Mark Bertolini,

Wage decision sparks new conversations about income inequality

May 01 2015
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In April, Aetna increased the minimum base hourly wage for its U.S. employees to $16/hour. This increase positively affected approximately 5,700 of the company’s employees across the U.S. On average, this means an 11% wage increase for impacted Aetna employees, and for some it may be as much as a 33%. For example, an employee previously earning wages of $12/hour will make $16/hour. A higher hourly wage also creates the opportunity for higher bonus and 401(k) contributions. The announcement earlier this year generated significant public interest and analysis, including an article in The New Yorker , a subsequent opinion piece by writer Scott Martelle in the LA Times, a place on Fast Company’s World Changing Ideas list and a report from John Ydstie with National Public Radio.

Martelle wrote in the L.A. Times, “…ultimately it’s not particularly good for a business to pay its workers the lowest possible wage. A substantial amount of research shows that a well-paid workforce is a happier and more productive workforce, with long-range benefits for the business.” Read Martelle’s column.

New Yorker staff writer James Surowiecki wrote:

“It’s no secret that the years since the Great Recession have been hard on American workers. Though unemployment has finally dipped below six per cent, real wages for most have barely budged since 2007. Indeed, the whole century so far has been tough: wages haven’t grown much since 2000. So it was big news when, last month, Aetna’s C.E.O., Mark Bertolini, announced that the company’s lowest-paid workers would get a substantial raise—from twelve to sixteen dollars an hour, in some cases—as well as improved medical coverage. Bertolini didn’t stop there. He said that it was not “fair” for employees of a Fortune 50 company to be struggling to make ends meet.” Read the full piece in The New Yorker.

Fast Company  highlighted wage decisions by Gap, Starbucks and Aetna in World Changing Ideas – 14 of the most audacious, most potentially transformative ideas that are starting to reshape the world today.”

In a profile on Bertolini, Strategy+Business noted the wage decision was part of a broader strategy to adapt to changes in health care. “The Aetna pay hike was a multifaceted and strategic move — and one that stemmed from personal motivations as well. It also showed Bertolini to be a culturally astute leader with a real stake in improving the well-being of people who rely on Aetna, be they customers, employees, or long-term shareholders. He is also keenly aware of the changing nature of the healthcare industry in the U.S. and elsewhere. Even without the 2010 Affordable Care Act, health insurance companies would have been forced to revise their business models. Consumers have far more choices now than they had even a few years ago, and they approach them in a more conscious, more participative way.” To read the full profile, go here.

When pay raises went to effect for eligible Aetna employees in April, National Public Radio’s John Ydstie spoke with employees like 33-year old Kally Dunn who are benefitting from the decision. Ydstie noted that prospects for low-wage workers at some large companies have improved recently as both Walmart and McDonald’s announced pay hikes, but one of the most significant announcements came at Aetna.You can here his report here.

You can hear Bertolini talking to USA Today writer Jayne O’Donnell about the decision to help Aetna’s front line employees through wage increases and wellness programs here. O’Donnell also wrote about the recent perspective of the Equal Employment Opportunity Commission on employers offering financial incentives for employees to participate in wellness programs, one component of Aetna’s benefits for its own employees.

Bertolini also addressed the topic in an article he authored for the Huffington Post on the future of the corporate workplace over the next 10 years, emphasizing the importance of empowering employees.