Profit as Purpose – or Profit with Purpose?

by Wanda Lopuch

 

Part I: Business Case

Profit as Purpose

Martin Shkreli, age 35 in 2017, the former CEO of a startup Turing Pharmaceuticals, raised the price of an HIV/malaria medication Daraprim overnight from $13.5 to $750 a tablet, bringing the cost of therapy for some patients to hundreds of thousands of dollars. Outside the US, the product is available for less than $1.  Shkreli has argued that such a move was legal, and good for investors…. – but was it?

Turining Pharma has stated that it needs the profits from the drug to fund the research and development of new drugs. The need to generate profit to fund research and development has been a universally accepted business principle. In the case of Turning Pharma however, patients, doctors and the public alike strongly disagreed as to the source of profit and the amount customers were to pay, without being given other therapy options.  The subsequent public backlash and internet shaming of Shkreli was intense as all stakeholders became very vocal in communicating their concerns and moral outrage. In response, Turning Pharma reduced the price by half, and offered a number of programs for patients with financial needs. As a result of the immense public pressure and scrutiny, Martin Shkreli stepped down from his CEO post in 2016.

Although Daraprim is an extreme, 5000% price increase, it is hardly an isolated case.  And yes, such actions are legal and argued in the name of profit. Profit as the purpose.

Champions of unfettered and remorseless capitalism have long argued for profit for profit’s sake:  from economist Milton Freedman to writer/philosopher Ayn Rand, to the business politicians in the current US Trump administration.  In her 1964 interview, Rand contended that “man exists for his own sake, that the pursuit of his own happiness is his highest moral purpose, that he must not sacrifice himself to others, nor sacrifice others to himself,”

Some 50 years after this interview, Rand’s books are still selling well, and her heroes keep influencing entrepreneurs and politicians alike, from Melbourne and Hollywood to Tel Aviv and Washington. Entrepreneurs like Michel Shkreli, the CEO of Turning Pharma; and James Kilts, former CEO of the Gillette Company in the US; Sonja Bernhart, Australian businesswomen;  Selvaraghavan Kasthuri Rajaan, an Indian film director, and Ayelet Shaked, Israel’s Minister of Justice, are but a few of many others who subscribe to Rand’s brand of literal capitalism.  Yet more recently, the appeal of a determined and self-centered strongman type leader oblivious to environment and social realities, is losing its allure and legitimacy in business, although political rhetoric fuels the debate.  Recently, the revelation of Uber’s rampant culture of bullying and sexual harassment was followed by an abrupt departure of Uber’s CEO and Rand-devotee, Travis Kalanick. While on the leave of absence, Kalanick admits to soul-searching and reflection on the role of profit as a sole purpose.

 

Profit With Purpose – Business Perspective

The starting point for the discussion of profit with purpose, is that profit is the driver of any enterprise in a capitalistic system. Simply put, profit enables growth, creates wealth, and defines the role of a business in society.

Ethics, economics, psychology, leadership, culture, business, religion,   philosophy … all of these perspectives provide unique angles to a debate on profit: its nature, its importance, its future.  For the purpose of this discussion, I narrow the focus to business drivers for profit.  We will not debate ethical justifications for Martin Shkreli and alikes’ views on profit. We will not ponder profit as a driver of the leadership styles of Travis Kalanick and his followers; and, we will not deliberate moral arguments for profit in the system of justice with Ayelet Shaked.

In the age of big data, we turn to empirical facts to uncover the broader trends. These data help us understand factors that contribute to the purchasing behaviors of consumers, explain employee behavior in the modern labor market place, and predict investors decisions.  With the help of technology, the behavior of consumers, employees, and investors is captured in its most unaltered form: real action beyond intentions. Data reveals more than one’s intentions, which are often muddled, consciously or subconsciously, by one’s personal believes and worldview.  These empirical facts help to decode and understand underlying business forces that drive and inhibit profit, independently of one’s political, religious or philosophical views.

 

Sustainability is one of these mega forces.

Consumers and employees across the globe, in both developed and developing economies, increasingly expect businesses to integrate environmental and social accountability into their products and services not solely as a charity or advocacy effort, but rather with intentions of stewardship and responsibility for the development of concrete outcomes as value-adds.

