Aetna CEO on decision to raise minimum pay rates
Aetna announced last week that it was increasing the incomes of its lowest-paid employees by as much as 33 percent, to a minimum of $16 an hour because to do otherwise would be unfair, the insurer's chief exec said Wednesday. And he wants other companies to follow suit.
"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," Aetna CEO Mark Bertolini said during a "Squawk Box" interview, according to CNBC.
Many of the workers affected by the wage increase, which will begin in April, are single mothers who have been relying on food stamps and couldn't even afford Aetna's own health plans, Bertolini said.
But Aetna isn't just paying some employees more money; the insurer also is taking an "infrastructure investment in the quality of our employees" to help existing workers increase their performance and skills.
"We're going to invest in [our under-skilled workers]. 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," Bertolini 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."
Although it isn't breaking news when companies pay their employees more money, Aetna's decision is important because it sends a clear message to investors and shareholders--employees should be considered a company's asset not liability, Barbara Dyer, president and CEO of the Hitachi Foundation, wrote in a Fortune column.
Therefore, she said, employers should be investing in their workers. That's exactly what Bertolini is hoping for, telling Squawk Box that he is trying to persuade other CEOs to raise wages.
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