Social Entrepreneurship is often championed as a solution to social problems. As I understand it, social entrepreneurs are ingenious people who use their creativity to help those who suffer from poverty, sickness, lack of education, and whatever other problems catch their attention. Their solutions, because ‘Social Entrepreneurs’ would never question the basic good of capitalism (would they?), are of course only feasible if they return a profit to good-as-angel investors. Let’s ignore that the framing of Social Entrepreneurship, by itself, suggests that other profit seekers are Anti-Social Entrepreneurs (which is probably right). Instead let’s offer a brief critique of social entrepreneurship itself.
Here’s a good example in this morning’s New York Times. Retail monster Walmart is well known to pay its employees a less than livable wage of, on average, $13.85 an hour. One fortunate worker highlighted in the piece, Alexis, earns $19.25 an hour. Trading 30 hours a week with Walmart, she gets in return around $30,000 a year. This would put Alexis and her 4 children just beyond the $28,780 federal poverty guideline for a family of 5 in 2017, but they’re certainly eligible for many forms of assistance. So, this is a paycheck to paycheck life.
Alexis says she’d like to save more, but that’s hard to do with most of your money spent between pay-periods. So, here’s a problem for the Social Entrepreneurs to solve. In this case the solution is an app called Even, cofounded by idealistic young man Jon Schlossberg, to help low-wage workers manage their money. With Even, workers can even withdraw some of their earned cash before the next paycheck. No more pay-day loans with their high interest rates, but rather earlier access to money you’ve earned. Jon is focusing his entrepreneurial energy on helping those in need, which is good. He’s able to do this because he’s already created something very useful for us:
“Before creating Even, one of the firm’s founders, Jon Schlossberg, had developed an app called Knock, which allows phone users to unlock a Mac computer by knocking on their phone.”
Having made his money via this invaluable contribution to society, it was time to do good.
Idealistic and flush with money from the success of Knock, Mr. Schlossberg said
he began studying how a cash shortage affects people’s physical and mental well-being. “It is a fundamental problem with the capitalistic society,” Mr. Schlossberg said in an interview. Mr. Schlossberg, 30, said he set out to create a product that could reduce the stress associated with money problems, joining a crowd of other so-called fintech start-ups seeking to disrupt the traditional banking model.
Sounding like a real Marxist (who conveniently came to understand how awful capitalism is for workers after he’d made his money), Jon identifies how capitalism is fundamentally alienating and destructive of the human person. That’s not good. So, what’s the lesson? Do as any good capitalist would and disrupt! For a profit, of course.
Walmart pays a small fee to Even to allow workers to withdraw their wages
ahead of payday. Workers can take out only a portion of wages that they have already earned during the two-week pay cycle — so technically, Even says, these are not loans.
Walmart is paying Jon. Jon, flush with cash because he made it easier to unlock your computer, is being paid by Walmart so that he can help Walmart employees manage their paycheck to paycheck lives. Stand-up guy, Jon. But, far from alone in his social entrepreneurial quest for justice, he has partners who share his concern for the struggles of the poor.
“You have earned this money,” said Safwan Shah, founder of PayActiv. “Who
decides you should get paid every two weeks?”
Jon’s comrade Safwan owns a company, missing an ‘e,’ that helps process the transactions between Walmart and its cash poor employees. Safwan understands that workers are the source of wealth, and how unfair it is that the capitalist decides when the worker gets access to the fruit of their labor. He’s going to help by processing a limited number of mid-pay-period transactions for a fee paid by Walmart, or if things get really bad, the employee.
With the new service, every Walmart employee can obtain a portion of his or her
earned wages eight times a year free of charge. For most of the workers, the so-called Instapays will be deducted from their next paycheck. The workers can pay extra if they want more than eight Instapays.
Safwan is also being paid by Walmart, at least indirectly, to help out it’s cash-strapped workers. Walmart is making the “reasonably substantial investment” in Even because C.O.O. Judith McKenna believes it’s “the right thing to do.” Judith says the company will keep “investing in its associates.”
$10.20 an hour Walmart associate Matt Fixel has some input for entrepreneurial justice warriors Jon and Safwan:
“That app sounds helpful,’’ Mr. Fixel said of the Even service, but added, “I
would prefer it if they gave me more hours.”
So, what do you say Jon and Safwan, maybe a campaign for better, more frequent pay for hard-working associates like Alexis and Matt? Of course, the needed changes might put your profits at risk, but you don’t actually care about those, do you? You care about justice.