These attitudes are reflected by consumers voting with their wallets and by employees choosing companies with shared values.  They are especially pronounced in the behavior of millennial employees, generally not as loyal to organizations, yet attracted to meaningful jobs and companies which they perceive as ethical.  Simultaneously, sustainability in the form of good governance is increasingly demanded by investors who want to better understand and mitigate their investment risks, including climate-related risks, environmental risks, and social risks.

Sustainability is a business force that re-shapes all modern business functions, from design and production, to marketing and sales, to delivery and utilization.  The myth that sustainability-driven strategies are marginal and costly business undertakings aimed at luring the pockets of wealthy suburban consumers has been dismissed many times over by research and undeniable business results.  Global sales data and stock prices trajectories of a variety of business enterprises provide strong evidence that sustainability-driven strategies generate growth and drive profit.  Sustainable profit. Profit with purpose.

For example, Uniliver’s 2015 global sales results show growth of sustainable brands to be 30% faster than other brands on a global scale.

Further, 2016-2017 sales data for the global food and beverage sector offer another tangible example of sustainability driving growth.  According to a Nielsen report, sales for the entire sector declined by 0.1% while the brands with sustainable claims grew 2.5% to 11.4%. These numbers underscore the growing importance, if not out of survival, of incorporating sustainability as an integral part of business strategies

Apple’s performance, coupled with recent statements by Apple CEO Tim Cook, offers another example of sustainability taking a central place in business strategy.  During the 2017 third quarter earning call (August 1st, 2017), Apple confirmed accelerating revenues and profits, while acknowledging that for a viable long run, the company needs more investment in people and in the planet.  Tim Cook makes a moral argument stating ““we have a moral responsibility to help grow the economy, to help grow jobs, to contribute to this country and to contribute to the other countries that we do business in. Meanwhile, investors reward Apple’s stock price, sending Apple stock on an upward trajectory.

It is now evident that the foundation for sustainable growth is based on embracing sustainability as a core business strategy.  In a recent address at the Global Forum of Consumer Good Products (June 2017 in Berlin), the CEO of Nielsen, Mitch Burns summarized three underlying consumer-behavior principles based on the data:

  1. Sustainability is a worldwide concern
  2. Consumers are putting dollars behind their values
  3. Social responsibility enhances corporate reputation and drives shareholder value

From consumer products and electronics to transportation and energy; all industries are beginning to follow this megatrend: sustainability sells, drives growth and generates profit.

 

Consumers Want It…

Consumers are actively seeking products with sustainable features, such as “Fair Trade”, “Organic”, and “Carbon Neutral.”  Point-of-purchase data show that consumers are paying 5%-20% more for sustainable products, a substantial premium in a crowded and competitive marketplace.  According to a Stanford study, not only are consumers willing to pay more, they will take it a step further and punish companies that are not responding to expectations of sustainable offerings, by simply withdrawing support and switching to brands they perceive are more aligned with their values. More and more frequently, consumers have been taking activist positions by disclosing dishonesty or greenwashing practices. They exercise the power of viral marketing on the internet, and they skillfully harness social media to disclose and shame such deceptive business practices (i.e. Martin Shkreli).  And smart businesses listen. Smart business adjusts and creates new offerings that better reflect the needs and values that customers are willing to pay for.

Year after year, more products with “green, clean and responsible” claims enter the global market.  In the profile of the “Future Consumer 2018” , WGSN describes consumers across all continents as expecting sustainability to be a main feature rather than just a value-add of any commercial offering.  Today, sustainability is mainstream and going far beyond the buzzword of yesterdays’ marketing campaigns.  Sustainability has become a material feature, quantifiable by concrete sales figures and stock prices.

It has been well documented, that consumers put their money where their values are. According to a global consumer purchasing behavior survey by Nielsen in 2015, 66% of respondents were willing to pay premium for sustainable products; this is a trend that is expected to grow only stronger.

Therefore, it is only natural that for-profit enterprises are allocating their research and development resources towards “what sells”, which are sustainable products and services. These sustainable offerings have been incorporated independently of philosophical and social views of executives, independently of the political connections of Boards, and independently of leadership styles.  Such an approach of creating a portfolio of what consumers want, a sustainability-driven portfolio, is not a reflection of a value statement of a business enterprise; it is simply a calculated business behavior geared towards increasing profits.

