The JUST Report: Are We Making Progress on Income Inequality?

Tackling inequality in income and wealth has always been high on JUST’s list of objectives. In his 2015 TED Talk, our co-founder and Chair Paul Tudor Jones expressly identifies closing the economic inequality gap as a motivation for founding the organization. And for as long as I can remember, paying a fair and living wage has been at or close to the top of the public’s priority list in our polling. It’s fair to ask, therefore, whether progress is being made on this most critical of metrics.

Recent data suggests the answer to our headline question appears to be a tentative “yes.”  

Let’s look at income first. For the lowest-earning 50% of Americans, income growth was 4.5% over the last 12 months compared to an average of 1.2% for all Americans, according to University of California, Berkeley, economists. From February 2020 to September 2022, the average income of lowest-earning Americans increased by more than 10%, faster than all groups of population except for the top 1%. Last month, real average hourly wages finally started to beat inflation, as the WSJ reports this week,increasing 1.2%, seasonally adjusted, from June 2022 to June 2023.

When it comes to wealth, the bottom 50% of Americans may hold just 3.3% of the nation’s total, but that’s up from 0.4% in mid-2011. As noted by investor Steve Rattner back in January, from 2019-2022 total wealth for Americans in the bottom half rose by 126% compared to around 25% growth for those in the top half (though the dollar amounts are much smaller). Rising hourly wages, a shortage of workers in low-wage jobs and increased real estate values were some of the reasons cited. Interestingly, the total value of real estate held by the bottom 50% – home equity makes up a disproportionately large percentage of their wealth – has risen by 75% since September 2019 compared to 41% for the overall population. 

While it’s true that many millions of Americans still face severe financial difficulties – CNBC reports that 70% of Americans are feeling financially stressed and more than half of Americans (58%) are still living paycheck to paycheck – it’s also true that things do seem to be finally trending in the right direction. If you’re interested to find out how some corporations are actively supporting their employees on these issues, click this link.

Be well, 

Martin

P.S. For more on why companies should be listening to the people’s priorities, I highly recommend this new Harvard Business Review article by our board member Michael Weinstein and advisors Daniel J. Benjamin and Ori Heffetz. 

WORKER FINANCIAL WELLNESS INITIATIVE VIDEO SPOTLIGHT

(JUST Capital) 

JUST Capital is proud to present an exciting compilation video showcasing the journeys of our corporate partners in The Worker Financial Wellness Initiative. Hear from workers at PayPal, Verizon, Chipotle, and Prudential Financial in this short clip about the life-changing impacts of investments in worker training, benefits, and wages.  

The Worker Financial Wellness Initiative is a vibrant and growing community of business leaders dedicated to improving the financial health and security of their workers, and includes peer learning opportunities for C-suite leaders; resources and events for HR and compensation professionals; and direct assistance to companies on how to develop and deploy a Worker Financial Wellness Assessment. Get more  info or to see how you can partner with us. 

JUST IN THE NEWS

As companies rethink their ESG strategies, JUST board member Michael Weinstein and advisors Daniel J. Benjamin and Ori Heffetz make the case for using JUST’s polling as an alternate model to ESG ratings and frameworks. Their Harvard Business Review feature lays out why now’s the time for companies to turn to the public’s top priority – workers.  

MIT professor and Good Jobs Institute President Zeynep Ton sits down with JUST Capital to  explore her cutting edge research on the business and shareholder case for investing in workers.  

JUST Capital interviews Morgan Stanley’s Chief Medical Officer David Stark about the company’s decision to offer enhanced care benefits. 

Akamai Technologies’ VP of Inclusion, Diversity, and Engagement Khalil Smith speaks with HR Executive Magazine on the company’s DEI successes, including being named one of America’s Most JUST Companies. 

QUOTES OF THE WEEK

“Paying workers low wages is actually very expensive for companies. Think about the costs of high turnover, the costs associated with low wages like lost sales, lost productivity, mistakes, errors, customer frustration. […]  Investing in workers isn’t about being nice. You’re doing this because this is how you win with customers. This is how you win as a business.” 

