It’s another week, and yet another multinational corporation is embarrassing itself with a political stand. This time its Bank of America, which is backsliding on its pledge not to fund manufacturers of so-called assault weapons mere weeks after making a big stink of it on Bloomberg TV.
Reuters reports that BofA will loan gun manufacturer Remington $43.2 million to help the company emerge from bankruptcy. Though news stems from a court decision on an agreement that was reached before BofA’s pledge, the report states that “Bank of America’s agreement with Remington allows it to back out and find another lender to cover its commitment.” The problem with doing so is that “withdrawing from the deal would hurt the bank’s reputation for standing by its lending agreements and could undermine Remington’s survival.”
BofA is not commenting on the news, but the revelation puts the bank in a pickle that it should have seen coming a mile away. There’s a reason why, for decades, the conventional wisdom has to keep politics out of the boardroom. If you’re just going to piss off NRA members in an attempt to court the gun-control crowd, what’s the point? Meanwhile, it’s difficult for any business, let alone a massive, publicly-traded bank, prioritize controversial political stance above the bottom line, as the Remington situation shows.
But it’s a mistake to view Wall Street’s newfound political conscience as a customer acquisition strategy. BofA has millions of retail customers, nearly half of which don’t earn the bank a penny, and besides, large banks have bigger weapons in their arsenal in the fight over retail-banking market share than political activism. Instead we should see these gestures as part of a employee recruitment effort that will be far more important to BofA’s future that its relationship with gun owners and manufacturers.
The twin forces of globalization and automation have created a winner-take-all economy, whereby the most talented among us are able to leverage their skills to gain ever-larger shares of the economic pie. This drives economic inequality among workers, but it has also created an intense competition among multinational corporations to hire the shrinking share of the population that will be responsible for most of their profits over the next generation. BofA itself admits in its 10-K that biggest competitive threat it faces is competition over new hires and employee retention.
The largest single age group in America was born in 1991, and the battle over this cohort’s best and brightest is one Wall Street is fighting with one hand tied behind its back. The tech industry has just as much money to throw at these over achievers as financial services, as their jobs are usually located in places with better weather than the Financial District in February. Worse still for banks is that a growing share of young folks are eschewing money for jobs that offer other forms of status, like a job that lets them feel they are contributing to the public good.
Banks have been given a couple advantages in the competition for this ascendent generation of talent. One is the evolution of society towards one in which political affiliation has become a primary source of personal identity, and the other is that the American political system significantly under-represents people who live in big cities.
Wall Street’s target recruiting demographic is therefore going to be easily motivated by potential employers political stances, especially if they are seen to be helping affect changes, like better gun control, which clearly represent the democratic will but are blocked by the idiosyncrasies of American government. If a political gesture can help attract even a handful of the millennial generations’ best and brightest, it could pay for the bad press among America’s shrinking number of hardcore gun enthusiasts.
Of course, this strategy depends on a good helping of self-deception from the millennial generation itself. Anyone who takes comfort in Bank of America’s pledge not to loan money to gun manufacturers shouldn’t think much about how deep this commitment goes, lest that comfort be quickly disturbed. After all, if BofA really wanted to stop gun violence, why isn’t it funding an aggressive PR campaign and the campaigns of anti-gun Democrats?
Attempts at corporate responsibility, be they isolated policies like Bank of America’s on gun companies, or corporate philosophies like Google’s “don’t be evil,” are usually overwhelmed by the ineluctable force of the profit motive. It’s actually quite hard to do good in the world while lining your own pockets, but not all meaning-filled lives are actually meaningful. Just because millennials are eschewing money for other forms of status doesn’t make them any less delusional about the fundamental worth of that status. It does mean that Wall Street firms looking to hire them should behave accordingly.
Christopher Matthews is a writer who splits his time between New York City and Accra, Ghana, with an interest in the intersection of markets, the economy, and public policy. He previously held staff positions at Axios, Fortune Magazine, and Time Magazine, and has been published in Forbes and Debtwire.