The best talents are inspired by visions of “green, clean and responsible”, and the best minds rush to design such products and services.  These designers and inventors are guided by principles of eco-efficiency, which includes conserving energy, water, and responsibly sourcing, using and reusing materials.  New product innovations, process innovations, and material innovations not only bring competitive products that are supported by customers, they are saving money and produce material gains for companies increasing profit.

 

Employees Choose It…

The war on talent, and specifically retaining young talent, is one of top challenges facing businesses, that CEOs lose sleep over.

While pay and benefits are still the strongest drivers attracting new employees, once hired, employees increasingly seek meaning and purpose in employment that goes beyond the paycheck.  Loyalty towards employers, or lack of such, is greatly shaped by the meaning and purpose employees experience first-hand through their work.

According to 2016 Deloitte Millennial Survey, 66% of millennial employees expect to leave their companies within the next 12 months.  Losing trained employees is costly for business, so retaining young talent within organizations is a priority for human capital strategies.  Retaining talent goes far beyond pay and benefits, underscored by the Deloitte Millennial Survey.  Corporate values that are aligned with personal values bring purpose and meaning to work, becoming powerful tools that cultivate loyalty and retain a motivated workforce.  This is a clear case of values directly impacting the bottom line by increasing or decreasing the cost of running business, ultimately decreasing or increasing profit. 

Talented employees gravitate towards purpose-driven enterprises, towards employers that project strong values that are aligned with personal values of employees.  This trend has been consistently backed by research.  As in a Nielsen global survey of 30,000 households, 67% of respondents preferred to work for socially responsible companies. http://www.nielsen.com/us/en/insights/reports/2014/doing-well-by-doing-good.html.  In a Rutgers University survey, 50% of millennial employees were willing to accept a pay cut if allowed to work on a project that is more closely align with their values. https://netimpact.org/sites/default/files/documents/what-workers-want-2012.pdf

To help entice millennial employees to stay with a company, employers recognize that they must project corporate values and demonstrate ethics and responsibility in an authentic way, they must communicate a sincere commitment to broader goals including environment stewardship and responsible actions within communities they operate in.  Today employers are quickly learning how to effectively present a business strategy of embracing sustainability and  how to bring purpose and meaning to jobs.  If not done properly, employees will look for a better fit, starting from the alignment of values.  HR executives understand today that every millennial employee is only 12 months away from a new job with a new employer.  They know that unless meaning is incorporated into jobs, unless sustainability is embraced authentically throughout an enterprise, unless profit with purpose is clearly communicated, they will keep losing talent and consequently, incur turnover expenses.

 

Investors Demand It..

Investment decisions are based on understanding and mitigating risks, from operational, development, cyber risks to reputation risks, environmental risks, social and political risks.

Reputational risk is a complex factor, as Nike learned in the 80s.  At that time, Nike’s management and its investors had not fully comprehended the long-term impact of the “sweat shop riots”. They underestimated how this legacy will shape their current business and future brand image until they faced consumer backlash.  30+ years later, Nike still cannot fully shake off its sweat shop legacy. Despite transparent labor practices rigorously instituted after the riots in addition to an aggressive marketing campaign, Nike’s investors took notice and their portfolio lost value.

Reputational risk challenges were faced by Apple and its investors in the 2000s.   Despite the fact that the company had imposed the highest global standards in contract manufacturing, Apple lost 5%, or half a billion dollars of its stock value after the 2008-2010 reports of suicides in one of its contract manufacturers, the HongKong-based Foxconn Corporation. Foxconn had manufactured iPhones for Apple, computers for Dell, HP and other consumer electronic devices for global electronic companies.  In late May 2010 WSJ reported that 10 employees of Foxconn working on the Apple phone assembly line committed suicide by jumping to their death at the Foxconn Shanghai facilities.

