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Brewing a new model for sharing the wealth

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By most accounts, Jeff Althouse brews terrific beer. Which allows the founder of Eugene-based Oakshire Brewing to provide health and life insurance and a 401(k) match for nearly all his 23 employees.

Those workers aren’t getting rich, at a little more than $10 an hour, but then neither is Althouse. Becoming rich, if that’s what Althouse wanted, would mean expanding what is now the 16th-largest brewery in Oregon. And that’s something Althouse promises he won’t do, even though he’s selling all the beer he can make.

“We have chosen not to grow our business,” Althouse says. “We feel there’s an appropriate size where we can maintain a quality product and a quality of life for the people who work for us, and also meet the needs of all our stakeholders.”

If that sounds, well, un-American, it’s only because the current version of what is American has become skewed, says University of Portland economist Mark Meckler. Bottom-line efficiency and the maxing out of short-term profits weren’t always the holy grail they are today, Meckler says. They were, he says, two in a constellation of values that went into decision-making.

And when Meckler talks of an attitude change, he’s not just thinking about corporate titans; he’s including all of us.

“We have an efficiency addiction,” Meckler says. “That’s America. Save as much time as possible. Save as much money as possible. Take the shortest shortcut.”

That change in attitude, in the view of Meckler and others, has contributed significantly to the widening income inequality gap that many, including Meckler, think is among our most pressing social problems. Wealth inequality has been linked to a number of social problems, ranging from teen pregnancy and violence to mental illness. In fact, a number of studies make the case that inequality correlates more directly with those problems than poverty.

The price for our efficiency addiction, Meckler says, is huge multinational corporations and stores that send jobs oversees and pay local employees as little as possible.

And yes, Meckler admits, Portlanders are more inclined than most Americans to buy local. But we’re still susceptible to the impulse to find a bargain.

Which is why Meckler and fellow UP professor Sam Holloway find the Oregon craft brewing industry and people like Althouse so fascinating. The culture of Oregon craft brews, they say, is a little bit more like the entire country once was, and a model for combating the inequality that has soared in the past 40 years.

Meckler and Holloway have been studying the local craft brewing industry and they say it represents an economic model that works to the benefit of owners, employees and consumers.

“They make a nice living, they pay good wages, and they allow people to work in an environment where creativity and artistry trump profit seeking,” Holloway says of local brewers.

Althouse isn’t the only Oregon brewer who has decided not to expand — even though he could make more money if he did, Meckler says. And even some who are willing to grow have more than the bottom line in mind. Steve Waters at Backwoods Brewery says he wants to get bigger — so he can offer his employees health insurance.

Brewers, employees and customers are all intentionally connected in this bygone-era culture, Meckler says. If one of the local brewers starts to treat his employees poorly, the word will get out and the customers would stay away, he’s convinced.

Waters, who lives in North Portland but runs Backwoods in Carson, Wash., sees the popularity of local brews as a reaction against the prevailing business as usual. “I think our consumerist culture is what makes us want to churn out things as fast and as cheap as possible,” Waters says. “In the brewing community you’re going to see people who are more interested in the overall happiness of the people in their company.”

Michael Wright, who started The Commons Brewery in his Southeast Portland garage, likens craft breweries to small local farms that get support from U-Pickers and at farmers markets. So even if brewers wanted to grow larger, Wright says, that might lead to their downfall. “If it becomes ubiquitous, does it lose its special notion?” he asks.

Economic pressures from a global marketplace — not simply greed — are mostly responsible for the change in large corporate culture, says Barry Schwartz, professor of social theory at Swarthmore College and author of “The Paradox of Choice: Why More Is Less.”

“Producers are now competing against worldwide competition, which means you have to extract every modicum of value you can from the production process,” Schwartz says. And that means saving as much as possible on employee costs.

Consumers, Schwartz says, are lured by the siren call of unlimited information on the Internet that allows them to comparison shop in a way they never could before. So they do, and even that has been assumed a cultural value.

“There’s a badge nowadays that you get if you’re a smart shopper, meaning you’re getting as much as possible for as little as possible,” Schwartz says.

Not all of us, but most of us, could pay a little more even if it meant buying a little less, Meckler says. “If McDonald’s is right, that to pay a living wage to all its employees burgers will have to cost $3 instead of $2 ... it turns out (the problem) is us, the pressure from us to want it cheaper and cheaper.”

All this false efficiency, Meckler says, has led to the dominance of a few large companies and less room for the small and medium-size companies that are more likely to treat all their employees decently. End result? More income inequality.

Beer drinkers here are willing to pay more for craft brews because they feel an emotional connection to the local company, Holloway says. That same strategy seems to work for local purveyors at farmers markets. But it’s not unreasonable to think other local businesses could make similar appeals to consumers.

Only consumers will be able to make a dent in the dominance of the marketplace by corporations that don’t pay their employees a living wage, Meckler says. But owners of small businesses can themselves make the choices that will bring up the standard of living of their low-wage employees — if they can succeed by fostering the emotional connection that Portland beer drinkers feel toward their local brewers.

“Craft brewing is redistributing the wealth from a few big companies to small businesses without any policy change, just thanks to good old capitalism and customer preferences,” Meckler says.