To say that money is unimportant may be fine for an aesthete or a person already fabulously well-off. Someone has to pay the bills, and inadequate pay is the third biggest reason that people leave their jobs. If you're a business owner or freelancer, you can negotiate for more pay.
Unfortunately, the wiggle room in corporate pay, particularly after someone has worked at a place for a while, can be a lot less. Given that pay is typically a big chunk of expenses, it's notable when J.P. Morgan Chase and Starbucks both decide to significant raise pay -- for the regular worker, not top executives.
J.P. Morgan Chase CEO Jamie Dimon wrote in the New York Times on July 12, 2016 that over the next three years the bank will raise its U.S. minimum salary of $10.15 an hour to between $12 and $16.50 an hour "depending on geographic and market factors." That base pay raises would be at least 18 percent. As he wrote:
A pay increase is the right thing to do. Wages for many Americans have gone nowhere for too long. Many employees who will receive this increase work as bank tellers and customer service representatives. Above all, it enables more people to begin to share in the rewards of economic growth.
Starbucks announced its wage hike the day before, on Monday, July 11. Starting October 3, employees and store managers get a raise of at least 5 percent, with "geographic and market factors" determining any differences. Stock awards will double for employees who are with the company for two years or more. All told, the range of compensation increases will be between 5 percent and 15 percent. And, as import for part-time workers, the company will "work with every partner to ensure you have the hours you need" because worked hours can affect benefits eligibility. As CEO Howard Schultz wrote in a memo that went to all U.S. employees:
Striking the delicate balance between profit and a social conscience is a responsibility I take personally. Over the years, we have viewed our total compensation approach as the best way to create long-term opportunity for partners. We believe strongly in this philosophy but also recognize we must do more to help partners take advantage of all the company has to offer.
There are three factors in play. One is that some companies and executives feel a social responsibility toward employees and the greater community. Schultz in particular has been vocal about social issues and active in providing benefits like healthcare coverage and help with education costs.
The greater motivators, at least if this is to become a broader trend, are public image and employee retention. Income inequality has seen significant play in the press and among those who study public policy. It's hard to get rebuffed for saying that you're about to give tens of thousands or hundreds of thousands of people more money. That is particularly true for a bank still associated with the massive financial collapse, large payouts to executives, and the concept of too big to fail.
The other motivator, employee retention, is critical as more jobs are created resulting in more competition for employees. People who might have jumped ship now may be less inclined, although immediate higher pay, rather than larger figures phased in over a few years, as with J.P. Morgan.
Another question is whether such moves are too little, too late, especially with some arguing that a significantly higher federal minimum wage increase -- Hillary Clinton has spoken for a figure of $12 an hour instead of the current $7.25 -- is called for. Workers have been seen their real pay stay flat even as corporations have increased their earnings. It may take more effort over time to repair relationships rather than a sense of "we knew you were hurting and so finally got around to doing something."