Attending the CNBC Delivering Alpha Investor Summit this week it was clear that many believe we are likely to enter a recession at some point in the next year, with some – notably Stanley Druckenmiller – thinking it could be particularly deep and prolonged. Growing up in the UK in the 1970s and early 1980s, I remember what deep recession coupled with high inflation feels like. It’s not pleasant. Strikes, job losses, gutted communities, and a “Winter of Discontent.” Perhaps most of all, a pervasive feeling of anxiety and uncertainty. Inevitably, those in the lower and middle strata of the economic ladder suffer the most.
In such conditions, it’s going to be up to the private sector to find ways to do more. We need capitalism at its very best, as Meredith Sumpter from the Council for Inclusive Capitalism said to me recently. How does this happen? What should companies, especially large corporations, actually do to help society’s stakeholders? Eight years of polling Americans on this very topic has given us some pointers. And top of the list is the idea of investing in people.
This is why we launched JUST Jobs, a new umbrella program that applies the full JUST Capital playbook to support the nation’s largest companies in advancing just jobs. The work will build on our existing corporate engagement programs to lay out concrete pathways on all the top priorities of the public: paying a fair, living wage; creating jobs; providing key benefits; stable scheduling and on-the-job safety; better hiring, retention, development and advancement practices; retirement savings; and so on.
At our launch event this week, leaders from AEP, Mastercard, Franklin Templeton, and other organizations spoke eloquently about the power of the business case, why it’s better for shareholders, and also the scale of the potential social impact. And with an estimated 7.6 million workers in the Russell 1000 already not earning enough to support a single person with basic, local living costs, the need is clear.
If you’d like to learn more, please let us know.
Be well,
Martin Whittaker
Amazon raises hourly wages for delivery and warehouse workers to $19 per hour, from $18 per hour, as part of its plan to spend roughly $1 billion on pay hikes over the next year.
AT&T, T-Mobile, and Verizon plan to help customers hardest hit by Hurricane Ian, offering unlimited talk, text, and data, and waving overage charges in parts of Florida worst affected by the storm.
McDonald’s is facing a $10 billion lawsuit on claims that the company is intentionally excluding Black-owned media outlets from its advertising efforts.
Meta and Bain pilot a new platform designed to engage employees in corporate decarbonization goals, sharing insights into how they can reduce emissions within the company.
Microsoft pledges to support public policies that would reduce global carbon and decarbonize power grids. The tech giant hopes to achieve carbon negativity by 2030, though its emissions rose by 21.5% last year.
Starbucks announces that it’s ready to begin contract negotiations in October with the hundreds of stores that have voted to unionize across the country.
On November 2, Martin will join Reuters for its ESG Investment North America 2022 conference to discuss how best to quantify “S” issues like workforce diversity and financial security, and how to integrate these elements into investing strategy. Register here to attend this conversation and hear from senior leaders across the investment community.
Despite being the public’s biggest priority for companies, corporate data on wages is lacking. We’re proud to announce a new partnership with Revelio Labs, a leading labor market data provider, to help fill that gap. Together, our modeling has already found that about half of U.S. employees at Russell 1000 employees aren’t earning a family-sustaining income.
Our latest Insights to Impact virtual event focused on how to define, create, and scale JUST Jobs – and the strong business case for doing so. Hear from leaders at Amalgamated Bank and Franklin Templeton on the long-term value of investing in workers, American Electric Power and Mastercard on embedding equity and upward mobility into workforce strategies, and The Families and Workers Fund on the challenge of measuring job quality.
Hear from JUST Senior Director of Research Kavya Vaghul, alongside other speakers at this summer’s Good Jobs Summit, on why businesses and investors should make job quality a North Star in a newly released video from The Families and Workers Fund.
Last week, Martin joined Workday’s Senior Director of Environmental Sustainability Erik Hansen for a conversation at the Nest Summit on the state of corporate climate commitments and the company’s own climate leadership. Catch up on the full discussion here if you missed it.
This week, we also announced a new partnership with ESG Book, a leading ESG technology and data provider, to incorporate its data into the methodology for our Annual Rankings of America’s Most JUST Companies.
“The real economy of the United States is intangible. People are at the heart of the value.”
“We’re doing outreach to women who have the skills, have an interest, introducing them to what this kind of work is, but then we’re giving them mentors and we’re paying them to go through the training. And at the end of this program, in a year to14 months, we’re going to hire them into full-time jobs. … You have to sometimes build that pipeline and not wait for it to happen.”
