The JUST Report: Investing in Workers When Inflation is High

(Brandon Bell – Getty Images)

We’re closely tracking how inflation is affecting company performance on key stakeholder categories, and I want to highlight two specific areas this week. 

The first relates to workers. A soon to be published JUST Capital survey 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. 

While this may be hard to do in the current economic environment, it is happening. And as we note in an article with more inflation-related polling this week, it can be smart business. As CBS News reported, over the past few months several companies have lifted wages and provided other financial incentives to alleviate employees’ angst. 

ExxonMobil (a JUST 100 company), for example, has used windfall profits to expand a program that gives stock to high-performing employees and handed U.S. workers a one-time cash payment equal to 3% of their salaries; T. Rowe Price offered most of its global staff 4% salary increases by July 1 “to reward their commitment and ensure that we remain an employer of choice.” And in mid-June, Walmart announced a raise in average hourly wages for more than 36,000 pharmacy technicians to more than $20 an hour.

Even where layoffs are necessary – as has happened recently with Meta, Shopify, Uber, Oracle, and others – they can be handled in a just way. Airbnb showed how best to do that in 2020. In some cases, companies are both downsizing and investing in workers. Microsoft, for example, has taken down job listings but also raised its budget for merit-based salary increases. 

The other stakeholder deeply affected by inflation is obviously the consumer. Here, we see large retailers, including Walmart, Best Buy, Gap, and Target, announce promotions and lower product pricing on high-inventory goods. This should help strapped shoppers somewhat. But some interesting shifts in consumer attitudes towards buying U.S. made goods also caught our eye. 

This week, our survey partner The Harris Poll partnered with Retail Brew and reported that while 64% of Americans who shop for U.S.-made goods say that inflation has a negative impact on them doing so, 72% of respondents say they seek out American-made products very often or somewhat often even in the face of inflation challenges. This should provide some comfort for companies who source products locally, which is a facet of our stakeholder model. 

The pressures inflation heaps on business does not mean stakeholder value creation needs to take a back seat. On the contrary, it can be a time for just companies to shine. 

Be well,
Martin Whittaker

This Week in Stakeholder Capitalism 

Amazon reveals that its carbon emissions increased 18% last year thanks to a COVID-related surge in online shopping. 

Amgen is fighting the IRS over a potential $10.8 billion owed in back taxes. 

Ford CEO signals it will reduce headcount in its legacy combustion engine business to fund the transition to EVs, and is preparing to cut up to 8,000 workers. 

Nike – responding to pressure from activist investors – will release data on the hiring and promotion rates for women and minorities in its workforce. 

Oracle begins thousands of planned layoffs across its global workforce, after discussing cutting $1 billion in expenses. 

Robinhood lays off 23% of its workforce after a downturn in crypto trading, its second round of layoffs this year. 

What’s Happening at JUST

We broke down the Q2 performance of the companies in our Rankings, discovering that those at the top outperformed the rest across four of the five stakeholders we measure. 

If you haven’t taken our Annual JUST Report Reader survey, please do! It helps us in shaping our coverage to include the content that’s most important to you. 

Board Member Peter Georgescu speaks with Krista Bourne, COO of Verizon, on how her company is investing in its workers and succeeding in making all of its stakeholders happy. 

The Forum


“This is good for the markets, it’s good for the country, it’s good for investors. It is possible to do an investment that provides a financial AND a social return. I fear…this backlash [against ESG] is ideological and not based on facts. This is market driven: every firm on Wall Street is creating ESG funds because consumers, investors are asking for these products to invest in, not because they are being browbeaten by activists.” 

“It’s part of the cycle. When we think about what’s happened in the last 60 days, in terms of the uber aggressive hiring that has gone on, what you’re seeing is a natural reaction. The math is pretty straightforward: inflation + a retreat from hiring + a heightened focus on retention = more perks à la raises.” 

“Our employees are the face of the brand. They are the factor that helps differentiate what we offer over what competitors offer…we get hundreds of job applications daily, but we compete in a tough job market. We just recently raised the minimum wage for starting positions. And we have a rich set of benefits. Incentive bonuses and profit-sharing. Employee stock ownership.” 

Must-Reads of the Week

In the midst of the debate around ESG, Barron’s invites commentary from Environmental Defense Fund’s Fred Krupp who urges readers to tune out partisan point-scoring and work through legitimate critiques and Ford Foundation’s Roy Swan who invites readers to consider pivoting toward more impact investment strategies. The Ford Foundation President Darren Walker went on CNBC to report the success of the foundation’s impact investing program, which has provided greater financial and social returns. On the other side of the conversation, Harvard Business Review publishes a new editorial on how ESG “won’t save the planet,” because it’s not actually designed to do that – it’s designed to drive returns. 

The Wall Street Journal features a new comprehensive McKinsey study on the frontline experience for workers of color that suggests companies’ diversity efforts have largely missed the employees that stand to reap the biggest socioeconomic gains from them. 

Fortune CHRO Daily unpacks the perplexing dynamics of the current labor market. WSJ reports U.S. job openings fell in JuneQuartz reports that wages are holding strong, signaling that many sectors are still struggling to hire at capacity, but Yahoo Finance focuses on the fact that, though wages are up, inflation is eating at those gains. Despite the tight labor market and high attrition risk, a Gartner study shows CEOs and CFOs are attempting to limit expectations for across-the-board pay hikes and that employees expecting pay adjustments that fully compensate for cost-of-living increase may be disappointed.

The New York Times investigates how companies are reassessing and reimagining workplace flexibility to attract Gen Z employees.

NBC looks at the record-high profits shared by energy companies as gas prices at the pump remain steep. 

Chart of the Week 

This graph comes from our Q2 2022 Stakeholder Performance Analysis, which shows that companies in the top of JUST’s Rankings outperformed those at the bottom across four out of five stakeholders. The Environment delivered the best performance with a long-short spread of 10.5%. Explore additional insights here.

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