Apple was caught in the crossfire of quick media accusation followed by the outrage of even Apple-loyal consumers. Consequently, Steve Jobs had found himself  defending Apple from accusations of sweatshops instead of promoting a the then-revolutionary features of the iPhone 3.   “Steve, Apple can do better” – wrote “Jay” one of many bloggers on the MacStories Blog after the Foxconn suicides were reported, reflecting the views of many loyal Apple devotees.   “You should educate yourself”, responded Steve Jobs. “We do more than any other company on the planet”. While there was truth to that claim, it was still not enough for Apple followers. The market responded with Apple losing $500,000,000 dollars over the course of 2 years.   In the 2012 analysis “Did Foxconn bring Down Apple Stock”, StockRiters argued: “The Foxconn riots and suicides have illustrated something all American companies with factories in Asian countries should be strongly cautious about – that when American Consumers realize that behind the iPads they use, behind the bright LCDs and LEDs, the Nike shoes and the designer clothes they wear, that behind these there is an undernourished, underpaid, possibly underage laborer toiling away in some dank sweatshops in the foul underbelly of Southeast Asia – that understanding has an immediate effect on the stock of the responsible company. A company that resorts to, condones, or ignores such business practices from its contractors, will get hurt where it matters most, its bottom-line. Therefore it is sound financial astuteness to spend money on removing this sort of incidents from ever happening”.

Watching Apple’s stock performance during the Foxconn crisis, while also remembering Nike’s “sweatshop” legacy, shareholders of global corporations were pressured to re-evaluate the risks and benefits of the short-term cost savings of labor arbitrage, and long-term benefits of a responsible supply chains. Creating value by cutting cost for profit as purpose became simply too risky and eventually too costly, and not sustainable in a long run.  Market punishment for profit as purpose was real, and painful.

It is not surprising that investors have been demanding transparency in corporate reporting in areas such as:  supply chain practices, labor practices,  company local reputation etc.   As a response, ESG reporting, or Environmental, Social, Governance reporting, both voluntary and compliance-driven, is becoming a standard disclosure practice in global business.  Business analytics powerhouses such as Bloomberg have incorporated these demands by offering an ESG reporting module on Bloomberg terminals.  Many others have followed by standardizing and simplifying ESG data to offer tangible and material risk assessment.

Shareholders activism, initially marginal, starts to play an important role in shaping investment strategies based on ESG factors.  Since 2011-2017, the New York City Pension Funds succeeded to implement various forms of ESG disclosure through shareholders’ resolutions at its 39 holdings, mostly technology and apparel companies. Where disclosure mandates do not exist, these resolutions require management of the companies to report on a material risk factors.  This strategy is being adopted broadly by investors community, starting from institutional investors and expanding to other groups of investors including individual shareholders. In fact, companies have started voluntary reporting, either defensively to avoid blacklisting, or proactively to appeal to the consumer base. This trend of applying ESG disclosures as a straightforward risk mitigation practice, has been evolving independently of investment philosophies, economic beliefs, or investors’ views on the social role of business. It is simply safe to invest in profit with purpose.

 

Profit with Purpose

As investors are demanding transparency in corporate reporting, they are finding allies in consumers, in employees, and in communities where their businesses operates.  These diverse groups of stakeholders are motivated by unique, sometimes opposing reasons, yet are unified by one common denominator: sustainability is the business driver for profits, and sustainable profits are driven by purpose.

Conversely, chasing quick gains at the expense of communities or environment,  offering products and services without eco-efficiency considerations, practicing deceptive communication and greenwashing, are simply too risky and may not be profitable for business in the long run.   Independently of ones’ economic views, philosophical beliefs or political affiliations, it pays to invest in profit with purpose:

  • consumers pay for it,
  • employees choose it,
  • investors demand it.

However, when sustainability is deployed just as a mean to maximize profit:  how does purpose fit into the profit equationIs it Profit with Purpose, or a variation of Profit as Purpose?

This author submits, that from the traditional Adam Smith’ market perspective, profit strategies driven by sustainability strategies are a way for the invisible market hand to connect profit and purpose, especially in the absence of social values or environmental considerations expressed by business leaders.  As such, profit through sustainability strategies is a pure business case for sustainability itself, where values are not part of the profit equation, yet values are imposed on business by the invisible market hand.  An enterprise cannot achieve sustainable profits without implementing general sustainability principles.  In the words of one CEO, sustainability is business’s enlightened self-preservation.

