It turns out, paying fair wages and providing healthcare isn’t a threat to profits.
The cost of increasing the living standards of more than 5 million Americans, adding $11.8 to $15.2 billion to GDP, and creating no less than 100,000 jobs amounts to just a small portion of total earnings among the biggest firms. The retail sector takes in more than $4 trillion annually and firms with 1000 or more employees account for more than half of that. At the same time labor compensation in the sector contributes only 12 percent of the total value of production, making payroll just a fraction of total costs. Large retailers could pay full-time, year-round workers $25,000 per year and still make a profit – satisfying shareholders while rewarding their workers for the value they bring to the firm. A raise at large retailers adds $20.8 billion to payroll for the year, or less than 1 percent of total sales in the sector. At the same time it is very likely the firm will experience benefits that offset the cost of the wage increase — in the form of productivity gains and higher sales per employee — making the net cost of the new wage even lower.
Of course. But prevailing conservative Reaganomics thinking, spurred by short-timer CEOs proving their profit-generating worth, has dictated that hatchet cuts to staff salaries and benefits is the most expedient means of turning a profit.
