One CEO has taken a step that could help fend off Thomas Piketty’s nightmare vision of rising wealth inequality: He’s giving thousands of his workers a raise.
Aetna Chairman and CEO Mark Bertolini announced…that the health-insurance company will be raising wages for its lowest-paid employees. Starting in April, the minimum hourly base pay for Aetna’s American workers will be $16 an hour, according to a company press release.
The 5,700 workers affected by the change will see an average pay raise of about 11 percent. The lowest-paid workers, who currently make $12 an hour, will get a 33-percent raise.
The Wall Street Journal reported that Bertolini recently requested that Aetna executives read Capital In The Twenty-First Century, by the French economist Piketty. The book, which has been hailed as the “most important book of the twenty-first century,” warns that the gap between the haves and the have-nots is heading toward Gilded Age levels of inequality and calls on the world’s largest economies to fix the problem.
The U.S. government, which last raised the federal minimum wage to $7.25 an hour in 2009, has not exactly scrambled to respond. Aetna’s move is one way companies could help close the gap…
Other factors may have influenced Aetna’s decision to boost pay. The Affordable Care Act is helping millions of Americans get insured, which means insurance companies have to beef up their consumer services to stay competitive.
“Health care decisions are increasingly consumer driven,” Bertolini said in a statement emailed to The Huffington Post. “We are making an investment in the future of health-care service.”
The job market is healing, as well, which should eventually push wages higher. Last month capped the best year for hiring since 1999, as the unemployment rate fell to 5.6 percent. That said, even though the job market has improved, wages have been slow to grow.
Still, some large employers, including Aetna, Starbucks and the Gap, have raised wages in the past year.
In the interview, Tom Keene makes the point that wages have been stagnant for years. Bertolini describes the segment that most influenced his decision were single moms who needed food stamps to get by in Connecticut’s capitol. Their kids often were on Medicaid because they couldn’t even afford the company’s healthcare plan.
60% of the increase dedicated to benefits. 40% of the budget increase went to the wages – raised to $16/hour minimum. Doing it this way produced the best possible increase in personal disposable income. Not that any of this means crap to Republicans and other tightwads pretending to be conservatives.
Bertolini’s cogent point is that healthcare is a growing segment in our service economy. Workers who are well-paid always perform better than folks treated like serfs. As much as today’s conservatives prefer the latter. Something not noted in this article are the changes in workplace life, as well. More advanced sectors in the American economy – like the tech sector – long ago proved that a small portion of time away from necessary work reduces tedium, makes for increased acuity in all tasks. That should include physical changes, exercise – as well a bit of time to rest your brain.
Aetna now brings in a bit of yoga, a little meditation time to their workplace. Something else, fundamentalist curmudgeons will also hate.