As a country, we have gone 11 years without an increase in the federal minimum wage of $7.25 an hour.
Every front line worker deserves to be paid a living wage − not just those that that are fortunate to work for businesses that are leading in providing equitable pay and benefits...
Equitable compensation across all levels of an organization should be the foundation of any company’s DEI (diversity, equity, and inclusion) initiative.
Today’s consumers have options - lots of options - from bricks and mortar to online retailers. While online sales are expected to continue to increase, brick and mortar retailers can have a competitive edge when it comes to the customer experience. The key lies with a retailer’s front line workers who interact directly with customers. The customer experience drives purchasing decisions; therefore, happy, well-trained frontline workers are an essential element in a retail company’s success.
Creating a superior customer experience is essential for any retailer. A bad customer experience can make a customer never want to shop at a retailer ever again. I know it did for me and according to a 2018 PwC Customer Experience report, I am not alone. The report indicates 1 in 3 consumers will give up on a brand they love after just one bad experience. The same report also shows that customer experience drove the purchasing decisions of more than 62% of customers surveyed and 65% of consumers consider a positive customer experience to be more influential than great advertising.
Frontline workers have the greatest level of influence in a consumer’s in-store experience. Recognizing the importance of those same frontline workers and the current health risks many of them face, then why is there still a disagreement about the need to raise the federal minimum wage? Supporters say that a higher minimum wage will give people a better standard of living and boost consumption. Detractors argue that it will lead companies to hire fewer workers and kill job creation − especially at a time when the industry is in flux due to the pandemic.
"If a company is committed to providing the best customer experience possible, then they need to start by meeting the basic needs of their employees."
The reality is that, as a country, we have gone 11 years without an increase in the federal minimum wage of $7.25 an hour. Most employees earning the minimum wage are part-time employees who have to work two jobs to secure 40-60 hours of work per week. A minimum wage worker with 60 hours per week will gross $435 per week which will not even begin to support a family, to pay basic bills like rent, food, utilities, transportation, and health care. If a company is committed to providing the best customer experience possible, then they need to start by meeting the basic needs of their employees.
Certainly, the pandemic and ensuing recession have shed a light on the struggles of the working class. Unemployment is at an all-time high and getting people back to work is the priority. However, we must also acknowledge the racial inequities in pay. The Washington Center for Equitable Growth asserts that “Increasing the minimum wage to $15 an hour would increase the earnings of 38.1 percent of Black workers, compared to 23.2 percent of White workers”. Pay inequity is real and persistent. And there is no question a pay gap exists between blacks and whites. Data collected by the Washington Center for Economic Growth also indicates that “Black and LatinX workers are significantly more likely to be paid poverty-level wages than White workers.”
Rather than waiting on Congress to act, there are some retailers who are leading the way. Costco raised its starting pay to $15 an hour in 2019 and they are not alone. According to a recent New York Times article Target recently announced its $11 starting wage would increase to $15 by the end of 2020 and Best Buy followed other major retailers including T.J. Maxx, Amazon and Gap in raising base wages.
There are some who would argue that retailers have been compelled to raise their base wages to compete with the disruption and challenges of the pandemic. But consider that many retailers began raising their starting wages well before the onset of the pandemic. Hobby Lobby, for example, raised its minimum wage to $15 an hour in 2014 and increased the wage again to $17 this past October. Could it be that higher wages for frontline workers leads to happier workers, improved customer service, and even raises the bar for recruiting new employees?
Equitable compensation across all levels of an organization should be the foundation of any company’s DEI (diversity, equity, and inclusion) initiative. Advancing Frontline Employees of Color, written by FSG in partnership with PolicyLink asserts that “employers can ensure they are providing competitive and equitable pay by examining racially disaggregated HR data for systemic pay gaps and publicly holding themselves accountable to providing the best benefits to employees.” The report also shows that companies that are successful in advancing racial equity go beyond traditional diversity and inclusion efforts by shifting their management and HR practices and transforming their company cultures.
Many retailers and companies are walking their talk and putting their commitment to racial and social equity into action by increasing their base wage. But that is still the exception rather than the rule. Every frontline worker deserves to be paid a living wage, not just those that work for businesses and retailers that are leading in providing equitable pay and benefits.
Now is the time for Congress to act and raise the minimum wage across the country rather than employees relying on legislative action on a state by state basis. That said, as businesses struggle to survive the economic fallout from the pandemic, is it fair to ask them to find the means to raise starting wages? Conversely, is it fair or even morally right to ask “essential” frontline workers to work for wages that are below the poverty line? What role should the government play? What can consumers and non-profits do to assist businesses and the government with this effort?
About the author: Co founder of the MAS Project, Cynthia Stewart has a passion for enhancing communities both large and small. A retail & travel maven, she has visited 47 states, 18 countries, and brings over 35 years of experience in retail real estate advocacy, and government relations. Oh, and she still has three more continents to explore.
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