A landmark ruling last week found the Chiquita Banana company responsible for using corporate funds to support a right-wing paramilitary group in Colombia which killed and displaced thousands of civilians. This verdict in a Florida court is a breakthrough in corporate responsibility: the first time a US corporation has ever been found legally responsible for human rights violations abroad and forced to pay compensation to victims. And this isn’t some long-ago error of the past: Chiquita was held responsible for financially supporting the paramilitary group up through 2004, and for allowing them to use corporate resources to smuggle guns and drugs.

But if the point of a case like this is deterrence, the damages awarded come up a bit short: while the jury found that Chiquita “had knowingly engaged in a ‘hazardous activity’ that substantially increased the risk of harm to the plaintiff’s murdered family members,” the penalty is a $38 million fine levied against a company that took in more than $3 billion of revenue last year. While advocates argued that the verdict shows that “profiting from human rights abuses will not go unpunished,” isn’t it also true that such a relatively small penalty effectively transforms these abuses from an international crime into a (small) cost of doing business? Is this corporate accountability, or is it just a convenience of corporate accounting? Because why on earth should a company still be allowed to do business as usual after being found to have violated human rights on this scale? 

Make it make sense.

People all around the world have been expressing sharply negative vibes about the economy, and with good reason: four decades of trickle-down neoliberalism have hollowed out opportunities and exacerbated inequality. But when you put the data into an international comparison, a sharp if somewhat surprising pattern emerges: since the pandemic, American workers have done far better than workers in similar countries.  

The chart below tells the tale: when you adjust changes in worker wages to account for the cost of living, you see that when compared to workers in peer countries, only American workers have seen significant income gains since 2019. In fact, workers in most developed countries have seen a decline in their standard of living. Of course, one number — even one as important as wages — doesn’t reveal everything about the economy. Things like security, quality of life, healthcare, and childcare certainly matter too. But nonetheless, it’s always nice when we can pull out the giant foam finger and holler “We’re Number One!” again. 

As every front-line worker and manager knows, staff turnover is expensive, disruptive, and inefficient. And while that seems fairly obvious, it’s fairly rare for top executives to really take these costs seriously —which is why it’s fascinating to read this Bloomberg account of how Ikea has recently transformed its approach to retention.

In short: the company was losing about one-third of its staff each year — 62,000 workers worldwide — and calculated that each employee the company had to replace cost the company about $5,000. Putting a price on the matter triggered all kinds of other strategies to lower the cost, including, most notably, paying people more money and providing more flexibility so they’d be more likely to stay in their jobs for longer. Part of the motivation for all this clearly traces to worker protests and union organizing efforts, but it also reflects some good old-fashioned business sense. Specifically: a simple recognition that employees can be a resource, not just an expense — and that investing in them can actually be a more profitable strategy than cutting costs at every turn. And it may even be cheaper in the long run.

Civic Action
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