“It’s a little nerve-racking right now as the money I’m getting from disability doesn’t even cover half my monthly mortgage payment. The 60% payments are based off my base salary, so it’s a significant drop in income. I had money saved up just in case, and I’ll have to go through it because I am not willing to give up days with my baby. I want to take 12 weeks, but I don’t know if the money I’ve saved is going to cover the whole time. It’s only my salary. It’s a huge stress.”
Axios reported union popularity is at a 57-year high, reaching 71% approval in a recent Gallup poll. It’s the highest approval rate since the1960s.
Airport workers are on strike at multiple airports across the country. The Washington Post has the story on the labor action that started with an open-ended strike on Monday at San Francisco International Airport and has spread to 21 airports nationwide.
A new working paper by economists in California and Europe argues that executives should be paid based on their ability to improve ESG metrics at their company. A growing number of companies have taken up the practice of ESG-linked pay over the last few years, including Apple, BP, and McDonalds.
Workers say their pay isn’t keeping up with inflation. A Bank of America-sponsored survey shared first with CNN found nearly three in four employees feel the cost of living is outpacing wage growth. NPR writes about the great resignation, dynamism, and the search for a job that can offer financial security in a turbulent economy.
Roy Swan of the Ford Foundation says ESG is a risk management framework on CNBC’s Squawk on the Street. Fortune reports on the need for ESG to protect companies’ profits. The Conference Board is out with a new report on shareholder voting trends, including an increase in ESG-related proposals.
JUST and Revelio found 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. Read more in our first collaborative article with Revelio about the state of workers at America’s largest companies.
Abigail Disney
CEO, Folk Films
JUST Capital Board Member
Abigail E. Disney is a filmmaker, activist and the Emmy-winning director of The Armor of Light. Abigail focuses on storytelling that fosters peace, justice, and human understanding. After years as a nonprofit volunteer and activist and stay-at-home mother, Abigail founded Fork Films and leads the production company as CEO.
Abigail released her feature documentary The American Dream and Other Fairy Tales last week, which provides a poignant view into America’s inequality crisis seen through the lived experience of Disney theme park workers.
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.
Lisa Simon is a Senior Economist and Daniel Firester is a Lead Data Scientist at Revelio Labs.
On September 28, JUST Capital held its latest Insights to Impact virtual event – Defining a JUST Job for Today’s Economy.
In an increasingly polarized country, the American public (and a growing number of institutional investors) are remarkably united in wanting companies to prioritize their workers. And investing in workers today requires creating truly “JUST Jobs.” But what is a JUST Job? This virtual convening set out to answer that question by exploring specific ways companies can close the gap toward all workers earning a living wage, advance equity & mobility, and deliver on the DEI commitments that are crucial to evolving the modern workforce.
JUST Capital’s Chief Strategy Officer, Alison Omens, kicked off the event highlighting our latest polling insights around jobs and wages in America. Our annual Issues Report, examining the public’s priorities for companies, found that once again “Pays a fair, living wage” is the most important issue to Americans across all demographics. And, four out of the top six Issues are Worker-related. Additional polling found that, not only do 84% of Americans believe large companies have a responsibility to pay full-time adult workers in frontline jobs enough to make ends meet, but large majorities of Americans also believe companies it’s a company’s responsibility to regularly increase wages to keep up with the rapidly rising cost of living (87%), provide quality, affordable health insurance to all adult workers, including part-time workers (84%), provide clear career pathways to job opportunities with higher pay (83%), and more.
It’s clear the American public supports the idea of a “JUST Job,” setting the stage for the conversations ahead.
Next up, JUST Capital’s Cambria Allen-Ratzlaff, Managing Director & Head of Investor Strategies, moderated a discussion on how creating JUST Jobs builds long-term value with speakers Meredith Miller, Director, Amalgamated Bank and Managing Member, Corporate Governance and Sustainable Strategies and Anne Simpson, Global Head of Sustainability, Franklin Templeton. Together, they addressed the very real challenges of prioritizing corporate investment in workers, fair wages, and DEI advancement. “People matter in investment. Value creation in a company doesn’t just come from deploying capital,” Simpson said, emphasizing that this is as much a mindset shift as it is a market one.