While this conversation on Profit as Purpose and Profit with Purpose  continues, the role of leadership will be explored in more detail.

SDG 1: WHERE POLICY MEETS POVERTY WITH THE MCSILVER INSTITUTE

Note: This piece was cross-posted from Impakter. by Andrew Budsock

Dr. Mary McKay is the current director of the McSilver Institute for Poverty Policy and Research at New York University, where she has served for 5 years. Prior to becoming director of McSilver, she served as the head of the Division of Mental Health Services Research at Mount Sinai in New York. The McSilver Institute is an award-winning research center dedicated to creating new knowledge about the root causes of poverty, developing evidence-based interventions to address its consequences, and rapidly translating research findings into action through policy and practice.

McSilver aims to create a platform for policy makers, funders, service providers, and community members where poverty is spoken about, the intersection between poverty and race, the focus on structures and systematic barriers that oppress people. Key to McSilver’s platform and in-line with SDG 1, End poverty in all its forms everywhere, is the rapid translation of knowledge into action-actionable policy recommendations and actionable service delivery options. Their work is implemented through community-based multi-stakeholder strategy in an aim at bringing more people to the table to talk about poverty and develop relevant solutions.

EDITOR’S NOTE: THIS INTERVIEW HAS BEEN EDITED AND SHORTENED FOR PUBLICATION

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Impakter: How would you define poverty? Why does it happen?

M.M: In the narrowest sense, poverty can be defined as not having the material resources to take care of your basic needs. So not having enough income to feed yourself and your family, to have some kind of stable housing that lets you sleep out of the elements. That’s the basic definition, but it does not go far enough, in terms of the burdens that poverty overlays on an individual’s and a family’s experience.

Poverty can also be simultaneously coupled with isolation. Doors close in terms of access to information or quality services or healthcare. It’s not that you don’t have enough purchase power, but you have a set of schools that are substandard or don’t provide quality education. Or you have a set of healthcare resources that don’t provide quality care. This closing of doors that goes along with poverty makes not having enough resources even worse—and then there’s also a kind of stigma.

We did some work on a project that we call “Poverty and Shame.” What do we do with populations that struggle with poverty? We stigmatize them. We say, “It’s your fault.” We attribute individual responsibility to a kind of social struggle, and then for many young people that we work with and families, they can’t help but also wonder, “What is it about me that I can’t do the same that we talk about?”

Our group went to a conference where they had all the members sit on the floor. They said, “Now pull yourself up by your bootstraps.” You can’t do that. Even the youngest, most nimblest of us, could not get up off the floor. So this notion that we attribute individual responsibilities to a set of structures and inequities that exist is really very blaming, and it underrides your sense of power and worthiness. I think that that’s intentional. The structures are meant to both close doors, but in lay terms, make you feel bad about your situation. That’s not material. That’s structural. That’s social. That makes a very stressful situation where you are trying to make ends meet even worse.

In a broader context, if you think of this stigma, with respect to policy making, we essentially discount the poor. 

M.M: If you really look back at the history of the U.S: our social welfare policies are grounded in something called “Elizabethan poor laws.” Essentially what those poor laws were, were either we lock you up because you’re poor, or it takes a more supportive extent. Those laws and those early policies were around subsistence support, which is not enough really for you to get out of poverty, because in a twisted way, it was thought that it would diminish your work ethic.

You can trace those strands of judgment around poorness and motivation or lack thereof to this day. If you look at financial benefits called “SNAP,” which is the food support program if you experience hunger and food insecurity in the U.S., it’s not enough to feed a family. It’s just enough to take the edge off. Those strands, those laws came from Europe. And, because we’re the U.S, we model things after us, policies get reenacted in countries that really need to give real serious legs up out of poverty. You’ll see all this worry about cash grants—will it disempower the population, make them less motivated to work? The reality is, it’s almost universal. People want to make meaning, and be productive, and contribute. Cash grants don’t make people lazy, but they do feed them while they’re struggling.


