Despite what Tim Montgomerie claimed in his Wall Street Journal piece (discussed last week), the facts are that there real problems exist in America- and the world over. We are not deluded with our thinking that the rich are getting richer and the poor are getting poorer or that corporations are evading their financial responsibility to their employees and to our communities.
That’s exactly why MIT (the Sloan School), Harvard University, and Northwestern (Kellogg) Business Schools (among others) have been revamping their curricula. The schools are now addressing the problems of income inequality- remedies that our business students should learn. And, the schools are teaching these soon-to-be-minted MBAs how one can market to those on the very bottom of the wealth pyramid.
The new courses address the fact that companies have been stressing high productivity and low wages- that companies are squeezing every potential dollar from business efforts. As a matter of fact, MIT has a free online course for all of us: Managing Sustainable Business for People and Profits. (Actually, that’s the classroom version- the online version is called The American Dream for the Next Generation.)
The professor, Thomas Kochan, attempts to train the next generation of business executives that keeping labor costs low may generate profits- but it screws productivity. Paying employees reasonable (he terms it “good”) salaries is the best way to ensure future profits and maintains jobs. It is clearly resonating with some companies, since the Hitachi Foundation is working with him to develop more courses- aimed at executive education (training current business executives) and new MBA students.
Harvard’s course in this area is “Presidents, Politics, and Economic Growth from World War II to Obama”. However, that course is not (yet) on the MIT/Harvard EDX site. (Of course, you can still learn about this topic from my book [The Big Lie: The Effects and Truths of The Great Recession & Wages in America] and by perusing my blog.)
Harvard also has a course detailing how products can be modified to meet the needs for low-income consumers. Most of the folks in that economic strata end up overpaying for healthcare, water, and basic staples. This is not a course for do-gooders; the professors involved stress these attitudes and modifications are crucial for running successful global businesses.
We can only hope that MBAs will become more aware of these prejudices and can reconnect with the social compact that obtained before Milton Friedman advocated its abrogation.