The next session focused on advancing equitable mobility, with insights from industry leaders from JUST Capital’s 2022 Workplace Equity and Mobility Ranking, American Electric Power and Mastercard, on how they’re supporting workers’ financial security and creating equitable pathways for their economic advancement. The session was moderated by Leslie Boissiere, Vice President, External Affairs from The Annie E. Casey Foundation (our partner on the ranking) with insights from Sandy Nessing, Vice President and Chief Sustainability Officer, American Electric Power, and Randall Tucker, Chief Inclusion Officer, Mastercard.
And finally, we concluded with a conversation on defining and measuring a JUST Job, which highlighted actionable takeaways about how corporate America can get closer to creating quality jobs. Moderator Kelley-Frances Fenelon, Director of Programs and Partnerships at JUST Capital, spoke with Rachel Korberg, Executive Director, The Families and Workers Fund and Kavya Vaghul, Senior Director of Research, JUST Capital.
Tolu Lawrence, Managing Director of Programs and Partnerships at JUST Capital, closed out our program with thanks to the cross-sector network of organizations that support our work on JUST Jobs including MetLife Foundation and The Annie E. Casey Foundation. If you’re interested in learning more about how to engage with JUST Capital on this topic, please submit this short interest form and a member of our team will be in touch soon.
If you weren’t able to attend or missed any part of the event, the full video is available below.
September 15, 2022
JUST Capital’s 2022 Issues Report – The People’s Priorities is by Jennifer Tonti, Managing Director, Survey Research & Insights.
The current economic environment is a marked difference from the one rocked by the COVID-19 pandemic and ensuing recession in 2020, and the “restart” we began to see in 2021. This year, ongoing pandemic-related supply shocks and repercussions from Russia’s invasion of Ukraine have helped to spark the highest inflation in decades. Soaring costs and economic uncertainty about a recession are impacting the national mood. And Federal Reserve Chair Jay Powell recently warned Americans that the Fed’s plans to continue rate hikes to slow inflation will “also bring some pain to households and businesses.” Economic inequality that was exacerbated by the pandemic could widen further in a sharper slowdown, understanding low-wage workers are often the first to lose hours and jobs.
It’s to be expected that the social, economic, and political disruptions at any moment will have some bearing on Americans’ attitudes and values during that time. In every year that we’ve been measuring which issues matter most to the public when it comes to just business behavior (what we call The People’s Priorities), the events of that year can determine which issues Americans deem more important than others, as well as the degree to which the public prioritizes each issue.
This year, the resounding refrain from the public is that America’s largest companies should put workers squarely at the heart of just business practices, foremost by paying their workers a fair and living wage.
Over the last six years, Worker Issues have consistently commanded the highest share of priority among the 20 stakeholder-related issues we measure, and this year is no different. Four of the five Worker Issues we track – including paying a fair, living wage; protecting worker health and safety; providing benefits and work-life balance; and investing in workforce training – are among the top six priorities of the public, and the collective prioritization of all five worker issues will comprise 44% of a company’s score in our Rankings of America’s Most JUST Companies.
What is more, despite increasing media attention and political rhetoric that the country is incredibly polarized, we are not divided as a country when it comes to just business behavior. There is broad consensus across all demographic and political cohorts that Workers should be corporate America’s top priority – something we also found in our recent survey on Workers & Wages. Specifically, among every demographic group – liberal, conservative, high-income, low-income, men, women, young generations, older generations, and white, Black, and Hispanic Americans – the Workers stakeholder is the top priority. And for every one of these demographic groups, the most important Issue is “Pays workers fairly and offers a living wage that covers the cost of basic needs at the local level.”
Every year we begin our annual Rankings process by facilitating a series of group conversations with a diverse mix of Americans across the U.S., to help us broadly understand the business behaviors and actions that they consider to be most “just.” These focus groups enable our research team to hear the unvarnished voice of the public speak to what issues matter most, and whether their opinions have changed over time. The polling team then distills the focus groups’ major themes into statements that capture these concepts, which we call “Issues.” In 2022, this work yielded 20 Issues, which is consistent with the number of Issues last year.
Since the public initially tells us that all of these Issues are of high importance, we then conduct a choice modeling exercise as part of our Annual Survey work, allowing us to derive the relative importance of these 20 Issues. From here, we extract a “weight” per Issue that we use as the foundation for our Rankings of America’s Most JUST Companies. The weights below reflect the probability that an individual would choose that Issue as most important to defining a just company, based on a representative sample of 3,002 Americans. These weights power our analysis of corporate stakeholder performance at the country’s largest companies, including JUST’s annual Rankings.
