In the article, Sex, drugs and hope, author of the Economist, Schumpeter, describes how big businesses are taking an interest, and action, in huge social issues that would affect profitability of the company. In this particular article, how the prevalence of HIV/AIDS is an issue for employers in high skill or labor specific sectors.
As we’ve been talking about multinational corporations in class and the affects foreign investment can have on the development of a nation, and looking at factors that incentivize or deter foreign investment, this article seemed like an interesting factor in investment that I hadn’t thought about before.
Schumpeter begins by telling the all too common story of rising HIV/AIDS rates in Africa, citing that in 2002, in South Africa the infection rate was 17% in adults. Some industries were affected lesser or more so. For example, a mining company whose workers were often migrants who stayed at sex hostiles, were always close to prostitution, and the disease spread and increased. With a labor intense job, the skilled workers sickened, and were dying quickly. Often one was trained to take their place. Thus, slowing efficiency, and production. The company decided that “in the end it was a moral decision,” said Brian Brink, Anglo Mine’s Chief Medical Officer. The company started offering testing to all employees. Testing up to 80% of the workers. Then, posting daily reports about where, in what mine, it was statistically most safe to have sex. The company also offered anti-viral drugs for those with critical Tcell counts. In the end, they began to control the spread of the virus, and also combatted the death of their skilled workers who had contracted in.
The article goes on to discuss other companies in other industries who have followed suit. One last example, a beer company in Africa who gave out condemns to its workers because as a statistical fact, their product had the tendency to cause unprotected sex, in this case a life threatening side affect of a beer buzz.
Another issue mentioned, perhaps more closely to home, was obesity and diabetes. With now over 50% of the adult population in the U.S. suffering from diabetes the business culture will be affected, we are now looking to free market solutions.
Many questions come to my mind as I think about this concept in the future of businesses taking on social issues because it is economically advantageous to do so. First, this isn’t the first time companies are doing this, lobbying politicians is the daily practice of comapny’s. But by directly offering solutions to workers companies have the ability to gain a certain amount of control. In the case listed above, this company got to choose which drug company to buy from, who to give drugs to etc. On a macro scale this is a big deal. What if it was the sole responsibility of the employer to make all health care purchases and decisions for/with employees?
This issue of corporations in social issues is a major consideration when companies are deciding where to invest, and how they invest. In class, Johannes talked about how Chinese companies were funding huge development projects in Africa, using Chinese tools, and Chinese workers, so an AIDS epedemic at first may seem to not affect this industry, as they are Chinese workers. Yet, what if the Chinese workers become infected? This is a risk for China now. Also, in another instance, a company that would have employed African workers, boosting the African economy, will now bring its own workers because of the epidemic.
As this issue is uncovered it seems to go deeper and deeper into the implications social trends and issues can have on businesses. Then, how these considerations look differently all over the world.
We see the same general trend here in the United States when it comes to companies providing subsidies to employees who have gym memberships. Companies do this to decrease their own expense on healthcare cost per employee. In Africa, companies have conducted their own cost analysis of hiring new workers and training them or keeping current employees healthy. Ultimately many of these companies will continue these practices until the cost of continuing are no longer productive for the corporation. One present example is companies who will no longer hire smokers. For several decades, corporation have actively promoted and helped smokers in their work places quit smoking. Today, it is cost prohibited hiring these individuals because of healthcare cost associated with smokers. Smokers no longer have the benefits they use to have a decade ago from corporations. Today, it makes financial sense not to hire smokers which is a dramatic change from a few decades ago.
ReplyDeleteIt's interesting to see how this trend is start to infiltrate businesses in developing countries. It is currently beneficial to companies to help their workers deal with these health issues, because the cost of not doing so can be much higher in the long run. If more developing nations realized this, it would help their economies. The only problem with this is the risk, in some cases, of the cost of helping employees getting higher than not helping. With the rise of certain health issues (obesity, STDs, etc), that is eventually a real possibility.
ReplyDeleteCompanies paying for their employees health is not that new of a concept like Ernest said many companies corporate and not, provide gym memberships and help nock off a small chunk of their healthcare for their employees. If you maintain a healthy workplace you are more effective, and being effective is efficiency in the economic world. The cost of finding new employees and training them is often greater than offering small health benefits in order to maintain the health of their workforce and the economic health of their company.
ReplyDeleteI have learned in other classes about the spread of HIV/AIDS among traveling workers in Africa. These workers contract diseases because their job demands that they travel long hours, resulting in these workers looking for a prostitute. Since they are on the road the disease can easily spread. I think it is a great initiative for the companies to provide health measure to try and protect the workers. It is much cheaper for them in the long run to take action now than later in the future when medical bills can get much more expensive.
ReplyDeleteCorporations increasingly focusing on social issues and providing benefits to their workers seems like win-win situation to me. Not only does it help the workers but it also helps the companies by increasing productivity with healthy workers. I think especially in African countries that face the rampant spread of HIV/AIDS, this shift in the focus of social issues is an important step to combatting the disease and increasing development. Much too often, corporations are focused solely on one thing: making money. In this quest to become economically prosperous, many lose sight of social and environmental issues. My point is that it's good to see some companies highlighting the importance of tackling social issues and actually following through with a solution.
ReplyDeleteOne of the most interesting things I've heard about the spread of HIV/AIDS is a story from a friend involved in a circumcision campaign. Circumcision apparently reduces the transmission of stds when performed safely. Safely healing requires a few weeks of no sexual activity. This created a large issue as many of the men refused to wait, having sex with open wounds. This largely increased transmission in the area.
ReplyDeleteAnother story from the same trip was a condom demonstration. The people who demonstrated how to use them put them on a broomstick handle. They later found that the men would put a condom on a broomstick, put that in the corner of the room, and have unprotected sex.
One of the most important things in my mind is education in regions like this. In areas where witch doctors and black magic are a part of life, there is a lot of misinformation. Education i think would have a huge impact on transmission.