Pushing back against corporate power in the US
When we think about power we often think about people in power. But institutions themselves wield immense power. For most of us, we think governments, as institutions, have the most control over our lives but, of the 200 largest institutions in the world, 157 are corporations not governments.
These corporations have accrued more wealth than some fairly wealthy countries. For example, Amazon and Walmart alone earned a combined $1.1 trillion in revenues in 2022 which together would make them the 17th wealthiest country in the world.
Corporate power has increased in the last few decades, thanks to a decrease in unionization and regulation and a rise in corporate lobbying. Following the US Supreme Court’s Citizens United decision in 2010, which removed constraints on the political spending of US corporations, their lobbying expenditures have been on the rise, reaching a record $4.1 billion in 2022. All of this has contributed to a lack of trust in political institutions, further polarization and an erosion of our democracy.
Corporate America has come out swinging in any attempt to hold them to account. Corporations are actively fighting the rights of workers to unionize, challenging the authority of agencies like the National Labor Relations Board and the Securities and Exchange Commission, working to erode and silence the right of shareholders to raise financially material issues, and preventing EU legislation from addressing human rights, to name a few.
A new report by Oxfam, Inequality, Made in America: How Corporate America is Fueling our Inequality Crisis analyzes data on the largest 200 US public companies. It finds that corporate America is making more money than ever but 90 per cent of the profits are allocated to already wealthy shareholders rather than proportionally sharing with other stakeholders of the company, like workers and suppliers.
Only 10 of the 200 companies actually support paying a living wage but don’t define or disclose enough information to verify that they are actually paying one. At the same time, the chief executive officers of the 200 companies were paid a combined $4.1 billion in 2022 or an average of $20.5 million each. Six companies actually paid their CEOs over $100 million.
Our report also found that while the retail sector is the most diverse, it is also the most inequitable sector, with 52 per cent of retail workers being people of color and 56.8 per cent being women, but senior executives are 69.9 per cent white and 77.7 per cent are men.
The report also points to the fact that DEI washing - when companies exaggerate their commitment to diversity, equity, and inclusion for purely cosmetic reasons - has become the new green washing, as all of the 200 companies talk about DEI but only 44 per cent have published concrete targets.
Corporations drive inequality in different ways. In addition to other pathways, the tech and pharmaceutical sectors have the lowest effective tax rates, usually avoiding tax through the use of tax havens. There is also no denying that all corporations are contributing to the climate crisis, yet only 16.5 per cent of the companies have made net-zero commitments and only 40 per cent actually reduced their emissions between 2020 and 2021. In fact, average emissions increased by four per cent.
We must begin to put people and planet over profits or corporate power will not only erode our democracy but with it the global economy. The good news is that we already see efforts to fight back - workers organized and went out on strike twice as much in 2023 as the previous year. Legislators called on CEOs to testify for their bad corporate behavior and the administration is calling for increased taxes on corporations.
We need to begin by creating stronger transparency by companies—our research found that for many indicators we couldn’t assess companies at all for lack of disclosure or because the disclosures were not consistent.
Next, we need a corporate reform agenda, one that ensures all stakeholders of a company can benefit, not just shareholders. This requires enacting living wage laws, protections for unionization and collective bargaining, fair taxation and enforcement of anti-trust and monopoly laws to name a few.
Finally, we need to promote alternative business models and corporate forms that are more inclusive and ensure the interests of people and planet are at the heart of their purpose.
Irit Tamir is the Senior Director of Oxfam America’s Private Sector Department