Each issue is color-coded by the stakeholder it most impacts. While we reference the prioritization of several Issues in this report, please note that the relative importance between many of these Issues often varies by a fraction of a percentage point.
Below we take a deeper look at these Issues, and focus on a few that have made substantial movement up or down in relative importance this year.
The above chart shows that four of the five worker Issues are among the top six overall. Most notably, “Pays workers fairly and offers a living wage that covers the cost of basic needs at the local level” is the top-most prioritized Issue for the third consecutive year, and will comprise a significant 21% of companies’ scores in our 2023 Rankings. This is a nearly six percentage point increase from last year, with three-quarters of Americans saying that this Issue is “more important” (including 50% saying it is “much more” important) than last year. And as we mentioned above, among each of our key demographic groups, this is consistently the top-prioritized Issue.
The current economic climate has undoubtedly impacted the public’s priorities. Findings from our partners at The Harris Poll show that 83% of Americans say their top concerns include the economy, inflation, and jobs. And despite the July U.S. job rate reaching pre-pandemic highs, eight in 10 Americans remain concerned about America entering a recession. Maintaining a stable job with a wage that enables a family to make ends meet each month is crucial staying afloat in today’s uncertain economy.
It is doubly important that wages rise in step with inflation. A recent JUST Capital poll shows that 87% of Americans say large U.S. companies have a responsibility to regularly increase wages to keep up with the rapidly rising cost of living. Large majorities of Americans also think that companies that pay a living wage are better for their workers, more competitive in their industry, and better for the U.S. economy overall. Unfortunately, this is more of an aspiration than a reality for workers in our economy today. As the U.S. Bureau of Labor Statistics reported last month, average weekly earnings may have risen 4.2% from June 2021 to June 2022, but real weekly earnings decreased 4.4% in that same time period.
This Issue also captures the concept of fair pay, which both ensures fairness of pay between peers as well as equal pay for equal work across gender, race, ethnicity, etc. Even in 2022, women continue to struggle to be paid at parity with their male colleagues – in 2022, women are paid 82 cents for every dollar earned by men, with even wider pay gaps for women of color, including Black, Hispanic, and American Indian women who earn 79, 78, and 71 cents to the dollar, respectively. Equitable pay – across gender and race/ethnicity – is a critical element in better, fairer treatment for companies’ most valuable assets: their workers.
In 2022, “Protects the health, safety, and well-being of workers beyond what is required by law” comprises 7.3% of a company’s score in our Rankings, showing that even two years from the height of the pandemic, protecting worker health and safety continues to be critical to the public. What’s more, two-thirds of Americans say that this Issue is more important this year than last.
Upward mobility for workers is an additional area of focus for Americans in an unsettled labor market. McKinsey finds that career advancement is the main reason people continue to leave jobs during the Great Reassessment. As such, “Focuses on workforce retention and employee advancement by providing training, education, and career development opportunities” has moved up five places, and comprises 7.1% of a company’s score in our Rankings.
Finally, “Offers a quality benefits package and supports good work-life balance for all employees” comprises 6.2% of a company’s score, a level unchanged from the previous year. As we saw in our August 2022 survey on workers and wages, majorities of Americans believe companies have a responsibility to provide quality, affordable health insurance to all adult workers, including part-time workers (84%) and match employee contributions to retirement savings plans (74%). And in our April 2022 survey focused on how companies support women in the workplace, 64% of respondents said it was important for companies to provide all workers at least 12 weeks of paid parental leave to promote equity at work.
There is a very clear business case for corporate leaders to focus on worker issues. Investments in good jobs can reduce the high costs incurred from absenteeism and turnover, increase a company’s labor productivity, and ultimately grow its revenue. Companies can also gain a competitive advantage as their corporate reputation attracts values-aligned job seekers, customers, and ESG investors. To help companies assess, measure, and improve performance on the worker issues that matter most to the public, we’re proud to announce the creation of a new JUST Jobs Program.
One Issue that falls under the Communities stakeholder, “Creates jobs in the U.S. and provides employment opportunities for communities that need them,” is once again #2 in relative importance, comprising 11.1% of a company’s score in our Rankings. 60% of respondents say that creating jobs in the U.S. is more important than last year.
