Companies that want to become truly successful have to fundamentally rethink the amount of money they are willing to spend on employees, especially the low-wage workers who have become “essential” during the pandemic, two prominent CEOs said on Monday.
“Success of the brand in business doesn’t translate automatically to success of everyone,” Chobani founder and CEO Hamdi Ulukaya said on Monday at the Fortune Global Forum.
“Chobani will never be complete and our success will never be complete unless I see that everyone who participated in this journey has their fair share,” added Ulukaya, who spoke hours after announcing that Chobani would raise its starting hourly wage to at least $15 an hour, or more than double the federal minimum wage. About 70% of the food company’s employees are paid hourly.
The federal minimum wage has remained at $7.25 since 2009, the longest span in the nation’s history that the rate has not risen. And about 44% of U.S. workers between the ages of 18 and 64 qualify as “low-wage,” earning a median hourly rate of $10.22 per hour, or $18,000 per year, according to an analysis published last year by the Brookings Institution.
“Capitalism in its current form isn’t working for a large segment of the population,” added PayPal CEO Dan Schulman in a virtual joint interview with Ulukaya at the Fortune Global Forum.
Employees are “the single most important asset that a company has,” Schulman said. “Any company that hopes to move from being a good company to maybe someday being a great company has, as its foundation, talented, financially secure, financially healthy employees.”
PayPal last year spent tens of millions of dollars to increase worker salaries and decrease the cost of their benefits. Schulman also pledged early this year that his employees would be safe from layoffs related to COVID-19. The payments company was recently named No. 3 on Fortune‘s 2020 Change the World list of for-profit enterprises that are working towards a greater social purpose.
Many large corporations are increasingly embracing “stakeholder capitalism,” the belief that companies have responsibilities beyond just maximizing profits for shareholders. But Schulman warned that such commitments aren’t for the faint of heart, especially in these politicized times.
“We live in a culturally charged environment, where when we stand up for something, people always think you’re taking a political stance,” said Schulman, who says that he “frequently” receives death threats over PayPal’s unwillingness to do business with neo-Nazi and other hate groups.
“We’re not taking a political stance, we’re standing up for our values,” and “the stands we take are sometimes controversial, but we’re consistent on them,” he added. “Sometimes people are upset about that. But I think that is consistent with our value of inclusion. That courage to do that—your employees see it, your customers see it, and people want to be a part of a company that stands for something.”
More must-read finance coverage from Fortune:
- What Wall Street needs from the 2020 election
- Tom Steyer thinks business is missing a big opportunity—and that Trump has done “nothing but whiff”
- Can an A.I. algorithm help end unfair lending? This company says yes
- Procter & Gamble shows that increasing spending during a recession is worth it
- Stocks in “election-sensitive” sectors seem oblivious to which candidate wins. Why?