New Report: Big Business, Corporate Profits and the Minimum Wage

Two Minnesota corporations make the list of ‘Top 50 U.S. Low-Wage Employers’

ST. PAUL (July 20, 2012) — A new report by the National Employment Law Project indicates that a majority of low-wage earners nationwide are employed by large corporations, many of whom are highly profitable. The report, titled “Big Business, Corporate Profits and the Minimum Wage,” was released yesterday and includes a list of the “Top 50 U.S. Low-Wage Employers,” ranked by number of U.S. employees. Minneapolis-based companies Target Corporation (4) and Buffalo Wild Wings Inc. (35) both made the list.

From the Executive Summary:

The central finding of this report is that the majority of America’s lowest-paid workers are employed by large corporations, not small businesses, and that most of the largest low-wage employers have recovered from the recession and are in a strong financial position.

Specifically:

  • The majority (66 percent) of low-wage workers are not employed by small businesses, but rather by large corporations with over 100 employees;
  • The 50 largest employers of low-wage workers have largely recovered from the recession and most are in strong financial positions: 92 percent were profitable last year; 78 percent have been profitable for the last three years; 75 percent have higher revenues now than before the recession; 73 percent have higher cash holdings; and 63 percent have higher operating margins (a measure of profitability).
  • Top executive compensation averaged $9.4 million last year at these firms, and they have returned $174.8 billion to shareholders in dividends or share buybacks over the past five years.

Three years after the official end of the Great Recession, the U.S. continues to face a dual-crisis of stagnant wages and sluggish job growth. Critics argue that a higher minimum wage will discourage companies from hiring, and that most low-wage employers are small businesses that are still struggling in a weak economy. In fact, this report demonstrates that the majority of low-wage workers are employed by large corporations, most of which are enjoying strong profits.

The full report can be found here: http://www.raisetheminimumwage.org/pages/report-big-business-corporate-profits-and-the-minimum-wage

Donna Cassutt, Director of Minnesotans for a Fair Economy noted that raising the federal minimum wage is critical for working families in Minnesota. “When you consider that executive compensations has increased by 725%, combined by the findings in this report and other data, we know that raising the minimum wage isn’t only possible, it is necessary,” said Cassutt.

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Media Contact: Eric Fought, efought@mnfaireconomy.org 

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