December 21, 2010

Should American Business Protect American Jobs?

This is certainly one of Robert Reich's most revealing posts of late. And it should be cause for national self-reflection. For whom does this nation exist? Right now, things are looking good for American corporations. Not so much for American workers. Here's mostly why:
"As the President recently told a group of CEOs, the choice “is not between Democrats and Republicans. It’s between America and our competitors around the world. We can win the competition.”

There’s only one problem. America’s big businesses are less and less American. They’re going abroad for sales and employees. That’s one reason they’ve showed record-breaking profits in 2010 while creating almost no American jobs.

Consider one of most popular Christmas products of all time – Apple’s iPhone. Researchers from the Asian Development Bank Institute have dissected an iPhone whose wholesale price is around $179.00 to determine where the money actually goes.

Some shows up in Apple’s profits, which are soaring.

About $61 of the $179 price goes to Japanese workers who make key iPhone components, $30 to German workers who supply other pieces, and $23 to South Korean workers who provide still others. Around $6 goes to the Chinese workers who assemble it. Most of the rest goes to workers elsewhere around the globe who make other bits.

Only about $11 of that iPhone goes to American workers, mostly researchers and designers."

December 16, 2010

Can Business Help Reverse Rising U.S. Inequality?

Robert Reich shows us more and more on how rapidly inequality continues to rise in the wake of this great recession:
"Why are America’s two economies going in opposite directions?
Two reasons:

First, big profits are coming from overseas sales of goods and services made abroad, not here. The world’s fastest-growing markets are China and India, whose inhabitants are eager to buy “American” products, and just as eager to work for the American companies that sell them. The U.S. market is barely moving.

Increasingly, American corporations are able to extract healthy gains from their global operations without adding much in the United States except executive talent.

Second, American businesses are boosting productivity by having U.S. employees do more work for less pay. According to the Bureau of Labor Statistics, between the third quarter of 2009 and the third quarter of 2010, productivity rose 2.5 percent, output increased 4.1 percent, the number of hours worked was up 1.6 percent, and unit labor costs dropped by 1.9 percent.

In other words, American workers are losing even more bargaining power as a sizeable chunk of corporate profit goes into software and digital equipment that can do what people used to do – but more cheaply."
His view of course, if you know much about him, is that the solution to this, if there is one, is entirely regulatory. We could for example have a more progressive tax system, spend more on education, discourage offshoring, and create a non-offshorable green energy industry.

But is there anything the private sector can (and should) do about this on its own? I should think so.

December 10, 2010

Setting an Ethical Gift Policy

Just in time for the holidays, comes a new piece from Inc. Magazine on the essentials of setting an ethical employee gift policy to minimize potential conflicts of interest. Lots of good advice for entrepreneurs, some of which even comes from me:
"....companies can find themselves struggling to identify what is appropriate for employees to be unwrapping in the offices around the holidays. Creating and maintaining a clear gift policy is an easy way to be confront the situation.

"If you don’t have one, then you open yourself up to a credibility, liability problem," says Julian Friedland, a business ethics professor and writer who edited the 2009 book Doing Well And Good: The Human Face of the New Capitalism.

"Whatever product you happen to be selling, whether it’s a service or actual object of any kind, can be compromised by the appearance of some conflict of interest."....

December 9, 2010

Lawrence Lessig on Citizens United v. FEC

An excellent video presentation by Harvard law professor Lawrence lessig, on the negative implications of this year's Citizens United US Supreme Court Ruling. Lessig is also Director of the Edmond J. Safra Foundation Center for Ethics.