Last week, Aetna, Inc., one of the largest healthcare insurers in America, made news when it announced it would boost its minimum wage base to $16 an hour for its lowest-earning employees. Aetna AET 0.35% also pledged to cover more of its employee’s health costs. In a Wall Street Journal interview, CEO Mark Bertolini said the company hopes to reduce its $120 million annual turnover costs and will monitor how this investment plays out.
While a firm’s decision to increase pay for lower-wage workers should certainly be applauded, it also begs the question: Why is the decision to pay workers $16 per hour breaking news?
My answer: because of the message it sends to investors and shareholders.