When we read about the high wages earned by CEOs of corporations the justification is always the same. Those high salaries are necessary to attract and keep good management. But doesn’t the same logic apply to workers? Aren’t good wages and good benefits part of keeping employees loyal and doing their best for the company? Or is it more cost effective for them to miss work, show up late and treat customers or their work product with indifference?
As Sheila Bair points out in a recent comment in Fortune, the lesson of treating workers well goes back to Henry Ford. He was clever enough to figure out that reliable workers with good pay in their pockets become good customers, too. Isn’t that what makes the economy grow? It’s a “no brainer,” as Bair points out. (“Corporate America Needs to Raise Wages. Why? It’s Good for Business,” by Sheila Bair, Fortune Magazine, July 21, 2014 pg. 43.)
A common myth attached to paying higher wages to the wealthy is that when money goes to the top, it trickles down to enrich everyone, the same way surface water permeates the soil to feed a plant’s roots. But the argument doesn’t bare scrutiny because the rich invest the bulk of their money in the stock market or bonds. In other words, they place bets on the economy. But buying shares of Wells Fargo or Exxon doesn’t create a single job. We all know this. We’ve seen the disconnect between Main Street and Wall Street too many times to be fooled. If we wish to grow the economy, money needs to be put in the hands of those who will spend it, the middle class and working poor. And let’s have no more talk about a “trickle down.” The worker who produces goods and services in this country deserves more than a trickle
Sheila Bair is right. We should return to the self-interested values of Henry Ford. Workers need a living wage.