Related article: “SDGSTORIES: LAUNCH OF OUR SUSTAINABLE DEVELOPMENT GOALS SERIES


Let me take us in a direction that looks at the intersection of race and poverty, because that’s a critically important mission for McSilver. You can’t really talk about stigma, closing of doors to opportunity without understanding that those experiences are completely unevenly distributed in the U.S. and that racism and structural racism are serious issues. You can’t look in any system that serves poverty-impacted people–child welfare, criminal justice, housing and homelessness—and not see disproportionately, people of color in those systems, even though, the disproportionality has nothing to do with the percentage of those actual people in the population. Why is that? Because there are structural blocks to having the same access to both economic opportunities, but also all the things I just talked about: education and healthcare.

There are segments of populations in this country that are truly being marginalized and need additional support and need removal of structures that block them having an equal opportunity to a host of things. Does the concept of race translate to all the places that we are in across the globe? To some extent, yes. The situation on the continent of Africa that I know the best translates to a continent that really within my lifetime, many of the countries were ruled by white, elite, rich people. That righted itself over the course of decades, but the lasting effects, those histories of exploitation, the kind of real systematic holding populations of color down, the legacy of that continues to play into the countries of Africa. There is a heroic effort to try and right those wrongs, but history really matters.

That’s why we are deeply committed to both the work here in New York City with populations of color but also work in country contexts where the history of oppression really existed, and there needs to be some real serious progress addressing that.

ghana_for_landing (McSilver)

PHOTO CREDIT: MCSILVER INSTITUTE 

In regards to how the McSilver Institute operates and how you are getting stakeholders together, including NGOs, local community members, researchers—this aspect is considered key to achieving to achieving the SDGs. By contrast, regarding the pitfalls of the Millennium Development Goals (MDGs) that preceded the SDGs, often times the lines of communication between different stakeholders were inadequate. How did you develop this framework, how did you get everyone talking together?

M.M: This is an intentional approach. The kind of value commitment and intentionality around who are the key stakeholders that need to be our full partners in this process—that is a process baked  into McSilver now. We have written a lot of academically-oriented articles to guide investigators to be intentional about who sits at the table as you begin to scope out a new initiative or a new project. There’s also a lot of challenges that you refer to in this process because these stakeholders are not used to being in the same room.

They often don’t communicate well—academics can be full of jargon, but so can program developers, funders, and community members. Your ability to facilitate real communication across groups is really important. The other piece that I think deters a lot of people from bringing groups together is because people have different perspectives based on their different social location. Inevitably, it brings up a set of misunderstandings and in many cases, real serious conflict.

Partnership and collaboration take time and effort. We find that in our research the extra effort is worth it. Why? If we develop a program in collaboration with youth, young people come to that program. Adolescents are terribly challenging to involve in programs and services. The last thing they want to do is to get supported within their high school, but a program designed by young people, aligned with their needs and interests, you’ll see participation rates in droves. The same is true for our global work, and it’s probably even more important with those partnerships.

What you do not need are U.S-based investigators and academics coming out and telling other investigators, or worse yet, community members, what they need or don’t need. You have no preparation for what is likely to be aligned with the perspectives of young people, families, and communities. If you think you do, you would be wrong. What you do as the academics, as those who know the science, what you know has worked within your own context, but how to align or reject that knowledge is really up to the stakeholders in each one of the places that we are going to go.

Do you have any examples of areas that you’ve seen, where communities start to break down the structures of injustice and start to rebuild a structure that works for everyone?

M.M: I think in South Africa, which I know the best, the dismantling of an apartheid system was huge. Nelson Mandela the first President really attempted to create a South African society where people can live together, I think that has been nothing short of heroic in terms of what’s been happening in South Africa.

Having said that, social inequities continue to exist — the residuals of unequal school systems continue to exist. The inability of a country held down by poverty—they were very slow to address the HIV epidemic, and that has everything to do with both resources and but also stigma—the stigma of apartheid and now here’s another kind of epidemic that’s impacting the country. You see countries like Uganda trying to leave behind an oppressive government and put together more voices within a government and represent the people. I think there are legacies of poverty in countries and oppressive government regimes that sometimes fuels corruption, sometimes scarcity mentalities, and I think that it’s very complicated, and you have to be careful how you write about that, because that can sound blaming.

You have to be really careful about corruption in Africa—assigning individual responsibility as opposed to looking historically and structurally around how people are set up. In the West and many other countries, we intentionally or unintentionally contributed to some of the inequities. It gets very complicated when you’re setting millennium goals to figure out how we all contribute positively, but also how to figure out if self-interest is guiding some of these decisions and what those are.

