How Does Inflation Affect Corporate Justness?

How does inflation impact corporate justness? With inflationary pressures set to continue well into next year, it’s a key question. 

Wages are the main issue. Those of you who follow JUST regularly will know that the American public’s number-one priority for business, as shown in our 2021 Issues Report, is “Pays a fair, living wage.” Indeed, this has been at or close to the top of priority list since we began polling in 2015. 

The good news is that at our last count, in our Russell 1000 universe over 190 companies employing some four million workers have lifted wages over the last few years. 

The less good news is that as a new report from Brookings finds, even with this year’s historically rapid wage growth the majority of workers at some of America’s largest companies fall still below a local living wage threshold, and to compound matters, inflation has eaten up at least half of those wage gains on average. That means, according to their calculations, hourly wages at Amazon had a nominal increase of $2.75 and a real increase of $1.61, at Target a nominal increase of $1.58 and a real increase of $0.53, and at Kroger a nominal increase of $1.25 and a real increase of $0.17.

Fears that wage increases themselves may be driving inflation appear to be unfounded. At his Wednesday press conference Federal Reserve chairman Jerome Powell stated that while wages are increasing at a faster rate than they have in many years, “wage growth has not been a major contributor to the elevated levels of inflation.” Powell also reported that the economy is “making rapid progress toward full employment.” 

The takeaway here seems to be that there remains plenty of headroom for companies to continue investing in their workforce and specifically lifting lowest paid workers closer to a local living wage level. Our work over the past year with our partners and cohort companies in the Worker Financial Wellness Initiative showcases the benefits of this in terms of corporate competitiveness and provides a roadmap for exactly how to do it. Concerns about inflation shouldn’t make us take our eye off the ball. 

Be well,
Martin Whittaker

This Week in Stakeholder Capitalism

Google tells its employees that they must comply with vaccine policies or they face losing pay and then losing their job.

Kroger removes paid emergency leave for unvaccinated employees who contract COVID-19. 

Netflix follows through on its pledge to invest $100 million into Black-owned financial institutions, and signals it wants to spend more to help close the racial wealth gap.

T-Mobile has set a company-wide $20 per hour minimum wage.

What’s Happening at JUST

If you missed the release of last week’s 2021 Issue Survey insights showing what Americans want companies to prioritize today – including fair and living wages, job creation, and greater accountability to stakeholders – take a look here, and catch up on coverage on CNBC and in The Street. The Issues and their relative importance will power our 2022 Rankings of America’s Most JUST Companies, coming soon on January 11th. 

The Forum


“One of the biggest things that retains people at our company is the growth of our company. You can join our organization as a crew member and in short order—I think it’s in short order anyway, two to three years—you find yourself as a restaurant manager. In five to seven years, a multi-unit leader, meaning you’re overseeing six to eight restaurants.”

“Technology is not ethical or unethical, it’s the whole ecosystem around it. The goal is obvious—to take the best out of A.I., to make it as beneficial as possible, and to avoid the negative impacts…no company wants to be involved in employing a technology that discriminates or has unintended negative consequences.”

“My belief is that our biggest contribution has not been the money we’ve given away. It’s not individual issues that we’ve advocated for. It’s not scaling grass-roots environmental activism through different levels of support. It’s operating from the bowels of business and proving that businesses can exist to do more than maximize the wealth of their owners, really consistently proving that in ways big and small over decades.”

Must-Reads of the Week

The Washington Post examines efforts to close the race gap at the executive level across corporate America to see if they are truly effective. 

The Wall Street Journal looks at the trend of billionaire corporate leaders selling their stock in 2021 before looming tax changes take over in the next year. The Financial Times Moral Money team further explores how the widening CEO-employee pay gap is at odds with the adoption of stakeholder capitalism principles. 

Reuters reports that White House Economic Advisors have revealed that the meat-packing industry saw profits soar 300% this year by collectively driving up meat prices.

Axios reveals that 45% of unemployed Americans not looking for work have stopped due to physical and mental health issues

The Wall Street Journal looks at how Amazon is turning into the wage and benefit setter for regions where their fulfillment centers are located, and the implications for other businesses in the area, both positive and negative. 

The Washington Post reports that the Biden Administration wants to make the federal government carbon neutral by 2050. 

The Wall Street Journal examines how resorts are rebranding and promoting themselves to the new class of permanent work-from-home employees as great places to have a work-cation. 

Chart of the Week 

This week’s chart comes from Brookings’ report – With inflation surging, big companies’ wage upticks aren’t nearly enough – which shows that despite strong increases in 2021, inflation has erased at least half of the average wage gains for frontline workers. Dig into the data here.

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