Fighting Short-Termism with Worker Power

By Susan R. Holmberg |

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This paper asks, “Can Germany’s co-determination system fix American corporate governance?” Prioritizing immediate increases in share price and payouts at the expense of long-term business investment and growth—a behavior we refer to as short-termism—has driven the inequality crisis in America and weakened our economy. By comparing the German stakeholder system of co-determination to corporate governance in the U.S., we find that emboldening workers with legitimate stakeholder power can help hold back the forces of short-termism.

Workers especially, who are investing in companies with their own labor on a daily basis, have a legitimate claim as corporate stakeholders, and it will serve companies, and society more broadly, if we—on the left at least—felt empowered enough to stake this claim.

Fighting short-termism by Roosevelt Institute on Scribd

Susan R. Holmberg is a political economist and a Fellow at the Roosevelt Institute, where she researches and writes on inequality, corporate governance, and climate change issues. Holmberg is the author and co-author of numerous books, reports, and articles including, The Hidden Rules of Race, Rewriting the Rules (with Roosevelt Chief Economist Joseph Stiglitz), Boiling Points, and The Atlantic essay, "Can CEO Pay Ever Be Reeled In?