That’s why partnership, communication and collaboration is so important because single voices and single solutions are often guided by a combination of good intent, but may not always think about the consequences and could be guided by self-interest. The partnerships are trying to protect from that, listening to different voices are one protection for that.

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IN THE PHOTO: STEP UP PARTICIPANT PRESENTS HIS PHOTOGRAPHY. STEP UP’S PHOTOVOICE PROJECT USES PHOTOGRAPHS TO MONITOR AND IDENTIFY ISSUES IN YOUNG PEOPLE’S COMMUNITIES. PHOTO CREDIT:KATY LITTWIN PHOTOGRAPHY 

What challenges are unique to poverty in urban settings in comparison to rural settings in your experience? What kind of issues are at play in both?

M.M: What you are seeing across the globe is this push towards economic opportunities that exist in urban centers. What is that all about? For example, we have a new study that we are working on with our colleagues in Ghana, we work in a number of countries that have very high rates of child labor. Young kids, even as young as nine or ten, traveling to urban centers by themselves trying to eat, make a living, and help support their families. This kind of rural to urban migration particularly around children but also other populations is a worldwide phenomenon.

It’s not only that there’s not access to basic material needs but also opportunity for less. What might have existed generations ago around farming and an agriculturally-based economy, with population growth and climate change, those become less and less viable options to be able to exist in rural areas. The kind of pull to a city to be able to take advantage of what looks like a powerful economic set of opportunities is pretty great except the populations traveling to cities find the city is a pretty harsh life too but in different ways. Your ability to afford housing and goods and communities is less, not more because it’s more expensive in cities.

For example, young women who go from the rural parts of Africa to the bigger cities find economic opportunities, such as a group of girls that carry loaves of bread on their head and sell small items on the street, but they also live and sleep on the street and then are incredibly vulnerable to victimization. They are unaccompanied as children without adult protection, making complicated choices, so their safety is compromised. I think they’re both pretty harsh, I think some context matters with consequences of poverty that vary from rural to urban centers, but it’s all pretty harsh, and I think that you’ll see more and more proportions of our population exposed to the harshness of urban centers as we go forward.

Can you talk about the intersection of poverty and health? I know that’s a lot of research you have some experience in. 

M.M: I’ll broaden it to both physical health and behavioral health-Poverty sets up a set of conditions where it is harder to maintain your physical health and your behavioral wellness, and your emotional and behavioral health. What are those conditions? High levels of stress, lack of access to healthy and nutritious food, lack of access to safe and secure communities, all undermine your physical wellness, what you put in your body completely defines your biology in some ways, what you breathe in terms of toxins define the biology of your physical wellness.

But also exposure to multiple traumas and chronic stress undermine your emotional well being and so the conditions that poverty creates undermines kids and their families’ physical health and emotional wellness. But it also goes the other way. If you have a vulnerability, a chronic health condition, a more serious mental issue, your ability to access good quality care that helps you manage that chronic condition whether that be serious diabetes or more serious mental issue is key. Your ability to access quality care will make or break your ability to make a living.

If I have a mental health issue and I don’t get the right treatment, then I’m much less likely to be able to maintain my job and maintain my active involvement in the work. If I have a health condition and my employer can’t flex my hours and provide additional support so I can go to my doctor’s appointment, I’m much more likely to lose my job and end up in poverty, and so I think that bi-directional set of relationships that go along with poverty and health and behavioral health or emotional wellness is really important for us to pay attention to.

I think we have very little understanding that if we don’t attend to kids’ behavioral health issues, they will be economically more challenged. For kids, anywhere from 1 in 5  in the U.S and up to 40% across the world are struggling right now with a serious behavioral health challenge. Not meeting those challenges puts them on a trajectory where seeking employment that will bring them out of poverty and achieving all the milestones needed to get employment like doing well in school,  takes those kids out of the game. I think more and more you’re seeing nationally and for sure locally where we are in New York City. A reinvestment in behavioral health but also around the globe is needed; understanding those issues are not a nicety, those issues are critical to the economic survival and thriving of the whole population.