Ethical leadership, an issue that falls under Shareholders & Governance, continues to be of high importance to Americans as well. “Compels leadership to act ethically and with integrity and to avoid wrongdoings” comprises 7.6% of a company’s score, and is the third most important Issue in 2022. Earlier in the year, our focus group participants told us that they are paying attention to how leadership acts – or doesn’t act – on important societal issues. Our polling confirms that Americans want corporate leaders to take ownership when companies make mistakes or become embroiled in a crisis or controversy. Action is perceived as good faith. Failure to own up to mistakes results in reputational damage.
The Environment stakeholder has grown to encompass 12% of the model. Americans told us that Minimizing pollution (up five places to become the eighth most important Issue) and Combating climate change (up two places to the 13th most important issue) are higher priorities for Americans in 2022, helping to propel the Environment stakeholder’s importance in our Rankings this year.
A need for increased transparency and disclosure from companies has been a key, recurring theme we heard in focus groups. This year, the refrain was louder than ever. As such, we modified the language in this Issue to broaden the focus to be more inclusive, and in turn, the Issue “Is transparent in communications with customers about its products, services, and operations” has moved up four places to become the 12th most important to Americans.
Another notable change is the “Cultivates a diverse and inclusive workplace with equal opportunity” Issue, which fell in priority from seventh most important in 2021 to 15th in 2022. Make no mistake: our polling shows that Diversity, Equity, and Inclusion continues to be an important element of just business behavior, with 92% saying that it is important for companies to promote racial equity in the workplace, and 77% saying that racial equity cannot be achieved until all workers are paid a living wage. What is more, half of respondents say this Issue is more important than last year.
One possible explanation for this decline is that we are two years removed from the racial justice movement our nation rose to in response to George Floyd’s death. And with economic matters such as inflation and recession closer to home for many Americans, when it comes time to prioritizing this issue over others, its relative importance falls.
The Priorities of the Public are based on responses from more than 3,000 U.S. adults and are representative of a cross-section of Americans. This means we hear from a variety of voices, both by demographic such as race/ethnicity, gender, income levels, and age, as well as behavior such as political ideologies or active investors. Remarkably, we found that there is substantial consistency in the Issues most important to these groups, with nearly all cohorts prioritizing the same top three: Pays a fair, living wage; Creates jobs in the U.S.; and Acts ethically at the leadership level.
With a few exceptions, each demographic is fairly unified in how they want corporate America to prioritize the top five Issues, demonstrating remarkable unity and consistency in a year when companies are increasingly under scrutiny from politicians and pundits for “being out of touch with the values of everyday Americans” or that stakeholder-focused capitalism is not “a reflection of consumer demand.”
To provide further clarity around how to better balance stakeholder interests, we classify each Issue by the stakeholder it affects most, organizing the 20 Issues into five stakeholder groups: Workers, Customers, Communities, the Environment, and Shareholders & Governance.
Specifically, we assign each of the 20 Issues to the one (and only one) stakeholder it most impacts. For example: “Compels leadership to act ethically and with integrity and avoid wrongdoings” is assigned to Shareholders & Governance, whereas “Makes products or offers services that benefit society” is assigned to the Customers stakeholder. The weight of each stakeholder group is calculated by summing all of its associated Issue weights.
For the sixth consecutive year, the American public prioritizes Workers as the most important stakeholder by a significant margin. The Workers stakeholder considers a company’s performance on factors related to how it invests in its employees, including (1) paying a fair, living wage, (2) protecting worker health and safety, (3) providing benefits and work-life balance, (4) cultivating a diverse and inclusive workplace, and (5) supporting workforce retention, advancement, and training.
The Communities stakeholder considers a company’s performance on factors related to how it supports its communities, including (1) creating jobs in the U.S., (2) addressing human rights issues in the supply chain, (3) contributing to community development, and (4) giving back to local communities.
The Customers stakeholder considers a company’s performance on factors related to how it treats its customers, including (1) protecting customer privacy, (2) treating customers fairly, (3) communicating transparently, and (4) making beneficial products.
In 2021 we added “Governance” to the Shareholders stakeholder be more representative of the Issues included in this grouping that explore how a company maintains good governance and delivers value to its shareholders by (1) acting ethically at the leadership level, (2) generating returns for investors, and (3) prioritizing accountability to all stakeholders.
The Environment stakeholder considers a company’s performance on factors related to how it reduces its environmental impact, including (1) minimizing pollution, (2) using sustainable materials, (3) combating climate change, and (4) using resources efficiently.
