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US companies heed plea to join voting rights battle

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Dozens more companies have come out against Republican voting legislation which critics say will disproportionately discriminate against African-Americans, after a group of top black executives urged the rest of corporate America “to move past indecision to action”. 

The chief executives of Uber, Salesforce, PayPal and Dow were among more than 170 executives who signed a statement on Friday expressing solidarity with their peers and denouncing lawmakers who “impose barriers that result in longer lines at the polls or that reduce access to secure ballot drop boxes”.

The statement, organised by a business coalition called Civic Alliance, captured a striking change of tone from US businesses as voting rights have shot up the corporate agenda in recent days.

As two bills made their way through Georgia’s Republican-controlled legislature in recent weeks, the largest companies that call Atlanta home seemed to tune out the activists who argued that the proposed changes to voting rights were discriminatory. 

Campaigners had urged the likes of Coca-Cola, Delta Air Lines, Home Depot and UPS to oppose the legislation, warning that pledges those companies had made over the past year supporting racial justice and democratic participation would otherwise ring hollow. 

Several companies issued statements supporting broad voter participation but hedged them by saying elections also needed to be “secure”, which critics saw as perpetuating debunked Republican claims about the integrity of the vote that ushered Joe Biden into the White House. 

If companies had concerns about the legislation, they chose to voice them in private. Days after Georgia governor Brian Kemp signed the bills into law, that strategy looks to have backfired. 

On Wednesday, 72 of the country’s most senior black executives issued a letter calling on the rest of corporate America to publicly oppose “discriminatory legislation” in Georgia and other states where Republicans have introduced similar measures.

“When it comes to protecting the rights of all Americans to vote, there can be no middle ground,” they warned. 

Other chief executives should be embarrassed by the reprimand from their peers, said Jeffrey Sonnenfeld, a professor at Yale School of Management, who said those executives who stayed silent on voting rights had been “seriously misadvised by cautious legal and public relations advisers”. 

Their reticence stemmed from their staff’s “cowardice”, he argued, and from their fear of boycotts from Republicans who say the changes are needed to prevent voter fraud and restore public confidence in elections. 

Richard Edelman, chief of the eponymous public relations consultancy, countered that many business leaders feared broaching what they saw as a partisan issue. 

“They do not want to get into the politics. They feel this is a red flag issue for Republicans and they feel it’s beyond their remit. What I’m hearing from my clients is it’s a bridge too far,” he said. 

Many large US companies have already picked sides in several debates over which voters are deeply divided, from which bathrooms transgender employees should use to immigration, policing and gun control. But the rift over voting rights is unusually fraught, as it is being presented as a test of two of their biggest recent public commitments.

Late last year, as former president Donald Trump questioned the validity of his election loss, many executives issued calls for a peaceful transfer of power, restating the importance of democratic norms for a stable business environment. 

Months earlier, after police officers in Minneapolis killed George Floyd, countless business leaders had made high-profile pledges to do more to erase racial inequities in their own companies and throughout US society. 

Today’s voting rights battles are “where the ‘big lie’ [that election fraud is rife] and Black Lives Matter meet”, noted Tom Rogers, former chief of DVR company TiVo. And Georgia is no isolated case: with similar legislation being debated in an estimated 43 states, companies risked getting “bogged down in trench warfare” across the country, Edelman warned. 

Some companies remained uncomfortable discussing specific legislation, said Mike Ward, co-founder of Civic Alliance. But, he added, their black colleagues’ letter added urgency to a growing consensus that they should speak up for the principle of broad voter access, which most of their employees and consumers support.

By Thursday there were signs of some companies trying to get ahead of the next wave of headlines in their home states, as American Airlines declared that it was “strongly opposed” to legislation passed by the Texas State Senate that day which would limit voting access.

One way to avoid state-by-state fights on the issue would be for businesses to support federal legislation to expand voting rights nationwide, said Daniella Ballou-Aares, co-founder of the Leadership Now Project, which rallies executives to support US democracy. 

But HR1, the For the People Act, which congressional Democrats have proposed, was probably too broad, too aggressive and too embroiled in procedural arguments about the Senate filibuster for companies to support unless it was narrowed down, Rogers cautioned.

Companies were engaging more readily with the narrower HR4, the Voter Rights Advancement Act also known as the John Lewis Act, Civic Alliance’s Ward said.

