It is looking really like the old: companies, especially public traded companies, are using workers to balance their books and offset their struggles. Over the last few years, we have read of new lexicons like Stakeholder Capitalism (not the typical Shareholder Capitalism), which came into the business world with a huge flash. Stakeholder capitalism posits that companies must make decisions to balance their fiduciary responsibilities with workers’ welfare, environmental protection, community sustenance, etc. Simply, “Stakeholder capitalism is a system in which corporations are oriented to serve the interests of all their stakeholders. Among the key stakeholders are customers, suppliers, employees, shareholders and local communities”. But it seems that it is all talk.
As the coronavirus pandemic squeezes global industry, companies are increasingly debating whether they pay shareholder dividends or staff salaries. Often, The Washington Post writes, workers are “the first to lose, even as shareholders continue to collect.” With profit margins shrinking, those at the helm must decide who sacrifices the most. Layoffs, executives argue, support a company’s “long-term health.” But critics say that sending millions of dollars to shareholders while axing staff belies the mantra from executives regarding “their concern for employees’ welfare during the coronavirus crisis.”
How do you fire hundreds of workers, and yet in the same earnings call promise to pay dividends?: “Similarly, Levi Strauss announced April 7 that the company would stop paying store workers, and about 4,000 are now on furlough. On the same day, the company announced that it was returning $32 million to shareholders.”
Yet, the same firm was a vanguard of this new movement. My point is simple: do not pretend, just be real, and do not sign papers you do not believe in. But making your workers feel like they are special, only to kick them out when small heat comes, may not help your long-term mission and reputation. Follow the barons and be frank: no one is special here, it is old century capitalism, and if you expect any special treatment, just go, because in this company, there is no work-life balance, and what matters is how shareholders feel! That way, they would not be expecting vapor promises.