Raising wages is the right thing to do, and doesn’t have to be bad for your bottom line – Zeynep Ton

MIT Sloan Adjunct Associate Professor Zeynep Ton

MIT Sloan Adjunct Associate Professor Zeynep Ton

From Harvard Business Review 

The “working poor” are a growing problem in America — one that is increasingly embarrassing to the corporate elite. Business leaders who are morally inclined to do the right thing should and can play a stronger role in solving this problem by raising wages to a level where their employees’ earnings cover the cost of living.

Jamie Dimon, CEO of JPMorgan Chase, was recently stumped in a U.S. House Financial Services Committee hearing when California Congresswoman Katie Porter asked him what advice he could give to a constituent — one of his own bank’s tellers, who makes $2,425 a month and lives with her daughter in a one-bedroom apartment with a $1,600 rent in Irvine. Food, utilities, childcare, and commuting cost about another $1,400, leaving her $567 short every month. Dimon had no good answer.

Yet Dimon is one of a number of corporate leaders — others include Warren Buffett, Ray Dalio, and Paul Tudor Jones — who have expressed public concern that the version of capitalism that has allowed them to be so successful is not sustainable for our society. The data are daunting. Between 1980 and 2014, while the pre-tax income doubled for the top 1% and tripled for the top 0.1%, there was little change for the bottom 50%. In 2017, more than 45 million Americans worked in occupations whose median wage was below $15 an hour. Although wages increases have finally been accelerating, 40% of Americans are living so close to the edge that they cannot absorb an unexpected $400 expense—not much, as car repairs or dental work go.

For business leaders operating in settings like that of JPMorgan Chase, where profit margins are high and low-wage employees are a small driver of overall costs, doing the right thing morally is not even that risky. Some wage increases would even pay themselves by increasing productivity and reducing turnover — employees would be more motivated, less distracted with life problems, and less eager to find a better job. For those leaders compelled by the same moral argument but operating in businesses with low profit margins and a high percentage of low-wage employees, doing the right thing morally is still possible. But it requires a lot more work.

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MIT Sloan Expert Series — The Business Case for Good Jobs — Zeynep Ton

Zeynep Ton, MIT Sloan Professor and author of The Good Jobs Strategy, took part in a live conversation on how operational excellence enables companies to offer low prices to customers while ensuring good jobs for their employees and superior results for their investors. Also appearing on the program were Thomas E. Perez, U.S. Secretary of Labor and James Sinegal, co-founder and former CEO of Costco. The Business Case for Good Jobs is a part of the MIT Sloan Expert Series.

What the Market Basket struggle means for Labor — Thomas Kochan

MIT Sloan Professor Thomas Kochan

MIT Sloan Professor Thomas Kochan

From Boston.com

Labor Day traditions call for celebrating worker struggles of the past that helped produce better working conditions for all. This year we have a bona fide case in our backyard that may just usher in a new era of workplace dynamics that future labor commentators will herald.

Arthur T. Demoulas captured the essence of this modern day struggle in his triumphant speech to his employees when he noted that they view their “workplace as more than just a job.”

Today’s workforce, young and old, executive and front line employees alike, want to identify with the mission of their workplace—whether it is serving customers well and providing value for scarce dollars, improving the quality of care to vulnerable patients, inspiring and educating children to reach their full potential, or creating and producing goods that help sustain the planet. When united in a cause people believe in and experience the pride and material benefits of a job well done, a deep culture of shared ownership inevitably develops. When combined with leaders who reinforce by word and actions the importance of teamwork, compassion when personal or family misfortunes arise, and a willingness to respond to community needs, the power of talented, motivated individuals multiplies into social capital no traditional competitor can match.

Read the full post at Boston.com

Thomas Kochan is the George Maverick Bunker Professor of Management, a Professor of Work and Employment Research and Engineering Systems, and the Co-Director of the MIT Sloan Institute for Work and Employment Research at the MIT Sloan School of Management.

Making good = profitable — Managing Sustainable Businesses–Thomas Kochan

MIT Sloan Prof. Thomas Kochan

From off-shoring good jobs to the great and growing income divide, finance-driven decision-making has long been at the core of many of our economic problems. It’s not that financial analysts and operatives are necessarily evil or uncaring – rather, they believe they have a fiduciary responsibility to generate maximum returns for their funds, even when the results have worker and society-unfriendly consequences.

Changing this mindset has proven a tough nut to crack even for union pension fund managers, who are aware of the social consequences of investment decisions. But there are glimmers of hope and interest. On June 7, for example, some of the nation’s largest institutional investors and the biggest single pension fund investor – the California Public Employees’ Retirement System (CALpers) — will hold a conference to explore ways to transform socially and environmentally sustainable investment criteria from a perceived liability to an asset. CALpers has a commitment to responsible investing – for example, it calls for neutrality in union organizing – but it has never figured out how to make such policies systemic. Read More »

What’s the Business Case for Diversity in the Workplace? — Evan Apfelbaum

MIT Sloan Asst. Prof. Evan Apfelbaum

What’s the business case for diversity in the workplace? It’s less about what diversity adds, and more about what homogeneity takes away.

Many people share a sense of moral responsibility to advocate for diversity in organizations, but what is the functional value of diversity in the workplace? Over half a century of research has provided few straightforward or consistent answers. Some studies have shown diverse teams—that is, teams comprised of people of different races, genders, and backgrounds—promote creativity, foster critical thinking, and tend to make better, more thoughtful decisions because they consider a wider range of perspectives. Other studies indicate diverse teams fuel interpersonal conflicts, reduce cohesion, and slow the pace of learning.

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