“Congress should immediately hive off and target a very specific motion related to voting rights and get it done now” to win the support of business, argued Tim Wirth, the Democratic former senator from Colorado.

In the meantime, he said, it was essential for the business community to speak up because of its status as one of America’s most trusted institutions. Executives should make clear to politicians that “if they continue this sort of thing, businesses are going to stop their activities [in their states]”, he added.

Teri Plummer McClure, a former UPS general counsel who issued another call for corporate action on voting rights with Sonnenfeld this week, said she had not heard of companies threatening to pull investments over voting restrictions. But that possibility hangs over companies’ discussions about a turn in US politics few of them welcome. 

As Microsoft president Brad Smith spelt out the software company’s concerns about the Georgia legislation on Wednesday, he noted pointedly that it had agreed a decade-long investment in Atlanta only last month, but “a healthy business requires a healthy community”.

“Capitalism does not work if we don’t have a functioning democracy,” echoed Craig Robinson, a former WeWork executive working with Leadership Now.

Within 36 hours of the letter from the 72 black executives, some other business leaders were endorsing its message, including Apple’s Tim Cook, Julie Sweet, the Accenture chief, and the Business Roundtable, the Washington lobby group. Brad Karp, chair of Paul Weiss, urged fellow lawyers to fight voter suppression efforts.

Most significant, though, were the statements from two Atlanta-based chiefs who had spent weeks saying little about the furore in their own state. Georgia’s new voting legislation was “unacceptable”, said James Quincey, Coca-Cola’s chief, and “based on a lie”, said Ed Bastian, chief of Delta. 

Asked on CNBC why he had not said as much before the Georgia bills passed, Quincey noted that companies had previously managed to achieve many of their aims in private discussions with lawmakers and others, without having to take a public stand. “But in this case it did not work, clearly.”





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Analysis

Taiwan seizes chance to host foreign reporters kicked out of China

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Taiwan is courting journalists fleeing China, spotting an opportunity to boost its visibility and build international support as concerns mount that Beijing is flirting with the idea of invading the country.

Last year, more than 20 journalists made the journey across the Taiwan Strait from China. Many had published articles critical of human rights abuses against the Uyghur Muslim minority in Xinjiang and the government’s early handling of the coronavirus outbreak in Wuhan.

They came at the invitation of the Taiwanese government, a move that has infuriated China, which claims the island as part of its territory.

Jojje Olsson, a freelance journalist living in Taipei since being denied re-entry to Beijing in 2016, said that Beijing’s reaction to critical reporting carried risks for the regime.

“China is shooting itself in the foot by expelling lots of journalists,” he said. When reporters come to Taiwan, he argued, “they are exposed to views that don’t reflect well on China”.

Steven Butler, the Asian head at the New York-based Committee to Protect Journalists, said that “Beijing is surely very unhappy about journalists moving to Taiwan”.

China, he added, was sensitive to the foreign media being in Taiwan, citing a case two years ago involving a prominent newspaper that was warned against setting up a regional headquarters in Taipei. 

Beijing said the newspaper’s offices in the Chinese capital would be forced to close if it went ahead with its expansion plans.

Michael Smith of the Australian Financial Review, who was forced to leave China in September after being questioned by state security officials, said Taiwan’s consulate officials in Sydney “made it very clear that we [journalists] were welcome”.

He declined the invitation but many others accepted.

Last year, journalists from The New York Times, The Wall Street Journal and The Washington Post arrived in Taiwan after being expelled from China, which Beijing said was a response to Washington’s blacklisting of its state media reporters.

They were joined three weeks ago by RTÉ’s Yvonne Murray and her husband John Sudworth of the BBC following threats of legal actions over his reporting on Xinjiang. 

Taiwan’s Ministry of Foreign Affairs and China’s Ministry of Foreign Affairs did not respond to requests for comment from the Financial Times.

Hong Kong had been the city of choice for journalists covering the Chinese state from afar. Western journalists booted out of China after Mao Zedong came to power in 1949 decamped to the British colony, leaving behind reporters from the Soviet bloc.

Veteran BBC correspondent John Sudworth left China late last month after facing an ‘intensifying propaganda campaign’ targeting the broadcaster and him personally © BBC

Seventy years later, Olsson said Taiwan was assuming Hong Kong’s former role. The introduction of China’s sweeping national security law on Hong Kong last year meant that the territory no longer afforded protection from Beijing. 

