PAP will abandon greed for Wagemark

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New ‘Wagemark’ logo for fair-wage companies: Goar

Very few businesses will make the cut. Most won’t even try.

To display the “Wagemark” insignia, a company must pay its chief executive no more than eight times the amount its lowest paid worker earns. At the moment, the chief executives of Canada’s top 100 corporations make 235 times the average worker’s pay.

Wagemark, a year in the planning, was introduced on July 17. Its founding director, Peter MacLeod, kept the fanfare to a minimum, aiming to build credibility before Wagemark’s international debut this fall. He notified organizations that had demonstrated an interest in social equity and contacted a handful of journalists who had written about the widening gap between rich and poor.

“The idea is simple,” he explained “In a world where consumers can purchase certified forest-friendly paper, dolphin-friendly tuna, fair trade coffee and register planet-friendly buildings; why not create a common standard for wage-responsible businesses?”

So far, 18 organizations have become Wagemark members. Most knew about the initiative in advance or were invited to apply. The vanguard includes Impact Mobile, a high-tech enterprise; Bellwoods Brewery , a beermaker, bar and restaurant; Oxibrite, a detergent manufacturer; Ninesides, a graphic design firm, and Urban Space Property Group, which remakes downtown heritage buildings into attractive, affordable workplaces.

Non-profit enterprises can also apply. The most prominent to achieve Wagemark status so far is Evergreen, creator of the Brickworks in Toronto’s Don Valley. The charity aims to bring nature back to the city.

This week, MacLeod is in Denmark, hoping to recruit the foundation’s first international members. “We’re not trying to solve the Fortune 500 problem,” he said, referring to the bloated pay packages of the ultra-rich corporate elite. “Wagemark is a simple straightforward rule of thumb that we hope can help arrest growing income disparities within organizations.”

He acknowledges that the 8:1 ratio is extremely stringent. Even a business such as Mountain Equipment Co-op, which prides itself on its fair wage policy, wouldn’t qualify. Its ratio is 9:1.

The pioneer of the movement, management guru Peter Drucker, who sounded the alarm about the expanding wage gap between workers and their bosses in the1970s, suggested a ratio of 15:1 for small and medium sized businesses and 25:1 for multinationals. More recently the Vancouver-based Shareholder Association for Research and Education (SHARE), a leader in the ethical investment field, set its bar at 30:1.
“We put a lot of thought into 8:1,” MacLeod said. He is confident that many startups, social enterprises and nonhierarchical companies “would fall close to that range.”

Even if Wagemark gets the public talking about the right pay ratio, that would be a victory, he said. At the moment, people feel powerless. No matter how hard they work, they can’t get ahead. They see inequality growing, the middle class shrinking and movements such as Occupy dying after a brief spurt of energy. “This gives them a voice.” MacLeod said. “It’s something tangible we can do.”

One of his hopes is that public agencies will incorporate Wagemark into their procurement policies, awarding points for responsible wage practices. “That would normalize the concept.”

Although Wagemark is a voluntary program, one requirement is mandatory. An organization must provide written proof from a chartered accountant or auditor that its pay structure meets the 8:1 standard. To settle for less — a verbal assurance or an honour system — would dilute the value of the label and the credibility of the registry.

MacLeod and his team do not require confidential corporate data or salary figures, provided an organization submits professional verification that it is in compliance. Nor they care how an applicant achieves the 8:1 ratio. It could pay new entrants the minimum wage ($10.25 per hour), for instance, as long as the chief executive made no more than $170,560. Conversely, it could pay its CEO $1 million (including salary, benefits, stock options and other perks) provided the lowest-paid employee earned at least $125,000.

In business circles, this initiative might seem laughably utopian. But to millions of Canadians whose living standard is falling while corporate profits rise, Wagemark doesn’t look so ridiculous. It shows there is a viable alternative to today’s top-heavy wage structure. It gives employers who pay their workers fairly a chance to take a proud stand.


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