The post Corporate Duty vs COVID-19 appeared first on Unism.
]]>And is a problem in a pandemic – every corporation does everything they can to stay operating and generating revenue – regardless of what is best for society.
A key factor is debt. Without debt, you can mothball a business, not pay for staff, turn off the lights. During the pandemic that could be the least worse option, compared to trading, if you have full operating costs and reduced revenue. For example, a fairground with social distancing.
But debt is rarely something you can pause. For many businesses during this pandemic, it is not a case of profits versus public welfare, but whether they do not go bankrupt from debt.
Everybody now knows that cruise ships are a risky place to be in a pandemic, and yet for whatever reasons, there are still customers. So what should a cruise company do? If they have debt interest to pay, if they are legally allowed to operate, and they hav willing customers?
This week, deep into the pandemic, two cruise ships in Norway have had virus breakouts.
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]]>They were quite advanced for their time, and perhaps the evolutionary step that led to us humans today.
Having suffered and seen suffering enough, it was common sense for them to keep some survival supplies on hand – basically food and water. Enough for a year or three.
A pandemic came along, they noticed the deaths and figured staying away from sick people would be a good thing. So they did, they hid in their cave until it went away. Life was a bit boring – they missed the thrill of killing beasts, and missed fresh meat – but being alive was all that mattered.
Fast-forward until today and everything is the same except for two things:
This is the problem with our current version of capitalism. We place importance on greed and winning.
One way of looking at the world is What I Need +. That is, if I have all the food, water, shelter, clothing and security I need, everything else is a wonderful bonus.
What we have during this crisis is a different viewpoint. We will all have all the food, shelter and so on that we need. Yet we are worried about who has more of the bonuses that we don’t actually need. To the point that some people will fight and steal.
We will get depressed (real depression, affecting our health) about our superannuation diminishing, even though it will bounce back to normal in a few years.
Losing our jobs can destroy us for a while, in a capitalist way. Here in Australia, we will still have food, shelter and so on for those without work. Those people just won’t be able to reach their goal of 2 investment properties as quickly as they had planned, during this crisis.
People have literally taken cruise holidays, despite the massively obvious risk, because it is their dream and they spent money on it. Some people like that will die because of capitalism.
A pandemic is a serious, heart-breaking, damaging and potentially species-ending event. But we are suffering worse because of the shape of economics we are using.
We need to start looking at life as bonuses beyond what we need, and model the economy around that mindset.
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]]>We are in the virus crisis, and Boeing & the airlines are asking for handouts. Airlines are necessary infrastructure, but Boeing is simply a large employer, like say car manufacturers.
What is interesting is these are businesses that have made a lot of money in the last decade, but instead of putting it in the bank, they have been buying back their own shares. Less shares in the market causes the share price to rise, making investors and executives richer.
They are literally lining their own pockets instead of saving money in an industry that can be highly volatile.
Boeing has spent $100 billion buying back its own shares since 2013.
For example, Boeing’s report to shareholders in 2017 said:
So, they saved just $700M of the $10.5B they made in cash that year, purely to enrich investors and execs (through bonuses). They then cut corners with safety on their MAX aircraft, causing their profits and share price to collapse. And now they are crying “poor us, we need help”.
This is a major problem with capitalism – too big to fail. Large corporations get handouts in times of need (and typically don’t pay them back), while siphoning away profits when times are good. Small businesses cannot do this, putting them at a distinct disadvantage.
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]]>It is getting harder to find new efficiencies in business, except at the expense of wages and employment. More jobs are lost to automation and more workers are underemployed.
These efficiencies, during the coronavirus crisis, will highlight how being overly efficient is a negative when things go wrong. Just-in-time manufacturing and just-in-time stocking backfires when we have panic-buying and hoarding. It creates social unrest and gross unfairness for those who are poor, disabled, elderly or all three.
Businesses becoming highly leveraged in low interest rate times doesn’t work out well if revenue suddenly declines.
Household spending is flat, despite record low interest rates. Wage growth is very low. The only thing growing is corporate profits, and obviously this imbalance cannot continue.
These are problems for capitalism, during a crisis, across many countries. They are significantly worse for a country like the USA, which has the least social form of capitalism, and by proxy an in-built culture of not caring for the poor and disadvantaged.
This creates a potential disaster that America is not prepared for, because their form of capitalism is lacking in compassion. And we know this from physical disasters like Hurricane Katrina and Puerto Rico’s Hurricane Maria in 2017.
It will be hard for Donald Trump to be re-elected in a recession, where his command was considered responsible for excessive deaths from COVID-19. It will be hard to fight the Democrats calling for universal healthcare directly after the worst health crisis in a century.
I only hope that the Green New Deal can happen with Biden at the helm. It can happen with Warren as his running mate. Or AOC.
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]]>Most advanced countries provide 4 weeks of annual leave for full-time employees. Some, like France with 6 weeks, offer more. The US is at the very bottom, with just 2 weeks (and that is not federally mandated). And, from my experience as an employer in the US, employees can be reluctant to even take the whole 2 weeks.
Now I learn, thanks to the coronavirus, that paid sick leave is not federally mandated either. While 70% or so of US workers do have paid sick leave, it is decided at the state or employer level. And lots of workers, typically the lowest paid, will not be paid when they are sick.
This is exploitative, (and not good for society), and gives the US a distinct advantage. Future trade negotiations could/should require the US to catch up with the rest of the civilised world, and give their workers a break.
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