Milton Hershey’s original chocolate factory in Hershey, PA is closing, and 500 workers will be laid off. The plant will be relocated outside of town, in a new facility designed to house more automated equipment. Hershey says it must make the move in order to compete with global giants in the industry. The company had intended to leave PA altogether, but the union conceded the 500 jobs in order to save the remaining 600.
When Milton founded the company in 1903, his dream was to create a “worker’s paradise.” The town grew up around the plant, and Hershey was a benefactor, building facilities such as a theater, low-rent housing and cheap public transportation… even a water park for his employees. The plant was designed around the concept of worker comfort and included amenities virtually unheard of at the time. What an odd thing for a business to do! Hershey wanted to create jobs, and good ones at that. He wanted to contribute to the growth and security of his country.
I have not found an instance in the folklore in which Milton Hershey mentions profits, or “shareholder returns” as a motivating factor in his decision to launch his ambitious endeavor.
When I started Barefoot Press in 1987, there were three main things that motivated me. I wanted to explore the craft of printing. I wanted to see what I was capable of building on my own, with no money – only a notion that green printing should and could be done using recycled papers so that we could slow the depressing deforestation of our old-growth forests. And I wanted to create a handful of good, local jobs and see if it was really possible to design a workplace that employees would enjoy coming to in the morning. I didn’t know if I could make a profit, and quite frankly that goal wasn’t at the top of my list. Naive at the age of 22, I believed that if you strive to do something that is inherently the right thing to do, the money follows.
In 1987, entrepeneurs regularly mentioned a desire to create jobs as a personal motivator. There actually was, as unlikely as it seems today, a feeling of responsibility ingrained in the business community – a notion that it was our obligation and privilege to return something to the community we grew up in, to actually contribute to the growth and positive development of American society. It’s amazing to me that today, only 24 years later, you never hear “job creation” mentioned as a guiding corporate principal.
It strikes me in this era of off-shoring jobs and reducing worker pay that the myopic pursuit of profit is a big part of the problem our country faces. We seek to reduce taxes and shrink the size of government while simultaneously bemoaning our 10%+ unemployment level, never making the connection that government is our largest jobs program. We drool over a good corporate earnings report hoping to salvage some of our 401k investments, forgetting that those profits are driven by a shrinking domestic payroll and cheap overseas labor. Full employment is the key to a healthy economy, and the reality that CEOs are actually rewarded for draining our jobs with multi-million dollar bonuses is insane.
The consequence of making “quarterly shareholder return” the guiding principal of business is a steady race to the bottom for the USA. Layoffs and downsizing lead to home foreclosures, which lead to plummeting property values, which lead to reduced consumer spending, which leads to price pressure that leads to demand for cheap foreign goods, which leads to factories closing and moving offshore, which leads to layoffs and unemployment, which leads to more home foreclosures… and downward we go, like water swirling down a toilet drain. The perpetrators of this scam on the American public are now filthy rich, beyond the average person’s wildest imagination, but it’s a one-way ticket for our great nation.
A new, healthy economy must be built from the ground up by ordinary Americans, employing their neighbors and giving back to the community. As alluring as cheap prices are, we must face the unavoidable fact that earning money here only to send it overseas through the consumption of cheap Asian products is a suicidal practice. Economics, like politics, work best at the smallest levels. Vampire corporations will keep right on sucking the life out of our economy as long as we are willing to help them do it.
Responding to pressure from a global market may have forced Hershey to automate and cut 500 jobs, but the company made the right choice to stay in Pennsylvania. Americans will have to put Americans back to work and support American companies in order to save America.