“There is no other place in the world that follows developments in China as closely as Taiwan,” argued Olsson, adding that finding out what the Chinese Communist party was up to was a matter of existential concern for the Taiwanese.

Taipei’s early detection of the pandemic is a case in point. Taiwanese officials were alerted to the novel coronavirus circulating in Wuhan through close monitoring of Chinese social media and introduced containment measures before any other foreign government. 

Taiwan boasts expertise in China across its government and private sector, and shares a language and timezone. But reporting from across the Taiwan Strait has its limitations. Journalists have experienced difficulties securing interviews and personal stories that present a more nuanced picture of China.

Their jobs have been additionally complicated by the absence of news assistants — China-based journalists and researchers employed by international media — who face more severe legal consequences and lack the privileges of a foreign passport.

Reporters have also been forced to operate without the support of a bureau, as media executives are wary of provoking China by opening offices in Taiwan. Deutsche Welle, the German broadcaster, was the last foreign media outlet to do so in 2018. Tokyo and Seoul are viewed as alternative east Asian headquarters, industry insiders said. 

The size of Taiwan’s economy is another factor that has given foreign outlets pause. Despite being home to some of the world’s most important technology companies, only a handful of news organisations provide consistent coverage of the Taiwanese market, which is often overlooked by foreign investors.

But China’s escalating military posturing towards Taiwan has kept the island in global headlines, as the two sides battle to dominate the international narrative around its contested status.

Beijing has used its economic and political might to entice Taipei’s few remaining diplomatic allies to switch recognition, undermining Taiwan’s sovereignty with promises of investment deals.

But by welcoming foreign journalists, the Taiwanese government has also exposed itself to critical coverage of the marginalisation of its aboriginal communities and migrant workers as well as a sluggish vaccination rollout. Journalists, after all, as one Taiwanese politician joked to the FT, “are hard to control”.



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Defund the police: how a protest slogan triggered a policy debate

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Eleven months ago “Defund the police” was a slogan that appeared on placards at protests; now it is being debated by American city councils.

Polls show only a small portion of Americans support the idea of defunding the police, a flexible phrase that can mean redirecting funds to social services or outright elimination of the department. Yet as lawyers prepare to deliver closing arguments on Monday in the trial of the officer accused of murdering George Floyd in Minneapolis, and in the wake of yet more deaths at the hands of police, what was previously a fringe concept has become part of mainstream US political discussion.

Minneapolis has three proposals to diminish the police department’s power that supporters are attempting to place on the ballot in November. Two would replace the police department with a department of public safety, with the police as one division of it. The third would place the police department under the control of a 13-member civilian commission, with the power to hire the police chief and discipline officers for misconduct.

Austin, Texas cut its police budget in August by 35 per cent, with 5 per cent taking immediate effect. Seattle cut the police budget by 20 per cent in December. City councils have cut police budgets in nearly two dozen other cities, although mostly because the pandemic has battered municipal finances.

“People will look back at this year and say this was a real turning point,” said Alexander Weiss, a consultant who has advised police departments in Chicago and New Orleans, in reference to police accountability.

People march near the Colorado State Capitol to protest the deaths of Daunte Wright and Adam Toledo © Michael Ciaglo/Getty Images

Floyd’s death last May set off protests around the world at the disproportionate number of people of colour killed by police. A key demand for many activists was to abolish police departments entirely, or cut their funding and redirect it to social services. In Minneapolis, nine city council members stood on a stage and pledged to defund the police. When Washington, DC Mayor Muriel Bowser ordered that the words “Black Lives Matter” be painted on a city street blocks from the White House, demonstrators used the same yellow paint to add: “Defund the Police”.

With more people killed by police in the past three weeks, the demands to defund have escalated. Chicago community organiser Rey Wences told non-profit news outlet Democracy Now! that following the killing of 13-year-old Adam Toledo last month by a Chicago police officer: “What we’re asking for is the same thing we’ve been asking for years . . . Defund the police and invest in our communities.”

In 2017, state and local governments around the US spent $115bn on police — some 4 per cent of state and local direct general expenditures — according to the Urban Institute. That share has stayed constant for the past four decades, even as the rising cost of healthcare means other big-ticket items, such as elementary education, now constitute a smaller portion of municipal budgets.

