Mark T. Bertolini — chairman and CEO of Aetna — has predicted a number of large companies will announce wage increases for their lowest-paid workers during 2015, according to The Wall Street Journal.
Mr. Bertolini made his forecast on April 6 at a Peterson Institute for International Economics event, saying, "I believe there are a number of CEOs that will come out in the next six months with wage increases that will matter. Corporations can make the investment in their communities and their employees, and we can improve the middle class as a result."
According to report, should Mr. Bertolini's prediction come to pass, the announcements may result in an acceleration of wage increases in other companies as well. The pace of wage increases has hovered around 2 percent annually for the past four years.
In January, the Hartford, Conn.-based health insurer set its wage floor to $16 an hour for its lowest paid employees, boosting the employees' incomes by as much as 33 percent.
The wage increase is expected to cost Aetna $26 million annually, but Mr. Bertolini predicts the higher wages will allow Aetna to realize some offsetting savings by reducing the $120 million spent each year on employee turnover-related costs.
Prior to increasing the wage floor, Aetna had roughly 5,700 employees earning between $12 and $13 an hour, 81 percent of whom were women, and a majority were single mothers. Additionally, Mr. Bertolini told The Wall Street Journal that many of the workers relied on food stamps or used Medicaid to cover their children's healthcare.
"How is it possible that a Fortune 100 company…has employees on Medicaid and food stamps?" he asked.
To tackle the issue, Mr. Bertolini has developed a "franchise kit" for other businesses to help them map out how they can increase wages and benefits for their employees.
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