The growing divergence between large and mid-size firms on the one hand and America’s middle and working class citizens and small business on the other, is not sustainable and unlikely to improve anytime soon, according to the findings of a new study by Harvard Business School.
Entitled, ‘An Economy Doing Half Its Jobs,‘ while top business leaders predict an erosion of U.S. competitiveness, they are less pessimistic than they were, and gloomy on the future pay of higher wages and benefits of workers.
Conducted among 1,947 of Harvard Business School alumni, the survey found, 47 percent of respondents expect, over the next three years, U.S. companies to be both less competitive internationally and less able to pay higher wages, versus 33 percent who thought the opposite.
Respondents saw weakness in the education system, the quality of workplace skills and the effectiveness of the political system, all aspects of the U.S. business environment that drive the prospects of middle-and working class citizens. And they saw strengths in the quality of management, the vibrancy of capital markets and firms’ access to innovation – aspects that influence company success.
Pointing to the boom after World War II where citizens thrived together, the authors note that the recent divergences of outcomes with firms, especially large ones, doing very well and workers struggling, is unusual in the U.S.
“Shortsighted executives may be satisfied with an American economy whose firms win in global markets without lifting U.S. living standards. But any leader with a long view understands that business has a profound stake in the prosperity of the average American,” the authors state in the report.
“Thriving citizens become more productive employees, more willing consumers, and stronger supporters of pro-business policies,” it states. “Struggling citizens are disgruntled at work, frugal at the cash register, and anti-business at the ballot box.”
