JUST Capital and New Partner Revelio Labs Find About Half of Russell 1000 Employees Do Not Make a Family-Sustaining Wage

For the third consecutive year, paying a fair and living wage ranks as the top priority for the American public when it comes to just business behaviors. JUST Capital’s 2022 Issues Survey – The People’s Priorities found that paying a fair, living wage was the most important business Issue this year, doubling in importance over the last two years, and will comprise 21% of our Annual Rankings of America’s Most JUST Companies model in 2023. To put this into context, the next highest priority – creating jobs in the U.S. – was the second most important issue at 11%. What’s even more compelling is that despite increasing rhetoric that the country is incredibly polarized, across every demographic group we surveyed – political affiliation, race, gender, age, or income group – Americans are united in wanting companies to prioritize paying a fair, living wage as the most important business Issue today. 

Despite the overwhelming consensus that companies have a responsibility to  pay workers enough to make ends meet and be transparent with job seekers about pay, there is remarkably little public data available to track explicit performance on wages by even the largest companies, like the Russell 1000 corporations JUST ranks. That’s why we are proud to announce our new partnership with Revelio Labs, a leading labor market data provider that is working to create the first universal HR database, to fill the measurement gap on corporate wages. 

The current state of corporate wage disclosures is poor, non-standardized, and mostly voluntary

There are many reasons why publicly available wage data in the U.S. is sparse. They include concerns over privacy, perceived litigation risk, and exposure of corporate trade secrets. Some concerns are more real than imagined, and some are even shared by those tasked with oversight. Federal agencies, for instance, do not currently disaggregate results from tax records or employer surveys by companies in a nod towards worker and employer privacy. In an ideal world, companies would provide equitable access to such data. But as it stands, the vast majority of disclosure on human capital metrics is voluntary, and thus public companies seldom have the incentive to release information about wages in their corporate social responsibility or diversity, equity, and inclusion reporting. 

In 2017, the Securities and Exchange Commission adopted the Dodd-Frank mandate requiring public companies to disclose the pay ratio between the CEO’s and median employee’s compensation in annual proxy statements, offering a rare window into the state of pay at public companies. The rule, however, provided companies with significant flexibility in identifying who the median worker is and how to calculate the median, with the ability to change this definition every three years. As a consequence, the publicly reported median worker pay data is incomparable and inconsistent. 

The odds of finding standardized, non-mandatory disclosure on wage data are also low. If shared at all, companies voluntarily disclose three wage-related metrics: (1) the cost of salaries, benefits, and pensions; (2) pay equity analyses by gender or race and ethnicity; and (3) minimum wage rates for hourly employees. Even though we’re in an economic climate characterized by fierce competition for talent among employers and rising inflation, under 10% of Russell 1000 companies disclose their minimum wage rates for hourly employees, the only disclosure among the three that can actually tell us anything about the bottom end of the wage distribution. 

Modeling estimates are required without comprehensive, standardized disclosure of data

While we wait for better company-specific wage data from government agencies and continue to push for increased voluntary disclosure among companies on key job quality issues like wages, we have to get creative by knitting together whatever wage data is available. That is a big reason why JUST’s annual Rankings has relied on models to help us estimate metrics on the state of wages among Russell 1000 companies. But not all models are created equal.

Historically, these models used a combination of crowdsourced data reported by current and former employees and data from federal agencies like the Bureau of Labor Statistics to construct a wage distribution for each company. But even this approach was a blunt instrument for assessing corporate wages: Without sufficient company-specific data, the results suffered from clustering and data bias. 

JUST Capital and Revelio Labs have partnered to bring out the best and mitigate the worst of available wage and employment data

To develop a model that more accurately measures the state of corporate wages for JUST’s annual Rankings and beyond, JUST has partnered with Revelio Labs to leverage its unique workforce datasets and modeling capabilities. Together, we have radically improved our visibility into the wage and salary distribution for each Russell 1000 company, adopting Revelio’s innovative machine learning model to predict salaries. This new wage and salary distribution enables us to produce estimates for three data points within the “Pays a fair, living wage” Issue: (1) the median U.S. worker pay (to compare to CEO compensation), (2) the share of U.S. workers earning a living wage to support a family of two full-time workers and two children, and (3) a score that evaluates how fairly a company pays for similar occupations compared to its industry peers. 

Read an overview of how it works in our methodology summary or dig into the full methodology for a deeper explanation. 

What have we learned so far?

The results from our joint modeling work give us several new insights about the state of wages among Russell 1000 companies. Most notably, we’ve learned that while estimates show that these companies pay better on net than the typical American employer, a slim majority of their workers still may not be earning enough to make ends meet. 

At the typical – or median – Russell 1000 company, for instance, 50% of full-time workers earn above roughly $65,000 annually, which is over $10,000 per year more than the median earnings of full-time workers nationwide.

These higher salaries and wages at Russell 1000 employers overall, however, do not translate to greater economic security for all Russell 1000 workers. In fact, our estimates show that 51% of all the workers at Russell 1000 companies, who in total made up about 15% of the employed population in the U.S. in 2021, are not earning a family sustaining living wage, a national population-weighted average of $24.16 per hour in 2022 according to our partners behind the MIT Living Wage Calculator. That’s about 11.1 million workers who are not making enough working full-time to support a family that has another full-time working adult and two children. We further estimate that about 35% of Russell 1000 workers do not earn enough to meet their own basic needs – or a living wage for one full-time employee without dependents, a national population-weighted average of $17.46 per hour in 2022.

These findings underscore the reality that some of the largest U.S. employers among the Russell 1000 have a disproportionate share of low-wage jobs and still have a long way to go when it comes to meeting the expectation of the American public to pay a fair, living wage.

In the coming weeks, we’ll be exploring more insights from these wage models. While these modeled estimates are just that, estimates, they nevertheless provide an insightful starting point from which we will iterate and improve. We will use these findings to better understand how America’s largest companies are performing on what Americans are prioritizing more than ever – creating JUST jobs.

• If you would like to learn more about the methodology behind JUST Capital’s and Revelio Labs’ wage models or your company’s performance in them, please reach out to our corporate engagement team at corpengage@justcapital.com.
• If you would like more information or access to company workforce data, including salaries, headcounts, or employee composition to benchmark your company to your peers, please reach out to info@reveliolabs.com. 
• If you would like to learn more about how this research is connected to JUST Capital’s JUST Jobs program and informing its priorities, please email programs@justcapital.com.

Lisa Simon is a Senior Economist and Daniel Firester is a Lead Data Scientist at Revelio Labs.