LOBBYING AGAINST RISING ECONOMIC INEQUALITY

Millions of Americans have lost their jobs, homes, and life savings as the middle class has undergone an unprecedented collapse. 

• A record-breaking 46 million Americans out of a total population of 311 million are living in poverty;
• One out of 5 U.S. households don’t have money to buy food.
• 14 million Americans are unemployed
• 25 million Americans are unemployed or under-employed;
• In total, Americans have lost $ 5 trillion from their pensions and savings since the economic crisis began and $ 13 trillion in the value of their homes.
• 1.4 million Americans filed for bankruptcy in 2009.
• The U.S. has the most expensive healthcare system in the world and ranks 37thin the world. 50 million U.S. citizens are without healthcare.
• Middle class families are making $3,600 less than they did ten years ago;
• Over five million U.S. families have already lost their homes. In the first 6 months of 2011 a total of 1,170,402 U.S. properties received foreclosure filings — default notices, auction sale notices  and bank repossessions.  Processing and  procedural delays are pushing foreclosures further and further out and it is estimated that as many as 1 million foreclosure actions that should have taken  place in 2011 will now happen in 2012, or perhaps even later. In total 13 million U.S. families are expected to lose their homes by 2014, with 25% of current mortgages under water.
• There are now over 3 million homeless Americans, the fastest growing segment of the homeless population is single parents with children.
• The U.S. has now the most unequal distribution of wealth and income of any major, advanced country on earth.  The top one percent earn more income than the bottom 50 percent and the 400 richest Americans own more wealth than 150 million Americans. The total combined wealth of the 400 richest Americans amounts to $ 1.57 trillion, which is more than the combined net worth of 50% of the U.S. population;  
• Today, the six largest US financial institutions have assets equal to more than 60 percent of GDP.  The four largest banks in this country issue two-thirds of all credit cards, half of all mortgages, and hold nearly 40 percent of all bank deposits. 
• Today, more than a quarter of all credit card holders in the US are paying interest rates above 20 percent and as high as 59 percent. 

In the face of this situation, business leaders need to address the main point of concern: rising economic inequality. Businesses should look at whether existing models of compensation are contributing to this inequality. They need to find ways to reward performance without increasing pay disparities. Developing new models of compensation and governance is not easy and can only be possible through a long-term and sincere engagement with a wide set of stakeholders, such as regulators, academics, and representatives of workers.

Next, business needs to engage with the protest movement sincerely and honestly, “empathizing with protesters’ frustrations on points of genuine concern. Any open and sincere engagement by businesses will show that the commercial world is not content being seen as part of the problem and is keen to be part of the solution. Even if businesses entirely disagree with the demonstrators’ viewpoints, they need to approach the protesters as equals in public discourse. Business leaders’ views will be better received if they are presented with humility.

Of course, these protests – while directed at Wall Street and the finance industry – are still at their core a political response to what is seen as sheer cronyism between big banks and politicians and bureaucrats in Washington, D.C.

Crony capitalism is only good for companies that lack real value. Entrepreneurs and innovative companies that are not content to profit off of cronyism, patent-trolling, or bailouts should support Occupy Wall Street in principle if not on every issue.

The Occupy Wall Street movement is not a revolt against capitalism, but rather a revolt against cronyism. There will be those who want to overthrow the system entirely, of course, but most of these protesters just want the system to work.

It is not in business’s long-term interest to be seen as tirelessly working to spread the economic inequality gap or make life harder for working Americans, or to support policies that make it harder for Americans to work or gain access to healthcare.

Corporate America needs to engage the protesters and engage their ideas. After all, most of these protesters just want to contribute to the economy. They want jobs. They want to make money so that they can spend it on goods and services that businesses in this country can provide.