In this month’s Fast Company there is a beautiful piece on Hale County, Alabama, a place that has hosted social designers for nearly two decades to help it with its woes. However lack of community collaboration and lack of greater vision has meant the social design projects in this county have largely gone nowhere, impacting hundreds of lives, not thousands. The part that struck me was when the reporter interviewed residents of Hale County about some of the design projects meant to create new jobs. Students had helped build a pie shop and were working on a bamboo bike manufacturing facility, yet these ideas didn’t excite them. They weren’t going to buy a $4 slice of pie and knew no one who road a bike. What did excite them? Walmart.
André and Barbara weren’t skeptical of the general notion of a catalyst for profound change. They just found Walmart a lot more convincing than design microenterprises. The store would have been pure and positive judgment that this is a place with a future.
While I assume many of the socially-minded readers out there might bristle at the idea that Walmart might be better for a community than a local pie shop, you’ve got to put it in the perspective of a resident. A pie shop might be more inclined to pay their employee above minimum wage but the amount of people they can employ is rather minimal. Plus Walmart puts you on the map, it brings people in surrounding rural areas needing anything from a vacuum cleaner to pet food, not just those with a hankering for pie.
It’s easy to criticize this thinking for being small minded. In the grand scheme of things Walmart kills more jobs than it creates and its low wages and benefits aren’t great for their employees. Yet that’s all easy to say, when your a professional social changemaker, as many of us are, often holding white collar jobs and many of us having few acquaintances that have a career at a place like Walmart. The new economy has pushed aside production workers who are still struggling to retrain and find jobs. So I think it makes it pretty easy for us to forget that while the local movement does create great jobs, it’s still not creating enough.
We need new companies that recognize that shirking employees isn’t the best business model. When Henry Ford famously raised wages to $5 a day he didn’t do it out of compassion for his employees, he did it because it made good business sense. Ford was losing employees and the drastic increase in wages actually saved him money on training and finding new employees. The increase in wages also made it easier for his employees to buy more of Ford’s cars, further fueling profits. Perhaps then, Walmart’s reluctance to raise wages will only hurt them in the end, as Adam Hartung suggests in a Forbes article. He believes trends show that more Americans are looking for companies to provide living wages for their employees. Those who do not could lose customers now or if a higher minimum wage is set they could lose out to companies like Costco who are already operating with a profit and decent wages.
But Ford wouldn’t have paid $5 to his employees if there weren’t other automotive companies offering more money. In order for Walmart’s low wages to cost them, there have to be better jobs available to their workers, and unfortunately in a rural area like Hale County there isn’t a lot of competition. Which is why I say we need to start thinking about how to beat Walmart at its own game. Walmart is beginning to show weaknesses. Online retailers are drawing away customers and more and more consumers are considering social impact in their purchases. While boycotting Walmart and running campaigns to stop new ones might help save our local businesses, a more long term strategy needs to be in place to create better jobs in our communities.
The rise of B Corporations is a promising signs that we are ushering in a new era of business. Ever since the East India Trading Company, corporations have been seen as shadowy figures seeking profit at any costs. Benefit Corporations are businesses founded and accountable not only for the monetary profit they make but their environmental and social impact. Twenty states (Maryland being the first) have passed legislation legally recognizing this new kind of corporation accountable not only to passing money to stockholders but to increase the public good. Perhaps this new designation will help companies ready to scale businesses that meet consumer needs without hurting workers. The designation could create new streams of funding socially conscious companies, make it easier for the consumers to identify companies with a higher purpose, and provide government incentives to create and expand companies ready to compete with the Goliath of Walmart.
The social designers in Hale County have still failed to answer the biggest design challenge of our time: how do we create organizations that meet consumer needs while providing living wage jobs, especially in areas with few traditional resources? While the local revolution is creating quirky, great, and vibrant new main streets it is time to expand our focus. We need a new economy that can compete with the behemoths of the old economy and usher in a new way of doing business.