Why Don't Corporations Care More About Their Image on Economic Fairness?

This week, Apple loudly touted its fealty to environmentalism, rolling out an updated website on what it's doing to be a greener company and playing up its progress in reducing its carbon footprint and removing toxins from its products. This blitz included expensive full-page newspaper ads in places like the Wall Street Journal. 

 

Apple, of course, is just one of many companies that has put a lot of effort into improving its environmental record. Most famously, Walmart has been talking this talk since 2005. I'll leave it to others to judge how well these companies are actually walking the walk, and instead turn to a more intriguing question: Why do corporations care so much about their image on environmental matters, and care so little about how they're viewed on economic fairness issues?

 

There are a few possible answers, but first let me state the obvious caveat: Many corporations have indeed fretted a lot over the past 15 years when it comes to their use of sweatshop labor. Everybody remembers how badly Nike was burned on this front, along with Kathie Lee Gifford, and so there's been huge attention by corporations to sanitizing their supply chains and making sure that 12-year old girls don't pop up on the Internet saying they've been working in slave-like conditions somewhere. We've just seen another round of this after that horrific building collapse in Bangladesh. 

 

Again, I'll leave it to somebody else to judge how genuine these efforts have been. What's fascinating to me is that many of these same companies seem to not care a whit about how their treatment of U.S. workers is viewed. Or how the public views the outsized compensation of their executives. Do you see Walmart or McDonald's or Yum! Brands buying full-page ads to tout their good economic citizenship? No, me neither. But given that, among other things, a new Demos report just found that fast food CEOs makes 1,000 more than their average workers, you'd think a) these companies would have an image problem: and b) they'd be scrambling to deal with it, whether substantively or cosmetically. 

 

So here are a few theories on why environmentalism ranks so much higher on the priority list than economic justice:

 

First, and most obviously, it may be that consumers simply care less about equity issues, so companies face fewer risks to their brand from bad behavior in this area. I think there's a lot to that. Yes, raising the minimum wages is hugely popular with the public, but that doesn't mean people frown on employers who pay the current minimum wage. We've yet to see that kind of shift to judgment, although there are signs it's starting. 

 

Second, it's cheaper for a company to improve its environmental record than to raise wages, and companies can follow through on their green rhetoric without taking a hit to their bottom line. In fact, they can actually improve their bottom line by becoming more energy efficient and reducing waste, as Zachary Karabell and Aron Cramer argued in their book Sustainable Excellence. Taking sustainability issues seriously is a way for companies to stay ahead of the curve and reduce their risk, especially when it comes to energy supplies. What CEO really wants their profit margins tied to peace and stability in the Persian Gulf? 

 

Equity advocates haven't gotten the hang of appealing to corporate America's bottom line, although they're starting to -- by arguing that raising wages for low-skilled workers is cost effective because it reduces turnover and increases loyalty and effort (think Trader Joe's). But that argument is still relatively new and environmentalists are far more advanced on this front. 

 

Third, ecological values in general have more traction among educated elites -- including those running corporations -- than economic equity values. There are various reasons for this, but certainly one is that modern liberalism over recent decades has mainly pushed a postmaterialist agenda related to the environment and identity, and that agenda has permeated the culture over time. It's only more recently that economic justice has moved back to the forefront of liberalism, and time will tell how much equity values get traction in the psyche of your average college grad. 

 

Fourth, the environmental threats looming on the ever-closer horizon are just a lot more scary than the foreseeable downsides of income inequality. We're not just talking rising sea levels and extreme weather, but a multiplicity of health threats from toxins. No educated person who believes in science can ignore this stuff, even those with a vested interest in doing so. Eventually, too, some of these threats will undermine the business model of many companies, which is why -- as the Times recently reported -- the debate on climate change is pretty much over in corporate America. 

 

The economic justice movement has struggled to find an equally grave existential threat, and it's only recently we've seen the powerful argument emerge that inequality slows economic growth by depressing consumer demand. If that argument gets more traction, it will help move the needle. 

 

Fifth, economic justice activists have been less loud and forceful than environmental activists in pressuring corporate America. Where's the Greenpeace of the equity movement? But again, this is starting to change, and in a big way, as labor revives and takes on low-wage employers with big national actions. 

 

So ultimately this may be a waiting game. The fight for greater equity is still just gearing up after many decades of being on the back burner of progressive politics. As that happens, corporations will have to change. And maybe even one day they'll be buying full-page ads to tout how well they're paying their workers.