The Future of Work: A Stakeholder Approach
If we don’t want to establish the minimum wage as a usable tool to reduce government assistance, what other options do we have?
If we don’t want to establish the minimum wage as a usable tool to reduce government assistance by providing Americans with the means to secure basic necessities on their own, what other options do we have?
What if we amend the Securities Exchange Act of 1934 to require directors and officers of publicly traded corporations to act in the best interests of the corporation, its shareholders, and its workers?
The Securities Exchange Act of 1934 required directors and officers of publicly traded corporations to act in the best interests of the corporation and its shareholders. Directors and officers of corporations have an obligation to their shareholders to guide the corporation to transparent profitability, rather than act in a manner that benefits themselves only.
President Franklin D. Roosevelt signed the Securities Exchange Act on June 6, 1934 as a response to the 1929 stock market crash and resulting near collapse of the US financial system. The act created the Securities and Exchange Commission, which continues to protect investors through oversight. One of the main purposes of the act is to protect investors by requiring public companies to disclose important information that would help them make informed investment decisions.
However, the Securities Exchange Act of 1934 does not require directors and officers of publicly traded corporations to act in a way that would benefit its workers. This means that, today, directors and officers of publicly traded corporations are only required to act in the best interests of the corporation and its shareholders.
In plain language. Corporate directors have an obligation to make decisions that benefit shareholders. They have no obligation to make decisions that would improve conditions for workers.
Should corporations have an obligation to act in such a way that would benefit their workers as much as their executives and shareholders?
If a corporation acted in this manner, would it put as high a priority on paying livable wages to workers as on paying political contributions, stockholder dividends, and executive bonuses?
Would this create more alignment between the interests of the different stakeholders, such as shareholders, workers, customers, suppliers, and communities? Would it reduce the potential for conflicts of interest?
Would this actually make corporations more sustainable, and boost the economy? For example, corporations might be more likely to pay livable wages to workers, provide them with safe working conditions, and offer them opportunities for advancement. This could lead to corporate innovation and a more stable workforce.
Some might say this change would put too heavy a burden on corporations. It could increase costs, which could lead to higher prices for consumers. It could increase the difficulty for corporations to compete in the global marketplace. It could increase corporate regulatory burden.
Let’s pull that thread as far as possible.
There is no argument here against profitability and business growth. If a business fails, all the workers lose too.
What if the business really does need to change to remain profitable? Leaders of corporations need to be able to change their business when necessary. However, change shouldn’t include paying poverty wages to employees to keep the business running.
And when a business succeeds, why would it pay its stockholders or politicians before paying its workers?
From the Federal Reserve Bank of St. Louis’ blog, The FRED Blog. The blue line represents corporate profits. The red line represents worker wages. From the article, “The past decade and a half seems to be different, though. Never have corporate profits outgrown employee compensation so clearly and for so long.”
Paying stockholders and politicians first, instead of workers, obligates the American people, through government programs, to fund basic necessities for working Americans. We fund these programs through tax dollars that support government housing, reduced price lunches, WIC, and other social programs. This money is the American people’s money.
This proposed change to the Securities Exchange Act of 1934 wouldn’t obligate directors and officers of publicly traded corporations to act in the best interests of its workers instead of the corporation or shareholders.
The proposed change would obligate directors and officers of publicly traded corporations to act in the best interests of the corporation, shareholders, and workers equally, to the extent that is achievable.
Sanity check. From previous articles, our objective and guidelines:
Objective: How do we make a strong, innovative American workforce that can drive world markets?
Guidelines:
Set conditions that enable Americans to provide for their own basic needs.
Consider what can be done for Americans who are self-motivated.
Focus on options that are not a significant burden on the American taxpayer.
First, regarding improving the innovation of the American workforce. By requiring directors and officers to act in the best interests of workers, corporations would be more likely to invest in their employees, which could lead to a more skilled and productive workforce. Corporations would be more likely to attract and retain top talent, which could help them to innovate and compete in the global marketplace.
From a tax perspective, amending the Securities Exchange Act of 1934 would not be a burden on the American taxpayer. The proposed change would not require any additional funding from the government, and it would save taxpayers money in the long run by reducing the need for government assistance programs. If Americans made enough pay from their work, we could have rational, feasible discourse about cutting government programs.
And most importantly, from an American worker perspective it helps Americans buy houses, heat the houses, and put food on the table.
What if we amend the Securities Exchange Act of 1934 to require directors and officers of publicly traded corporations to act in the best interests of the corporation, its shareholders, and its workers?
Thanks for considering my perspective.
May God bless the United States of America.
