Aetna recently raised all employees’ salaries to a base of at least $16 per hour, with CEO Mark Bertolini saying anything less is “unfair.”
The Fortune 500 company announced last week that it would raise the hourly wages of roughly 5,700 workers currently making between $13 and $14 per hour. Bertolini said many of these employees were single mothers who had to resort to food stamps and Medicaid because they could not afford to get health insurance through Aetna.
“Here we are a Fortune 50 company and we’re about to put these people into poverty, and I just didn’t think it was fair,” Bertolini said during a Squawk Box interview from the World Economic Forum in Davos, Switzerland.
Aetna is also trying to invest more in its employees, giving them a wider range of skills.
“We’re going to invest in them. We’re going to give them all a chance. We’re going to educate them into a new way, but we needed to engage them first,” he said.
“That population was too worried about whether or not they could put food on the table, whether or not they could afford health insurance.”
Bertolini bristled at the idea that it may cost too much for the company, noting that Aetna already spends about $120 million each year on rehiring and retraining costs.
Many others have spoken out about raising hourly wages for low-income employees. In his State of the Union address this week, President Barack Obama called for the federal government to not only raise the minimum wage, but also institute paid sick days and family leave.
“Will we accept an economy where only a few of us do spectacularly well? Or will we commit ourselves to an economy that generates rising incomes and chances for everyone who makes the effort?” Obama said.
“We need to set our sights higher than just making sure government doesn’t halt the progress we’re making. We need to do more than just do no harm.”
Mark Bertolini said Aetna’s decision to raise hourly wages to at least $16 per hour is already having ripple effects in the greater economy. He said several other companies have reached out to ask for advice on how they can also raise hourly wages for employees.