Policy Points: When Employers Take the High Road, Society Moves Ahead

 

By Michael Eberhart

Forward-thinking business leaders are increasingly choosing to take the “high road” by offering their employees better wages, flexible schedules, and benefits like paid family leave and paid sick days. They understand that taking care of their employees is good for their business – increasing morale, productivity, and profits. But beyond that, such family-friendly policies deliver benefits across the entire economy, including higher consumer demand and lower costs for social safety nets.

Unfortunately, many lawmakers mistakenly believe that taking the low road is the only way to make a profit. That’s because they mostly hear from traditional business interests that carry that message. But what if they heard instead from responsible employers who prove every day that high-road business practices can be very profitable? Since the high road delivers much more benefit to society, educated policymakers should use public policy levers to encourage and spread its adoption. That’s the goal of a new report from the American Sustainable Business Council (ASBC) that makes the case to policymakers that the high road is the best road for the country.

ASBC’s new report, “The High-Road Workplace: Route to a Sustainable Economy,” lays out a compelling argument for companies to adopt high-road policies. In an ideal world, every business would choose to adopt high-road practices because they are good for business, good for people, and good for the planet – the triple bottom line that we all understand. Unfortunately, many companies are still stuck on the low road and focused on short-term profits as their only goal.

Low-road businesses hurt us all

But taking the low road has high costs for society. The lack of a national policy for paid family leave does long-term harm to children, reduces parents’ opportunity for higher earnings, decreases overall productivity, and holds back women’s participation in the labor force. According to the Center for American Progress, between 13-25 percent of American families that file for bankruptcy do so after missing work caused by illness of a parent or family member. Other underpaid employees are forced to rely on EBT benefits and other government-funded safety nets to make ends meet. According to a 2015 report by the Labor Center at UC Berkeley, low-road practices cost over $152 billion in public support per year.

High-road practices can reduce those costs while building a stronger economy. Low-road business leaders hold the outdated belief that companies must pick between profit or social responsibility, but evidence from many successful high-road companies proves this is a false choice. High-road benefits create happier, more productive employees, reducing the costly turnover that can drag down an employer’s profits. This is just one example of the “virtuous cycle” described by Christine Cikowski, co-founder of Honey Butter Fried Chicken, who is profiled in the report.

“We can afford to pay and treat our people decently because we have a great restaurant, and we have a great restaurant because we have happy, dedicated, motivated employees,” she says. “We treat our employees really well, so they’re happy to come to work and they’re motivated to work hard.”

ASBC’s report shows that adopting an economically and environmentally sustainable business model means that employees get fair, livable wages and family-friendly benefits, while companies see better retention and productivity. Customers also increasingly choose to support values-based businesses, making the high road even more profitable.

“We’ve seen that family-friendly policies don’t just benefit the person, they benefit the company,” says Amy Hall, director of social consciousness at Eileen Fisher. She makes a persuasive case for the value of high-road practices in ASBC’s new report.

“If you’re under stress from a family illness or new baby at home but you can’t take the time off you need, you cannot possibly bring your whole self to work,” she says. “When people are given time to handle a life situation, they show their thanks with passionate productivity when they come back. It improves everyone’s morale and loyalty to know they won’t be forced to choose between people they love and work they love.”

How to Steer the Nation onto the High Road

But leaders like Cikowski and Hall will not change others on their own. Most low-road businesses continue to grow and turn a profit. Why should they change? Waiting for other companies to move to new business models and catch up to high-road leaders could take decades. That wasted time is a lost opportunity for companies, employees, and the economy as a whole.

Government can help companies move to the high road more quickly by implementing the policy solutions outlined in ASBC’s report. These recommendations include creating a national paid family and medical leave insurance program that would build on the FAMILY Act already in congress. Another solution would increase the national minimum wage and index it to the cost of living. Finally, governments can update procurement standards to make high-road practices a minimum threshold for federal, state, and local contract eligibility.

Adopting these public policies would help more American companies embrace best practices that benefit our economy and our society. But lawmakers need to be educated. They need to hear from more business leaders about how great the high road is for their businesses. Only when lawmakers believe it's possible will they set about the task of making the U.S. a high-road nation. ASBC’s full report can be found here.

Michael Eberhart is a Public Relations Intern for the American Sustainable Business Council.

Image credit: Pixabay / Seaq68