When looking at stakeholder prioritization across demographic groupings, we see significant alignment, with some specific areas of variance. For instance, Issues relating to the Environment are prioritized more highly among respondents under age 30 and Democrats, whereas Shareholders & Governance Issues are prioritized more highly by those age 65 and older.
There has never been a more urgent moment for corporate America to embark on the journey to becoming more just, and we hope this latest survey report provides clear guidance on how companies can reevaluate their priorities and better align their practices with the values of the American people. The data shines a clear, bright light on the specific actions businesses can take today to rebuild trust in business and markets as a force for good.
Since its inception, JUST Capital’s mission has been to build an economy that works for all Americans by helping companies improve how they serve all their stakeholders: workers, customers, communities, the environment, and shareholders. The goal is to encourage and incentivize real change in corporate America’s leadership.
At the core of our work is a robust research program that starts with focus groups in which we ask the American public to identify the policies, practices, and behaviors companies should prioritize to be considered just, (which we call “Issues”). These Issues include fair pay and living wage; a more diverse and inclusive workplace; stronger, healthier communities; good jobs; a cleaner environment; and more. Then, based on sophisticated polling of a representative sample of Americans, we estimate the relative importance of these behaviors – in other words, how important to defining a just company each behavior is relative to others.
Since 2015, JUST Capital has surveyed more than 160,000 Americans – representative of the U.S. adult population – asking them to define just business behavior. For the past two years, we have partnered with SSRS, an objective, non-partisan research institution that provides scientifically rigorous statistical surveys of the U.S. population, to survey more than 3,000 Americans on their perspectives.
Before answering questions about the just behavior of large companies, it is important for respondents to have a clear definition of the concept. Below is the definition we provided to our focus group and survey respondents in 2022: A just company operates in a way that serves its workers, customers, shareholders, the environment, and the communities it affects, even if it comes at a cost.
We conducted the 20 question survey online with a probability-based sample attained through the exhaustive statistical sampling methods employed by SSRS. The SSRS Opinion Panel is a nationally representative probability-based web panel, and findings are generalizable to the general adult population.
The full survey was conducted from June 22 to July 11, 2022 among a general population sample of 3,002 English- and Spanish-speaking U.S. adults 18+ years of age, with an oversample of 540 Hispanic and 460 non-Hispanic Black respondents. Panelists were sent an email invitation to take the survey online as well as up to eight reminder emails throughout the field period. The survey program was optimized so that respondents could complete it using a desktop or laptop computer as well as a mobile device. In total, 1,063 completed the survey on a computer and 1,939 completed on a mobile device.
The margin of error is +/- 2.2% at the 95% confidence level. Results were weighted to U.S. Census parameters for age, gender, education, race/Hispanic ethnicity, and Census Division to ensure representativeness of the U.S. population. All margins of error include “design effects” to adjust for the effects of weighting.
To identify the priorities of the public, we calculate for each Issue the probability that an individual would choose that as most important to defining a just company. As such, there are 20 probabilities calculated from the 20 Issues. These probabilities can be referred to as weights as each represents the relative importance of one Issue versus another. To illustrate more explicitly, the Issue “Creates jobs in the U.S.” was assigned a weight of 11.1% as there is a 1.11 in 10 chance that a respondent chosen at random will identify this Issue as most important in defining a just company. By comparison, the weight assigned to “Generates returns for investors over the long term” has a 2.2% weight.
Our full body of survey work for 2022 also includes six focus groups conducted in partnership with The Harris Poll and eight additional surveys fielded throughout the year. To learn more about how this survey data drives JUST Capital’s analysis and Rankings of the largest publicly traded U.S. companies, visit the Methodology section of our website.
(John Feingersh)
In the face of the backlash against ESG and stakeholder capitalism, have companies eased off in their actions to become more just? Our latest corporate engagement data suggests not.
This year, 350 companies engaged with our corporate portal, which is the online platform we created to interact with companies during the ranking process and which is crucial to building credibility, transparency, and trust. This is the most ever, a 40% increase over last year and up from just 74 in 2017. The number of company comments our analysts processed hit 13,952 (almost double last year), with a significant portion providing new or updated datapoints. The total number of companies engaged by JUST now stands at 578, up 296% since 2017.
When it comes to actual changes in company performance on the issues we track, we’re also seeing continued progress. For example:
I also note we now have 13 companies directly participating in our Worker Financial Wellness Initiative, several of which have implemented meaningful changes in the past few months.
