American decline is undeniable. The question is: Why is that happening? I conducted some research and came to conclusion that grid and corruption are at the core of that phenomena. Beloved “Artificial Intelligence” was helpful in getting to the bottom. Here we go!
Growing inequality
In modern business, the terms “socially responsible”, “inclusive” and “sustainable” have moved from optional buzzwords to core strategic metrics. Research shows that employee well-being and living standards are more than just moral considerations. They are leading indicators of financial success. They are leading indicators of financial success.
Whether employee well-being should determine success is a debate between two schools of economic thought.
1.The Shifting Definition of “Success”
Historically, corporate success was defined by Shareholder Primacy—the idea that a company’s only purpose is to maximize profits for owners. However, a newer model called Stakeholder Capitalism suggests that a company must create value for all stakeholders. These stakeholders include employees, customers, and the community. This approach helps the company remain viable in the long term.
Traditional vs. Modern Success Metrics
| Metric type | Traditional success (shareholders centric) | Modern success (stakeholder-centric) |
|---|---|---|
| Financial | Quarterly Dividends, Stock Price | Long-term ROI, ESG Scores |
| Human | Labor as a “Cost to be Minimized” | Labor as “Human Capital” |
| Operational | Efficiency & Output | Resilience, Innovation, Retention |
| Social | Compliance with Law | Social Responsibility & Sustainability |
2. Why Living Standards Drive Profitability
There is a growing “business case” for including living standards as a success factor. When employees earn a Living Wage—defined as enough to cover basic needs like housing, food, and healthcare without financial stress—the company benefits in several ways:
Reduced “Presenteeism”: Employees who are stressed about debt or housing are physically here but mentally disengaged. Addressing financial well-being restores focus and productivity.
Lower Turnover Costs: Replacing an employee typically costs 6 to 9 months of their salary in recruiting and training. Companies that pay living wages see significantly higher retention.
Talent Attraction: In a competitive job market, “socially responsible” branding attracts higher-quality candidates who prioritise values as much as salary.
Lower Healthcare Costs: Chronic stress from poor living standards leads to physical illness. Companies often pay for this through higher insurance premiums and more sick leave.
The Counterarguments
While the trend is toward inclusion, some economists and executives remain skeptical:
Cost vs. Benefit: Critics argue that raising living standards can be a “sunk cost.” This approach doesn’t always yield a proportional increase in profit. It can potentially make a company less competitive against lower-cost rivals.
Complexity of Measurement: Unlike profit, “well-being” is subjective. Measuring and reporting on the “happiness” or “living standard” of 50,000 global employees is a challenging task for a corporation. Consistency adds to the difficulty.
Role of Government: Some argue that living standards are the responsibility of the state. They believe this includes affordable housing and healthcare. These are not the responsibility of private corporations.
Current Global Trends
Major frameworks are already making this a reality:
- ESG (Environmental, Social, and Governance): Investors now use ESG scores to decide where to put their money. The “S” (Social) includes how a company treats its workforce.
- The “Well-being 100”: A stock portfolio of the top 100 companies for employee well-being has consistently outperformed major market indexes. It has surpassed the S&P 500 since 2021.
- Certifications: Programs like B-Corp Certification legally require companies to balance profit and purpose, specifically auditing their impact on workers.
Key Insight: A company is “sustainable” only if its employees can afford to live in the city where they work. Otherwise, the business model is inherently fragile. It relies on a high-turnover “burn and churn” strategy that is increasingly vulnerable to labor shortages and reputational damage.
How many American companies fit into Global trends? Many of them do it in a declarative way. Statistic are abused to show a picture that follows the narrative. I am going to deal with inequality in next article.
Greed is an excessive, selfish desire for more of something (like money, food, or power) than one needs. It is often characterized by an insatiable craving and dissatisfaction. Historically seen as a deadly sin and destructive force, it’s viewed in psychology as a personality trait linked to negative behaviors but also by some as a drive for success, though it can lead to issues like disparity and addiction
Aleksandar Adzic 