One morning last fall, we spoke with Alia, who was a rank-and-file worker at a growing restaurant chain. After her employer cut bussers’ wages in 2014 by more than half, to $2.13 an hour — the federal minimum for tipped employees — some staff struggled to pay basic bills.
“Somewhere,” she told us, “decisions were made in the boardroom with no regard for us.”
Nationwide, too many workers like Alia feel ignored by management. And that’s largely because aspiring managers at business schools like ours are implicitly trained to ignore them. We attend two top MBA programs where courses often treat front-line workers (and, increasingly, contractors) as an expense to be tolerated instead of as an asset to be valued. Their concerns and contributions are rarely discussed on campus. And when they are, the conversation tends to focus on values-driven leadership or the potential for workforce automation, not the need for a balance of power between executives and workers.
It wasn’t always this way. After the Great Depression, according to Harvard Business School professor Rakesh Khurana, business school deans traced the collapse of the economy to “an uncritical embrace by business schools of the laissez-faire market ideology” that disregarded the social toll of concentrated economic power. As society responded with policies that empowered organized labor, made taxation more progressive, and strengthened the social safety net, business schools pitched in. In 1942, Harvard hosted a novel Trade Union Program to develop labor leaders. Likewise, Khurana notes, many schools sought to reduce the pro-executive bias in their research and recognize concerns voiced by workers.
Yet as these efforts succeeded in creating shared prosperity in the mid-20th century — perhaps because of their success — they lost their sense of urgency. This led to the rise of an ideology that places shareholder and executive voices far above all others. Business schools helped shape that worldview. Harvard’s Trade Union Program has since shrunk and moved to the law school, physically and ideologically distant from the minds of business leaders. In today’s MBA programs, writes MIT Sloan School of Management professor Thomas Kochan, “Labor relations is often either ignored or, if covered, curricula tend to focus on how to avoid rather than how to work with” workers’ rights groups.
This neglect of worker voices in our programs should trouble MBA students, faculty, and deans who worry about our increasingly unequal society. A recent survey of 10,000 Americans found that 80 percent — including 73 percent of Republicans — say that “companies don’t share enough of their success with employees.” Sixty-two percent said they distrust corporations.
To address this divide, business school leaders, instructors, and students must bring workers’ perspectives into the MBA curriculum. In recent months, professors Kochan at MIT and Lenny Mendonca at Stanford University have done just that by providing venues for MBA students to collaborate with workers and labor organizers like restaurant worker Alia. Every MBA program should do the same. Workers’ rights organizations such as Coworker.org, OUR Walmart, Restaurant Opportunities Centers United, and the Independent Drivers Guild apply many of the tools and concepts taught in business school — creative business models, online platforms, and machine learning, for example — to help workers improve conditions and companies improve performance. Why aren’t more MBA students taught about these organizations?
Business schools must change their culture to one where the nature of the executive-worker relationship can be debated. How can we, as future shareholders and managers, restore dignity to, and share power with, frontline workers? What are the human consequences of hiring workers as poorly paid contractors instead of employees? How can we adjust the teaching of accounting, investment, and operations so students are less likely to reduce labor to a dehumanized input? If MBA students don’t engage with these questions, we risk blindly propelling another economic crisis.
MBA programs in the Boston area can lead these changes. Harvard Business School is a preeminent provider of teaching cases and can incorporate more perspectives from workers and workers’ rights groups. The MIT Sloan School of Management is a leader in finance theory, and just down the hall is the school’s respected Institute for Work and Employment Research. In addition to inviting a successful investor to class, why not bring in a nurse or factory floor worker who has weathered the organizational stress and job disruptions that so often accompany a leveraged buyout?
Some may argue that a more equal balance of power between executives and workers impedes economic opportunity by generating inefficiency. They might contend that the workplace is no venue for power sharing. That thinking is misguided.
An economy that delivers gains only to the top will suffer ills far worse than inefficiency. Moreover, as many corporations respond to a massive tax cut with modest one-time bonuses instead of raises, it’s clear that workers need a stronger voice — for their sake, and our economy’s.
Fortunately, Alia and her colleagues secured a return of busser wages to their previous rate of $5.15 per hour by organizing a campaign through Coworker.org. It’s time for business schools and MBA students to take action, too. Will we support efforts to restore dignity and power to American workers, or will we continue to respond with indifference? The choice we make will reveal whether business schools are valuable contributors to a fairer economy or obstacles to it.