The Roosevelt Rundown is an email series featuring the Roosevelt
Institute’s top 5 stories of the week.
1. The End of
Shareholder Dominance
After 50 years, shareholder-first
dogma is finally waning. This week, in their “Statement
on the Purpose of a Corporation,” America’s leading CEOs declared that
corporations must serve not just shareholders but all
stakeholders—including workers and customers. As Senior Economist and
Policy Counsel Lenore Palladino writes in a new Boston
Review essay,
these cracks in the foundation of shareholder primacy may signal the
beginning of an economic and political transformation: “Any such
massive change must be driven by public policy. But remember that
corporations are creatures of public permission. This
means that we—the public—can choose the rules that govern how
corporations interact with their stakeholders.”
2. Industrial Policy Can
Increase Equality
The left and right rarely agree on
which stakeholders matter. In response to conservative
writer Julius
Krein’s take that industrial policy has “united
the left and right,” Roosevelt Vice President of Policy and Strategy
Nell Abernathy argues
that progressives should proceed with caution. Noting that
today’s economy is, in some ways, a product of conservative industrial
policy, Abernathy makes the case that progressive
industrial policy can target economic
inequality—especially across race and gender. “The tools we
promote are an essential component of building an innovative and
sustainable multi-racial democracy,” she writes.
3. Pay Inequality Is Built into the
System
As demonstrated by Black
Women’s Equal Pay Day, today’s shareholder-first
economy hurts some more than others. Black women earn 61 cents on the
dollar compared to white men, which means it takes them 20 months to
earn what white men earn in a year. For Time,
Roosevelt Fellow Andrea Flynn traces the history of this
gulf—from the
racist roots of tipping to exclusionary New Deal
carve-outs to the 1970s backlash against civil rights
legislation. “This day—like the staggered equal pay days to
follow—begs us to understand how such inequities came to be, and why
they have been so difficult to move
beyond.”
4. The Pay Gap Reinforces the Racial
Wealth Gap
Pay inequality contributes to a
widening racial
wealth gap, as
explored this week in O. In the article, Roosevelt Fellow Anne
Price explains that Black women are more likely to be
financial caretakers of family members. “This strips away about 27 percent of a
Black family’s wealth,” she says. “The choice is, ‘What do I do: Pay
off my student loan? Start to save for retirement? Put away money for
my child’s education? I can’t do all three and take care of parents or
siblings.’”
5. How Unions Can
Help
Labor law can help remedy
these racial and gender inequities—though not
for everyone. As
noted in an On
Labor piece,
“Under current law, workers in the fastest growing sectors of our
economy are excluded from the protections of labor law due to the
continuing impact of institutional racism in the 1930s.” The labor
plans of 2020 candidates like Sen. Bernie
Sanders and former
Rep. Beto
O’Rourke tout the
need for strong unions and echo the calls of Roosevelt Fellow Brishen
Rogers and Kate Andrias of the University of Michigan: All
workers must have a voice in their workplace.
What We’re
Listening To
On Wednesday’s
episode of The
Daily, host Michael Barbaro and
journalist Andrew Ross Sorkin examine CEOs’ ideological shift toward a
shareholder-first vision decades ago—and how the
renewed focus on workers, wages, and communities is good for
business. “It was the idea
that if you could attract great employees and you could keep those
employees—often for life—that you would have a better product, that
you would have a better company,” said Ross Sorkin.
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