Study shows widespread anti-corporate sentiment raging in US.

www.rtk.net/preamble/

Corporate Irresponsibility: There Ought to Be Some Laws - A Study of the
Political and Policy Implications of Public Attitudes Toward Corporate
America:

EXECUTIVE SUMMARY

PROFITS BEFORE PEOPLE: AMERICANS ANGRY AT CORPORATE EXCESS WANT GOVERNMENT
TO STEP IN

Anger and anxiety over layoffs, wage stagnation, declining benefits and
the movement of jobs overseas has left the American public with a starkly
negative view of the actions and motivations of corporate America. Ire at
large corporations crosses race, class and political lines and is not
waning despite the upbeat economic news of the last several months. It's
so intense that, for the majority of citizens, it now rivals or exceeds
anger at government. Most significant and most surprising, anger at
corporate America has begun to translate into broad public support for
government action to make corporations act more responsibly - and has the
potential to change the nation's political landscape.

These are central findings of a public opinion survey commissioned by the
Preamble Center for Public Policy in order to better understand public
anger at corporations and how it relates to issues of public policy and to
American politics. The study, and a corresponding series of focus groups
with middle and working class Americans, reveal that the American people
have become firm in their belief that corporations are good investments
but bad citizens. For example, when asked to assign corporate America
letter grades for its performance in various areas, 78% of respondents
give companies good grades (an A" or a B") for making profits." When it
comes to keeping jobs in the US "and being loyal to employees," however,
seven in ten people say companies are not getting the job done (giving
companies a C," D" or F" in these areas).

Between 70% and 80% of the public recognize serious problems "in the way
corporations put the interests of their executives and shareholders ahead
of their employees and society," and identify greed "as the motivation
behind new waves of corporate layoffs and downsizing," rejecting the
corporate argument that such actions are necessitated by competitive
pressures.

These attitudes are held across the economic and political spectrum, and
are especially evident among the core middle class workforce hard hit by
corporate layoffs and downsizing. This attitude has remained intense and
shows no sign of abating - even as media coverage of downsizing has
dwindled, and despite the recent stream of positive economic news. The
public now realizes that corporate profitability does not guarantee worker
wellbeing (even though much economic policy making in recent years has
been based on exactly that assumption).

The study also demonstrates that public anger at corporations has
significant political and policy implications as it begins to translate
into popular support for more aggressive efforts to alter corporate
behavior. While anger at government remains high, people are so fed up
with corporate behavior and so frightened by their economic vulnerability
that they are willing to take a chance on government intervention.

Consequently, seven in ten people (69%) favor government action to promote
more responsible corporate behavior and to penalize bad corporate
citizenship. Large majorities favor a host of specific policy approaches,
many of which are already part of the political debate - from living wage
laws, to proposed New Jersey legislation designed to penalize corporate
downsizers, to Minnesota's law requiring corporations that get tax breaks
for job creation, but do not create new jobs, to pay back the money.

The survey results also indicate that issues of corporate accountability
and economic fairness may well have increasing salience in the electoral
debate. This opinion climate creates the potential for a new kind of
political dialogue - the public is increasingly eager to hear what their
leaders have to say about the problems created by big business. Those who
present a strong critique of corporate behavior and show how proactive
government action can be a remedy will be striking a responsive chord.

Americans are much more likely to support leaders who favor such policies
as setting standards for responsible corporate behavior and rewarding
companies that meet the standards, denying tax deductions for CEO raises
granted at the same time layoffs are occurring, and requiring large
companies to provide basic benefits to all employees. And when the public
faces a choice between a politician focusing on the problem of corporate
greed and one attacking big, bad government, public sentiment will
increasingly be with the former. In 1994, simply being the more
antigovernment candidate was often enough; in the future, it won't be that
simple. Progressive leaders focusing on corporate misbehavior as a central
cause of economic problems for working families can more than hold their
own in the battle for the public's hearts and minds.

