In March, Sen. Tammy Baldwin (D-WI) proposed a big idea to try to make the economy fairer: requiring public companies to let their workers directly elect one-third of the corporate board’s members.
That might sound radical. But Americans largely support the idea. A poll of more than 3,300 American likely voters by Civis Analytics finds that a majority (53 percent) would support allowing employees at large companies to elect representatives to those companies’ boards of directors, thus giving employees a direct, democratic say in how the company is run.
The idea is overwhelmingly supported by Democrats (71 percent to 10 percent opposed) and Democratic leaners (75 percent to 9 percent), with pluralities of both independents (37 percent to 14 percent, with 49 percent saying “don’t know) and Republican leaners (43 percent to 31 percent) supporting the idea as well. Self-identified Republicans only reject the idea very narrowly, 35 percent to 39 percent.
The poll was conducted by Civis Analytics, a data science and polling firm formed by veterans of the 2012 Obama campaign, and its senior data scientist, David Shor, from February 15 to March 2.
This proposal, requiring worker seats on corporate boards, is commonly referred to as “codetermination.” A number of European countries require worker representatives to be included in corporate boards, or for councils of workers to be consulted in appointing board members.
Arguably the most aggressive and well-developed codetermination system is that of Germany. Typically, German companies have two boards: an executive board composed of the CEO and other senior executives, and a supervisory board representing both workers and shareholders, fulfilling a similar role to corporate boards in the US.
In large German companies of 2,000 or more employees, half of supervisory board members are elected by workers, with the other half and the chair elected by shareholders. Companies are also required to allow works councils elected to represent workers in day-to-day disputes over work conditions, layoffs, etc. These councils have a variety of legal rights requiring companies to consult them, and about 43 percent of workers in the former West Germany and 35 percent in the former East Germany are represented by one.
Economists in the past four decades have produced a large literature trying to determine the effects that codetermination has had on the German economy, and while the results are mixed, more often than not, studies find that codetermination and “works councils” lead to higher wages, less short-termism, greater productivity, even higher levels of income equality (see here for a good overview of recent research). They may, however, reduce profitability and lower returns for shareholders, suggesting they lead to a shift in both power and corporate earnings away from shareholders and toward workers.
Perhaps more importantly, codetermination gives workers a tangible stake and voice in their companies, which could appeal to voters in the wake of decades of slow wage growth and increasing job precarity. That’s led some Americans, notably including Boston College law professor Kent Greenfield, to embrace the idea and call for its adoption in the US. And while the idea raises some constitutional challenges (as reducing shareholder power over companies could be ruled a “taking” under the Fifth Amendment), it has no budgetary cost, unlike many populist economic proposals common in the left wing of the Democratic Party.
That’s why Shor and Civis conducted the poll, pitching the idea to respondents with the conceit that Democrats had embraced codetermination as a campaign proposal, with Republicans opposed (this conceit might affect the results, though I still think they’re informative regardless). Shor and Civis weren’t commissioned by any campaign or party; they just wanted to see how much support the idea got.
The survey also enabled open-ended responses. Supporters argued repeatedly that the system would better serve the interests of workers (“Execs tend to forget about the little guy and focus too much on high profits,” one respondent, who voted Obama in 2012 and Trump in 2016, said), that codetermination is more “democratic,” and that it would “give employees a voice.” One particularly informed respondent cited the idea’s success in Germany.
Opponents argued it was unfair or even unconstitutional to force such a change on businesses (“GOVERNMENT SHOULD NOT BE ABLE TO MANDATE ARBITRARY THINGS IN COMPANIES,” one Obama-Clinton voter wrote, in all caps), and that it represented too much intrusion into the economy; and more than a few argued it was a communist or socialist idea (as one Obama/Trump voter wrote, “better dead than red”).