Most of the money is used to pay salaries and benefits to police officers, so cutting more than 15 per cent of a department’s budget often means cutting the size of the force, Weiss said.

Police officer pay has increased as police unions have grown in power and unions are some of the defunding movement’s most dedicated opponents. After Austin City Council in August voted to cut the police budget by $150m, the Texas Municipal Police Association put up a billboard outside the city, saying, “Warning!!! Austin Police Defunded Enter at Your Own Risk”.

Critics have warned that crime will rise if police budgets are cut. The number of homicides did rise in most US cities last year. Although the reasons are unclear, that increase seems to be unrelated to police budget cuts, which in most cases had not yet taken effect.

Some Democrats have been critical too. President Joe Biden said in a meeting with civil rights leaders that talk of defunding the police was how Republicans “beat the living hell out of us across the country” in the November elections.

An Ipsos/USA Today poll released last month found that 18 per cent of Americans support defunding the police, and only 11 per cent support abolition. About 57 per cent support fully funding their own local police department, while 43 per cent support redirecting some of that money to social services.

Richard Auxier, a tax and budget expert at the Urban-Brookings Tax Policy Center, said that since police budgets were set by local governments: “there are literally thousands of them across the country, . . . and they all have their own politics”.

The politics have been particularly intense in Minneapolis. Three of the councillors who took the pledge in June backed away from it. The Minneapolis Charter Commission, a previously obscure body, killed an attempt last year by council members to place a proposal on the ballot that would replace the police department with a new public safety agency. The Minneapolis City Council launched a second attempt in January.

Activist Antonio Williams is a canvas director for the Yes 4 Minneapolis coalition, which is trying to land an initiative on the ballot that is similar to the city council’s. (A third group, Twin Cities Coalition for Justice 4 Jamar, also is pursuing a ballot initiative.) So far more than 20,000 residents have signed the Yes 4 Minneapolis petition.

A demonstrator holds Daunte Wright’s portrait during the seventh night of protests over his shooting by a police officer in Brooklyn Center, Minnesota on Saturday © Chandan Khanna/AFP/Getty Images

Williams said some of the residents he had spoken to thought the petition’s language went too far, while others thought it did too little. He sees all those conversations as a first step in the process of persuading someone to sign, then to show up at the polls in November to support the initiative.

For him and other activists, the killings of Daunte Wright by a Brooklyn Center police officer, or of Toledo in Chicago, add no urgency to their cause, because it has always been urgent. But perhaps for some, the fact that Wright’s death occurred while former police officer Derek Chauvin is being tried for Floyd’s death, when the world is watching Minneapolis, underlines “a dire need for some change”.

“It’s going to continue to happen all over the country until policing as we know it and see it is done away with,” said Williams.

Certainly Floyd’s death “galvanised” the city’s residents on the issue of police misconduct, Williams said. He doubts the signature drive could have succeeded 11 months ago. “The conversation could have been had for sure, but the next step, the commitment, the action part of it?” he said. “I don’t see it happening.”





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UK business groups call for mandatory reporting of ethnicity pay gap

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A duty for large companies to publish the pay gap between staff of different ethnicities would be a straightforward step to tackle racial inequality in the workplace, according to UK business groups and economists who accuse the government-commissioned race report of downplaying the extent of problems in the labour market.

A storm of criticism greeted the report by the Commission on Race and Ethnic Disparities (Cred), after it concluded last month that the UK was not “rigged” against minorities and that “very few” disparities were linked to racism. But the main complaint from business groups was its failure to recommend a statutory reporting obligation of the kind in place since 2017 for gender pay disclosure.

The report said there had been a “broadly positive story” on ethnic minorities’ place in the labour market over the past 25 years, with “a gradual convergence on the white average in employment, pay and entry into the middle class”.

But Jonathan Portes, professor at King’s College London, said Cred had relied on “crude sleight of hand” in presenting statistics to back up its narrative.

Ethnic pay gaps have not improved over time in the UK, gap in mean wages (%), 9-year rolling average*

A headline gap of 2.3 per cent between the hourly median pay of all minorities and white British employees hides a much bigger gap for certain groups — with those of Bangladeshi and Pakistani ethnicity at particular disadvantage, and black men suffering a far bigger shortfall than black women.

