The other day I wanted to cheer after I saw what came up when I Googled three words: "companies raising wages." The hits told me, at a glance, what's happening to minimum wages: they're beginning to go up in a way that looks like a trend. Try that search and it will require about three seconds of your time to recognize, at a glance, what's happening from the headlines of those three top hits, all from The Huffington Post. In order, from the most recent back to the oldest article:
April 2, 2015 -- "13 Companies that Aren't Waiting for Congress to Raise the Minimum Wage"
February 2, 2015 -- "10 Companies that Aren't Waiting for Congress to Raise the Minimum Wage"
June 26, 2014 -- "7 Companies that Aren't Waiting for Congress to Raise the Minimum Wage"
It's a cumulative honor roll that keeps repeating the names of the firms already singled out for praise, while adding new ones to the roster with every new report. You can put aside the latest indicators from Wall Street and the Dow -- we know profits and earnings per share are on another historic bull run. We also know those numbers are doing little to solve our crisis of income inequality. By contrast, this simple list of exemplary companies is one of the most hopeful economic actions that can help ameliorate our current chronic economic and social stagnation, pointing many steps needed to address not only economic inequality but also the devastating social consequences of unemployment and low wages. Dare I hope for a 16 in August? A 19 in October? A 25 in January of next year?
Business leaders are waking up. They know that the key to success is paying people a living wage. Having a workforce of committed and motivated employees is the only way to build customer loyalty, especially in retail, and if people aren't paid enough they will pass along their discontent and discouragement to customers. A company that treats its employees well knows that those workers will treat customers like royalty. It's a philosophy of respect and generosity to workers that has been working at Home Depot for years now. Like it, these companies are retailers who depend entirely on repeat business from consumers in a world where defection to another retailer is as easy as a One Click purchase at Amazon.
The list began last summer with Ikea, The Gap, Costco, Whole Foods, Shake Shack, In-N-Out, and Ben & Jerry's. (At the same time, others were reporting the same good news from Zappo's and Trader Joe's.) In the next round, this February, those early adopters were joined by Wal-Mart, T.J. Maxx, and Starbucks. And in April, HuffPost reported that McDonald's, Aetna, and Target have climbed aboard the higher wage train.
There are many ways economic inequality can be addressed, but the most effective route is to address it is through jobs and wages. The private sector is the creative sector and no economic turnaround will last unless it's creating new value, in the form of new services, new products, and new ideas from existing companies about how to keep customers happy -- and get them to spend.
It might sound odd to hear that the best news of all is the way the "quit rate" has risen steadily since 2010. It sounds a little counter-intuitive to assert that when more employees are quitting their jobs, things are looking up. But that's exactly how some economists see it: at least a good portion of those workers are leaving their current jobs for higher-paying ones elsewhere. And that increase in job mobility is an indication that even the free market is getting into the act. If there is more demand for good workers, then naturally the price of their labor is rising. And that means more money in circulation. As Business Insider reports: "The high quit-rate indicates that employers are under more pressure to retain their best staff members, who are increasingly more willing to leave their current job for a better-paying one. And while increased wages could be pressuring the bottom line for some companies, according to Morgan Stanley, this trend of higher wages is good for everyone."
I couldn't agree more. Whatever business you're in, it may be time to get ahead of the curve and think about increases in minimum wages or a more equitable way to share profits with employees. You'll help your business win and keep new customers. When Henry Ford, in a historic decision, unilaterally raised wages for all his workers early in the last century, he knew he was creating more demand for his own cars, while creating loyal and motivated workers, all at the same time.
Peter Georgescu is the author of The Constant Choice. He can be found at Good Reads.