When a CEO realized many of his employees were on food stamps, he made a change to their paychecks.
He didn't do it purely out of the goodness of his heart, but it's still a big deal.
Let's be real. Health insurance companies are notoriously stingy.
"What do you mean you'll only pay for $2.79 of my $473,000 gum surgery?!"
But at least one big health insurer is fighting that reputation, at least where its employees are concerned.
Aetna CEO Mark Bertolini was shocked to learn that many workers in the company's call centers made so little money they rely on food stamps and Medicaid to get by, according to an NPR report.
Rather than let them continue to struggle, he decided to do something about it.
The Aetna CEO raised the salaries of all of his lowest-paid employees to $16/hr.
Bertolini didn't just do this out of the goodness of his heart.
He did it because it made good economic sense.
The cost of raising the wages for Aetna's lowest-paid workers is significant, even for a massive corporation:
"[Aetna CEO Mark] Bertolini ... discovered the cost of boosting compensation for his low-paid workers would be significant — about $27 million a year."
But, when you look at the company's long-term financial future, it turns out paying that $27 million a year is totally worth it.
"But he also found that research shows there are costs associated with paying low wages. Low-paid workers quit more often, and the turnover is expensive. There's also evidence higher-paid employees provide better customer service. Bertolini thought the potential benefits could offset the $27 million cost and improve his company's profits in the long run." — John Ydste, NPR
At a time when worker productivity is rising faster than wages, and workers across America are walking off the job to call for a $15/hr minimum wage, a move like this is a pretty big deal.
Paying employees a living wage is also part of a larger trend.
Not sure I need that giant bag of tilapia, but it's only $3.99!
Just a few weeks ago, Gravity Payments CEO Dan Price announced that he was taking a pay cut and raising starting salary at the company to $70,000/year.
And thriving companies like Costco and The Container Store already pay their retail workers far higher average salaries than the industry standard on the theory that higher wages lead to greater productivity and better employee retention.
We shouldn't wait for more companies to do this voluntarily.
It's important to keep pushing for higher, fairer wages for employees across all industries. A $15/hr minimum wage should be the absolute baseline.
In the meantime, it's great that more and more corporations are realizing that treating your employees with dignity and respect — and paying them accordingly — is not just more ethical.
It's also good for business.