Alan Manning, a professor at the London School of Economics, said that after adjusting the data for personal characteristics such as age, qualifications and family status, there was “no evidence for pay gaps being smaller . . . than they were 25 years ago”, and that while the ethnic penalties for some groups had improved over time, “the overriding impression is of stasis”.

These persistent pay disparities partly reflect occupational segregation, with many ethnic minorities clustered in low-paid jobs with little chance of progression. Andrea Barry, an analyst at the Joseph Rowntree Foundation, notes Bangladeshi men are three times as likely as white British men to work as chefs and waiters, while Pakistani men are more than 10 times as likely to work as taxi drivers.

But they also reflect the barriers to career progression in professional life. Ethnicity pay gaps are largest in managerial, professional and skilled occupations — and when employers examine pay differentials within their organisations, they generally find ethnic minority employees are concentrated in frontline roles, and under-represented at senior level.

The new rise in youth unemployment has been much worse for those from black and Asian backgrounds,  unemployment rate for those aged 16-24 in the UK (%)

A growing number of employers — from law and accountancy firms to local authorities and large companies such as Sainsbury and Network Rail — now report ethnicity pay gaps on a voluntary basis.

Cred endorsed this voluntary approach, arguing that there were statistical “pitfalls” in trying to impose the framework used for gender pay to report outcomes for many ethnic groups.

However, business groups have repeatedly urged the government to introduce a mandatory reporting requirement, modelled on gender pay disclosure, arguing that practical difficulties can be overcome.

Matthew Fell, CBI chief UK policy director, said pay gap disclosure was “one of the most transformative steps a company can take to address race inequality at work”.

Peter Cheese, chief executive of the Chartered Institute of Personnel and Development, criticised Cred for a “missed opportunity” to press for mandatory disclosure, adding: “Racial equality at work is not just about participation in employment but also about progression into more senior roles. Pay reporting can highlight organisations and sectors where this is not happening.”

Sandra Kerr, of Business in the Community, campaigns for mandatory reporting © S Meddle/ITV/Shutterstock

Sandra Kerr, race director at the charity Business in the Community, which has campaigned for mandatory reporting, said that while disclosure was not a “silver bullet”, it prompted companies to examine where people were sitting in their organisation, and was a way of “ensuring that the conversation is had at the top table”.

BITC has found that barely one in 10 large companies reports on its ethnicity pay gap voluntarily, and points to a sharp drop-off in gender pay reporting last year, when the pandemic led to a suspension of the usual requirement to disclose the pay gap between male and female staff.

The government consulted in 2018 on options to introduce a mandatory requirement, and has tested possible approaches to reporting with various businesses, but it has not yet taken further action. The Department for Business, Energy and Industrial Strategy said that it would respond to the consultation “in due course”.

Ethnicity pay reporting is more complicated than for gender. One issue is disclosure: many companies hold only patchy data because employees do not have to disclose their ethnicity and some are reluctant to do so — or unable to find a box to tick that matches their heritage.

A bigger issue is sample sizes. Ideally, employers would give a detailed breakdown of outcomes for different ethnic groups, but it is not always possible to do this while preserving anonymity. Cred argued that many employers recruiting from predominantly white areas do not have enough ethnic minority staff for a median pay comparison to be meaningful.

But business groups say these issues are manageable, if companies also put the headline figures in context and explain how they plan to close pay gaps.

Network Rail has published figures showing the pay gap for black employees is much bigger than for Asian colleagues © Alamy Stock Photo

Network Rail, for example, has published figures showing the pay gap for black employees is much bigger than for Asian colleagues, based on disclosure by 90 per cent of staff. With more than 100 nationalities among its staff, it collects more granular data to inform internal policy but does not publish figures where the sample size is too small to be reliable.

Sainsbury, meanwhile, has published figures showing that median pay for black employees is higher than for white colleagues — explaining that more black staff work in London stores with a higher pay weighting. Mean pay for black employees, who are under-represented at senior level, still lags.

Without an accompanying narrative of this kind, a pay report is “not worth the paper it’s printed on”, Kerr said.

The complexity of reporting ethnicity pay data is no reason not to report it, as Andy Haldane, the Bank of England’s chief economist, has argued.

“Published pay gaps are a starting point for corporate and national accountability and explanation, not an end point,” he said in 2019. “No single metric can perfectly summarise all dimensions of diversity. But publication of a single metric can, and has, served as the catalyst for an explanation and action.”



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