Aetna CEO Asked Execs To Read Piketty, Then Gave His Lowest-Paid Workers A Raise
One CEO has taken a step that could help fend off Thomas Piketty's nightmare vision of rising wealth inequality: He's giving thousands of his workers a raise.
Aetna Chairman and CEO Mark Bertolini announced on Monday that the health-insurance company will be raising wages for its lowest-paid employees. Starting in April, the minimum hourly base pay for Aetna's American workers will be $16 an hour, according to a company press release.
The 5,700 workers affected by the change will see an average pay raise of about 11 percent. The lowest-paid workers, who currently make $12 an hour, will get a 33-percent raise.
The Wall Street Journal reported that Bertolini recently requested that Aetna executives read Capital In The Twenty-First Century, by the French economist Piketty. The book, which has been hailed as the "most important book of the twenty-first century," warns that the gap between the haves and the have-nots is heading toward Gilded Age levels of inequality and calls on the world's largest economies to fix the problem.
The U.S. government, which last raised the federal minimum wage to $7.25 an hour in 2009, has not exactly scrambled to respond. Aetna's move is one way companies could help close the gap.
“It’s not just about paying people, it’s about the whole social compact,” Bertolini told the Journal. “Why can’t private industry step forward and make the innovative decisions on how to do this?”
Other factors may have influenced Aetna's decision to boost pay. The Affordable Care Act is helping millions of Americans get insured, which means insurance companies have to beef up their consumer services to stay competitive.
“Health care decisions are increasingly consumer driven," Bertolini said in a statement emailed to The Huffington Post. "We are making an investment in the future of health-care service."
The job market is healing, as well, which should eventually push wages higher. Last month capped the best year for hiring since 1999, as the unemployment rate fell to 5.6 percent. That said, even though the job market has improved, wages have been slow to grow.
Still, some large employers, including Aetna, Starbucks and the Gap, have raised wages in the past year.