While executive pay has been rising and the average worker pay has seen better days, some companies are going against the curve to develop what they see as a “more profitable” business strategy in the long run.  Costco pays its workers almost 3 times the minimum wage because it believes its employees are more important to keep in the long run, and they forgo the short run profits of a lower wage.  They believe this can develop an excellent corporate culture.   It allows them to spend less of their money on employees who aren’t meeting performance standards and instead groom their employees to be productive, dedicated and loyal.  Another example of this would be Wholesale foods, which has kept a CEO to median pay that never exceeds 19:1.

Governments around the world have even started to place regulations on this ratio such as in Switzerland, where the ratio that must be met is 12:1.  As there has been a public backlash to such a private issue as this, it is time for other companies to follow in Costco’s footsteps and increase the wages of their employees to promote more commitment to the company.

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Source:

http://www.theglobeandmail.com/news/national/time-to-lead/how-one-company-levels-the-pay-slope-of-executives-and-workers/article15472738/