Aetna CEO Asked Execs to Read Piketty, Then Gave Lowest Paid Workers a Raise

These days, when we read a story that contains the words 'CEOs' and 'pay,' it it is usually about breaking some new compensation record or cutting benefits in order to fund managers' salaries.

So when word came out that Aetna Insurance CEO Mark Bertolini was urging his executives to read French economist Thomas Piketty and then gave his workforce an 11 percent raise - on average - that amounted to a 33 percent raise for the lowest paid, it attracted attention.

Which was not necessarily his point, but it helped amplify the impact of his action, aimed as it was at doing something, anything, his organization and he could affect himself.

It would probably be unwise to bet that thoughtful, inclusive behavior is going to assume epidemic proportions among the world's CEO population. But it's nice to know that at least one of them gives a damn - and that he reads something other than business magazines. JL

Emily Cohn reports in Huffington Post:

The 5,700 workers affected by the change will see an average pay raise of about 11 percent.

Aetna executives read Capital In The Twenty-First Century, by the French economist Piketty. The book warns that the gap between the haves and the have-nots is heading toward Gilded Age levels of inequality
One CEO has taken a step that could help fend off Thomas Piketty's nightmare vision of rising wealth inequality: He's giving thousands of his workers a raise.
Aetna Chairman and CEO Mark Bertolini announced on Monday that the health-insurance company will be raising wages for its lowest-paid employees. Starting in April, the minimum hourly base pay for Aetna's American workers will be $16 an hour, according to a company press release.
The 5,700 workers affected by the change will see an average pay raise of about 11 percent. The lowest-paid workers, who currently make $12 an hour, will get a 33-percent raise.

The Wall Street Journal reported that Bertolini recently requested that Aetna executives read Capital In The Twenty-First Century, by the French economist Piketty. The book, which has been hailed as the "most important book of the twenty-first century," warns that the gap between the haves and the have-nots is heading toward Gilded Age levels of inequality and calls on the world's largest economies to fix the problem.
The U.S. government, which last raised the federal minimum wage to $7.25 an hour in 2009, has not exactly scrambled to respond. Aetna's move is one way companies could help close the gap.
“It’s not just about paying people, it’s about the whole social compact,” Bertolini told the Journal. “Why can’t private industry step forward and make the innovative decisions on how to do this?”
Other factors may have influenced Aetna's decision to boost pay. The Affordable Care Act is helping millions of Americans get insured, which means insurance companies have to beef up their consumer services to stay competitive.
“Health care decisions are increasingly consumer driven," Bertolini said in a statement emailed to The Huffington Post. "We are making an investment in the future of health-care service."
The job market is healing, as well, which should eventually push wages higher. Last month capped the best year for hiring since 1999, as the unemployment rate fell to 5.6 percent. That said, even though the job market has improved, wages have been slow to grow.
Still, some large employers, including Aetna, Starbucks and the Gap, have raised wages in the past year.