Business Leaders and
Investors for a Living Wage

Introduction

Despite a record stock market and strong economic growth, poverty remains high in the United States. One out of five children live below the offical poverty line in the richest nation on earth. The population of Americaâs working poor has grown because the wage floor has failed to keep pace with the cost of living over the last three decades. The federal minimum wage, which in 1968 stood at 86% of the wage necessary to lift a worker and his or her family to the official poverty line for a family of four, today represents less than 64% of that "living wage." The federal minimum wage, presently $5.15 an hour, would need to be raised to $8.20 an hour simply to meet the federal poverty level. In many higher-cost regions, a true living wage is substantially higher (up to $18 per hour).

The dominant voice of American business has predicted economic doom and mass layoffs in their consistent opposition to minimum wage increases. While none of these forecasts have come to pass when the minimum wage was increased in the past, the business lobby nonetheless remains a powerful obstacle to raising the wage floor to a decent level.

Many business people, investors, and other Americans hold a different view, understanding that paying employees a living wage is good business - creating stronger communities and better customers. However, their voices have not previously come together and thus they have been left out of the debate.  Responsible Wealth aims to change this through the Living Wage Covenant. We invite you to join with other employers and investors in support of fair wages.

Business Leaders Support a Living Wage

"Paying a living wage is good for business.  I have a stable and productive workforce, which enables me to better serve my clients.  Satisfied clients lead to more business and more jobs.  Also, my employees have more money to spend which has a very positive economic impact in the community."

-Barry Hermanson, Hermanson's Employment Services

"It's unconscionable that, in one of the most prosperous eras in our country's history, many businesses can't commit to pay a living wage. Idyll, Ltd. has an official policy that the highest paid staff person cannot receive more than three times the amount of the lowest paid."

-Hal Taussig, Idyll, Ltd.

"The economy has been growing at a rapid rate, but the buying power of the minimum wage has contintued to decrease. It's time for businesses to step up to the plate and take some responsiblity. How can I expect an employee to have any dedication to this company if I do not treat all employees with respect by paying them a living wage?"

-Michele McGeoy, RH Solutions

The Living Wage Benefits Businesses

Paying a living wage has the potential to:

• reduce employee turnover and absenteeism, thereby lowering recruitment and training costs
• increase productivity
• increase morale and commitment to the company

When people are paid enough to support their families, they no longer need to rely on public assistance in the form of housing subsidies, medical assistance, food stamps, and welfare.  In effect, taxpayers are subsidizing employers who don't pay living wages.

When people are paid enough to support their families, they pay more taxes and buy more goods and services in the local economy, stimulating growth of neighborhood economies.

The vast majority of economic research concludes that there is little or no disemployment effect associated with wage increases, and the benefits far outweigh any negative consequences.

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