Corporations hands extend far outside of just the lives of their employees and the services they offer. The term “corporate responsibility” can be a umbrella term that covers a plethora of ideas but root idea is that corporations have a responsibility to the groups, people, and environment that their business impacts.
Cities will often rush to make themselves more appealing to bigger businesses in the hopes that they will bring a wave of new jobs and bolster their economy.
However, due to the fact that some of these jobs pay such low wages they can wind up causing a drain on the local economy when those same citizens have to go back and apply for government benefits such as food stamps.
The positive side of employers raising the minimum wage can be beneficial to both parties. Alan B. Krueger a Professor of Economics found that by slightly increasing the minimum wage, yes corporations had to pay money, but in turn had less employee turnover thus keeping more skilled people at their jobs.
Walmart is frequently cited as a example of a bad business paradigm, where their wages and benefits are so low that in 2014 according to Americans for Tax Fairness they cost U.S taxpayers 6.2 billion dollars in public assistance for their workers who were not paid enough.
The other downside of businesses who display more corporate responsibility is the impact on the environment. Corporations who have unsustainable environmental practices are not just acting unethically, but they are also costing themselves, heavily. Researchers from First Carbon Solutions, noted this firsthand, “The costs of pollution go beyond medical bills and loss of productivity. Heavily polluted areas make it difficult for companies located there to hire and retain workers, forcing them to pay higher wages to attract and keep employees. In addition, unchecked pollution can temper investors’ interest. To produce their products safely, companies in heavily polluted areas may need to close shop and move their operations to less polluted locations.”
Even with extensive research pointing to the fact that unsustainable corporate greed negatively impacts both sales, profit, and employee livelihood, we still find that across the table, when it comes to corporate responsibility everyone wants to point the finger of blame at someone else.
As long as these blame games continue, progress will not be made. Businesses need to set themselves up, from the beginning, with sustainable measures that take into consideration the lives of not only their employees but also the planet’s. Communities must also hold corporations responsible and not just allow big brands with unsustainable practices the ability to walk into their communities.
So, while corporate responsibility may seem like an umbrella term, it is important for us to realize, that we all play a part in keeping the rain at bay.