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The Idea That Raising Wages Destroys Value Is A Fallacy

November 02, 2020 |

This article was originally published on Forbes

“Its predictability doesn’t make it any less perplexing. Time and again Wall Street analysts will criticize a company for raising wages at the alleged expense of shareholders, and the stock will take a hit. Shortly thereafter, as the benefits of the wage increase begin to pay off – in the form of more engaged and productive employees, happier customers, better retention, etc. – the stock recovers and goes on a tear. Fears of margin compression subside. The returns on that investment in human capital become clear. Shareholders are satisfied.

The myth that lifting wages, especially of the lowest paid and most financially vulnerable employees, is somehow harmful to the interests of a company’s shareholders, is one that we at JUST Capital are pushing back against with the Worker Financial Wellness Initiative.

…The goal [of the Initiative] is simple – to encourage companies to evaluate the financial health of their workforce, determining whether employees are earning enough to not only get by each month but also plan and save for the future. The Initiative is rooted in the belief that if CEOs know this information, they can make better decisions about their business and workforce.”

Read on at: Forbes

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