5 key social responsibilities for entrepreneurs

I wish everyone a happy and prosperous new year. I wanted to start this year with a provocative post. I am not going to hide what I hate about this year as this is one of my new year resolutions. Entrepreneurship is one of the driving forces of capitalist socities but over the last decade it has become a disgusting disgrace to the society. Here are the top things that entrepreneurs should take care this year.

Minimum Wage

The current federal minimum wage in US is $7.25¹ per hour. The range of minimum wage across states is from $7.25 in 21 states to $11.50² in Washington DC. The average of minimum wage across all states is $8.17. In a year of 52 weeks with 10 government holidays³. An individual is expected to work for 40 hours a week for 50 weeks in a year. The total working hours will be 2000 hours per year. If you calculate the gross income for an indivdual at federal minium wage it is $14,500. The sad part of this equation is that if the wage earner is a single parent they directly fall below poverty level since the federal poverty level for a family of two is $15,930. The minimum wage increase was less than one dollar for a decade. In Jan 1, 1980 it was $3.10 per hour in Apr 1, 1990 it was $3.80 per hour. In Sep 1, 1997 it was $5.15 and in Jul 24, 2007 it was $5.85⁴.

Shouldn’t companies pay wages to keep people above poverty level instead of below poverty level?

I think it is high time entrepreneurs don’t go by government minimum wage and start providing a decent wage to keep people above the poverty level. One more side-effect of this problem is that 22% of kids in US are growing in a family whose income is below poverty level i.e almost quarter of US kids population is growing up in poverty ⁵. The future generation is also getting deprived of a bright future along with their parents.

Equal Opportunity

I have a good a laugh when I see this phrase is job advertisements. I believe that companies are using this phrase sarcastically and only for legal sense. If a company is providing equal opportunity then it should make sure that women are paid equal to men. As an immigrant I feel irritated when employers post that they are equal opportunity employer but refuse to hire immigrants because they need visa sponsorship. Some employers hire immigrants only to keep them as indentured salves by taking advantage of the backlog situation and don’t hire US workers. Both these extremes are not good for the company and the country. One of the critical factors for innovation is diversity. If there is no diversity in workforce then not much innovation is going to happen. One of the 7 pillars of western wisdom is mertiocracy⁶ and I believe that equal opportunity is the way to keep that alive.

Value based self-regulation

The 2009 financial crisis showed clearly that regulation was not ahead of innovation and that companies exploited the loopholes in regulations. I think companies should not only follow rules based regulations but also value based regulation. An organization should have values and principles for it to stand tall in the market place. The 2009 crisis was disgusting to see, almost companies from all industrial sectors were asking for bailout. The crisis didn’t just taint capitalism, it made it a dirty word.

No Phony Philanthropy

This is something that companies are doing to makeup their image after the financial crisis. The recent backlash against Facebook in India is a good example. If Mark Zuckerburg has guts he must first preach this to China or Middle East and then come to India. Entrepreneurs who acts a philanthropists must make sure that the first three items are taken care of completely in their company before stepping out to save the world. These philanthropists must also pay their fair share of tax and not lobby to cut the taxes. Lot of companies are moving money out of US and not paying tax for money earned in US and not bringing the money from their subsidiary in other countries and not creating enough jobs in US. So stop the phony philanthropic activities.

No bailouts

It is a shame on entrepreneurs and capitalists to ask government to bail them out. Some capitalists are clever that they get a bailout but not as a bailout. The best example is Tesla Motors. To me all the ventures by Elon Musk seem to be controversial. Instead of making a car that is affordable Tesla made a luxury passenger car with a bailout of more than $400 million at a dead rate of interest. Elon Musk was celebrated as hero when he open sourced Tesla’s patent. To me that is the only fair thing he did because he was given loan by tax payers and common people and Tesla’s patent must be made open source without any choice. The hypocrisy in this is that he made all the money he wanted before open sourcing the patents.

I wish entrepreneurs come forward to save the capitalism. I am a real admirer of capitalism even though I was brought up in a socialist republic. The ability to reward people who take risks for well being of themselves and others was the most moving principle of capitalism. I wish this can be a year of revival for capitalism in its true image.