This meant investing in workers and making sure they are paid fairly.
According to a recent analysis by the Brookings Institution, many companies have failed to fulfill that promise nearly three years later. Researchers concluded that these companies paid shareholders far more generously than those who offered workers public praise and modest wage rises.
The think tank assessed 22 top companies that collectively employ 7 million Americans. This list includes Amazon, Best Buy CVS, Target, Walmart, Kroger, Costco, Kroger, Albertsons, Costco, Kroger, and Hilton Hotels. It also includes Chipotle, McDonald’s, and Starbucks.
Brookings discovered that 22 companies spent five-times more on stock buybacks and dividends during the pandemic than they did on additional wages for employees.
Researchers stated that “[D]espite that more than half the companies raised their minimum wages during pandemic, no one pays a minimum wage today which meets the living wage standard.”
Costco’s starting pay of $17 an hour is the lowest at a living wage (which Brookings estimates is $17.70). Brookings discovered that only five companies, Amazon, Best Buy Costco, Marriott, and UPS, pay at least half of their employees a living wage.
What is a “living wages”?
Brookings defines a “living wage” as one that is sufficient to allow a worker to pay basic expenses such as housing, food, and health care. This pay does not allow for extras such as entertainment or savings. Brookings estimates that the national average living wage is $17.70 per hour. This amounts to just under $37,000 annually.
Brookings found that Amazon offered the largest pay increase to its workers during the pandemic. Brookings discovered that Amazon’s workers now earn 10% more today than they did in October 2019.
However, this increase was outweighed by the gains made by investors. Amazon shareholders saw their shares rise by $767 billion over the course of the pandemic. Comparatively, Amazon spent $4.3 billion more on worker pay between January 2020 to October 2021, which included COVID-19 “hazard” payments, bonuses, and permanent wage increases.
Home Depot increased stockholders’ wealth to $149 billion and Lowe’s to $70 billion. Home Depot could have doubled the average worker’s income if they had used the money to repurchase stock. Brookings estimates that the worker’s average annual income was $24,500 last year. Lowe’s could’ve offered workers a 75% increase, which would have raised the median annual salary to $47,000.
Home Depot and Lowe’s didn’t immediately respond to our request for comment.
Brookings also found that senior executives of the companies studied have done well during the pandemic. Sometimes, their annual compensation has jumped by millions of dollars.
This includes businesses that made record profits and saw skyrocketing stock prices. It also includes businesses in the leisure, hospitality and tourism sectors that suffered badly during the initial stages of the pandemic. Some of these companies made steps to protect the CEOs’ salaries, even as they furloughed or laid off frontline workers.
Brookings stated that “nearly half” of the hardest-hit companies had changed their compensation rules to protect tens of million dollars in CEO compensation. This was despite the fact that companies were underperforming and workers losing income.
“Little meaningful change”
Brookings singles Chipotle out, Dollar General, and McDonald’s for having the largest gap between what CEOs and workers make. The minimum wage at Chipotle and McDonald’s is $11 an hour.
Researchers found that shareholders and executives amassed trillions of dollar while the majority of workers who generated those fortunes do not earn a living wage.
Workers are not surprised by this state of affairs. The pandemic has triggered a wave in organizing unlike anything seen in decades. This includes high-profile union campaigns at Amazon , Starbucks. Brookings says that much more is required to level the playing fields.
The authors write that “when we began this analysis almost a year ago there were many reasons to be optimistic that the 22 companies included in this analysis might live the potential of this instant.” Despite record profits by corporations, tight labor markets, and company promises to improve, the authors write that “the pandemic testing of these companies shows little significative change”.
