The JUST Report: Dozens of CEOs Vow to Reduce Inequality
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On Wednesday, The WBCSD’s Business Commission to Tackle Inequality, a group of some 60 leaders from the world’s largest businesses and organizations (and including yours truly), released its inaugural report on the private sector’s role in reducing inequality. It’s a huge business issue. As The Wall Street Journal reported recently, inequality is a massive drag on the U.S. economy, slowing growth, costing taxpayers and workers, and chipping away at innovation.
What’s refreshing about the new report is that it lays out a clear, actionable roadmap for what executives can do about it, and why taking action benefits all stakeholders.
One of the 10 action items is for companies to pay workers a living wage. As JUST followers will know, “Paying a fair and living wage” is routinely the top priority for Americans when it comes to just corporate behavior. Recent surveys show that about 36% of consumers say it has been “somewhat” to “very difficult” for them to pay their usual bills, and 60% of Americans would struggle to pay an $1,000 emergency expense.
The good news is that companies are responding. More CEOs are seeing the business case for higher wages. As analysis we’ve just released shows some companies like Accenture and MSCI are encouraging or requiring their supply chain vendors to pay their workers a living wage. Home Depot recently invested $1 billion to increase wages despite slumping sales. The news follows similar moves over the past year by Walmart, Target, and others. Investors are also responding. Bloomberg reports that dozens of shareholder resolutions have been filed this proxy season pressing companies to address employee-related issues ranging from paid leave to wages.
The business case for reducing inequality is a compelling one, and the WBCSD’s report shows how to do it.
Be well,
Martin
PS: Advancements in AI are moving at breakneck pace, but already it’s clear the impacts on society will be profound. In a new weekly section called JUST AI, we’ll be tracking all the major developments at the intersection of AI and our mission.
JUST Rankings Spotlight
This week we’re highlighting the top five companies encouraging or requiring their suppliers to pay a living wage from our 2023 Rankings.
Morgan Stanley Capital International (MSCI) requires its suppliers to pay employees a living wage and provides a clear definition of living wage – an essential step toward influencing behavior change.
Accenture developed an action plan for scaling living wage pay practices throughout its global operations and supply chain and regularly disclosing progress. UK suppliers are required to pay employees a living wage while global suppliers are strongly encouraged to do so.
Analog Devices Inc (ADI) is one of the few companies in the Semiconductor Industry that encourages suppliers to pay a living wage and has identified living wage as a key focus area to improve in its operations and supply chain practices.
Smartsheet requires suppliers to pay employees a living wage, as well uphold a safe and healthy work environment and ethical workplace conditions.
Teradyne ensures a living wage for its own employees and expects suppliers to follow the same practice.
JUST IN THE NEWS
The Washington Post covers JUST Capital’s launch of The Corporate Care Network at the Global Citizen NOW conference. The initiative will work to improve care benefits for workers, including paid leave, flexible work, and childcare support. Companies within the Network will have access to leading research and data as well as a community of peers to share insights and inform action. Connect with our team if you’re interested in joining or learning more.
Bloomberg showcases JUST research and insights from JUST’s Tolu Lawrence in an article about more companies switching to gender-neutral paid leave policies that give flexibility to all parents.
A new JUST analysis finds that only 31% of Russell 1000 companies provide disclosure on both political contributions and lobbying spending – with companies more likely to disclose political contributions than lobby spend. Leaders from the Business and Democracy Initiative also share two key ways CEOs can navigate the current political climate as corporations are asked to take stances on today’s leading issues.
JUST board member Peter Georgescu pens an opinion piece in Directors & Boards on the benefits of capitalism as an engine for growth and the need to reimagine its relationship with stakeholders.
QUOTE OF THE WEEK
JUST Capital
“Overwhelmingly and consistently for the past eight years as we’ve been polling Americans – this is across demographics and political ideology – there’s agreement that the public wants to see companies invest in workers. The COVID-19 pandemic made clear that in order to invest in workers, you need to be providing them with care benefits they need to be able to thrive both at work and at home.”
– Tolu Lawrence, JUST Capital’s Head of Corporate Impact announcing The Corporate Care Network at Global Citizen NOW.
JUST AI
The New York Times reports that the “godfather” of AI Geoffrey Hinton quit his post at Google over concerns about AI, saying, “It is hard to see how you can prevent the bad actors from using it for bad things.” From human rights to climate to job loss issues, the Financial Times’ Moral Money team asks if technology companies at the forefront of generative AI can be ethical investments.
The White House announces a $140 million investment to create seven artificial intelligence research hubs and also released new federal guidelines on AI ethics, per CNBC.
IBM CEO Arvind Krishna shares with Bloomberg that the company plans to pause hiring on close to 8K back-office jobs they see as replaceable by AI in the next few years. It is one of the first acknowledgments by a major company that it plans to replace its workforce with AI.
Microsoft unveils a new AI-powered version of its Bing search engine to anyone who wants to use it. “The decision to add generative AI features to Bing could be particularly risky, however, given how much people rely on search engines for accurate and reliable information,” CNN Business reports.
MUST READS OF THE WEEK
The Wall Street Journal investigates America’s reliance on low-wage jobs subsidized by government programs such as food stamps and housing vouchers, writing it’s harmful to workers, taxpayers, and innovation.
CNBC reports on Home Depot’s billion-dollar pay raise for its workers. The retailer stands by its decision as a long term investment in the future of the company even as consumer spending slumps.
Since the pandemic, the lowest earners have seen the highest wage growth according to data featured in the Financial Times. The New York Times highlights strong wage growth even as the Federal Reserve continues its fight against inflation.
CHART OF THE WEEK:
In our latest analysis exploring how and whether companies ensure that workers in their supply chain are paid a living wage, we found that just 30 of America’s largest companies (the Russell 1000) encourage or require their suppliers to do so. Furthermore, of those 30, only nine companies actually required their suppliers to pay a living wage, signaling that there is a very long way to go before workers in corporate America’s supply chain are paid enough to cover the local cost of basic living expenses – including food, housing, and medical care.
