Congress left town last week, unable to agree on further pandemic relief. News coverage focuses on the political drama of legislating, but for tens of millions of Americans the issue is not drama or politics, it’s survival. Their financial house is on fire, and they are rightly wondering, will anyone come to help?
We know more than 30 million – roughly 1 in 5 – Americans are still unemployed. In our work at Commonwealth we are reminded of this each week: across multiple research projects since March, a stunning 30 to 50% of participants have reported job loss. These families decide – every week – what bills won’t get paid, how much more credit card debt they can take on, and which food pantries they haven’t already visited. It often means having to think more about your finances than your children.
If our political leaders won’t act, who can?
In truth, in moments of crisis, America responds across sectors. It took US industrial might and community-level sacrifice, as much as government and military action, to win the Second World War. After 9/11, private firms volunteered to cooperate with the federal government in unprecedented ways – and individuals across the country took in stranded travelers, and sent first responders to New York, Washington, and DC.
Our responsibility to tens of millions of fellow Americans isn’t absolved because our political leadership is dysfunctional. Now is the time for the private sector to remind the country of what it’s capable of – not just for shareholders, but for the nation.
A year ago The Business Roundtable challenged American firms to redefine their purpose to include being accountable to all their stakeholders… shareholders yes, but also employees, customers, suppliers, and communities. No one foresaw how prescient this call would become. Today many of these stakeholders are fighting for their life. Waiting for further government action is just not an option.
What would a private sector pandemic response look like? We’ve already seen some early examples, but on behalf of tens of millions still struggling, we have to ask: what more is possible? What are actions truly sized to the problem?
For starters, it means corporate America bringing its full power, capability and capital to this fight. At the beginning of the year, American firms were sitting on $4 trillion in cash reserves, and in 2019 paid out nearly half a trillion dollars in dividends to shareholders. Our technology and communications industries touch virtually every American household, most on a daily basis.
It means aggressive action by firms to prevent evictions and service shut-offs, suspend debt payments and extend credit, even to provide grants and essential goods and services free of charge.
How might the nation’s investment banks use their capital and influence to ensure no family loses housing while unemployment remains above pre-pandemic levels? Suppose our supermarkets, farmers, and mega-retailers decided that no one will go hungry while the pandemic persists. Could our tech industry simply commit to ensure every school and student remains connected until it is safe for all children to be back at school? Imagine the nation’s biggest banks set a goal that no more small businesses will fold over the next 12 months.
To be sure, none of these are simple, easy, or costless undertakings. But does anyone doubt America’s most powerful, innovative firms could accomplish all of these, if they resolved to?
The goal is not to replace government, but to complement it – perhaps even to shame it, challenge it, or just simply to recognize the devastating need around us and step into the breach. In a word, to lead.
Many private sector leaders recognize, on some deep level, that many of our trend lines simply can’t continue forever – wealth disparities, systemic racism, loss of trust in institutions – “something has to give.” They know equally that there is no reward – and often swift punishment – for going first, or acting alone. Viewed through this lens, 2020 is a game changer; this is the moment when private sector leadership is critically needed, and there are real risks for firms seen as shirking their responsibility.
If history teaches us anything, it’s that change finds a way. Often it catches us off guard, sparked by a tipping point that surprises us – and then it’s rarely orderly, organized, or pretty. But six months into an unprecedented pandemic, nothing should surprise us. The next 90 days may be the last chance corporate leaders have to to signal clearly that their loyalty to our country and the common good exceeds their duty to their firms’ owners. Their last chance to help shape the change that lies ahead, rather than be shaped by it.
CEOs of America, your country needs you. For the sake of the nation, and millions of families looking into an economic abyss, now is the time to show us what you and your firms can do.