Unless you earn more then $200,000 a year corporate tax cuts likely make your life worse. Even though it’s a myth, it’s long been argued that by cutting taxes for wealthy companies jobs will magically pop into existence. Indeed, this myth is so pervasive in modern capitalism that we’re increasing inequality as a byproduct of supporting tax cuts. The good news is that the discourse is changing. Every year there’s more evidence that helping the 1% is detrimental to the rest of society and people are growing more aware of this. This month the Harvard Business School released their research on corporate tax cuts.
In the paper Corporate Tax Cuts Increase Income Inequality (pdf), Rouen and his collaborators, Duke University professors Suresh Nallareddy and Juan Carlos Suárez Serrato, analyze data created by tax filings to compare effects on workers at varying compensation levels in different US states with and without tax cuts.
“Compensation and income inequality are very relevant to managers,” Rouen says. “This is something that they’re now having to deal with in terms of SEC disclosures and having to disclose CEO pay ratio. Active managers are often the face of income inequality, in that these are the people who set the pay for everyone else and also are the highest paid employees in their organizations.”
Thanks to Delaney!
On of the richest people on the planet is sick of climate change and has launched a venture capital firm to slow down global warming. Breakthrough Energy Ventures (BEV) funds companies that can make a marked reduction on annual carbon output while also being profitable. Using capitalism to undo what capitalism has caused isn’t a new idea but hopefully it’ll work. So far BEV has funded some really neat initiatives from better batteries to cutting edge biofuels manufactured by plants.
“We are a unique fund with investors who are patient and flexible,” says Rodi Guidero, executive director of BEV. “Our goal is to find the companies that will have the greatest impact on accelerating the energy transition and help them in whatever way we can.”
To help him find those companies, Guidero draws on an in-house group of scientists, technologists, and entrepreneurs, along with a network of 140 academic institutions and large corporations. They provide expertise on the vast range of technologies that BEV is interested in.
To be eligible for BEV’s money, a startup needs to showcase a scientifically sound technology that has the potential to reduce annual global greenhouse-gas emissions by at least 500 million metric tons. Global emissions currently measure about 40 billion metric tons a year.
We’re all well aware of the harm caused by the box-box retailers on local communities and their international suppliers; indeed, the people hurt the most are the workers. As a result of the pressures of large multinational corporations mixed with poor working conditions an old solution is gaining new traction. Worker-owned corporative corporations help deal with the profit-focused multinationals by empowering workers to be focussed on the economic sustainability of the company. Worker-owned co-ops are brewing in popularity amongst employees and entrepreneurs who don’t want the companies they built to fail.
“We are in a wave of growth right now,”, Hoover says. Worker-owned cooperatives, she says, have undergone several major “waves” over the last 40 years, each fueled by a different goal. In the 1970s, many newly formed cooperatives were tied to people desiring a counter-cultural lifestyle outside of traditional economies, but today, Hoover observes that more co-ops are being formed in response to economic stressors. “People don’t feel secure at their jobs anymore, and having ownership of something gives them security,” Hoover says. And some aging baby boomers implement co-op models as a way to keep their businesses open after retirement — by transferring ownership to employees.
Similar cooperatives have secured comparable benefits for staff. Whereas the state of Oregon’s minimum wage is $10.25 an hour, Blue Scorcher offers a flat wage of around $15 to $16 per hour including tips. At Austin’s Black Star Co-op brewery, employees start at around $12 per hour and receive pay increases after three months to $13.10 per hour — nearly twice the state’s standard minimum wage. Employees can pursue additional raises if they work towards a role on the managerial-level governing body called the Workers Assembly, which comprises roughly half of the brewery staff. In addition to the living wage, Black Star gives all employees paid time off, and staffers, regardless of their leadership role, are also empowered in the decision-making process. “We operate democratically, so there’s no one person making decisions,” says Black Star business team leader Jodi Mozeika.
Business that adapt to climate change are more likely to be successful in the coming years, and business that basically cut their carbon footprint to zero will thrive. This is the thinking behind a growing field that helps companies reduce their consumption and waste while increasing their profits. With the likelihood of global warming reaching two degrees above normal companies will have to change their practices regardless of their industry. It’s good to see that some business are planning beyond the next quarter.
“Sustainable strategy is just that — it’s a strategy. It’s not a function, it’s not an industry, it’s not just recycling. That’s a very, very small piece of a much bigger movement for business,” Loinaz says. “We’re a launching pad for future industry leaders to solve the world’s problems, particularly the most pressing social and environmental ones.”
The health of a company’s labor force is inextricably linked to its environmental practices. Oftentimes the people who extract the resources companies use are underrepresented, marginalized, or disenfranchised. Nearly all smartphones, for instance, are made from mining rare metals and rare earth elements. As investigations show, it’s incredibly dangerous work that often requires miners — many of them children — to hand-dig tunnels hundreds of feet underground, with few safety precautions in place. Local communities are often exposed to poisonous levels of toxic metals and waste as a result.
The suburbs are an energy-intensive housing solution that started in North America and has spread worldwide. The appeal of the tract housing the very thing that makes the suburbs detrimental to society: large lots, expansive houses, low density, and that they are reliant on individual use automobiles. With the mounting pressure of rapid climate change and urbanization of civilization what can we do to negate the poor planning of the suburbs? One solution is to rezone the suburbs to allow business to operate to make the neighbourhoods liveable.
It’s not specifically the built form of the suburbs that makes them unappealing; the buildings there—the houses—are perfectly fine. What deadens these areas is the homogeneity of the uses these buildings are put to. But a building that looks like a house can easily be altered and put to another use. Toronto’s two most iconic and walkable neighbourhoods, Yorkville and Kensington Market, were created like this 100 years ago. If the City took away restrictive zoning, suburban areas will change as local people set up stores and services in converted single family homes and these neighbourhoods will develop organically into complete and vibrant communities.
The permit office should parcel out permits to create a situation where you can go six blocks in any direction anywhere in Toronto and find one or two services. For instance, from my house in North York, you have to walk 12 large suburban blocks to get to the only services available, at Bayview Village. Why isn’t there a little ice cream store or cafe on the first floor of one of the brand new townhouses built across from Bayview Village Park, six blocks away? My home has a walk score of 38 out of 100. Gradually, the City should rezone wherever necessary until every home has a walk score of at least 50. The point isn’t to make all of Toronto like downtown or Kensington Market; just add reasonable access to services that will benefit the neighbourhood. The suburbs would still be the quietest neighbourhoods with the most green space, but they would be better off by virtue of a few local amenities. If a neighbourhood wanted to opt out of this scheme, it could cease issuing these permits altogether, or, alternatively, request that the City issue more of them and to try becoming a new Kensington Market.