One final point: Our flagship JUST Index continues to beat its benchmark, and our latest research indicates that a basket of the most improved companies in the rankings outperformed the least improved by almost 7% in 2022 thru June 30, 2022.
The backlash may make companies more cautious about taking a stance publicly on hot button social issues, but they don’t seem (yet) to be easing up on their actual performance.
Be well,
Martin Whittaker
Chobani has withdrawn its IPO plans in light of recent stock market turmoil.
Google’s cafeteria workers quietly unionized during the pandemic.
Hilton and Marriott hotels are adopting pay-on-demand services in order to compete for talent, enabling workers to be paid on the same day they worked, eliminating a two-week pay cycle.
Starbucks has named its next CEO, Laxman Narasimhan.
UPS is in contract negotiations with the Teamsters Union, which is preparing for a strike.
Investing in workers today requires creating truly JUST Jobs. But what is a JUST Job? This convening will set out to answer that question by exploring specific ways in which companies can close the gap toward all workers earning a living wage, mobilize around equity and mobility, and deliver on the DEI commitments that are crucial to evolving the modern workforce. Sign up to be a part of this conversation here.
Today Martin will join Rashad Robinson, President of Color of Change, at a Ford Foundation andWashington Post Live event today, September 9, at noon ET, on the Future of Work. They’ll discuss how businesses are listening to and engaging with their employees to help navigate this period of mass disruption. Register to watch live here.
On September 22, Martin will be joining The Nest Summit during Climate Week NYC to discuss The State of Corporate Climate Commitment. Who is actually walking the walk? Register to attend this and many other conversations at the event here.
We’d love your feedback on The JUST Report! To help us understand what’s working for you and to guide future content development, we’ve prepared a short survey. It will take about 3-5 minutes to complete. We look forward to hearing from you. Share Your Feedback →
(Alastair Grant/Getty Images)
“All these anti-ESG crusaders position themselves as defenders of the free market. But they are attempting to use government to block private firms from acting in the best interests of their clients, including retired police officers, teachers and many others who depend upon public pensions. And in doing so, they are turning the most basic investment rules on their head.”
“The combined pinch of historic inflation and market fluctuations contributed to a rare drop in financial health for higher income households, while lower income earners experienced employment-related improvements like wage increases or new jobs. Even with those modest gains, lower income households are in a precarious position due to systemic financial barriers and wealth disparities.”
“I just signed a landmark bill that will give fast food workers the voice they have long deserved – a say in shaping the workplace standards at their jobs.”
Bloomberg writes about California’s new law requiring that companies post salary ranges on all of their jobs listings in a bid for more transparency.
The New York Times DealBook highlights BlackRock’s pushback to recent anti-ESG criticism, firing off a letter to 19 state attorneys general rebuffing claims made about the company.
The Washington Post makes the case for why the apprenticeship model needs to be more widely adopted throughout the U.S. in the face of exorbitant college costs and a lack of skills in critical infrastructure jobs.
The New York Times looks at the Fed’s proposed rule that would make more companies legally liable for labor law violations committed by their contractors or franchisees.
Fortune reports on Larry Fink’s latest statement that companies must bring workers back to the office in order to stem inflation, and how that fits into the ongoing debate about post-pandemic office life.
This chart comes from our deeper look at our 2022 data review period, showing that more companies than ever are engaging with our Rankings data collection. Learn more here.
Dan Ariely
JUST Capital Board Member
Dan Ariely is the James B. Duke Professor of Psychology and Behavioral Economics at Duke University and a founding member of Duke’s Center for Advanced Hindsight. He’s authored several books, produced a documentary, and created a board game to bring his research findings to a non-academic audience and help more people discover how to use behavioral economics to enrich their own lives.
Dan recently shared his concerns about the SEC’s new executive compensation rule, which will require companies to disclose how CEO pay aligns with long-term financial performance, in Fortune. He writes that the SEC’s regulation could unintentionally harm company culture and, ultimately, detract from creating long-term value. “For executive salaries, I want something that would be similar to the way we think about judges: I want them not to worry about money and I want them to take the long-term view.” Read more on his thoughts here.
(CNBC)
Ahead of Labor Day, let’s take stock of where things stand for the American worker.
On the one hand, it’s becoming abundantly clear that with inflation, the markets and the broader economy being where they are, there will be some challenging times ahead, particularly for lower income and middle-class Americans. And as I mentioned in last week’s newsletter, it’s not obvious today who actually has their backs.
