One of the more concrete actions President Obama can take tomorrow is announcing an executive order to raise the wages of federal contractors. As my colleagues, Amy Traub and Robbie Hiltonsmith found the federal government is the nation’s leading low-wage employer, with nearly two million private sector employees paid through federal contracts, grants, loans, concession agreements and property leases were paid $12 or less per hour. These wages can, and should, be raised by an executive order.
But, the larger issue is that the vast majority of wages need to be raised. Over the last few decades, wages for those at the bottom of the income scale have seen anemic growth while income growth for the top 5 percent grew five percent each year. While Congress deserves its share of blame for refusing to raise the minimum wage, corporations are also to blame because they have kept wages stagnant while ensuring profit and shareholder returns skyrocket.
Boeing is a perfect example of this dynamic. In return for receiving the largest single state-tax giveaway in the nation’s history- $8.7 billion- the company wanted to pay its workers as little as possible, slash their benefits, and freeze their pension benefits. And, in the end, Boeing got everything it wanted: a record-breaking level of tax breaks and significant workers’ concessions. Workers wages will remain stagnant while the company’s stock is at a record high and the CEO received $27.5 million in 2012. As Timothy Egan wrote, “[T]his is how the middle class dies, not with a bang, but a forced squeeze.”
It’s important to note that this is a conscious decision by Boeing and not the way things have to be or an inevitable conclusion of capitalism. Boeing is deliberately choosing to put shareholder and executive wealth above that of its workers or communities. But, not all corporations work this way. Ben and Jerry’s, another large corporation, had $132 million in annual sales yet the lowest paid hourly worker makes 46 percent above the living wage. Additionally, more than 40 percent of the board and management are from underrepresented population sand more than 50 percent of emissions are offset with certified carbon offsets.
So, what explains the difference between how Boeing treats its workers and Ben and Jerry’s? The answer is simple: values. Ben and Jerry’s, even though it is a wholly owned subsidiary of Unilever, chose an alternative corporate structure and certified as a Benefit Corporation, or B-Corp. B-Corps arose in response to a desire for something more than the relentless drive for profit. Pioneered by B Lab, B Corps provide legal protection for for-profit businesses to prioritize a higher purpose than profit, such as environmental sustainability and higher wages.
We highlighted their success a while and ago and since that time, eight additional states and D.C. have passed laws allowing B-Corps, including Delaware where 50 percent of all publicly-traded companies, and 64% of the Fortune 500 are incorporated, a list that includes Boeing.
It’s important to remember that income inequality and wealth inequality are not unfortunate accidents or an inevitable result. They are the result of deliberate, targeted policies and choices that take the work and labor of many to enrich the very few. B-Corps show that another economy is possible where corporations, workers, the community, and the environment all profit.