SAU CFDD
May 042011
 

By Frank Wessling

What might happen if we could all choose where to be born? The result would probably be something like Garrison Keillor’s mythical paradise, Lake Woebegon, where “all the women are strong, all the men are good looking, and all the children are above average.”

We would at least be tempted to go to homes where they pay for good grades in school and reward good behavior with candy and toys.

That’s something like the incentive system operating quietly in our business community. It appeals to self-interest in a rational way, but loads the scale in favor of immediate gratification: candy for now rather than milk and vegetables for a healthy future. Low taxes, deferred taxes, even no taxes as incentives for a business to move or build in our back yard rather than the neighbor’s.

It isn’t exactly bribery but has a similar smell.

A business wants a location that suits it, with access to suitable transportation and energy facilities, living conditions attractive to a good workforce, good connections to suppliers and efficient access to likely customers. Any reasonable person would use these criteria for choosing where to do business.

Then come considerations of quality: of more or less, of good, better and best, of “efficiency” that can slide into cheapness. One looks for lowest labor cost and lowest community sharing, also known as taxes. As business thinking loses community connection, it invites global competition in cheap labor. As sites compete on the basis of low or no taxes – low community sharing – they invite a low sense of community responsibility. It should then be no surprise if the race to cheapness and immediate gratification includes poor care for the environment.

The shift of so-called American jobs to countries with cheaper labor is part of a rational business judgment. So is the movement of business from one state to another as tax break candy is put on the table. Not long ago, Caterpillar Corporation suggested that it might lose its historic attachment to Peoria, Ill., if the state doesn’t do what Caterpillar wants on taxes. Of course other states see opportunity there and begin designing their low tax offers.

Or it could be that a business moves to avoid the bother of organized workers. The National Labor Relations Board has evidence that Boeing, the airplane builder, decided to build a big new assembly plant in South Carolina rather than the state of Washington, where its work has historically been based, because of differences in labor law. South Carolina, unlike Washington, is a “right to work” state, meaning that union membership cannot be a condition of employment even if most workers in a business belong to a union. The effect is to weaken employee strength in relations with management, tending toward a lower pay environment. The NLRB is challenging this kind of civil war between the states.

In the current political atmosphere of hostility to unionized labor, we can only hope that this move in a race to the bottom for labor costs will be stopped. At some point even the most libertarian business owner and politician must realize that fewer workers with fewer dollars of disposable income mean lower sales for quality products in the economy as a whole. The race to the bottom can’t be kept in one category only.

But beyond considerations of business “efficiency,” Catholic social teaching is offended in two ways by these trends. They reduce concern for the dignity of workers and cut some of the ties that keep community life orientated toward the common good. The Church already has a global sense of the common good, and we learned in the 19th century that giving the most aggressive entrepreneurs whatever they want is no recipe for a good life in the community as a whole. For the weakest members it is a disaster.

Looking for the good life in both personal affairs and business is a balancing act. We don’t want it disoriented by the pull of short term incentives appealing to greed. That’s childish, too close to bribery, and not the path of truly human progress. This is something the Church learned through hard experience during the industrial revolution in Europe. Loyalty to tradition became skewed in ways that cost the allegiance of the new working class, which saw more of salvation in socialism than Catholicism. It’s a lesson relevant for all of our society today.

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