Can Business Leaders Help Prevent the Next "Baltimore"?

Business leaders can help prevent future crises like the one in Baltimore with a simple character trait that also turns out to be very good for business - generosity.
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To be sure, the causes of the crisis in Baltimore are many and complex. However, it does seem clear that the death of Freddie Gray was less of a root cause and more of a "last straw" in a hay stack of frustration that has been growing in Baltimore for a long time.

A large part of that growing frustration has surely been caused by the long history of police brutality in Baltimore. According to a September, 2014 article in the Baltimore Sun,

"The city has paid about $5.7 million since 2011 over lawsuits claiming that police officers brazenly beat up alleged suspects... Victims include a 15-year-old boy riding a dirt bike, a 26-year-old pregnant accountant who had witnessed a beating, a 50-year-old woman selling church raffle tickets, a 65-year-old church deacon rolling a cigarette and an 87-year-old grandmother aiding her wounded grandson [who had been shot]."

I suspect that the frustration we've seen expressed through riots in Baltimore has much deeper roots than even the police incidents mentioned above. Those incidents are just one of the many fruits of decades of economic disparity that disproportionately affects the black and other minority communities as a result of our nation's history of racism.

I believe that if the economic divide continues to grow between the wealthy and everyone else in our country, we may see many more "Baltimores" in the near future, and that the riots will include all of the economically disadvantaged, regardless of ethnicity.

This concern over the growing economic divide and its repercussions is precisely why leadership consultant, MBA professor, and lifelong Baltimore resident, Karin Hurt, has spent a lot of energy raising awareness outside of Baltimore about the deeper leadership issues within her city.

As Hurt told me,

"It's easy to look at the turmoil and disruption in other cities, say a quick prayer, and move on, glad it's not happening in your neck of the woods. But the truth is the huge economic divide that has been eating away the infrastructure of Baltimore for years mirrors that of many other cities in America. The only difference is their powder keg has not yet exploded.

"The city has changed dramatically in my lifetime. The once safe-feeling row house neighborhood where my father grew up now faces many of the economic issues underlying the protests."

Nick Hanauer is an extremely wealthy businessman and self-admitted "one percenter," who humbly credits most of his success to spectacular luck, timing, to where and to whom he was born, and to other items of circumstance. But Hanauer has an amazing intuition about what will happen in the future. This powerful intuition has led him to found, co-found, or fund over 30 companies, and to be the first non-family investor in

In his brilliant TED talk, Hanauer echoes the concern mentioned above about the consequences of a shrinking middle class, and essentially predicted that riots like the one in Baltimore would soon occur.

He says, again leaning on his astute intuition about what the future holds,

"So what do I see in our future today, you ask? I see pitchforks, as in angry mobs with pitchforks, because while people like us plutocrats are living beyond the dreams of avarice, the other 99 percent of our fellow citizens are falling farther and farther behind.

"In 1980, the top one percent of Americans shared about eight percent of national wealth, while the bottom 50 percent of Americans shared 18 percent. Thirty years later, today, the top one percent shares over 20 percent of national wealth, while the bottom 50 percent of Americans share 12 or 13. If the trend continues, the top one percent will share over 30 percent of national wealth in another 30 years, while the bottom 50 percent of Americans will share just six."

What Can Business Leaders Do?

Business leaders can help prevent future crises like the one in Baltimore with a simple character trait that also turns out to be very good for business - generosity.

We might be very well advised to follow the example, at least to some degree, of the CEO of Gravity Payments, Dan Price, who slashed his annual salary from $1 million to $70,000 so that he could gradually raise the minimum salaries of the 120 employees at his firm to $70,000.

Price's decision was based primarily on his awareness of the current economic inequality in our nation and on the desire to help employees to be happier. He had read the research of Angus Deaton and Daniel Kahneman, a Nobel Prize-winning psychologist, suggesting that people report optimal levels of happiness when they make about $75,000 per year. Interestingly, the research also suggests that making more than $75,000 per year has no additional effect on increasing happiness.

Price realized that he could increase the well-being of the employees at his firm - which, of course, increases productivity substantially - without being any less happy himself. In fact, his happiness has likely increased substantially as a result of being so generous, and feeling as though he is helping relieve the economic divide in our country.

As a nice side effect, business boomed in the weeks after he made the announcement. In addition to the short-term gain of the media exposure, Gravity Payments is now able to attract and retain many more highly-talented employees - applications for jobs at the firm have increased by a factor of about 10 - which is a huge competitive advantage for the company.

In the TED talk mentioned above, Hanaurer makes a solid case for why increasing the wages of the middle class is a much more effective strategy for economic growth than the "trickle-down" theory of economics, which has apparently failed miserably. The argument is simple: a large middle class that has sufficient buying power buys a lot more stuff than a few very wealthy people. He cites the city of Seattle, which recently raised the minimum wage there to $15 per hour, as one case study suggesting his theory is correct.

"If trickle-down thinkers were right, then Washington state should have massive unemployment... Yet, Seattle is the fastest-growing big city in the country. Washington state is generating small business jobs at a higher rate than any other major state in the nation. The restaurant business in Seattle? Booming. Why? Because the fundamental law of capitalism is: when workers have more money, businesses have more customers and need more workers."

Proactive Generosity Beats the Alternative, Hands Down

As Hanaurer warns above, if we don't voluntarily begin to share the wealth in our country, the wealthy will likely eventually lose it anyhow. The "angry mobs with pitchforks" (he's citing revolutions in old Europe) will eventually rise up. History provides no examples of nations with extreme economic disparity that did not eventually crumble.

Thus, instead of waiting for the angry mobs of the highly probably future to violently re-establish equality in Baltimore and the rest of our nation, perhaps it would be wise to take a proactive approach. Being proactively generous is a win from every angle: it makes us happier, makes those around us happy, and it seems to be quite good for both individual businesses and the economy as a whole.


Matt Tenney is a social entrepreneur, an international keynote speaker, and the author of Serve to Be Great: Leadership Lessons from a Prison, a Monastery, and a Boardroom.

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