Corporations and generosity
Do corporations have a responsibility to help the economy?
Daniel Gross has a front-page article on Slate claiming that certain specific companies can “afford” to match employee 401(k) contributions again; companies like UPS and FedEx put their matching programs on hold during the worst of the recession.
The article uses two facts to assert its conclusion:
- It would be good if workers had more money
- At least some companies have cash reserves
What Gross doesn’t seem to understand is that corporations don’t have an obligation to The Economy — they have obligations to their shareholders (and, of course, to comply with government regulations).
This would be a simple and quite charming misconception if thinking like this didn’t end up on the front page of popular national publications.
What’s pernicious about Gross’s position is that it doesn’t make a call for any action that might actually help. Corporations are not likely to be shamed into providing benefits higher than they must. If wages must go up, employees will have to demand them, governments will have to mandate them, or employees will have to deliver more value. (I tend to prefer the last.) If Gross valued the long-term health of the economy he would have an eye on international competitiveness and productivity, not the short-term marginal compensation of a few thousand employees.
-John
Image courtesy Wikicommons.
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