“Hwith you looked at our caps recently? is the question a worried Nazi soldier asks his comrade in a comedy skit starring David Mitchell and Robert Webb. He has just noticed that their uniforms are emblazoned with skulls; a doubt torments him. “Hans,” he asks. “Are we the bad guys?
No employee of the company has such worries. But some sectors are stigmatized enough to be called “sinful industries” – alcohol, gambling, tobacco, etc. Other industries have gone from respectable to questionable: fossil fuel companies, for example. (A few, like cannabis companies, are traveling in the opposite direction.) Nationality now casts shadows in ways it didn’t before: working for a Chinese company might once have drawn admiration, but now arouses suspicion. In a time when everyone is supposed to have a purpose, why would employees with a choice work for the bad guys?
The cynical answer would be to pay. There is evidence to suggest that leaders of sin industries are demanding more money to compensate them for the stigma of their work. A 2014 article found that the bosses of liquor, betting and tobacco companies earned a premium that could not be explained by the complexity of running these companies, less job security or poor governance. The size of the bounty, however, corresponded to periods of increased bad publicity, such as settling of scores in the tobacco industry. The stigma that covered these executives was also observable in other respects: they sat on fewer boards than the bosses of more virtuous industries.
Compensation is a lever that may work for some positions and some people, but not for all. And that hardly satisfies as a psychological explanation. “Yeah, I work for a terrible company but at least the pay is great,” isn’t the kind of story people like to fall asleep to. Thomas Roulet of the Judge Business School at the University of Cambridge points out in “The Power of Being Divisive”, a book on stigma in business, that employees of demonized companies are often proud to be paid.
The most basic reason for this is a classic free market narrative. If you believe in freedom of choice and companies have the license of society to operate, that’s justification enough to work there. This may not seem particularly helpful: many employees would view operating legally and meeting customer needs as a requirement rather than a source of pride. But it is a perfectly coherent position.
Freedom of choice works less well as a justification if the harm caused by the products, whether to the lungs or the environment, has been concealed, or if the products undermine consent by encouraging addiction. But the companies under fire have a habit of turning the negative effects of their products to their advantage. Energy companies say the money they make from oil and gas today allows them to fund the transition to low-carbon energy tomorrow. Diageo, a beverage company, promotes its programs to encourage drinking in moderation. Tobacco companies peddle cigarettes even as they strive to lessen the harms of smoking: British American Tobacco says its aim is to ‘build a better future by reducing the impact of our business on health’.
It’s easy to scoff at this corporate cakewalking. Easy, but reckless. First, hostility itself can sometimes act as a sort of constraining agent for employees of stigmatized companies. A study by Mr. Roulet found that job satisfaction increased in companies that were disapproved, provided their employees saw the criticism as illegitimate. Second, corporate attitudes can change, sometimes suddenly. The arms industry seems less evil now that its products are helping the Ukrainians fend off Russian tanks. Reliance on Russian gas has made safe, even if not low-carbon, energy sources more attractive.
Third, employees in reviled industries are often able to do valuable things. Switching from cigarettes to harm reduction products is a net gain for people’s health. Widespread suspicion of genetically modified crops ignores the abundant evidence that they are safe and useful. And a rapid decline in the number of new petroleum engineers in America will seem less desirable if a lack of expertise is holding back carbon sequestration projects.
There may be a cohort of evil employees who seek out demonized companies, flailing their fingers, petting cats, and plotting to ruin lives. But people who work in these industries are more likely to see their work as important. They may not be wrong.
For more expert analysis of the biggest stories in economics, business and markets, sign up for Money Talks, our weekly newsletter.