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October 2019

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A Fair Economy Needs Unions

The Business Roundtable, which represents some of America's top corporations, issued a significant policy change in August that gives a lot of insight into the thinking of corporate America these days.

It reversed decades of established practice, declaring that a corporation shouldn't exist just to make money for its shareholders but to create value for all its stakeholders — customers, employees, communities and shareholders alike.

Now, this might sound like parsing words, but it represents a big shift in corporate America's approach.

For decades the official line of corporate America was that a business exists for one purpose and one purpose only: to make money for stockholders and Wall Street.

The problem with this approach, as Washington Post business columnist Steven Pearlstein puts it, is that "maximizing shareholder value has meant doing whatever is necessary to boost the share price … over the years it has been used to justify bamboozling customers, squeezing workers and suppliers, avoiding taxes, and lavishing stock options on executives."

This vision has led to an economy where the bull market, while lining the pockets of the 1%, has bypassed too many working families, and where Wall Street looks on any company that's loyal to its workforce and pays them a living wage as heretical.

So, the Business Roundtable's statement is a welcome change. But if corporate America is truly serious about changing its ways, more is needed than good intentions.

First and foremost, workers need a voice in today's capitalism.

Many economists view the 1950s through the beginning of the 1970s as the golden age of capitalism, where the American people at all income levels shared in the increasing prosperity and wealth that marked this period. There was a reason for that: strong labor unions.

It was organized labor that fought for and won good wages, decent benefits, and quality training that made sure that wages grew in tandem with productivity growth.

In the 1980s that link was broken as widespread union-busting and outsourcing devastated labor's power and drove down wages and benefits. The Business Roundtable could put its money where its mouth is if it discarded the dogma that unions are bad for business and respected employees' right to join a union.

Every day, the IBEW is proving in practice that labor and management can work together to support both successful companies and good, living-wage jobs. That's what our Code of Excellence is about, and it's why some of America's top energy CEOs are proud of the relationship they have with us.

Building an inclusive capitalism means giving workers a voice and a place at the table. That's what the labor movement is all about, and the IBEW is ready and willing to work with corporate America to build an economy that works for everybody.


Also: Stephenson: Power in Numbers Read Stephenson's Column

Kenneth W. Cooper

Kenneth W. Cooper
International Secretary-Treasurer