers to positively influence environmental, social and economic development through governance practices and market presence, (and) to strengthen the role of directors in pursuing the long-term interests of their company.”
In the United States, the Clean Slate for Worker Power Project has put forward equally ambitious proposals. Yet as labor scholar Mark Anner of Penn State University points out, these proposals face a steeper hill than the EU. He notes that in the United States,
“There is a sense of acceptance that the workplace is not a place where you can speak up, it’s a top down system. You exercise your power by quitting and looking for something else. Surveys show that people would like to have a union, but they fear that if they ask for what they want, the unions won’t actually have the power to protect them. So bringing this to citizens’ rights, I think they are interactive. If people don’t see their rights protected at work, this diminishes their expectations about policies to protect their rights generally.”
Maria Stephan, an expert in democracy and social movements and co-author of Why Civil Resistance Works, agrees. “Issues and concerns about fair wages, about not being evicted, are core issues for the conservative base too and might transcend, but they face narratives that block us from being able to really talk about and bring democracy and economic justice issues together.”
American democracy is in crisis. As recent parallel editorials in both the Washington Post and New York Times highlighted, peaceful social movements such as Black Lives Matter, Women’s March, and March On for Voting Rights are being met in equal measure with active preparation for armed and violent insurrection. America’s corporations may prove to be the deciding factor when it comes to peaceful elections and transitions of power in the future. That is why independent news outlets such as ProPublica and Popular Info have made it their business to examine business and its role in supporting politicians that aid and abet current and future violence.
Subsequent to the November 2020 U.S. election, civic activists worked hard to bring corporate America on their side in the battle for democracy. Yet today companies that promised to suspend donations to politicians who refused on January 6, 2021 to certify the vote are quietly renewing donations that may support future insurrections, while taking out expensive ads to target vulnerable Democrats for their support for economic stimulus.
So as the Biden Administration prepares to convene allies to a global Summit for Democracy, how should we think about the role of corporations and labor? Groups like Sleeping Giants have sought to mobilize consumers-as-citizens to propel companies to reflect on the ethics of donating to politicians who actively promote hate speech and suppress voting rights. But as older consumer movements such as the 1960s California grape boycott should teach us, consumer actions are only effective when they directly engage with social and worker movements. Voices inside companies are important to reinforce actions outside companies, particularly on social and political issues where companies may have a limited direct stake but outsized influence with policymakers.
Today’s voting rights activists also need to consider the relationship between their efforts and Amazon warehouse workers pushing for a union vote, or Alabama mine workers on strike, or yes, even Googlers for climate action. To be sure, many civic groups are already supporting a set of labor reforms, the PRO Act, as part and parcel of a package of pro-democracy legislative reforms at a national level. In efforts to advance this package, it may be helpful to keep firmly in mind Ferreras’s explanation of the importance of checks and balances within firms as well as within governments.
Our best check and balance would be to strengthen the ethical function that workers can play within firms. A small and little noticed victory should give us hope. On September 28, the two leaders of Amazon Workers for Climate Justice had their hearing before the NLRB. The company agreed to a settlement that not only restores back pay for those fired, but posts a notice to both tech and warehouse workers worldwide that they cannot be fired for exercising their voice at work. In the meanwhile, Popular Info continues to point out the many companies that, like Amazon, made pledges to fight climate change while lobbying for public policies that do just the opposite. Companies may find it easier to make coherent policy choices if workers have a greater voice. Business will thrive and give people a reason to put away their pitchforks.