Time to pay workers a living wage

Real charity doesn’t come with a tax deduction. That’s what I told a gathering of generous Wall Street and business luminaries this month about the increasing paradox of even some of the most well-intentioned philanthropy.

All too often, charitable gifts are used not only to help those who can’t help themselves but to make up for the failure of companies to pay people a living wage and treat their workers with dignity.

This is a time of year that should be defined by giving. For many business leaders, it may be a time of year to rethink their role in giving, too.

Countless CEOs donate to worthy causes that, for example, help fund food banks and homeless shelters across the country. They should be applauded for their charity.

But the real opportunity for generosity is more likely inside the workplace.

Do you know who goes to the food banks that so many support? It is not just the homeless and unemployed. It is, many times, the people we all work with: The janitors and support staff who help offices run smoothly and keep them clean. The Uber drivers and people who work at the checkout counter and deliver groceries. The nannies and caregivers.

According to Feeding America, 43% of people who visit a food bank have at least one family member who is working full time but still doesn’t earn enough to cover bills. A researcher for the Urban Institute estimated that a quarter of adults in homeless shelters work.

If business leaders genuinely care about eradicating poverty, paying people a living wage matters.

In New York City, the poverty threshold for a family of four is US$32,402 (977,244 baht). Do the math. If only one member of a family is working 35 hours a week, with 10 days of vacation including national holidays, and is paid anything less than $18 an hour — which is higher than the minimum wage in New York and much higher than the national average — then that family more than qualifies for help from a food bank that charity often supports.

So here’s a challenge for chief executives and employees alike: When you go back to work after the holidays, ask your human resources department what the lowest pay is for any employee at the company. And, just as important, what is the lowest pay for any outside contractor that your company uses? What kind of benefits do they get? Do the outside firms your company contracts with provide benefits?

Once you have answers to those questions, the real charity is to do something about it — whether you’re a decisionmaker or you can use your voice to influence the decision-makers.

“When I walk to work, I’m looking into the eyes of the homeless people. I can’t forget about them,” Marc Benioff, the founder of Salesforce, told me. “I mean, that’s the whole point — that’s why we’re here.” (In 2018, Mr Benioff successfully pushed for a tax in San Francisco on corporations to help the homeless.)

“This is why I like being in business, because I can create change — that business must be the greatest platform for change. If it isn’t, then what is?” he said.

Mr Benioff wrote in his book, Trailblazer, that change shouldn’t be left only to a company’s leadership.

“Just as CEOs can’t look away when social issues clash with their values, employees can’t pretend that whatever its leadership decides to do is above their pay grade,” he wrote. “If leadership won’t act on a company’s values, employees at every level need to hold them accountable.”

This past year, Brian Moynihan, chief executive at Bank of America, raised the firm’s minimum wage to $20 an hour. Walmart’s chief executive, Doug McMillon, who lifted his company’s starting wage, has called on Congress to raise the federal minimum. Mark Bertolini, a former chief executive of Aetna, raised the minimum wage at his company to $16 an hour — in 2015. All three companies have benefited — and their stock went up.

Jeff Bezos, the Amazon founder, this year raised hourly wages to $15 an hour nationally. Is it enough? No. But Mr Bezos was onto something when he challenged his rivals: “Better yet, go to $16 and throw the gauntlet back at us. It’s a kind of competition that will benefit everyone,” he wrote.

At the gathering of business leaders organised by the UJA Federation of New York I shared what I had learned about the idea of charity. I grew up thinking that the Hebrew word tzedakah means charity, which is its modern definition. But I later learned its original meaning was much more profound: It meant “justice” and “fairness”.

So when it comes to giving, the goal shouldn’t be to simply donate more money, as laudable as that is. The aim should be to create a society where we don’t need places like food banks in the first place. To put it in Wall Street terms, we should be trying to put the food banks out of business.

I ran into Darren Walker, chief executive of the Ford Foundation, a little over a week ago, and he reminded me of a poignant quote from the Rev Dr Martin Luther King Jr: “Philanthropy is commendable, but it must not cause the philanthropist to overlook the circumstances of economic injustice which make philanthropy necessary.”

Some people live to work. Others work to live. But we all can work to give.

Andrew Ross Sorkin is a columnist for The New York Times.