What corporate America should do for low-wage workers
The voices of low-wage workers are about to get a lot louder.
On April 15, fast food, retail, and other low-wage workers are planning a wave of actions to demand a $15 minimum wage. Organizers say protests in 200 American cities and solidarity actions in 35 other countries will add up to the largest mobilization of underpaid workers in history.
This should be a wake-up call to the business community. It’s a moral disgrace that so many hard-working Americans have to scrape to get by on a minimum wage that is 25% below what it was in 1968.
It’s also bad for business.
I chair the board of a company —Ben & Jerry’s—that has had a livable wage policy for about 20 years. Exact wage levels are determined by local costs of living. In Vermont, where we have our headquarters and flagship factories, our starting wage is $16.92.
In the 250 Ben & Jerry’s “scoop shops,” where 75% of employees are 16 to 22 years of age, some franchise owners have adopted a living wage and others have not. We’re encouraging innovations that will make this transition easier. The Washington, DC area shops have been especially creative in finding ways to increase the value of jobs for young people, while strengthening the business. The franchisee offers transportation and food allowances, as well as meaningful, paid experiences outside the shops, like working in low-income community gardens.
Not every new idea has panned out, but perhaps some of these efforts are helping to shine the light on the fact that employers need to step up their game.
At Ben & Jerry’s, these relatively high labor costs have not held us back. We outsell the overall U.S. ice cream market and profits are at the top end of the industry. Globally, we operate in more than 30 countries.
You may say our branding makes us a special case. It’s true that Cherry Garcia (the only major ice cream named after a rock legend) is not exactly the emblem of cut-throat capitalism. But other large firms with less peaceniky images have pursued a similar path. Costco (COST) is perhaps the most well-known example, with an average wage of $20 per hour. The Container Store is another one, with annual salaries of nearly $50,000 — almost twice the retail average.
Insurance giant Aetna (AET), which recently announced substantial raises for their lowest-paid workers, has crunched the numbers on just one of the costs associated with the low-wage model: employee turnover has been draining company coffers by an astounding $120 million per year.
Some of the largest low-wage employers, including Target (TGT), Wal-Mart (WMT) and McDonald’s (MCD), have recently announced small pay increases. Recently both Starbucks (SBUX) and McDonald’s announced plans to expand their college tuition assistance programs.
Workers are demanding more, and they should. They should also call out the corporate lobby groups that are being flat out obstructionist.
The National Restaurant Association and the American Hotel & Lodging Association, for example, are using every legal and political tactic in the book to block minimum wage raises from being implemented in Seattle, San Diego, Los Angeles, and other cities. Instead, these trade associations should be helping businesses transition to a high-road model.
At Ben & Jerry’s, we don’t claim to have smoothed out all the bumps on this road. Scheduling, for example, continues to be a challenge. Whereas many US low-wage workers complain about not being able to get enough hours to earn a decent living, some of our employees would like more leisure time than they get during periods when high demand means we need more overtime work.
I’m hoping that one day we may look back and see April 15, 2015 as a day that marked a fork in the road. Whether these workers succeed in getting a minimum wage of exactly $15 per hour is not the real issue. Getting employers to see the value in caring for their employees and ensuring they can lead a dignified life is.
As Aetna CEO Mark Bertolini put it, “Companies are not just money-making machines. For the good of the social order, these are the kinds of investments we should be willing to make.”
Or as the Grateful Dead might say….”what a long, strange trip it’s been” for those at the bottom of the income scale who’ve been struggling to make a decent living. On April 15, perhaps those workers will have something to sing about.
Jeff Furman serves as Chair of the Ben & Jerry’s Board of Directors.
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