On November 17, I attended Income Inequality: Is This the End of American Dream?, a lecture in Uris Hall organized by the Tamer Center for Social Enterprise at Columbia Business School. The speaker was Peter Georgescu, former chairman and CEO of the advertising agency Young & Rubicam.
After an introduction by Raymond Horton, the Frank R. Lautenberg Professor of Ethics and Corporate Governance, Georgescu shared his unique success story. Born in Romania at the start of WWII, he was separated from his parents at age 7 after the country was taken over by the Soviet Union. From the ages of 10 to 15 he served in a hard-labor camp with his brother. With the help of President Dwight D. Eisenhower, Georgescu and his brother were then reunited with his parents, who had settled in the United States. He went on to graduate from Princeton University and Stanford Business School before pursuing a successful business career.
Georgescu reflected on his topic in light of the post-WWII era, when a strong middle class was established and millions were lifted out of poverty. Now the middle class and the poor are suffering; real wages have been flat for about four decades even though productivity has increased. It appears that companies are more concerned with short-term gains and maximizing shareholder value, while employees are dehumanized and seen as costs.
According to Georgescu, inequality of income in the United States is creating a caste system where it is becoming more difficult to climb the economic ladder without exceptional talent, athletic skill, or luck. He suggested that companies must lead the way to address income inequality and should invest in their employees, who are the real “value creators.” He showed us a list of “enlightened businesses” – companies that are addressing income inequality and investing in their workforce, including Google, Home Depot, and Whole Foods.
In response to a question about how to create more jobs, Georgescu replied that private sector companies should invest more in research and development. In the public sector, jobs can be created to improve the nation’s outdated infrastructure. When asked whether the definition of growth should be redefined in business, Georgescu said that was a long-term question, and that companies need to move now on income equality.
I left inspired to support more “enlightened businesses.” As customers and shareholders, perhaps we should all take a closer look at the companies we support. Luckily, I am already a frequent shopper at Whole Foods.
For more information on Georgescu’s ideas, you can read his recent op-ed piece in The New York Times: Capitalists, Arise: We Need to Deal with Income Inequality.