Josh Bolten, who served in the White House under President George W. Bush as chief of staff and director of the Office of Management and Budget, was just named head of the Business Roundtable, which its website describes as “an association of chief executive officers of leading U.S. companies working to promote sound public policy and a thriving U.S. economy.” More impressive that the $6 trillion in annual revenue of its member companies is the nearly 15 million employees who work for the chief executives. This is a big cross-section of America.
We normally wouldn’t remark upon a new head of a trade association, especially the Business Roundtable, which has been much less visible than other pro-market, pro-growth advocacy groups lately. But Bolten arrives at a precipitous moment for business, the start of Donald Trump’s presidency. Trump intends to slap tariffs on goods from China, round up and deport 11 million people and hector companies to keep jobs in the country or face his wrath. He has already threatened Boeing with cancellation of two new Air Force One airplanes, lit into General Motors and vowed to impose a border tax for cars manufactured in Mexico, and taken credit for saving 5,000 Sprint jobs (which actually had been “saved” before the election).
Stepping back for a moment, the problems for business go beyond Trump’s day-to-day antics. Public support for trade agreements has collapsed. Americans swayed by xenophobic demagogues think immigrants steal our jobs. As with many institutions, big business has lost the confidence of the vast majority of Americans. Only 18 percent, according to Gallup, say they have “a great deal” or “quite a lot” of confidence in big business. Only Congress does worse (9 percent) among the 14 institutions listed.
So Bolten and his CEO members have their work cut out for them. Bolten, no doubt, is getting lots of suggestions, but here are a few that might help promote policies that favor growth, a dynamic economy, higher wages and integration, not rejection, into the modern, global economy.
First, he and his members need to start defending trade, high-skilled immigration and globalization. These have helped lift billions out of poverty, given Americans the widest array of affordable goods any people in human history have ever enjoyed, stimulated phenomenal innovation, and allowed Americans to increase their earnings and wealth by selling their goods around the world. Unfortunately, Republicans have lost their nerve to defend these simple truths and the free-market policies that made them possible. Even those who know better refuse to defend these elements, which are at the heart of a free-market economy. (Groups such as Heritage Action are fair-weather friends of capitalism, refusing to rise in defense of trade or immigration for fear of losing favor with Trumpkins.) If business and its employees don’t do it, who is going to make the case for the building blocks on which American industry and workers rely?
That brings us to the next point: The employees of companies that compete in the global economy depend upon trade, high-skilled immigration and globalization for their livelihood. They are the ones most likely to be hurt (along with consumers) if populist policies are enacted. The failure to make the connection between the livelihood of those 15 million people working for Business Roundtable companies and tens of millions who work for other companies that must compete globally has been a great failure of business and free-market conservatives. The rich (like Trump) don’t need a thriving, dynamic, globally integrated economy to be prosperous; these workers do. Their voices have been almost entirely absent from the debate that seems to rage between blue collar, less educated Americans who have fared poorly in the 21st-century economy and nebulous “elites.” Where is everyone else? We should be hearing from them, learning how they have navigated the 21st century and why “populism” isn’t going to help people like them at all.
Third, as long as the federal government is dysfunctional (for the foreseeable future) business will need to attend to functions normally thought to be the responsibility of the public sector — K-12 education, higher education, lifetime worker training, anti-poverty measures, and even urban violence stemming from encounters between the police and minority communities. If business wants an educated workforce, prosperous consumers and safe places for its employees to live and for it to do business it is going to have to roll up its sleeves and recommit to what we used to call “corporate citizenship.” A great deal of this is already going on. Businesses “adopt” schools, fund research, provide constant training and often educational grants to their employees and more. Every museum, concert hall and sports stadium built in the past few decades has a long list of corporate sponsors. These will need to increase. Public-private partnerships can be the vehicle for everything from support for charter schools to mentor programs that combat truancy to library and community athletic programs. Business will need to scale up their programs and systematically commit to developing a 21st-century workforce.
And finally, business can voluntarily sign onto to a host of initiatives that focus on the working poor, upward mobility and social justice. We have already seen Walmart agree to increase its minimum wage; other retailers, such as Target, followed suit. IKEA announced last year it was offering “four months paid parental leave to its U.S. workers of all genders, whether they’re salaried or hourly — and irrespective of whether they’re becoming parents via birth, adoption, or fostering.” The Human Rights Campaign reports that 517 companies have gotten perfect scores on its rating for LGBT employee policies. These companies did not do these things out of the goodness of their hearts; they did so out of a sense of enlightened self-interest. They need healthy, economically secure employees (who are also their customers). They want to get and retain the best workers. They, in essence, have developed their own social contracts with employees that go above and beyond what is legally required. Every single Business Roundtable member company should do the same — and then challenge the rest of the Fortune 500 to do so.
If employers do not want to be thrashed by the new president, see their markets and employment pool dry up, operate in violent and wretched cities or lose a skilled workforce that will carry them through the next century, they better not be passive. Markets and skilled workers don’t magically appear and renew themselves; they must be fostered and maintained.
Corporate citizenship and private social contracts are not a substitute for government. Of course, not everyone works for a big company with resources to do this, but some of what we are recommending should benefit non-employees as well — the families of employees and the communities and schools in the places they operate. Moreover, a more activist business community focused on working and middle-class prosperity may begin to change the mind-set of the country by demonstrating we all do rise or sink together.
Very simply, if big business wants to survive Trump and change the way it is viewed, it better take on important tasks that are visible to the country at large. Otherwise, they’ll feel the wrath of Trump and his angry minions.