In November, Praxis Mutual Funds® joined over 100 institutional investors in a statement calling on U.S. companies, particularly those in low-wage sectors such as the retail, restaurant, hospitality, and gig sectors, to pay a living wage to their workers.
The investors argue that paying a sub-living wage to workers exposes companies to significant financial and reputational risks and view paying a living wage as critical to helping close the racial, gender, and income divides causing so much social and economic unrest in the U.S.
Over the course of the next six months, the investor signatories will begin engagements with companies on living wage policies. Some conversations will start with new company dialogues, while others will be added to existing conversations.
The U.S. federal minimum wage has remained stagnant at $7.25 per hour since 2009 – despite inflation and major cost-of-living increases – and can’t be considered a living wage. The concept of a living wage as a human right is recognized in multiple international treaties and frameworks such as the Universal Declaration of Human Rights and the UN Sustainable Development Goals.
The Global Living Wage Coalition defines a living wage as the compensation received for a standard workweek by a worker in a particular place sufficient to afford a decent standard of living for the worker and his or her family. Elements of a decent standard of living include food, water, housing, education, health care, transportation, clothing, and other essential needs.
From a business perspective, companies have a lot to gain from ensuring a living wage for their employees. While there is a prevailing assumption that paying a living wage will hurt a firm’s bottom line, research suggests that paying a living wage is a long-term investment that can yield significant business benefits. Some of these benefits can include improved worker morale and productivity, better recruitment and retention, and an enhanced reputation as an employer.
Praxis seeks to advocate for living wages both for the well-being of workers and for the long-term profitability of the company. It reflects our core values of respecting the dignity and value of all people and demonstrating a concern for justice in a global society.