Inside of a few weeks, business has shifted the national dialogue about what constitutes a fair wage. Aetna CEO Mark Bertolini made headlines in January when he announced the company's decision to establish an internal minimum wage of $16 an hour. A few weeks later, General Motors surprised factory workers by restoring the union profit-sharing plan eliminated when the company took the government bailout in 2009. And now Walmart and McDonald's have joined the parade, establishing a wage floor almost $2 an hour above the federal minimum -- and adding some important new work rules and benefits as well. While no one gets rich at $9 or $10 an hour, with 1.3 million employees in the U.S., Walmart, alone has the power to set national labor standards. The impact of these two giants will be felt throughout the retail and food industry.
The executives at the helms of these corporations emphasize the benefits that accrue to a company; employee retention, better morale and higher skills were the big factors. But Bertolini went further in his stated objectives -- stepping beyond the self-interest of Aetna.
"Since I became CEO, one of my goals has been to help reestablish the credibility of corporate America," he said, adding, "With these investments we are leaning into the recovering economy and working to bring everyone along instead of just a few."
As more companies leapfrog the federal standard, the need for an adjustment in pay at the low end becomes more obvious -- but it still takes courage to raise a social issue like wage inequality in the face of investors focused only on boosting the stock price.
Now what? For executives like Bertolini, who are concerned with the wider issue of inequality, what's the next move? More broadly, does business have a bigger role to play? The answer to that question is a resounding yes.
"Inequality" brings to mind government regulation and public policy fixes, but let's face it: Decisions about wages, benefits, work schedules and skills reside largely in the business sector, which holds the key to the expansion of the middle class. At the upper end of the scale are issues of runaway executive compensation, a significant contributor to the growth in wage inequality.
Here are six ideas that could keep up the momentum at Aetna and get the ball rolling elsewhere:
- Consider the needs of your employees in designing work schedules. A less noticed but perhaps more valuable change for Walmart's hourly workers is the promise of more consistent and predictable work schedules. Walmart and its peers utilize software designed to efficiently match hourly schedules with peak customer traffic. The system creates havoc for workers -- who may be asked to show up for an hour, leave for two more and then come back for another three -- and it greatly undermines the goal of a committed and productive workforce. The real costs of such a system are borne by working people balancing childcare, education and the work schedules of other family members. Walmart's promise of better work schedules is a big step in the right direction -- and may deliver bottom-line benefits as well.
Inequality is a problem for everyone -- for business, for the health of the democracy and for society at large. Our free-enterprise system is the driver of income and wealth. Business leaders don't have to wait for government solutions to the inequality problem. They have the tools at hand -- they just need the courage to step away from the pack and use them.
Maureen Conway is the executive director of the Aspen Institute Economic Opportunities Program. Judith Samuelson is the executive director of the Aspen Institute Business and Society Program. This post originally appeared in the March/April 2015 issue of the Aspen Journal of Ideas.
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