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Film producer and JUST board member Abigail Disney’s new documentary, “The American Dream and Other Fairy Tales,” spotlights the struggle of low-wage Disneyland workers to make ends meet and in doing so, establishes a narrative about workers all around the country.
It’s an issue companies have no choice but to take seriously these days. Take Disney itself. While they did score below average for offering a living wage in this year’s Rankings, they made it into the JUST 100 for the first time (at #72), up from #118 last year and a low of #329 the year prior. It also reached a deal with a park workers union in December to raise their hourly minimum wage by 16% to $18 by next year. At Amazon, a reported “mass exodus” of talent was one reason leadership reestablished vesting of company stock during parental and medical leave. And at Bank of America, nearly all employees will benefit from the distribution of $1 billion of restricted stock in a move tailored to this era of “the Great Resignation.”
Pressure from investors is one reason why this is happening. BlackRock CEO Larry Fink wrote about it last week in his annual letter to CEOs. “Workers demanding more from their employers is an essential feature of effective capitalism,” he opined. In an extended human capital supplementto its 2022 proxy voting guidelines, State Street stressed that “employers cannot take their employees for granted,” encouraging boards to take a more active role in listening to their companies’ workers and share more detailed workforce wage breakdowns with investors. Similarly, Vanguard specified in its voting guidelines that boards need to take a more active rolein considering how human capital plays into long-term strategy. Expect human capital issues to feature prominently in this year’s proxy voting season.
There is not a one-size-fits-all approach corporations can take with their workers (which is why we started the Worker Financial Wellness Initiative), but the prospect of providing a decent, reliable job for all employees does not have to be a dream from a forgotten era.
This Week in Stakeholder Capitalism
General Motors is investing $6.6 billion into creating more electric vehicle plants in Michigan as part of its bid to compete with Tesla.
Google hires its first head of Tech and Society. The position will report to Alphabet CEO Sundar Pichai and focuses on how tech affects society.
Intel is investing at least $20 billion into creating new chip factories in Ohio to avoid future chip shortages.
KLLM Transport Services, one of the largest trucking companies in the U.S., is raising pay by up to 33% for its workers starting next month in a bid to lure more drivers to the industry.
Kroger approves a new contract for its unionized Denver workers after a nine-day strike, raising wages for employees with some receiving increases of more than $5 an hour.
Medtronic is investing $4 million to provide STEM learning and opportunities to over 60,000 underserved children.
What’s Happening at JUST
CNBC’s Squawk on the Street features our reporting and Rankings data exploring what Microsoft’s acquisition of Activision Blizzard means for stakeholder capitalism.
Our 2022 Rankings of America’s Most JUST Companies were also featured in Carol Cone’s Purposeful Connections newsletter.
Martin appears on the Impact Alpha podcast to discuss Larry Fink’s latest shareholder letter, the shifting corporate attitudes towards stakeholder capitalism, and more.
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“Economically, evidence is stacking up to show the financial benefits to companies that consistently apply their principles and actively work to solve societal problems. Looking to silence CEOs who embody this approach undermines styles of corporate leadership and culture we should instead be trying to promote. … So let’s not drag down those executives who are genuinely ready to take a stand. Most of them didn’t set out to become societal leaders, but this is the responsibility bestowed upon them by the times. This is a moment that calls for more leadership, not less.”
- Paul Polman, former Unilever CEO and Imagine co-chair, in his Financial Times’ op-ed, “Critics of ‘woke’ capitalism are wrong.”
“The Biden-Harris Administration believes that the federal workforce should be treated with dignity and respect. Raising pay rates across the federal government to a minimum of $15 per hour reflects our appreciation for the federal workforce and our values as a nation.”
- Kiran Ahuja, Director of the Office of Personnel Management, speaking to CNBC on the federal government’s minimum wage raise this week.
“In shifting the blame for society’s ills to a narrow set of individuals, this book misses a chance to make a more substantive and credible contribution to the very important economic issues it raises in the first place. At a time when we need more facts-based, credible, and rigorous economic analyses to guide us to a better future.”
- Peter Vanham, Head of Communications at the World Economic Forum, responding to the criticisms levied at the organization in the new book “Davos Man.”
Must-Reads of the Week
Harvard Business Review points the way for corporate leaders who want to move beyond “greenwashing” and toward actual change.
The Business Roundtable releases guidelines to help companies achieve “responsible A.I.” as advances in the industry threaten to exacerbate current problems.
The Wall Street Journal highlights new polling from Slack that shows that workers care more about having flexible hours than whether or not they have to come into an office, with 95% of those surveyed looking for the former, compared to 78% who want location flexibility.
Fortune reveals that “The Great Resignation” is the top concern for Fortune 500 CEOs in 2022. Axios concurs, claiming that the era of “worker abundance” is at an end for corporate America.
Fortune explains why corporate efforts to diversify the supply chain are not going as well as many businesses think.