Among the additional major findings:

While public anger at government remains high, a majority of
people(68%)now view corporate greed" as an equally important or more
important cause of the economic difficulties faced by working families
(46% of people say corporations are a bigger problem than government waste
and inefficiency," 22% choose both).
Americans firmly believe that recent trends in corporate behavior -
such as large- scale layoffs, downsizing," reduced benefits, and overseas
job relocation - is motivated by greed (70%) rather than a quest for
competitiveness and efficiency (22%).
Americans across party lines - Democrats (79%), Republicans (67%), and
ticket-splitters (74%) - believe the economic and human impact of these
corporate behaviors are serious enough to warrant purposeful government
intervention - through incentives, mandates and penalties designed to make
corporations think twice before trading jobs and wages for profits and CEO
compensation, including:
setting standards for corporate behavior, and rewarding companies
which meet these standards with a lower tax rate than non-complying
companies (82% favor - 44% strongly favor);
requiring corporations receiving government assistance (tax breaks,
subsidies, etc.) for the purpose of job creation to make specific
commitments, and to pay back the aid if the proposed jobs do not
materialize (as is now law in Minnesota) (78% favor - 39% strongly favor);
requiring that all employees receive a basic package of health and
pension benefits, so that corporations cannot cut costs by replacing
current workers receiving benefits with new ones who will not (77% favor -
42% strongly favor); and
requiring any company that does business with a city or town
government, or receives any special tax break, to pay employees a living
wage of at least $7/hour (76% favor - 42% strongly favor).

In contrast, laissez-faire economic policies tested in the survey
generally received significantly lower levels of support.

In order to measure the true depth of public sentiment on these policy
issues, the survey asked respondents whether these issues would
significantly affect their voting decisions. Looking at the same breadth
of progressive and laissez-faire policy options, people were asked if
candidates campaigning on these policies would be more likely or less
likely to get their vote. We take the percentage who say they would be
much more likely to vote for a candidate who takes a particular policy
position and subtract those who are much less likely to vote for that
candidate - creating a measure of net impact. Three policies stand out as
having particularly strong popular support, yielding a net impact of +37
percentage points or more:
setting standards of responsible corporate behavior and rewarding
companies that meet the standards with lower taxes; (+48) among all voters
and (+56) among ticket-splitters;
disallowing tax deductions for excessive CEO compensation; (+38)
among all voters and (+45) among ticket-splitters;
requiring large companies to provide a basic benefits package to
all employees; (+38) among all voters and (+37) among ticket-splitters.

About one-half of the public says each of these issues makes them much
more likely to vote for a candidate. All three are progressive policies
aimed at increasing corporate responsibility.

Middle class Americans are among the strongest advocates of a progressive
agenda for holding corporations accountable. The middle class is angry at
finding itself stalled on the ladder of success, with suddenly limited
prospects for more affluent futures, and new fears that their careers and
lifestyles are no longer as secure as they once believed.

People in middle income families earning $35-$44,999 are most likely to
favor government taking action to make corporations act responsibly (81%
versus 71% of Americans as a whole). They are also most likely to believe
that government serving corporate interests has a more adverse impact on
the economy than government waste or inefficiency (45% versus 21%).
(Overall, 40% of Americans pick government serving corporate interests
versus 33% who pick government waste.)

Middle class Americans are the strongest advocates of mandating health and
pension benefits (60% say they are much more likely to support a candidate
who takes this position compared to 3% much less likely - a net impact of
+57 compared to +48 among all Americans). They also give strong support to
candidates who campaign on setting standards for corporate behavior (+47)
and eliminating tax deductions for CEO raises at companies laying off
workers (+34).

Economic changes are creating a gray ceiling." Middle-aged workers, once
inclined to take steady promotions and pay raises for granted, are less
likely to find them. Younger entry level workers - whose salary increases
and promotions are less costly to their corporate employers - are
experiencing more good news than other segments of the workforce.

The percentage of workers who have received both a promotion and a pay
raise, or know someone who has, declines as the workforce moves from
entry-level (42% of the workers 18-34), to more seasoned workers (26% of
workers 35-54), to those nearing retirement age (only 17% among people age
55-64).

About one in three Americans facing retirement (aged 55 to 64) is close to
someone who has lost a job (31%) or had benefits reduced or eliminated
(38%) - or has experienced one of these crises themselves.

Among workers age 45 to 64, 55% give corporations a failing grade for
loyalty to employees - the highest of any cohort.

An extraordinary 69% of people age 55 to 64 say corporate greed is a
bigger cause of economic problems than big government.

Anger at corporations crosses racial lines. Large numbers of Caucasians
and African Americans say corporate greed is a serious problem which
requires government intervention. Large majorities of both Caucasians
(67%) and African Americans (83%) favor government doing something to
insure that corporations act more responsibly.

