Friday, June 27, 2014

Corporate Social Responsibility and the Minimum Wage

Perhaps, the “Father of Corporate Social Responsibility” was Henry Ford. One hundred years ago, in 1914, Henry Ford stunned the industrial world by more than doubling wages to $5 a day. As a result of this progressive move, Henry Ford helped build America’s middle class and create today’s consumer-driven economy. He also put his Ford brand on the path to great success by endearing his company to every American family.
 
It’s now time for this generation of business leaders to follow in Henry Ford’s visionary footsteps and practice CSR by raising the minimum wage to a “living wage.”  And, what should that wage be? According to MIT’s Living Wage Calculator, it varies from city to city across our nation. But, regardless of the wage amount, the goal must be to lift people above the poverty line and expand America’s middle class so that we can experience a sustained economic recovery and ensure prosperity for the next twenty years. To calculate your city or state’s living wage, visit: http://livingwage.mit.edu/
 
Here are three living wage examples. In San Diego, the MIT Living Wage Calculator calls for $11.38 per hour or $23,671 per year. In Atlanta, it’s $10.10 per hour or $21,007. In New York City’s Queen Borough, it’s $12.75 or $26,521 per year. None of these wages are outside the boundaries of fair and reasonable compensation.

Can any prudent business leader or entrepreneur seriously argue that raising the minimum wage to a “living wage” will “break the bank?” If so, I would question that leader’s logic and standard of fairness. I would also ask them to live on $7.50 - $8.25 an hour for the next 30 days to see how it feels to struggle in the trenches of corporate America to make ends meet. I’m sure their opinions of what is “fair and reasonable” would change quickly.

If we truly believe that our nation stands for Life, Liberty and the Pursuit of Happiness, doesn’t part of that sacred covenant also ensure that minimum wage earners deserve a fighting chance to experience the American Dream? If not, then greed and arrogance will rule us.

Let’s set aside the politics and arguments of greed to come together and strengthen America’s middle class. Let’s follow Henry Ford’s lead and do the right thing. Actually, according to the American Consumer Council, raising the minimum wage makes good business sense. By boosting the minimum wage, companies will help expand the middle class and empower more consumers. This will create more spending and help to create higher corporate profits. That’s good for businesses, shareholders and investors. 

As the power shifts from the corporation to the consumer, it’s time for business leaders to stand up for consumers by ensuring a living wage for all workers. It’s time to rebuild America’s middle class.

About the Author:  Thomas Hinton is president of the American Consumer Council, a non-profit consumer education organization with over 145,000 members. He can be reached at: tom@americanconsumercouncil.org 

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