A corporate role in ending epidemics

A promise of no layoffs by many firms during the virus crisis should help reduce at least one fear.

The Monitor's View

A society’s response to an epidemic, writes historian Frank Snowden in a new book on the topic, is a lens on the moral priorities of its leaders. Did they create a resilient community during more settled times? Have they built up trust in institutions? Epidemics reveal “the moral relationships that we have toward each other,” the Yale scholar told The New Yorker.

A current example of moral priorities in the United States is the number of companies promising to keep paying employees – even temporary wage-earners – despite the shock and disruption of the coronavirus outbreak. Congress could decide soon to mandate paid leave during the health crisis. Yet many corporate leaders are a step ahead in announcing no layoffs or furloughs, creating a sort of cordon sanitaire that protects jobs and eases fears.

At Microsoft, 4,500 hourly employees “will continue to receive their regular wages even if their work hours are reduced,” says company President Brad Smith. Similar commitments have been made by Google and other big firms. “I encourage all of our peers to consider this as well,” tweeted Chuck Robbins, chief executive of Cisco.

One practical reason to retain workers during the crisis is that, up to now, the task of finding new workers has been difficult. The U.S. economy is in its 11th year of expansion. The jobless rate is a low 3.5%. Many companies are enjoying record profits. They can afford a temporary loss.

Yet another reason may be a trend among companies, made strong since the 2008 financial crisis, to better consider how they treat workers, customers, suppliers, local communities, and the natural environment. Such “social responsibility” toward stakeholders is often genuine. It can also prevent a high cost to a corporation’s reputation.

The promises of no layoffs during this crisis have become a signifier of ethical progress. Other signs are showing up. Citigroup is offering leniency to many debtors. Some health insurers are absorbing the cost of copays for customers. For many firms, belt-tightening will come in ways other than hits on the most vulnerable.

Worldwide, business has become the most trusted institution, taking the lead role in global governance, according to the latest Edelman survey. Based on 40 years of surveys for its “trust meter,” the communication firm finds the “trust capital” for businesses depends on three ethical drivers: integrity, dependability, and purpose.

“Business has leapt into the void left by populist and partisan government,” states the 2020 report. “It can no longer be business as usual, with an exclusive focus on shareholder returns.” The survey finds 73% of employees want the opportunity to change society. Nearly two-thirds of consumers make buying choices based on core beliefs.

Epidemics are not extinguished only by new medicines, quarantines, and improved health practices. Societies also need to have their moral priorities in place. Healing the economy with fear-reducing actions is as important as healing the sick.