About 7 in 10 Caucasians (71%) and 8 in 10 African Americans (81%) support
five out of seven progressive legislative items tested.

At least three-quarters of both Caucasians and African Americans say
corporate actions are causing serious problems for the nation.
Specifically, they are concerned about layoffs (81% Caucasians and 85%
African Americans), outrageous CEO salaries (80% and 83%), and stagnant
ages (75%and 89%).

Angry White Males" may be angry at government and government programs, but
they are even more angry at corporate America. So are Caucasian women.
Caucasian men chose corporate greed (43%) over government waste (32%) as
the greatest obstacle to the middle class from getting ahead. 22% chose
both. Caucasian women also chose greed over waste (51% to 24%).

Nearly two-thirds (62%) favor government taking action to ensure that
corporations act more responsibly. Caucasian women are even more likely to
want action (72%). Caucasian men report a deep support for the progressive
legislative agenda, including:
Mandating basic benefits packages (net impact +31);
Setting standards for corporate behavior (+47); and
Disallowing tax deductions for excessive CEO compensation (+36).

The American Dream promises that hard work and loyalty will propel people
up the economic ladder into larger salaries, bigger homes, better lives,
and comfortable retirements. Throughout the twentieth century, that dream
has depended on the economic might and communal benevolence of corporate
employers. From health care to pensions, defining elements of family and
individual security have long been fundamentally connected to voluntary
corporate largesse. Law and government never required corporate employers
to guarantee such things (as did the collective public might of labor
unions), but they seemed to many Americans like birthrights all the same.

Now, the public sees corporations beating a rapid retreat from long-term
standards of employee loyalty, high pay, and community partnership. And
the working families left behind - and denied pay raises, promotions, and
job security as a result - are angry. Americans believe corporations have
broken an unwritten social contract whereby hard work and loyalty on the
part of employees was respected and rewarded. The sense of betrayal many
people now feel is reflected by the comment of a San Jose focus group
participant:

A lot of these people who have had a job for twenty years, they were told
something when they first started working there. They were given very
clear issues that this is what we expect from you and this is what we will
give you in return. And they're not keeping their word. So, when you see
that happening it creates some real problems...because that is truly
dishonest bad faith.

Despite decades of anti-regulatory politics, a majority of Americans now
believe corporations should be subjected to additional government
oversight designed to ensure more responsible behavior. What is emerging
from this intensifying public mood is strong support for a new agenda of
corporate responsibility - an agenda geared toward ending the ability of
corporations to treat workers unfairly with impunity; compelling
corporations to fulfill responsibilities beyond the maximization of
earnings, CEO compensation and investor return; and reclaiming the
guarantee of a tradition whereby American citizens who play by the rules
are protected and rewarded by corporate citizens who do the same.

METHODOLOGY

The study was conducted by EDK Associates, a New York based research firm,
and directed by Ethel Klein, president of EDK. Guy Molyneux, a
vice-president of Peter D. Hart Research Associates, served as a
consultant throughout the project from design to analysis. The project
began with six focus groups involving working and middle class Americans
without clear allegiance to either major political party. The focus groups
were conducted in order to gain a sense of how Americans feel their lives
are affected by changing economic circumstances, how they view
corporations as employers and economic actors, and what policies, if any,
they support to improve the economic well-being of working families.

Three focus groups were conducted with Caucasian, working class, non
college educated men and women in Hartford, Connecticut on May 6, 1996;
San Jose, California on May 23, 1996; and in Oak Brook, Illinois on June
27th, 1996. Two focus groups were conducted with Caucasian, middle class,
college educated men and women in Iselin, New Jersey on May 9th, 1996; and
in San Jose, California on May 23rd, 1996.

One focus group was conducted with African American, working class men and
women of mixed educational levels in Oak Brook, Illinois on June 27th,
1996.

A public opinion survey involving telephone interviews with 800 randomly
selected registered voters nationwide was conducted from June 17-21, 1996.
The margin of error for the poll is 3.5%. All percentage differences
discussed in this report are statistically significant at the 95%
confidence interval.

[Go to this URL for links to the full text of the study and survey
results. http://www.rtk.net/preamble/ Look for link to: Corporate
Irresponsibility: There Ought to Be Some Laws]

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