Allstate CEO Wants To Save Capitalism By Raising Wages

It’s time for companies to open their purse strings a bit more, according to one top executive. All-Star This week, the Business Roundtable, a group of CEOs from some of the world’s largest companies, released a statement urging companies to shift their focus from delivering profits to their shareholders to taking into account the needs of employees and the greater community. The statement has elicited reactions ranging from muted support, to eye rolling, to outright hostility. In an opinion piece for The New York Times, Allstate Chief Corporate Executive Tom Wilson builds on the Roundtable’s ideas by suggesting that corporate boards and CEOs need to not only stop prioritizing shareholders, but to also start paying employees more in order to save the very idea of capitalism. Capital Letters Wilson points to an off-cited statistic from Gallup that less than half of young Americans support capitalism. He notes that while overall unemployment is low, wages are stagnant, and many struggle to get by, as 40% of Americans do not have $400 in case of emergency. Wilson realizes this is not sustainable, writing “Poor financial health creates stress, reduces hope and undermines capitalism. It is a cancer waiting to metastasize.” Many analysts agree with Wilson’s conclusions, and argue economic stress both compounds the ongoing mental health crisis and is the driving force behind populism on both the left and the right. Secure the Bag Wilson admits he’s been in a ton of board meetings over the past 30 years, during which profit is always discussed and improving jobs is rarely discussed, even though he knows many of his peers know it’s an issue. He argues that corporations need to make creating better and high paying jobs a major priority, and investors need to “ask companies how they are helping Americans prosper while creating a profit.” All In He notes that Allstate raised their minimum wage to $15 an hour, and created a Prosperity Report to replace their annual report, and that when people have more money, everyone prospers. There is a great deal of evidence to bolster Wilson’s claims, with studies finding that when wealthy people get more money, they tend to save it or invest it, so the money doesn’t go back into the economy. People with less money, however, will spend to improve their quality of life, which therefore boosts the economy. It looks like the cultural tides are shifting towards Wilson’s argument as the debate about economic inequality has become an enduring political talking point, and lawmakers and activists have been pressuring companies such as Walmart and McDonald’s to raise their minimum wage. -Michael Tedder Photo by Adobe