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Walmart announced last month that it was raising pay for some of its lowest-wage workers. Investors responded by pummeling its shares, sending them down by more than 6 percent on the day.
That wasn’t quite as bad as in 2015, when the retailer’s stock dropped 10 percent after it said a wage increase would cut into profits.
$13.5 billion in profit in its most recent fiscal year.
Chief executives have in recent years publicly pronounced their commitment to “stakeholder capitalism” and “doing well by doing good.” But when it comes to paying workers a wage that can support their families, investors send executives a clear message: increase pay at your peril.
This is a problem. Worker compensation as a percentage of our national output has declined for decades, and especially steeply since 2000. Low-wage workers at companies including Amazon, McDonald’s and Walmart rely on public assistance such as food stamps to make ends meet, according to an October report from the Government Accountability Office. A shocking 30 percent of Americans couldn’t easily come up with $400 on their own in an emergency, and women and people of color generally earn less than their peers.
But two new books highlight good ideas for how to more fairly allocate pay, some new and others fallen into disuse. They can maybe even help investors to accept that reallocation.
Just Work,” Ms. Scott, a former Apple and Google executive, calls on managers to identify the gaps in pay between gender, racial and ethnic groups. “Unless you believe that white men are superior to others and that’s why they’re paid more, it’s impossible to believe that bias is not a factor,” she writes. American women, for example, make only about 85 percent of what men earn.