• Zeynep Ton, MIT Professor and president of the nonprofit Good Jobs Institute to JUST Capital. 

“We believe that JUST’s unique approach to prioritizing issues and ranking companies based on public opinion should be a model for others to follow. […] The public’s judgments may be more homogeneous and stable than you’d think — making it easier for managers to prioritize corporate behaviors than they may anticipate.” 

• JUST board member Michael Weinstein and advisors Daniel J. Benjamin and Ori Heffetz in Harvard Business Review on how JUST’s stakeholder model can provide a path forward for companies on ESG. 

“Enhancing parental leave does not directly cost anything. It has a significant impact in terms of improving productivity, retention, and employee morale. Anecdotally, the feedback that we get from employees who’ve had the time to bond with their child, recover from giving birth, and support their partner in recovering from giving birth, is that [access to paid time] buys loyalty.” 

• Morgan Stanley’s Chief Medical Officer to JUST Capital on the company’s decision to expand care benefits.  

JUST AI 

Revelio Labs publishes a study exploring the salary advantage for workers with AI-related skills. They found that workers with knowledge of machine learning can earn 5.8% more than their counterparts in similar roles who do not have knowledge of those systems.

Can AI invent? Scholars, patent authorities, and politicians are all asking the question as machine learning systems entrench themselves in innovation. The New York Times reports.   

The New York Times writes about the threat AI poses to American call center workers who have come to rely on the jobs to support middle-class lifestyles in otherwise economically depressed parts of the country. 

Margaret Atwood and James Patterson are among a group of writers asking Microsoft, Meta, and Alphabet to compensate authors if they are going to use their work to train AI models. It is still unknown whether or not companies have secured permission to use certain data sets, while some companies argue scraping information from the internet is fair use.  

Gary Gensler, the head of the SEC, warns that the mass use of AI models in the financial sector could create a herd mentality as systems base their suggestions on the same data sets and influence investors towards a decision making “monoculture.” Business Insider has the story.  

MUST READS

BSR shares key takeaways from workshops held with 25 U.S. Chief Sustainability Officers exploring the potential scenarios around the future of the field, from addressing political polarization to regulation. 

Meet the Press Reports explores the state of living wages in the U.S., traveling to Cleveland to speak to workers firsthand. “Those 30-year jobs, those 40-year jobs are gone for us,” says Kanika Williams, a single mother of four working three part-time jobs to make ends meet. 

Disneyland workers’ pay could rise to nearly $20 per hour, the Los Angeles Times reports, after a California court ruled that the theme park is within jurisdiction of an Anaheim living-wage law. The news comes after workers at Disney World in Florida won a minimum wage hike that will bring them to $18 per hour. JUST board member Abigail Disney’s 2022 documentary, “The American Dream and Other Fairy Tales,” highlights the financial struggles of Disneyland workers.      

Fortune covers new research that finds that the “motherhood penalty” affects all women, regardless of their breadwinner or education status among other factors. New moms see a 51% cut in pay, about $8,000 annually, while new dads’ earnings remain unaffected. 

United Airlines and its pilots’ union agree to a deal with an estimated worth of $10 billion that will increase wages up to 40% over four years. The New York Times has the story.  

The New York Times tells the story of Missy Sims, a lawyer taking on oil and gas companies by employing novel legal strategies. They include seeking damages from major weather events, like Hurricane Maria, and arguing fossil fuel companies are in violation of the Racketeer Influenced and Corrupt Organizations Act (RICO).  

CHART OF THE WEEK:

Year over year, Americans we poll agree across demographics – liberal, conservative, high-income, low-income, millennials, boomers, and more – that companies should prioritize workers. This chart from a Harvard Business Review feature on our polling breaks down that consistency, making it clear to corporate leaders that “if you think your constituency feels differently… think again.” Read more on the importance, and alignment, of public opinion.