SAN JOSE, Calif.–One of the country’s best-known payments platform has learned its employees have trouble making payments, and in response has launched an initiative to encourage companies to rank employees’ financial security on par with other priorities.
PayPal has joined with Just Capital in launching the initiative, with both companies providing tools that managers can use to measure whether their employees might struggle to make ends meet, according to the New York Times.
PayPal CEO Dan Schulman and Just Capital co-founder Paul Tudor Jones spoke to the Times about the importance of livable salaries — and what it’s like to realize your own employees aren’t making enough to get by.
Employers may discover “a different reality than what you might expect,” Mr. Schulman told the New York Times.
According to the report, after PayPal spun out of eBay, Schulman conducted an internal pay audit, looking at how much cash workers had after essential living expenses and tax.
Assumption Challenged
“PayPal already paid at or above market rates, so he assumed he would be able to show off positive results at an all-company meeting. But in fact, almost two-thirds of the company’s call-center and entry-level workers” were “struggling to make ends meet at the end of the month,” Schulman told the New York Times.
It was a sign that “you can’t count on the market because the market isn’t working for a large segment of our population,” the report added.
Both Schulman and Tudor Jones told the Times fair pay is good for business — and shareholders.
“What we have to do is get away from this mentality that I’ve got to keep my labor costs as low as I possibly can,” Tudor Jones told the Times, “because the only purpose of a business is to make a profit à la Milton Friedman.”
Both Tudor Jones and Schulman told the Times that higher pay boosts the economy and helps companies recruit, both important factors for long-term success
“So many great CEOs spend a lot of their time philanthropically when, in actuality, the first place to start is under the own roof of your business,” Tudor Jones told the Times.