A living wage enables workers and their families to afford a decent standard of living in which all basic needs are met. Multiple international treaties and frameworks recognize the concept of a living wage as a human right. In the United States, the federal minimum wage has remained stagnant at $7.25 an hour since 2009. Workers in traditionally low-wage retail, restaurant, hospitality, and gig sectors are most likely to earn below the living wage. Meanwhile, CEO pay and stock buybacks rise at the expense of investments in the workforce. In addition to the urgent need to raise federal and state minimum wages, corporate pay practices must shift to close the gap between the minimum wage and living wage.
Our Theory of Change
ICCR members and allied investors urge U.S. companies to take steps toward the payment of a living wage to direct and contract workers, in line with international human rights standards. We urge each company to work constructively with all workers, as well as labor unions and franchisee and subcontracted operations, to increase wages towards a living wage. Investors are calling for companies to:
- Adopt, disclose, and implement a living wage policy commitment, inclusive of pay practices and lobbying alignment;
- End the payment of subminimum wages (e.g. tipped workers in restaurants);
- Disclose wage-setting strategies and compensation metrics;
- Perform and disclose cost-benefit analyses of wage increases; and
- Establish compensation committee responsibilities to oversee pay practices at all levels.
The Business Case for Action
Research suggests that paying a living wage is a long-term investment that can yield significant business benefits. Investing in a living wage for workers can help companies attract and retain talented employees, increase job satisfaction, and improve worker performance. Wage increases for the lowest earners can also aid in addressing broader systemic risks such as income inequality and gender and racial disparities in the U.S. labor market that can have long-term societal and economic impacts.