Bezos breaks corporate responsibility pledge

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Jeff Bezos
Photo courtesy Associated Press

By Sarah Montgomery

Last month, almost 200 major corporations signed a pledge to prioritize their workers, customers, suppliers, and communities over shareholders. Jeff Bezos is already defecting. 

Bezos is the owner of Amazon, which owns several other companies, notably Whole Foods. This is important because recently Whole Foods announced that, coming Jan. 1, employees working 20-30 hours per week will lose the company health plan. This is contradictory to the pledge. 

Whole Foods told Business Insider that the decision was made in order to improve efficiency within the company. They also claim that they are providing their affected workforce with resources to find alternative healthcare or to explore positions that are healthcare-eligible. 

The Business Roundtable, a large corporate lobbying organization, wanted this pledge to serve as a new approach to the “purpose of the corporation.” The goal was to get rid of the prevailing idea that the maximization of shareholder value is what businesses should strive for. This concept, propagated by conservative economist Milton Friedman, has been the commonplace corporate ideology since the 1970’s. Though this pledge is a welcome change, it is important to know that there is no mechanism in place for supervision or enforcement—nothing is committing these CEOs to the pledge other than their word. 

The pledge from Business Roundtable

Many economists doubted that companies would hold true to the pledge in the first place. Nell Minow pointed to the lack of substance in the pledge and its inherent contradiction to capitalism, amongst other reasons, as to why she does not trust these CEOs. Some pointed out that corporations have a responsibility to pay taxes, which many have avoided— also under the guise of helping their employees, but in reality done in the interest of lining their own pockets. Jack Kelly, Senior Contributor at Forbes, writes “signing the agreement to be better was the perfect public relations stunt to earn kudos for their supposed new ‘woke’ view.” 

Stanley Litow, an expert on corporate social responsibility, argues that corporations do not need to neglect the needs of shareholders in order to produce good behavior. After all, shareholders do not want to be part of an abusive company that will inevitably be burned by regulators. 

This shareholder-first mentality has been so pervasive in the corporate culture for so long that it seems like an essential component. “No one is quite sure how to rebalance corporate priorities so that greater shareholder value is seen as a byproduct of socially responsible behavior rather than the primary goal,” LA Times journalist Michael Hiltzik writes. 

Other high-profile CEOs include Tim Cook of Apple and Ginni Rometty of IBM, amongst dozens of other influential business leaders. Only time will tell if they follow Bezos’s path.

Pop the bubbly on this unique economic indicator

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By Sarah Montgomery

Photo from reservebar.com,

Champagne was discovered by Dom Pérignon, a monk who lived in the Champagne region of France in the 17th century. Upon the creation of this new concoction, he said to his peers, “Come quickly, I am tasting the stars!” Beyond being a delightfully bubbly beverage, champagne also serves as an economic indicator. Because the consumption of champagne often goes hand-in-hand with celebrations, the sales of champagne mirror the ambiance of the market. This relationship offers analysts insight into how the economy is doing. As put by Pascal Férat, the president of a Champagne-producer’s union, “When people are down in the dumps, they don’t feel like drinking [C]hampagne.” 

When people are down in the dumps, they don’t feel like drinking [C]hampagne. 

PASCAL FÉRAT
Image result for champagne pouring
Photo from vinegar.com.

When people are spending money on champagne, it indicates that not only do people have enough money for necessities, but they have enough disposable income to splurge on luxuries—times are good. 

NPR’s Planet Money searched for the most interesting economic indicators. They found that Champagne sales are about 90% accurate in, one year later, anticipating the average American income. The theory is that while good times are ahead, bad times will soon follow. Davidson offered the peak of the Internet and Housing bubbles as examples of times when champagne sales were high in 1999 and 2007 respectively; famously, the years following those were those of a weaker economy. 

Graph from The New York Times Company.

In its annual report, the Comité Champagne, a French community that represents champagne makers, notes an increase of global champagne sales while also having a 1.8% fall in shipments. An interesting place where champagne sales fell was in the U.K, historically the largest export market for the fizzy refreshment.; some suggest that Brexit is the reason. Shipments to the following countries grew: the US, Japan, China, Hong Kong, Russia, and South Africa. 

Graph from the Comité Champagne.

The U.S. Champagne Bureau, a representative of the Comité Champagne, echoed these findings and announced in March that an increase of sales champagne bottles occurred between now and 2017. And according to Beverage Wholesaler, “overall consumption [of champagne and sparkling wine] is up 56% in the past decade, and shows no sign of slowing.” Furthermore, more people are drinking champagne year-round. These are significant developments signaling prosperity, so perhaps the economy will falter in the near future.