Blame it on Wall Street. Expectations of the financial community have forced most corporate leaders to focus their attention on meeting quarterly numbers. Looking ahead to the next fiscal year qualifies as long-term strategy in many corporate boardrooms.
This near-term focus can bring success in the business world. But in the political world it is a recipe for disaster. Our industry’s opponents—if you don’t think we have opponents you might as well stop reading now—plan multiyear campaigns to shift public opinion and gain insurmountable leads. By the time the threat has broken into the boardroom, much ground has already been lost. Turning public opinion back on itself at this point is expensive and often futile. Failure becomes a self-fulfilling prophecy as waiting has made it impossible to win.
Three months ago six states raised their minimum wage through citizen ballot initiatives. Those initiatives included indexing provisions that will mandate permanent yearly increases in the minimum wage, effectively ending all future debate.
Supporters of the wage hikes began planning these efforts three years ago. By the time the industry began organizing against the initiatives, public support for an increase was around 85 percent. Aggressive and expensive opposition campaigns were able to cut support by 20 percent—30 percent in several states—but that wasn’t enough to prevail.
Not only did the industry get a late start, it was also out-gunned. Across all states, business spent slightly more than $5 million to oppose the wage hikes. Just one activist group—ACORN—spent more than $10 million in four states alone. If you’re late to the battle and have lost public opinion, you better have overwhelming resources. The industry did not and lost. If you operate in one of these states, do the math. What will the increase cost you versus what you spent to stop it?
Last year also witnessed the first volleys in an emerging debate on expanding access to health insurance. Massachusetts passed a law requiring universal coverage, which received wide attention in press across the country. Lawmakers in dozens of states have expressed interest in building on the state’s program.
California Gov. Arnold Schwarzenegger recently announced his own effort to build on the Massachusetts plan and provide universal coverage in his state—the world’s seventh-largest economy. Specific details are sketchy, but employer contributions look to be a significant foundation of the plan.
This debate will no doubt have twists and turns as it moves across the country, but a critical assumption has been made: Employers have some responsibility for partially funding universal health care. If this is cemented in the public’s mind, all that’s left for the industry is to negotiate the final price tag. And with the public believing we are cheap, insensitive and earning high margins, we don’t hold good cards.
There are many more examples, but we can’t assume the public will learn our facts late in the game and remember them in the voting booth. Competition for the public’s attention is fierce. If we wait to start the conversation until a specific time—say, right before a vote—we risk our message getting drowned out.
Tens of millions of customers—think voters—pass through your doors each week. Between elections, an individual may visit your restaurant dozens of times. Each visit presents an opportunity to tell your story. Consider it “catastrophic political” insurance coverage.
When the public hears about wage hikes or health care mandates, it usually responds positively, in large part because there is so little understanding of the economic impact. Because the public generally is not familiar with business economics, these feel-good policies look like a “free lunch.”
We simply cannot ignore the fact that unions and other labor activists are taking advantage of widespread economic illiteracy among the voting public to circumvent the legislative process.
The best way to get beyond this problem is to find a way to speak directly to the public about policy issues. I recently helped develop a model program to address the pressing question of economic literacy. The Washington, D.C.-based First Jobs Institute successfully tested a campaign called Econ4U, which provides diners with economic information in a fun, nonthreatening and casual way in the form of trivia questions on coasters.
If reaching out to customers seems difficult, start with your employees. Collectively, the industry employs millions of voters. Each one is directly and negatively impacted by the proposals promoted by our opponents.
If your own employees don’t understand what’s at stake in these debates, it is hard to expect the general public to understand the consequences of these emotional but misguided laws.
Be warned, these debates are coming whether you talk about the issues or not. The opposition believes these issues are critical to their political success. They will pursue them when legislatures are in session, at the ballot box and any other time they can bend the ear of a reporter or sympathetic columnist.
In 2008, our industry can expect close to a dozen ballot initiatives, covering either wages, paid leave or health coverage. As the vote nears, if public support for these issues is running over 80 percent again, we will lose.
Focusing on short-term business challenges is important. But making it your sole concern is a mistake. Surely you can pass the “chew gum and walk” test.
Ignoring longer-term political dynamics can upend the best-run business and erase any gains made in the marketplace. Start the conversation now.