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The prosperity principle

On Monday, Starbucks Corp. chairman and CEO Howard Schultz sent a message to all U.S. employees of the company, saying this fall they would receive compensation hikes of 5 percent to 15 percent. “Striking the delicate balance between profit and a social conscience is a responsibility I take personally,” he wrote.

A day later, JPMorgan Chase & Co. CEO James Dimon declared in a New York Times op-ed that 18,000 of the bank’s lowest-paid employees would be getting a raise, from $10.50 an hour today to between $12 and $16.50 an hour. “Wages for many Americans have gone nowhere for too long,” he wrote.

For those prone to cynicism, these announcements offered a target as big as a bank-vault door. After all, Mr. Schultz pocketed $20 million in total compensation last year, and within 24 hours of the pay-hike message the firm rolled out price hikes for many of its beverages.

As for Mr. Dimon, he earned roughly $27 million in 2015, up 35 percent from the year before. And like other banks, JPMorgan Chase has been slashing costs. Over the last several years thousands of its employees have lost their jobs.

The cynics might be right. Maybe these moves are no more than PR ploys. But it’s also possible these CEOs truly recognize the wage plight of lower-paid American workers and believe it’s in their own interest—and the nation’s—to do something about it.

“Too many people are not getting a fair opportunity to get ahead,” Mr. Dimon wrote. “We must find ways to help them move up the economic ladder.”

It’s not quite right to say wages have been going nowhere for many Americans. In fact, the data show they have been going backward. Since 2000, inflation-adjusted median household income has declined roughly 7 percent.

The pay increase is only one step JPMorgan Chase plans to take. It also plans to invest more than $200 million in training this year.

Mr. Dimon believes government and nonprofits also have an important role to play. But the heart of his message is a call to action for business.

7/15/2016 (c) 2016 Rochester Business Journal. To obtain permission to reprint this article, call 585-546-8303 or email rbj@rbj.net.


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