That said, there are some tangible positives to hold onto. The first is the evident agreement among Americans – including along political lines – that companies have a clear responsibility to step up, to raise wages in line with cost of living increases, to provide affordable health insurance, to present opportunities for advancement, and more. As our latest survey report shows, 87% of Americans believe companies should pay enough so workers don’t rely on public assistance. If you think that sounds intuitive and obvious, as CNBC’s Wilfred Frost noted on Thursday, you’re right. It is. It’s also a grim reality for the tens of millions of hard working Americans who don’t make enough to get by.
The second is an Edelman Special Report on Trust in the Workplace out this week, which finds that ““My Employer” has emerged as an anchor of trust and stability” and that, among other things, the workplace is now an important source of community for workers.
Finally, we see business itself stepping up, individually and collectively, to take action. I highlight AEP’s investment in recruitment and retention; Bank of America’s commitment to raise its starting hourly wage to $25 by 2025 and its dedication to gender and racial pay equity, with reported near-equal pay ratios at over 99%; and Mastercard’s In Solidarity Initiative, which bring employees into its investment in workforce development and inclusion. Efforts such as the World Business Council for Sustainable Development’s Business Commission to Tackle Inequality, which we are part of, are also gathering steam.
Grounds for optimism for sure. Wishing you a wonderful long weekend,
Be well,
Martin Whittaker
Investing in workers today requires creating truly JUST Jobs. But what is a JUST Job? Investing in workers today requires creating truly JUST Jobs. But what is a JUST Job? Our next virtual event will set out to answer that question by exploring specific ways in which companies can close the gap toward all workers earning a living wage, advance equity and mobility, and deliver on the DEI commitments that are crucial to evolving the modern workforce. Click here to register.
Next Friday, September 9th, Martin will join Rashad Robinson, President of Color of Change, and Former Best Buy CEO and JUST Advisor, Hubert Joly, at a Ford Foundation and Washington Post Live event on the Future of Work to discuss how businesses are listening to their employees to help navigate this period of mass disruption. Sign up to attend here.
On September 22nd, Martin will be joining The Nest Summit during #ClimateWeekNYC to discuss The State of Corporate Climate Commitments. Who is actually walking the walk? Register to join this and many other conversations at the Summit here.
(Ford Foundation)
“To future-proof our economy, we must look at what hasn’t worked in the past and fix it. We know that promoting higher-quality jobs and expanding economic opportunities points us upward. Leaders and investors must commit to reimagining a form of capitalism from which everyone can benefit.”
“While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses…These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”
“Unfortunately, the answer is we don’t know. You know, this is not a labor market-driven surge of inflation. This is not the traditional story where the labor market gets tight, wages climb, businesses have to pass those costs on. And then that leads to inflation.
Big news out of California on wages for fast food workers. PBS reports that the state has advanced a landmark fast-food workers bill, which would raise wages to $22/hour next year and create a new council that would set sector wages, hours, and working conditions.
Axios explains that $20/hour is the new $15/hour according to search analysis from the job search site, Indeed. Democratic lawmakers and labor unions in New York are also pushing to raise the state’s minimum wage to $20/hour from its current $15/hour.
Gallup reports that 71% of Americans now approve of labor unions, the highest rating it has recorded on the measure since 1965.
Bloomberg reports that job openings have climbed to 11.2 million, with openings outnumbering available workers by just shy of a 2-to-1 margin. Quartz reports nearly 6% of workers in the leisure and hospitality industry quit their jobs in August, outpacing the 2.7% rate for remaining sectors.
Fortune frets over current consumer sentiment, which has never been so bad for so long and contributes to the economic outlook of the nation. It also discusses how this forecast is impacting workers’ demands of their employers, as many scale back requests with concerns mounting over a recession and layoffs.
Institutional Investor reports that despite mounting GOP attacks on ESG, a new Morningstar analysis reveals that 90% of public pension funds — including 98% of funds in blue states and 80% in red states — showed support for key ESG resolutions in 2021.
Wharton’s ESG Initiative Faculty Director pens a helpful editorial explaining why the anti-ESG investing movement is gaining ground, and what can be done to mitigate its impact. Ruth Ben-Ghiat chronicles in CNN how businesses are starting to strike back against culture war crusades.
This chart comes from our latest polling report, and reveals that, across the political spectrum, Americans believe that large companies have a responsibility to pay workers a living wage and to pay workers in frontline jobs enough so they don’t have to rely on public assistance.
