Oxfam: Top U.S. firms prioritize shareholders over living wages
WASHINGTON, D.C., UNITED STATES — Only ten out of the 200 largest corporations in America have committed to paying employees a living wage. At the same time, their Chief Executive Officers (CEOs) rake in salaries over 1,500 times higher than the average worker.
This revelation comes from an Oxfam report exposing how the nation’s biggest publicly traded companies are supercharging economic inequality.
The study found that across the top 200 U.S. public firms, a staggering 90% of profits – around $1.1 trillion – are funneled to wealthy shareholders instead of being reinvested in workers.
Just ten out of the 200 companies examined have pledged to pay a living wage. Meanwhile, four companies have high CEO-worker pay ratios, trending above a 1,500:1 ratio — Jabil (1,864:1), McDonalds (1,745:1), TJX Corporations (1,604:1), and The Coca-Cola Company (1,594:1).
“Big business’ priority to make the rich richer fails to recognize the financial materiality and long-term economic risks of inequality,” said Irit Tamir, Senior Director of Oxfam America’s Private Sector Department.
Largest #US public companies fuel increasing #inequality crisis.@Oxfam's new research shows that only 10 of top 200 US public companies publicly support a living wage, while 4 have CEO-worker pay ratios over 1500:1.@APhttps://t.co/g0czqLaSaT pic.twitter.com/gBCSjjhezs
— Oxfam International Media Team (@newsfromoxfam) March 18, 2024
The retail sector epitomizes this divide, with 52% of the workforce being people of color and 56.8% being women, yet most or 69.9% of executives are white, and 77.7% are men.
Oxfam also raised concerns about “DEI [diversity, equity, and inclusion] washing” – superficial diversity commitments without meaningful action on equity.
“Just about half (44%) have published DEI metric targets, and just 11% disclose promotion rates and 12% share retention rates,” the report said.
Based on 10-Ks, proxies, and other public filings from 2018-2022, Oxfam’s study condemns corporations for exacerbating America’s yawning wealth gap through excessive shareholder payouts and executive overcompensation at the expense of workers.
On the other hand, 53% of U.S. workers feel their pay is not keeping up with rising inflation, with 38% reporting increased financial stress compared to last year, the American Staffing Association revealed.
The U.S. is one of the top 10 countries with high average wages amounting to $4,917.79, based on statistics from the International Labour Organization and Numbeo.
“We urge policymakers, investors, and other corporate stakeholders to take seriously the dangerous impacts of unrestrained inequality and their power to hold corporate America accountable,” Tamir added.
In the United Kingdom, FTSE 100 CEOs with hourly pay exceeding the median salary of £34,963 ($44,441) have surpassed the typical employee’s yearly earnings, according to the think tank High Pay Centre. The FTSE 100 is the collective name for the 100 largest UK companies by value.
While some companies fail to address corporate inequality, others are pioneering changes in their respective industries. Boldr, the world’s first B-Corp registered business process outsourcing company, recently met its target to provide all of its employees in the Philippines, South Africa, and Mexico a living wage by December 2023.
In an interview on The Outsource Accelerator Podcast, Boldr Founder and CEO David Sudolsky recognized the huge gap in development between developed and developing countries, with around 1 billion people in the world still “live on just $1 a day.” He believes that outsourcing, impact sourcing and global work provides a clear path for graduates to earn “up to $3,000 a month” in several years.