The U.S. is a democracy; yet, the dominant corporations of our time are run like oligarchies. Throughout U.S. and world history, this contradiction of oligarchies within a democracy has proven costly to lives, tax dollars, and many of our freedoms. A tax cut to organizationally democratic corporations will save and make the government billions of dollars a year and will recruit the talent needed to get us out of this economic crisis.
Corporations are legally obligated to put the interests of shareholders above all competing interests; when corporations are not organizationally democratic, the interests of the majority are often overlooked. Corporations have overlooked the interests of the majority...
(1) by evading between $250 billion and $300 billion in taxes per year. As a result, you and I pay 15% more in taxes every year--according to PBS Frontline. When corporations' financials are not transparent, the pressure to follow the crowd and use tax shelters to evade taxes is constantly present.
(2) by not making health coverage affordable. Wal-Mart and other corporations have encouraged their employees to apply for government health care assistance--instead of making medical coverage affordable. Government health care assistance costs the government billions of dollars.
(3) by outsourcing jobs to foreign countries. Billions of tax dollars have been lost to outsourcing.
(4) by paying CEO's 866 times more than minimum wage employees. That number has increased from 51 times in 1965--according to faireconomy.org. When corporations create many layers of management, the higher up managers receive large compensations at the expense of lower paid employees. However, when times get tough, having a large number of managerial layers ensures that layoffs will occur, and higher paid managers are consistently the ones laid off. Unemployment and low wages cost the government billions of dollars in relief.
(5) by underpaying their employee's pension plans. In 2006, PBS Frontline reported that corporations were underpaying their employee's pension plans by $450 billion. As you may know, in 2006, the government agency, P.B.G.C., was already in a $23 billion debt. The government can't afford to guarantee all of these and future pension plans that are dumped on the government during corporate bankruptcy.
(6) by constantly violating the law. In the 1990's, large corporations were sued for hundreds of millions of dollars for attempting to pass off costs and obligations to an unaware or unwilling public: (1) Exxon pled guilty to criminal charges related to the Valdez oil spill and paid $125 million (2) GE was guilty of defrauding the federal government and paid $9.5 million (3) Chevron was guilty of environmental violations and paid $6.5 million (4) Mitsubishi was guilty of anti-trust violations and paid $1.8 million (5) IBM was guilty of illegal exports and paid $8.5 million (6) Pfizer was guilty of anti-trust violations and paid $20 million (7) Odwalla was found guilty of food and drug violations and paid $1.5 million (8) Sears was guilty of financial fraud and paid $60 million. (Read about 1,000's of more violations at multinationalmonitor.org). The cost to the government for all unprosecuted violations is probably in the billions.
(7) by creating unfulfilling workplaces. In 2006, Gallup estimated that disengaged employees cost the American economy $350 billion per year. The lost tax-dollar revenues are also in the billions.
In contrast, organizationally democratic corporations are proactively transparent, offer ownership to all employees, and have very few layers of management (in proportion to number of workers).
During this information age, many corporations such as, Southwest Airlines, Great Harvest, 1-800-GOT-JUNK, the GE plant that produces Air Force One engines, DaVita, The Container Store, and Whole Foods (to name a few) are moving towards this new, democratic corporate structure. Not only does this new, democratic corporate structure attract the best talent in the U.S., but these corporations save and make the U.S. government millions of dollars. A tax cut to organizationally democratic corporations would encourage more corporations to become democratic. More organizationally democratic corporations would attract the necessary talent to pull us out of this financial crisis and save and make the government billions of dollars.
The largest obstacle for identifying organizationally democratic corporations will be to create a standard to determine which corporations are organizationally democratic and which one's are not. A consulting company called World Blu (worldblu.com) currently has a score card to identify organizationally democratic corporations. If you have any questions, visit my website at democraticbusiness.blogspot.com and make a comment.
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