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The JUST Report: Raising Wages Doesn’t Destroy Value – Here’s Why

 

Last year, before COVID-19 rocked our world, we looked at three myths of sustainable – or “just” – investing. Myth #3 was that raising wages will kill share price and destroy value for investors (spoiler alert: this is not true).

I come back to this today because it’s more relevant now than ever before. “Paying a fair and livable wage” is the single most important issue identified in our 2020 polling work. Our 2021 Rankings of America’s Most JUST Companies, released last week, are heavily influenced by how companies fare on this and other critical worker themes. And we know from our own research that millions of workers at large, profitable, publicly traded corporations still fall below local living wage thresholds, and rely on government support to make ends meet. That’s one reason we launched The Worker Financial Wellness Initiative – to help companies take the first crucial step toward addressing employee financial hardship and simply ask the question: how many of our workers fall into this category? Often, just knowing the answer to this question is all that’s needed to spark action. And if you don’t believe me, ask Mark Bertolini or Dan Schulman.

This year we’ve seen dozens of companies step up to provide hazard pay to their workers during the coronavirus crisis, and some even raising wages permanently (see: Target, Charter Communications). It is clear that employees on the frontlines – many of whom are among the lowest-paid workers in our country – need these pay increases to survive, pandemic or no. But it’s also clear that investing in workers, addressing employee financial hardship, and lifting wages more broadly can have direct and material benefits to corporations, their investors, and society as a whole. Our own analysis supports this. Dozens of CEOs, investors, and business leaders know this. Henry Ford definitely knew it. Yet still we see the myth perpetuated. Just last month, historically pro-worker Costco’s stock took a hit, despite a record-breaking sales quarter, because it is continuing to uphold its $2/hour pandemic pay increase months into the crisis.

Read my take on the subject here, and if you work at a big company and want to learn more about the financial wellness initiative, please reach out.

Stay safe, and stay tuned.

Martin Whittaker,
JUST Capital CEO

This Week in Stakeholder Capitalism

This week, we continue to highlight some of the standout policies of our JUST 100 leaders. Here are a few:

PepsiCo distributed more than 50 million meals to low-income populations during the pandemic, and shared its distribution knowledge with partners to ensure that food could reach students who were no longer receiving meals at school.

Cigna launched the Brave of Heart Fund, in partnership with the New York Life Foundation, to provide monetary grants to family members of U.S. healthcare workers who lost their lives fighting COVID-19, in addition to waiving out-of-pocket fees for tests, screenings, and appointments related to COVID-19.

Workday supported employees’ financial well-being throughout COVID-19, offering one-time bonuses and need-based grants through a pandemic-specific employee relief fund, which recently saw an increased investment of $1 million.

Synchrony Financial offers a gender-neutral paid parental leave policy, expanding its scope in 2020 to provide 12 weeks for all caregivers, while also providing back-up dependent care, fertility benefits, and flexible work arrangements.

Apple has achieved 100% renewable energy for all offices, retail stores, and data centers across 43 countries, and 44 of its suppliers have committed to using 100% renewable energy, supporting Apple’s goal of becoming carbon neutral across its entire business by 2040.

JUST Events

Tuesday, October 27th, 8AM to 9:30AM ET
MasterClass Series Course 1: Framing Today’s Challenges as a Stakeholder-Led Company
Martin joins Nasdaq for a three-part masterclass series on Board Leadership in the Stakeholder Era. For this first session, he’ll be talking about how Just corporations are framing the challenges of COVID-19, Racial Inequality, and more to tackle them within their business. Sign up to join here.

Wednesday, October 28th, 2PM to 3PM ET
How to Make Worker Financial Wellness a C-Suite Priority
Participants will hear from leaders at JUST, the Financial Health Network, and the Good Jobs Institute on how and why companies should conduct an assessment of wages, benefits, and employees’ overall financial health – including a look at how PayPal addressed the financial insecurities in its workforce in 2018. Join our webinar here.

Thursday, October 29th, 12PM to 1:30PM ET
HCM and DEI Reporting: What Investors, Managers, and Employers Should Know
Alison Omens  joins World at Work to discuss how to balance consistency and simplicity with the complexity of reporting human capital management and diversity, equity & inclusion numbers. Register today.

Thursday, November 5th, 4PM to 5:30PM ET
Business and Markets as a Force For Good: Building Stakeholder Capitalism in America
Join JUST Capital and the New York Stock Exchange for a discussion on how business and markets can take the lead in building a more just and inclusive marketplace in America. Featuring speakers from APG Asset Management US, Two Sigma Impact, AT&T, and more. Sign up to watch here.

Must-Reads of the Week

The Financial Times reports that nine out of 10 of the largest ESG ETFs outperformed the S&P 500 in the first half of the year.

Axios take a look at how corporate redlining – the practice of denying small-business loans in Black neighborhoods – has cost Black communities millions in potential business revenue.

S&P Global examines how the COVID-19 pandemic has affected women in the workplace, showing that while it seems to be helping to rapidly expand family leave policies, it’s also putting immense strain on working womens’ opportunity to advance.

The Financial Health Network released a report on how HR executives view the financial needs of their employees. The takeaway? Employer awareness of employee financial health challenges is largely based on limited metrics, contributing to a gap between employee needs and solutions.


Chart of the Week


For our Chart of the Week, we’re highlighting our recent analysis of where Business Roundtable signatories stand in our 2021 Rankings. Between our 2020 and 2021 Rankings, BRT signatories’ overall rank improved by an average of 42 places, while the rank of other non-signatory companies in the Russell 1000 decreased by an average of 8.5 places.

Have questions about our research and rankings?  We want to hear from you!