Profitability and Social Responsibility – an Incompatibility?

By JOHN YOUNG

The name is New Belgium, and if you’re a beer drinker, most likely you are familiar. It started 23 years ago in Jeff Lebesch’s basement in Fort Collins, Colo. Now, with Fat Tire its most popular label, it’s the nation’s eighth-largest brewery. It’s also one of the most socially responsible corporations in America. Observe the New Belgium representative at a recent Environmental Protection Agency hearing in Denver. She came to speak in favor of the Obama administration’s new carbon restrictions.

“Ack,” squawked various business interests in reaction to those standards, which couldn’t be more moderate and reasonable, unless maybe you mine coal.

“Can’t be done,” parroted forces of the status quo. “Polly want a profit.”

But as New Belgium demonstrates, as Starbucks demonstrates, as Costco demonstrates – well, let New Belgium director of strategy and sustainability Jenn Vervier say it: “Being honorable and making a profit go hand in hand.”

Beg your pardon, Miss Vervier, but in our sacred free-market system, profit is the definition of honor. Whether the issue is clean air and water, a livable wage, health coverage for all or anything to curb worker exploitation – OSHA, the Americans with Disabilities Act, and of course hiking the minimum wage — the mantra is voiced: “It’ll kill jobs. It’ll kill profits.”

Regarding livable wages: If the “job-killer” claim is the case, San Jose, Calif., is a burned-out wasteland. Ah, but it’s not. It’s one of the nation’s most prosperous cities. And last year it voted to raise its minimum wage to $15 over the next several years, the highest in the nation — this as compared to a federal minimum wage frozen at $7.25.

A University of California-Berkeley study of San Jose’s move has detected no serious hit on the jobs front. How did businesses adjust? Among restaurants, for instance, prices were hiked by a barely noticeable average of 1.75%. Businesses can do the right thing for their employees, whether in pay or benefits. “Can’t do it,” say so many mega corporations. “Market won’t bear it.” But, of course, mega corporations do it. Consider Starbucks. Not only does it provide generous benefits, but it began a program this year to provide scholarships to its employees through a program with Arizona State University. Costco routinely is listed along with Starbucks as one of the best places to work in the business of big-ness. You wonder how it does it – paying employees an average $21 an hour, 65% higher than Walmart. Its management long ago came to understand that investing in its employees means better morale, lower turnover and a better product. Costco’s home state of Washington is one of 10 states that recently have raised the minimum wage — in its case, to $9.32. Costco starts its employees at $11.50. Raising the minimum wage nationally would result in marginal job loss in the short term. It also would result in more buying power and the consequent economic activity in the long term. The Center for American Progress studied states that hiked the minimum wage and found that over 20 years there was “no clear evidence” of aggregate job loss, even in times of high unemployment. It is tragic that this nation is living in a Milton Friedman fantasy while so many Americans live the working-poor reality of laboring frantically just to put food on the table and electricity in the heater. And for what? To keep prices artificially low for people who can afford the difference.

The bottom line is irrefutable: When corporations act in the public interest, they act in the private interest.

Longtime Texas newspaperman John Young lives in Colorado. Email: jyoungcolumn@gmail.com.

From The Progressive Populist, September 15, 2014