The relationship between the Democratic Party and big business this year has all the makings of a good romantic comedy. Based on their histories and values, these two couldn’t be more different. And yet, the fates seem to be drawing them together. All that’s missing is one party walking in, drenched from the rain, exclaiming, “You had me at ‘$15 minimum wage’!”
This love affair was long unimaginable. Democrats have been the party of the worker, and of organized labor, with business as the natural opposition. And to be sure, in spirit, it’s easy to see this attitude among high-profile Democrats in Congress. Senator Elizabeth Warren rose to fame by attacking Wall Street, and perhaps the highest-profile member of Congress is Senator Bernie Sanders of Vermont, a self-described democratic socialist who spent much of his campaign for the presidential nomination raging against millionaires and billionaires.
Big business, on the other hand, has seen Democrats as its natural enemy because of the party’s support for (profit-sapping) regulations, taxes and labor concerns.
But in three specific areas this year, big business and Democrats are finding themselves in sync, in part because the Trump administration departs from Republican values and in part because the economy is behaving strangely.
It began with the Trump administration’s first big move, rolling out a travel ban on certain Muslim-majority nations. This was immediately challenged in the courts and protested in the streets, and set the terms of the broader immigration debate in a way that was off-putting both to the Democratic Party’s base and to the college-educated cosmopolitan people who run large, multinational corporations. The tech community in particular was critical of the travel ban, with Uber’s then-CEO Travis Kalanick leaving one of President Donald Trump’s business councils. On the Trump administration’s first major move, Democrats found a powerful ally in big business.
They continued to be simpatico as Trump opened new fronts in the culture wars. The president’s equivocation about white supremacists in Charlottesville was repugnant to many business leaders, as it was to many Democrats (and Republicans, for that matter). So many CEOs quit the president’s business councils that he chose to disband them to save face.
Trump’s decision to call out athletes who have kneeled during the playing of the national anthem in protest of police violence and racial inequality led to ever more widespread kneeling protests last weekend. Perhaps the image that best epitomized the mood of the league was the sight of Jerry Jones, owner of the Dallas Cowboys, kneeling with his team before the playing of the national anthem. Are billionaire NFL owners defending their business interests, rather than protesting for the reasons athletes have been doing so? In this case it’s beside the point: The big business interest aligns with the Democratic Party’s concern about racism and police brutality. On issues of race, diversity, inclusiveness and tolerance, there appears to be Trump on one side with Democrats and big business on the other.
Perhaps most surprising could be a possible partnership based on a concept that seemed radical only a few years ago — a $15 minimum wage. The Fight for $15 movement began in 2012 with the goal being to enact a $15 minimum wage nationwide. The movement grew, has been adopted by multiple cities, and has been championed by many prominent Democratic politicians.
Politics is one thing, but business decisions are another. This week, Target announced that it will raise its minimum wage to $11 an hour in October, and to that hallowed $15 an hour level in 2020. The company’s leaders are not doing this out of the goodness of their hearts, but because the labor market has become so competitive, particularly for lower-paid service workers, that they have to be aggressive on pay to keep pace with their peers like Wal-Mart, which kicked off the wage arms race in 2015. Other large employers have announced increases to their minimum wage over the past several quarters.
What’s likely to happen is these increases will end up putting smaller, less efficient companies out of business, because they can’t afford to pay higher wages. Again, that’s beside the point when it comes to this political alliance: By increasing wages, big businesses will get the labor it needs, and Democrats will get the pay increases they desire.
An unlikely alliance like this between Democrats and big business, one based more on mutual interests than shared values, may not last forever. But for the time being, on immigration, cultural values and even employee pay, the two groups are moving in the same direction.
Conor Sen is a Bloomberg View columnist. He is a portfolio manager for New River Investments in Atlanta and has been a contributor to the Atlantic and Business Insider. Readers may email him at [email protected]